EXHIBIT 4
EXECUTION COPY
CHASE FUNDING, INC.,
Depositor
CHASE MANHATTAN MORTGAGE CORPORATION,
Servicer
and
CITIBANK, N.A.,
Trustee
--------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of October 1, 2001
--------------------------------------
CHASE FUNDING Loan Acquisition Trust, MORTGAGE LOAN ASSET-BACKED
CERTIFICATES, SERIES 2001-AD1
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS.............................................................................1
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND
WARRANTIES ............................................................................39
SECTION 2.01. Conveyance of Mortgage Loans................................................39
SECTION 2.02. Acceptance by Trustee of the Mortgage Loans.................................42
SECTION 2.03. Representations, Warranties and Covenants of the Depositor..................43
SECTION 2.04. Representations and Warranties of the Servicer..............................50
SECTION 2.05. Substitutions and Repurchases of Mortgage Loans which are not
"Qualified Mortgages" ......................................................51
SECTION 2.06. Authentication and Delivery of Certificates.................................51
SECTION 2.07. REMIC Elections.............................................................51
SECTION 2.08. Covenants of the Servicer...................................................55
SECTION 2.09. [RESERVED]..................................................................55
SECTION 2.10. [RESERVED]..................................................................55
SECTION 2.11. Permitted Activities of the Trust...........................................55
SECTION 2.12. Qualifying Special Purpose Entity...........................................55
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS........................................56
SECTION 3.01. Servicer to Service Mortgage Loans..........................................56
SECTION 3.02. Servicing and Subservicing; Enforcement of the Obligations of
Servicer ...................................................................57
SECTION 3.03. Rights of the Depositor and the Trustee in Respect of the Servicer..........57
SECTION 3.04. Trustee to Act as Servicer..................................................57
SECTION 3.05. Collection of Mortgage Loan Payments; Collection Account;
Distribution Account .......................................................58
SECTION 3.06. Collection of Taxes, Assessments and Similar Items; Escrow
Accounts ...................................................................60
SECTION 3.07. Access to Certain Documentation and Information Regarding the
Mortgage Loans .............................................................61
SECTION 3.08. Permitted Withdrawals from the Collection Account and
Distribution Account .......................................................61
SECTION 3.09. [RESERVED]..................................................................62
SECTION 3.10. Maintenance of Hazard Insurance.............................................62
SECTION 3.11. Enforcement of Due-On-Sale Clauses; Assumption Agreements...................63
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TABLE OF CONTENTS
(continued)
Page
SECTION 3.12. Realization Upon Defaulted Mortgage Loans; Determination of
Excess Proceeds; Repurchase of Certain Mortgage Loans.......................64
SECTION 3.13. Trustee to Cooperate; Release of Mortgage Files.............................66
SECTION 3.14. Documents, Records and Funds in Possession of Servicer to be
Held for the Trustee .......................................................68
SECTION 3.15. Servicing Compensation......................................................68
SECTION 3.16. Access to Certain Documentation.............................................68
SECTION 3.17. Annual Statement as to Compliance...........................................68
SECTION 3.18. Annual Independent Public Accountants' Servicing Statement;
Financial Statements .......................................................69
SECTION 3.19. Rights of the NIMs Insurer..................................................69
ARTICLE IV DISTRIBUTIONS; ADVANCES BY THE SERVICER...............................................69
SECTION 4.01. Advances....................................................................69
SECTION 4.02. Reduction of Servicing Compensation in Connection with
Prepayment Interest Shortfalls .............................................70
SECTION 4.03. Distributions on the REMIC Interests........................................70
SECTION 4.04. Distributions...............................................................70
SECTION 4.05. Monthly Statements to Certificateholders....................................76
ARTICLE V THE CERTIFICATES.......................................................................79
SECTION 5.01. The Certificates............................................................79
SECTION 5.02. Certificate Register; Registration of Transfer and Exchange of
Certificates ...............................................................80
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen Certificates...........................83
SECTION 5.04. Persons Deemed Owners.......................................................84
SECTION 5.05. Access to List of Certificateholders' Names and Addresses...................84
SECTION 5.06. Book-Entry Certificates.....................................................84
SECTION 5.07. Notices to Depository.......................................................85
SECTION 5.08. Definitive Certificates.....................................................85
SECTION 5.09. Maintenance of Office or Agency.............................................85
SECTION 5.10. Authenticating Agents.......................................................86
SECTION 5.11. Appointment of Paying Agent.................................................86
ARTICLE VI THE DEPOSITOR AND THE SERVICER.........................................................87
SECTION 6.01. Respective Liabilities of the Depositor and the Servicer....................87
SECTION 6.02. Merger or Consolidation of the Depositor or the Servicer....................87
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TABLE OF CONTENTS
(continued)
Page
SECTION 6.03. Limitation on Liability of the Depositor, the Servicer and Others...........87
SECTION 6.04. Limitation on Resignation of Servicer.......................................88
SECTION 6.05. Errors and Omissions Insurance; Fidelity Bonds..............................88
ARTICLE VII DEFAULT; TERMINATION OF SERVICER.......................................................88
SECTION 7.01. Events of Default...........................................................88
SECTION 7.02. Trustee to Act; Appointment of Successor....................................89
SECTION 7.03. Notification to Certificateholders..........................................90
ARTICLE VIII CONCERNING THE TRUSTEE.................................................................91
SECTION 8.01. Duties of Trustee...........................................................91
SECTION 8.02. Certain Matters Affecting the Trustee.......................................91
SECTION 8.03. Trustee Not Liable for Mortgage Loans.......................................93
SECTION 8.04. Trustee May Own Certificates................................................93
SECTION 8.05. Servicer to Pay Certain Trustee's Fees and Expenses.........................93
SECTION 8.06. Eligibility Requirements for Trustee........................................93
SECTION 8.07. Resignation and Removal of Trustee..........................................94
SECTION 8.08. Successor Trustee...........................................................94
SECTION 8.09. Merger or Consolidation of Trustee..........................................95
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee...............................95
SECTION 8.11. Tax Matters.................................................................96
ARTICLE IX TERMINATION............................................................................98
SECTION 9.01. Termination upon Liquidation or Repurchase of all Mortgage Loans............98
SECTION 9.02. Final Distribution on the Certificates......................................99
SECTION 9.03. Additional Termination Requirements........................................100
ARTICLE X MISCELLANEOUS PROVISIONS..............................................................100
SECTION 10.01. Amendment..................................................................100
SECTION 10.02. Counterparts...............................................................102
SECTION 10.03. Governing Law..............................................................102
SECTION 10.04. Intention of Parties.......................................................102
SECTION 10.05. Notices....................................................................102
SECTION 10.06. Severability of Provisions.................................................103
SECTION 10.07. Assignment.................................................................103
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TABLE OF CONTENTS
(continued)
Page
SECTION 10.08. Limitation on Rights of Certificateholders.................................103
SECTION 10.09. Inspection and Audit Rights................................................104
SECTION 10.10. Certificates Nonassessable and Fully Paid..................................104
SECTION 10.11. Third Party Rights.........................................................105
SECTION 10.12. Additional Rights of the NIMs Insurer......................................105
EXHIBIT A FORM OF OFFERED CERTIFICATES
EXHIBIT B FORM OF CLASS C CERTIFICATES
EXHIBIT C FORM OF CLASS P CERTIFICATES
EXHIBIT D FORM OF CLASS R CERTIFICATE
EXHIBIT E FORM OF CLASS L CERTIFICATES
EXHIBIT F MORTGAGE LOAN SCHEDULE
EXHIBIT G [RESERVED]
EXHIBIT H FORM OF TRUSTEE CERTIFICATION
EXHIBIT I FORM OF TRANSFEREE'S LETTER AND AFFIDAVIT
EXHIBIT J FORM OF TRANSFEROR CERTIFICATE
EXHIBIT K FORM OF INVESTMENT LETTER
EXHIBIT L FORM OF RULE 144A LETTER
EXHIBIT M REQUEST FOR RELEASE
iv
POOLING AND SERVICING AGREEMENT, dated as of October 1, 2001, among
CHASE FUNDING, INC., a New York corporation, as depositor (the "Depositor"),
CHASE MANHATTAN MORTGAGE CORPORATION, a New Jersey corporation, as servicer (the
"Servicer") and CITIBANK, N.A., a national banking association, as trustee (the
"Trustee").
The Depositor is the owner of the Trust Fund that is hereby conveyed to
the Trustee in return for the Certificates. The Trust Fund (other than (i)
proceeds of prepayment penalties and late payment charges on the Mortgage Loans,
(ii) assets held by the Middle-Tier REMIC or the Upper-Tier REMIC, and (iii) the
interests in the grantor trusts described in Section 2.07) for federal income
tax purposes will include three REMICs.
In consideration of the mutual agreements herein contained, the
Depositor, the Servicer and the Trustee agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
Accepted Servicing Practices: The Servicer's normal servicing
practices, which will conform to the mortgage servicing practices of prudent
mortgage lending institutions which service for their own account mortgage loans
of the same type as the Mortgages Loans in the jurisdictions in which the
related Mortgaged Properties are located.
Accrual Period: With respect to the Group I Certificates (other than
the Class IA-1 Certificates) and any Distribution Date, the calendar month
immediately preceding such Distribution Date. With respect to the Group II
Certificates and the Class IA-1 Certificates and any Distribution Date, the
period commencing on the immediately preceding Distribution Date (or, in the
case of the first Distribution Date, the Closing Date) and ending on the day
immediately preceding such Distribution Date. All calculations of interest on
the Group I Certificates (other than the Class IA-1 Certificates) will be made
on the basis of a 360-day year consisting of twelve 30-day months, and all
calculations of interest on the Group II Certificates and the Class IA-1
Certificates will be made on the basis of the actual number of days elapsed in
the related Accrual Period and a 360 day year.
Adjustment Date: As to each Group II Mortgage Loan, each date on which
the related Mortgage Rate is subject to adjustment, as provided in the related
Mortgage Note.
Advance: The aggregate of the advances required to be made by the
Servicer with respect to any Distribution Date pursuant to Section 4.01, the
amount of any such advances being equal to the sum of (A) the aggregate of
payments of principal (except with respect to the final Scheduled Payment on any
Balloon Loan) and interest (net of the Servicing Fees) on the Mortgage Loans
that were due on the related Due Date and not received as of the close of
business on the related Determination Date (including monthly interest on the
Stated Principal Balance of a Balloon Loan remaining outstanding after the Due
Date with respect to the final Scheduled Payment for such Balloon Loan) and (B)
with respect to each REO Property that has not been liquidated, an amount equal
to the excess, if any, of (x) one month's interest (adjusted to the Net Mortgage
Rate) on the Stated Principal Balance of the related Mortgage Loan over (y) the
net monthly rental income (if any) from such REO Property deposited in the
Collection Account for such Distribution Date pursuant to Section 3.12, less the
aggregate amount of any such Delinquent payments that the Servicer has
determined would constitute a Non-Recoverable Advance were an advance to be made
with respect thereto.
Affiliate: With respect to any specified Person, any other Person
controlling, controlled by or under common control with such Person. For the
purposes of this definition, "control" means the power to direct the management
and policies of a Person, directly or indirectly, whether through ownership of
voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agreement: This Pooling and Servicing Agreement and any and all
amendments or supplements hereto made in accordance with the terms herein.
Amount Held for Future Distribution: As to any Distribution Date, the
aggregate amount held in the Collection Account at the close of business on the
immediately preceding Determination Date on account of (i) all Scheduled
Payments or portions thereof received in respect of the Mortgage Loans due after
the related Due Date and (ii) Principal Prepayments and Liquidation Proceeds
together with any prepayment penalties and late payment charges received in
respect of such Mortgage Loans after the last day of the related Prepayment
Period (or Due Period, in the case of Liquidation Proceeds).
Applied Realized Loss Amount: With respect to any Distribution Date,
the amount, if any, by which, (i) with respect to the Group I Certificates, the
Group I Certificate Principal Balance after distributions of principal on such
Distribution Date exceeds the aggregate Stated Principal Balance of the Group I
Mortgage Loans as of such Distribution Date, and (ii) with respect to the Group
II Certificates, the Group II Certificate Principal Balance after distributions
of principal on such Distribution Date exceeds the aggregate Stated Principal
Balance of the Group II Mortgage Loans as of such Distribution Date.
Appraised Value: With respect to a Mortgage Loan the proceeds of which
were used to purchase the related Mortgage Property, the "Appraised Value" of a
Mortgaged Property is the lesser of (x) the appraised value based on an
appraisal made for the originator by an independent fee appraiser at the time of
the origination of the related Mortgage Loan, and (y) the sales price of such
Mortgaged Property at such time of origination. With respect to a Mortgage Loan
the proceeds of which were used to refinance an existing mortgage loan, the
"Appraised Value" is the appraised value of the Mortgaged Property based upon
the appraisal obtained at the time of refinancing.
Assignment of Mortgage: 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 Mortgage 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: As defined in Section 5.10 hereof.
Balloon Loan: A Mortgage Loan having an original term to stated
maturity of approximately 15 years which provides for level monthly payments of
principal and interest based on a 30-year amortization schedule, with a balloon
payment of the remaining outstanding principal balance due on such Mortgage Loan
at its stated maturity.
Book-Entry Certificates: Any of the Certificates that shall be
registered in the name of the Depository or its nominee, the ownership of which
is reflected on the books of the Depository or on the books of a Person
maintaining an account with the Depository (directly, as a "Depository
Participant", or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 5.06). As of the Closing
Date, each Class of Regular Certificates constitutes a Class of Book-Entry
Certificates.
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Business Day: Any day other than (i) a Saturday or a Sunday, or (ii) a
day on which banking institutions in the States of California and in the City of
New York, New York or the city in which the Servicer is located are authorized
or obligated by law or executive order to be closed.
Certificate: Any one of the certificates of any Class executed by the
Depositor and authenticated by the Authenticating Agent in substantially the
forms attached hereto as Exhibits A through E.
Certificate Group: Either of the Group I Certificates or the Group II
Certificates.
Certificate Owner: With respect to a Book-Entry Certificate, the Person
that is the beneficial owner of such Book-Entry Certificate.
Certificate Principal Balance: As to any Certificate and as of any
Distribution Date, the Initial Certificate Principal Balance of such Certificate
less the sum of (i) all amounts distributed with respect to such Certificate in
reduction of the Certificate Principal Balance thereof on previous Distribution
Dates pursuant to Section 4.04, and (ii) any Applied Realized Loss Amounts
allocated to such Certificate on previous Distribution Dates pursuant to (i)
Section 4.04(i) for the Group I Certificates and (ii) Section 4.04(j) for the
Group II Certificates.
Certificate Register: The register maintained pursuant to Section 5.02
hereof.
Certificateholder or Holder: The Person in whose name a Certificate is
registered in the Certificate Register (initially, Cede & Co.), as nominee for
the Depository, in the case of any Class of Regular Certificates, except that
solely for the purpose of giving any consent pursuant to this Agreement, any
Certificate registered in the name of the Depositor or any Affiliate of the
Depositor shall be deemed not to be Outstanding and the Percentage Interest
evidenced thereby shall not be taken into account in determining whether the
requisite amount of Percentage Interests necessary to effect such consent has
been obtained; provided, however, that if any such Person (including the
Depositor) owns 100% of the Percentage Interests evidenced by a Class of
Certificates, such Certificates shall be deemed to be Outstanding for purposes
of any provision hereof that requires the consent of the Holders of Certificates
of a particular Class as a condition to the taking of any action hereunder. The
Trustee and the NIMs Insurer is entitled to rely conclusively on a certification
of the Depositor or any Affiliate of the Depositor in determining which
Certificates are registered in the name of an Affiliate of the Depositor.
Chase: The Chase Manhattan Bank, a New York state banking corporation,
or its successor in interest.
Class: All Certificates bearing the same Class designation as set forth
in Section 5.01 hereof.
Class A Certificates: The Class IA-1 Certificates, Class IA-2
Certificates, Class IA-3 Certificates, Class IA-4 Certificates, Class IA-5
Certificates, Class IA-6 Certificates and Class IIA-1 Certificates.
Class B Certificates: The Class IB Certificates and Class IIB
Certificates.
Class M Certificates: The Class IM-1 Certificates, Class IM-2
Certificates, Class IIM-1 Certificates and Class IIM-2 Certificates.
Class IA-1 Certificate: Any Certificate designated as a "Class IA-1
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
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Class IA-1 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class IA-1
Certificates.
Class IA-1 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class IA-1 Pass-Through Rate on
the Class IA-1 Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the interest portion of any previous
distributions on such Class that is recovered as a voidable preference by a
trustee in bankruptcy, less any Non-Supported Interest Shortfall allocated on
such Distribution Date to the Class IA-1 Certificates. For purposes of
calculating interest, principal distributions on a Distribution Date will be
deemed to have been made on the first day of the Accrual Period in which such
Distribution Date occurs.
Class IA-1 Interest Carryforward Amount: As of any Distribution Date,
the sum of (i) the excess of (a) the Class IA-1 Current Interest with respect to
prior Distribution Dates over (b) the amount actually distributed to the Class
IA-1 Certificates with respect to interest on such prior Distribution Dates and
(ii) interest on such excess (to the extent permitted by applicable law) at the
Class IA-1 Pass-Through Rate for the related Accrual Period.
Class IA-1 Margin: 0.23% per annum.
Class IA-1 Pass-Through Rate: For the first Distribution Date 2.755%
per annum. As of any Distribution Date thereafter, the lesser of (i) One-Month
LIBOR plus the Class IA-1 Margin and (ii) the Group I Net Rate.
Class IA-2 Certificate: Any Certificate designated as a "Class IA-2
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class IA-2 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class IA-2
Certificates.
Class IA-2 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class IA-2 Pass-Through Rate on
the Class IA-2 Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the interest portion of any previous
distributions on such Class that is recovered as a voidable preference by a
trustee in bankruptcy, less any Non-Supported Interest Shortfall allocated on
such Distribution Date to the Class IA-2 Certificates. For purposes of
calculating interest, principal distributions on a Distribution Date will be
deemed to have been made on the first day of the Accrual Period in which such
Distribution Date occurs.
Class IA-2 Interest Carryforward Amount: As of any Distribution Date,
the sum of (i) the excess of (a) the Class IA-2 Current Interest with respect to
prior Distribution Dates over (b) the amount actually distributed to the Class
IA-2 Certificates with respect to interest on such prior Distribution Dates and
(ii) interest on such excess (to the extent permitted by applicable law) at the
Class IA-2 Pass-Through Rate for the related Accrual Period.
Class IA-2 Pass-Through Rate: 4.058% per annum.
Class IA-3 Certificate: Any Certificate designated as a "Class IA-3
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class IA-3 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class IA-3
Certificates.
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Class IA-3 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class IA-3 Pass-Through Rate on
the Class IA-3 Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the interest portion of any previous
distributions on such Class that is recovered as a voidable preference by a
trustee in bankruptcy, less any Non-Supported Interest Shortfall allocated on
such Distribution Date to the Class IA-3 Certificates. For purposes of
calculating interest, principal distributions on a Distribution Date will be
deemed to have been made on the first day of the Accrual Period in which such
Distribution Date occurs.
Class IA-3 Interest Carryforward Amount: As of any Distribution Date,
the sum of (i) the excess of (a) the Class IA-3 Current Interest with respect to
prior Distribution Dates over (b) the amount actually distributed to the Class
IA-3 Certificates with respect to interest on such prior Distribution Dates and
(ii) interest on such excess (to the extent permitted by applicable law) at the
Class IA-3 Pass-Through Rate for the related Accrual Period.
Class IA-3 Pass-Through Rate: 4.541% per annum.
Class IA-4 Certificate: Any Certificate designated as a "Class IA-4
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class IA-4 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class IA-4
Certificates.
Class IA-4 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class IA-4 Pass-Through Rate on
the Class IA-4 Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the interest portion of any previous
distributions on such Class that is recovered as a voidable preference by a
trustee in bankruptcy, less any Non-Supported Interest Shortfall allocated on
such Distribution Date to the Class IA-4 Certificates. For purposes of
calculating interest, principal distributions on a Distribution Date will be
deemed to have been made on the first day of the Accrual Period in which such
Distribution Date occurs.
Class IA-4 Interest Carryforward Amount: As of any Distribution Date,
the sum of (i) the excess of (a) the Class IA-4 Current Interest with respect to
prior Distribution Dates over (b) the amount actually distributed to the Class
IA-4 Certificates with respect to interest on such prior Distribution Dates and
(ii) interest on such excess (to the extent permitted by applicable law) at the
Class IA-4 Pass-Through Rate for the related Accrual Period.
Class IA-4 Pass-Through Rate: 5.392% per annum.
Class IA-5 Certificate: Any Certificate designated as a "Class IA-5
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class IA-5 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class IA-5
Certificates.
Class IA-5 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class IA-5 Pass-Through Rate on
the Class IA-5 Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the interest portion of any previous
distributions on such Class that is recovered as a voidable preference by a
trustee in bankruptcy, less any Non-Supported Interest Shortfall allocated on
such Distribution Date to the Class IA-5 Certificates. For purposes of
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calculating interest, principal distributions on a Distribution Date will be
deemed to have been made on the first day of the Accrual Period in which such
Distribution Date occurs.
Class IA-5 Interest Carryforward Amount: As of any Distribution Date,
the sum of (i) the excess of (a) the Class IA-5 Current Interest with respect to
prior Distribution Dates over (b) the amount actually distributed to the Class
IA-5 Certificates with respect to interest on such prior Distribution Dates and
(ii) interest on such excess (to the extent permitted by applicable law) at the
Class IA-5 Pass-Through Rate for the related Accrual Period.
Class IA-5 Pass-Through Rate: The lesser of (i) 6.252% per annum (or on
any Distribution Date after the Optional Termination Date for the Group I
Certificates 6.752% per annum) and (ii) the Group I Net Rate.
Class IA-6 Certificate: Any Certificate designated as a "Class IA-6
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class IA-6 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class IA-6
Certificates.
Class IA-6 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class IA-6 Pass-Through Rate on
the Class IA-6 Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the interest portion of any previous
distributions on such Class that is recovered as a voidable preference by a
trustee in bankruptcy, less any Non-Supported Interest Shortfall allocated on
such Distribution Date to the Class IA-6 Certificates. For purposes of
calculating interest, principal distributions on a Distribution Date will be
deemed to have been made on the first day of the Accrual Period in which such
Distribution Date occurs.
Class IA-6 Interest Carryforward Amount: As of any Distribution Date,
the sum of (i) the excess of (a) the Class IA-6 Current Interest with respect to
prior Distribution Dates over (b) the amount actually distributed to the Class
IA-6 Certificates with respect to interest on such prior Distribution Dates and
(ii) interest on such excess (to the extent permitted by applicable law) at the
Class IA-6 Pass-Through Rate for the related Accrual Period.
Class IA-6 Pass-Through Rate: 5.651% per annum.
Class IA-6 Principal Distribution Amount: As of any Distribution Date
prior to the Distribution Date in November 2010, the principal to be distributed
to the Class IA-6 Certificates equal to the product of (i) a fraction, the
numerator of which is the Certificate Principal Balance of the Class IA-6
Certificates immediately prior to such Distribution Date and the denominator of
which is the Group I Class A Certificate Principal Balance immediately prior to
such Distribution Date, (ii) the Group I Class A Principal Distribution Amount
for such Distribution Date and (iii) the Class IA-6 PDA Factor for such
Distribution Date. With respect to the Distribution Date in November 2010 and
each Distribution Date thereafter until the Class IA-6 Certificate Principal
Balance has been reduced to zero, the Class IA-6 Principal Distribution Amount
will equal the Group I Class A Principal Distribution Amount for such
Distribution Date.
Class IA-6 PDA Factor: As of any Distribution Date set forth below, the
Percentage set forth across from such Distribution Date:
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Distribution Date Occurring in Percentage
------------------------------ ----------
November 2001 through October 2004........................ 0%
November 2004 through October 2006........................ 45%
November 2006 through October 2007........................ 80%
November 2007 through October 2008........................100%
November 2008 through October 2010........................300%
Class IIA-1 Certificate: Any Certificate designated as a "Class IIA-1
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class IIA-1 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class IIA-1
Certificates.
Class IIA-1 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class IIA-1 Pass-Through Rate
on the Class IIA-1 Certificate Principal Balance as of the first day of such
Accrual Period (after giving effect to all distributions of principal made or
deemed to be made as of such first day) plus the interest portion of any
previous distributions on such Class that is recovered as a voidable preference
by a trustee in bankruptcy, less any Non-Supported Interest Shortfall allocated
on such Distribution Date to the Class IIA-1 Certificates. For purposes of
calculating interest, principal distributions on a Distribution Date will be
deemed to have been made on the first day of the Accrual Period in which such
Distribution Date occurs.
Class IIA-1 Interest Carryforward Amount: As of any Distribution Date,
the sum of (i) the excess of (a) the Class IIA-1 Current Interest with respect
to prior Distribution Dates (excluding any Class IIA-1 Interest Carryover
Amount) over (b) the amount actually distributed to the Class IIA-1 Certificates
with respect to interest on such prior Distribution Dates and (ii) interest on
such excess (to the extent permitted by applicable law) at the Class IIA-1
Pass-Through Rate for the related Accrual Period.
Class IIA-1 Interest Carryover Amount: As of any Distribution Date, the
sum of (A) if on such Distribution Date the Pass-Through Rate for the Class
IIA-1 Certificates is based upon the Group II Available Funds Cap, the excess of
(i) the amount of interest the Class IIA-1 Certificates would otherwise be
entitled to receive on such Distribution Date had such rate been calculated as
the sum of One-Month LIBOR and the applicable Class IIA-1 Margin for such
Distribution Date, up to the Group II Weighted Maximum Rate Cap, over (ii) the
amount of interest payable on the Class IIA-1 Certificates at the Group II
Available Funds Cap for such Distribution Date, up to the Group II Weighted
Maximum Rate Cap, and (B) the Class IIA-1 Interest Carryover Amount for all
previous Distribution Dates not previously paid pursuant to Section 4.04(f)(vi),
together with interest thereon at a rate equal to the sum of One-Month LIBOR and
the applicable Class IIA-1 Margin for such Distribution Date.
Class IIA-1 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Group II Certificates, 0.30% per annum and, as
of any Distribution Date after such Optional Termination Date, 0.60% per annum.
Class IIA-1 Pass-Through Rate: For the first Distribution Date, 2.825%
per annum. As of any Distribution Date thereafter, the least of (i) One-Month
LIBOR plus the Class IIA-1 Margin, (ii) the Group II Weighted Maximum Rate Cap
and (iii) the Group II Available Funds Cap for such Distribution Date.
-7-
Class IB Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Group I Mortgage
Loans which have been applied to the reduction of the Certificate Principal
Balance of the Class IB Certificates.
Class IB Certificate: Any Certificate designated as a "Class IB
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class IB Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class IB
Certificates.
Class IB Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class IB Pass-Through Rate on
the Class IB Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the interest portion of any previous
distributions on such Class that is recovered as a voidable preference by a
trustee in bankruptcy, less any Non-Supported Interest Shortfall allocated on
such Distribution Date to the Class IB Certificates. For purposes of calculating
interest, principal distributions on a Distribution Date will be deemed to have
been made on the first day of the Accrual Period in which such Distribution Date
occurs.
Class IB Interest Carryforward Amount: As of any Distribution Date, the
sum of (i) the excess of (a) the Class IB Current Interest with respect to prior
Distribution Dates over (b) the amount actually distributed to the Class IB
Certificates with respect to interest on such prior Distribution Dates and (ii)
interest on such excess (to the extent permitted by applicable law) at the Class
IB Pass-Through Rate for the related Accrual Period.
Class IB Pass-Through Rate: The lesser of (i) 6.804% per annum and (ii)
the Group I Net Rate.
Class IB Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (i) the Class IB Applied Realized Loss Amount over (ii) the sum of all
distributions in reduction of the Class IB Applied Realized Loss Amount on all
previous Distribution Dates.
Class IIB Applied Realized Loss Amount: As of any Distribution Date,
the sum of all Applied Realized Loss Amounts with respect to the Group II
Mortgage Loans which have been applied to the reduction of the Certificate
Principal Balance of the Class IIB Certificates.
Class IIB Certificate: Any Certificate designated as a "Class IIB
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class IIB Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class IIB
Certificates.
Class IIB Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class IIB Pass-Through Rate on
the Class IIB Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the interest portion of any previous
distributions on such Class that is recovered as a voidable preference by a
trustee in bankruptcy, less any Non-Supported Interest Shortfall allocated on
such Distribution Date to the Class IIB Certificates. For purposes of
calculating interest, principal distributions on a Distribution Date will be
deemed to have been made on the first day of the Accrual Period in which such
Distribution Date occurs.
Class IIB Interest Carryforward Amount: As of any Distribution Date,
the sum of (i) the excess of (a) the Class IIB Current Interest with respect to
prior Distribution Dates (excluding any Class IIB Interest Carryover Amount)
-8-
over (b) the amount actually distributed to the Class IIB Certificates with
respect to interest on such prior Distribution Dates and (ii) interest on such
excess (to the extent permitted by applicable law) at the Class IIB Pass-Through
Rate for the related Accrual Period.
Class IIB Interest Carryover Amount: As of any Distribution Date, the
sum of (A) if on such Distribution Date the Pass-Through Rate for the Class IIB
Certificates is based upon the Group II Available Funds Cap, the excess of (i)
the amount of interest the Class IIB Certificates would otherwise be entitled to
receive on such Distribution Date had such rate been calculated as the sum of
One-Month LIBOR and the applicable Class IIB Margin for such Distribution Date,
up to the Group II Weighted Maximum Rate Cap, over (ii) the amount of interest
payable on the Class IIB Certificates at the Group II Available Funds Cap for
such Distribution Date, up to the Group II Weighted Maximum Rate Cap, and (B)
the Class IIB Interest Carryover Amount for all previous Distribution Dates not
previously paid pursuant to Section 4.04(f)(vi), together with interest thereon
at a rate equal to the sum of One-Month LIBOR and the applicable Class IIB
Margin for such Distribution Date.
Class IIB Margin: For any Distribution Date up to and including the
Optional Termination Date for the Group II Certificates, 1.90% per annum and, as
of any Distribution Date after such Optional Termination Date, 2.85% per annum.
Class IIB Pass-Through Rate: For the first Distribution Date, 4.425%
per annum. As of any Distribution Date thereafter, the least of (i) One-Month
LIBOR plus the Class IIB Margin, (ii) the Group II Weighted Maximum Rate Cap and
(iii) the Group II Available Funds Cap for such Distribution Date.
Class IIB Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (i) the Class IIB Applied Realized Loss Amount over (ii) the sum of
all distributions in reduction of the Class IIB Applied Realized Loss Amounts on
all previous Distribution Dates.
Class C Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Class C Group I Certificate
Principal Balance or the Class C Group II Certificate Principal Balance.
Class C Certificate: Any Certificate designated as a "Class C
Certificate" on the face thereof, in the form of Exhibit B hereto, representing
the right to distributions as set forth herein.
Class C Certificate Principal Balance: As of any date of determination,
the aggregate of the Class C Group I Certificate Principal Balance and the Class
C Group II Certificate Principal Balance. The initial Certificate Principal
Balance of the Class C Certificates will be zero.
Class C Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period in an amount equal to the Class C
Distributable Interest Amount plus the interest portion of any previous
distributions on such Class that is recovered as a voidable preference by a
trustee in bankruptcy, less any Non-Supported Interest Shortfall allocated on
such Distribution Date to the Class C Certificates.
Class C Distributable Interest Amount: The sum of (i) the interest that
would accrue during the related Accrual Period on an amount equal to the
aggregate principal amount of the Middle-Tier REMIC Group I Accrual Interest as
of the first day of such period at a rate equal to the excess, if any, of (x)
the Group I Net Rate over (y) the weighted average of the pass through rates of
the Group I Marker Interests (treating, for this purpose, 0.001% of the portion
of the principal amount of the Middle-Tier REMIC Group I Accrual Interest in
excess of 99,999 times the principal amount of the Group I Marker Interests (as
determined without regard to this parenthetical) as a Group I Marker Interest
subject to an interest rate cap of 0%) and (ii) the interest that would accrue
during the related Accrual Period on an amount equal to the aggregate principal
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amount of the Middle-Tier REMIC Group II Accrual Interest as of the first day of
such period at a rate equal to the excess, if any, of (x) the Group II Net Rate
(y) over the weighted average of the pass through rates of the Group II Marker
Interests (treating, for this purpose, 0.001% of the portion of the principal
amount of the Middle-Tier REMIC Group II Accrual Interest in excess of 99,999
times the principal amount of the Group II Marker Interests (as determined
without regard to this parenthetical) as a Group II Marker Interest subject to
an interest rate cap of 0%). For purposes of this calculation, amounts will be
rounded to eight decimal places.
Class C Group I Applied Realized Loss Amount: As of any Distribution
Date, the sum of all Applied Realized Loss Amounts with respect to the Mortgage
Loans which have been applied to the reduction of the Class C Group I
Certificate Principal Balance.
Class C Group I Certificate Principal Balance: The initial Class C
Group I Certificate Principal Balance will be zero. The Class C Group I
Certificate Principal Balance will equal the excess of the aggregate principal
amount of the Group I Mortgage Loans over the aggregate principal amount of the
Group I Certificates. The Class C Group I Certificate Principal Balance at any
time will represent prior accruals in respect of the Class C Distributable
Interest Amount which have been added to the Certificate Principal Balance of
the Class C Certificates. No interest, other than the Class C Distributable
Interest Amount, will accrue in respect of the Class C Certificate.
Class C Group I Current Interest: For any Accrual Period, the amount
described in clause (i) of the definition of Class C Distributable Interest
Amount.
Class C Group I Unpaid Realized Loss Amount: As of any Distribution
Date, the excess of (i) the Class C Group I Applied Realized Loss Amount over
(ii) the sum of all distributions in reduction of the Class C Group I Applied
Realized Loss Amount on all previous Distribution Dates.
Class C Group II Applied Realized Loss Amount: As of any Distribution
Date, the sum of all Applied Realized Loss Amounts with respect to the Mortgage
Loans which have been applied to the reduction of the Class C Group II
Certificate Principal Balance.
Class C Group II Certificate Principal Balance: The initial Class C
Group II Certificate Principal Balance will be zero. The Class C Group II
Certificate Principal Balance will equal the excess of the aggregate principal
amount of the Group II Mortgage Loans over the aggregate principal amount of the
Group II Certificates. The Class C Group II Certificate Principal Balance at any
time will represent prior accruals in respect of the Class C Distributable
Interest Amount which have been added to the Certificate Principal Balance of
the Class C Certificates. No interest, other than the Class C Distributable
Interest Amount, will accrue in respect of the Class C Certificate.
Class C Group II Current Interest: For any Accrual Period, the amount
described in clause (ii) of the definition of Class C Distributable Interest
Amount.
Class C Group II Unpaid Realized Loss Amount: As of any Distribution
Date, the excess of (i) the Class C Group II Applied Realized Loss Amount over
(ii) the sum of all distributions in reduction of the Class C Group II Applied
Realized Loss Amount on all previous Distribution Dates.
Class C Interest Carryforward Amount: As of any Distribution Date, the
excess of (a) the Class C Current Interest with respect to prior Distribution
Dates (other than amounts added to the Class C Certificate Principal Balance)
over (b) the amount actually distributed to the Class C Certificates with
respect to interest on such prior Distribution Dates.
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Class C Group I Interest Carryforward Amount: As of any Distribution
Date, the excess of (a) the Class C Group I Current Interest with respect to
prior Distribution Dates (other than amounts added to the Class C Group I
Certificate Principal Balance) over (b) the amount actually distributed to the
Class C Certificates with respect to Class C Group I Current Interests and Class
C Group I Interest Carryforward Amounts on such prior Distribution Dates.
Class C Group II Interest Carryforward Amount: As of any Distribution
Date, the excess of (a) the Class C Group II Current Interest with respect to
prior Distribution Dates (other than amounts added to the Class C Group II
Certificate Principal Balance) over (b) the amount actually distributed to the
Class C Certificates with respect to Class C Group II Current Interests and
Class C Group II Interest Carryforward Amounts on such prior Distribution Dates.
Class C Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (i) the Class C Applied Realized Loss Amount over (ii) the sum of all
distributions in reduction of the Class C Applied Realized Loss Amount on all
previous Distribution Dates.
Class L Certificate: Any one of the Class IL Certificates or Class IIL
Certificates executed by the Depositor and authenticated by the Authenticating
Agent in substantially the form set forth in Exhibit E.
Class IL Certificate: Any Certificate designated as a "Class IL
Certificate" on the face thereof, in the form of Exhibit E hereto, representing
the right to distributions as set forth herein.
Class IIL Certificate: Any Certificate designated as a "Class IIL
Certificate" on the face thereof, in the form of Exhibit E hereto, representing
the right to distributions as set forth herein.
Class IM-1 Applied Realized Loss Amount: As of any Distribution Date,
the sum of all Applied Realized Loss Amounts with respect to the Group I
Mortgage Loans which have been applied to the reduction of the Certificate
Principal Balance of the Class IM-1 Certificates.
Class IM-1 Certificate: Any Certificate designated as a "Class IM-1
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class IM-1 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class IM-1
Certificates.
Class IM-1 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class IM-1 Pass-Through Rate on
the Class IM-1 Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the interest portion of any previous
distributions on such Class that is recovered as a voidable preference by a
trustee in bankruptcy, less any Non-Supported Interest Shortfall allocated on
such Distribution Date to the Class IM-1 Certificates. For purposes of
calculating interest, principal distributions on a Distribution Date will be
deemed to have been made on the first day of the Accrual Period in which such
Distribution Date occurs.
Class IM-1 Interest Carryforward Amount: As of any Distribution Date,
the sum of (i) the excess of (a) the Class IM-1 Current Interest with respect to
prior Distribution Dates over (b) the amount actually distributed to the Class
IM-1 Certificates with respect to interest on such prior Distribution Dates and
(ii) interest on such excess (to the extent permitted by applicable law) at the
Class IM-1 Pass-Through Rate for the related Accrual Period.
Class IM-1 Pass-Through Rate: 6.096% per annum.
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Class IM-1 Unpaid Realized Loss Amount: As of any Distribution Date,
the excess of (i) the Class IM Applied Realized Loss Amount over (ii) the sum of
all distributions in reduction of the Class IM-1 Applied Realized Loss Amount on
all previous Distribution Dates.
Class IM-2 Applied Realized Loss Amount: As of any Distribution Date,
the sum of all Applied Realized Loss Amounts with respect to the Group I
Mortgage Loans which have been applied to the reduction of the Certificate
Principal Balance of the Class IM-2 Certificates.
Class IM-2 Certificate: Any Certificate designated as a "Class IM-2
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class IM-2 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class IM-2
Certificates.
Class IM-2 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class IM-2 Pass-Through Rate on
the Class IM-2 Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the interest portion of any previous
distributions on such Class that is recovered as a voidable preference by a
trustee in bankruptcy, less any Non-Supported Interest Shortfall allocated on
such Distribution Date to the Class IM-2 Certificates. For purposes of
calculating interest, principal distributions on a Distribution Date will be
deemed to have been made on the first day of the Accrual Period in which such
Distribution Date occurs.
Class IM-2 Interest Carryforward Amount: As of any Distribution Date,
the sum of (i) the excess of (a) the Class IM-2 Current Interest with respect to
prior Distribution Dates over (b) the amount actually distributed to the Class
IM-2 Certificates with respect to interest on such prior Distribution Dates and
(ii) interest on such excess (to the extent permitted by applicable law) at the
Class IM-2 Pass- Through Rate for the related Accrual Period.
Class IM-2 Pass-Through Rate: The lesser of (i) 6.561% per annum and
(ii) the Group I Net Rate.
Class IM-2 Unpaid Realized Loss Amount: As of any Distribution Date,
the excess of (i) the Class IM-2 Applied Realized Loss Amount over (ii) the sum
of all distributions in reduction of the Class IM-2 Applied Realized Loss Amount
on all previous Distribution Dates.
Class IIM-1 Applied Realized Loss Amount: As of any Distribution Date,
the sum of all Applied Realized Loss Amounts with respect to the Group II
Mortgage Loans which have been applied to the reduction of the Certificate
Principal Balance of the Class IIM-1 Certificates.
Class IIM-1 Certificate: Any Certificate designated as a "Class IIM-1
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class IIM-1 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class IIM-1
Certificates.
Class IIM-1 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class IIM-1 Pass-Through Rate
on the Class IIM-1 Certificate Principal Balance as of the first day of such
Accrual Period (after giving effect to all distributions of principal made or
deemed to be made as of such first day) plus the interest portion of any
previous distributions on such Class that is recovered as a voidable preference
by a trustee in bankruptcy, less any Non-Supported Interest Shortfall allocated
on such Distribution Date to the Class IIM-1 Certificates. For purposes of
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calculating interest, principal distributions on a Distribution Date will be
deemed to have been made on the first day of the Accrual Period in which such
Distribution Date occurs.
Class IIM-1 Interest Carryforward Amount: As of any Distribution Date,
the sum of (i) the excess of (a) the Class IIM-1 Current Interest with respect
to prior Distribution Dates (excluding any Class IIM-1 Interest Carryover
Amount) over (b) the amount actually distributed to the Class IIM-1 Certificates
with respect to interest on such prior Distribution Dates and (ii) interest on
such excess (to the extent permitted by applicable law) at the Class IIM-1
Pass-Through Rate for the related Accrual Period.
Class IIM-1 Interest Carryover Amount: As of any Distribution Date, the
sum of (A) if on such Distribution Date the Pass-Through Rate for the Class
IIM-1 Certificates is based upon the Group II Available Funds Cap, the excess of
(i) the amount of interest the Class IIM-1 Certificates would otherwise be
entitled to receive on such Distribution Date had such rate been calculated as
the sum of One-Month LIBOR and the applicable Class IIM-1 Margin for such
Distribution Date, up to the Group II Weighted Maximum Rate Cap, over (ii) the
amount of interest payable on the Class IIM-1 Certificates at the Group II
Available Funds Cap for such Distribution Date, up to the Group II Weighted
Maximum Rate Cap, and (B) the Class IIM-1 Interest Carryover Amount for all
previous Distribution Dates not previously paid pursuant to Section 4.04(f)(vi),
together with interest thereon at a rate equal to the sum of One-Month LIBOR and
the applicable Class IIM-1 Margin for such Distribution Date.
Class IIM-1 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Group II Certificates, 0.85% per annum and, as
of any Distribution Date after such Optional Termination Date, 1.275% per annum.
Class IIM-1 Pass-Through Rate: For the first Distribution Date, 3.375%
per annum. As of any Distribution Date thereafter, the least of (i) One-Month
LIBOR plus the Class IIM-1 Margin, (ii) the Group II Weighted Maximum Rate Cap
and (iii) the Group II Available Funds Cap for such Distribution Date.
Class IIM-1 Unpaid Realized Loss Amount: As of any Distribution Date,
the excess of (i) the Class IIM-1 Applied Realized Loss Amount over (ii) the sum
of all distributions in reduction of the Class IIM-1 Applied Realized Loss
Amounts on all previous Distribution Dates.
Class IIM-2 Applied Realized Loss Amount: As of any Distribution Date,
the sum of all Applied Realized Loss Amounts with respect to the Group II
Mortgage Loans which have been applied to the reduction of the Certificate
Principal Balance of the Class IIM-2 Certificates.
Class IIM-2 Certificate: Any Certificate designated as a "Class IIM-2
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class IIM-2 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class IIM-2
Certificates.
Class IIM-2 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class IIM-2 Pass-Through Rate
on the Class IIM-2 Certificate Principal Balance as of the first day of such
Accrual Period (after giving effect to all distributions of principal made or
deemed to be made as of such first day) plus the interest portion of any
previous distributions on such Class that is recovered as a voidable preference
by a trustee in bankruptcy, less any Non-Supported Interest Shortfall allocated
on such Distribution Date to the Class IIM-2 Certificates. For purposes of
calculating interest, principal distributions on a Distribution Date will be
deemed to have been made on the first day of the Accrual Period in which such
Distribution Date occurs.
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Xxxxx XXX-0 Xxxxxxxx Xxxxxxxxxxxx Xxxxxx: As of any Distribution Date,
the sum of (i) the excess of (a) the Class IIM-2 Current Interest with respect
to prior Distribution Dates (excluding any Class IIM-2 Interest Carryover
Amount) over (b) the amount actually distributed to the Class IIM-2 Certificates
with respect to interest on such prior Distribution Dates and (ii) interest on
such excess (to the extent permitted by applicable law) at the Class IIM-2
Pass-Through Rate for the related Accrual Period.
Class IIM-2 Interest Carryover Amount: As of any Distribution Date, the
sum of (A) if on such Distribution Date the Pass-Through Rate for the Class
IIM-2 Certificates is based upon the Group II Available Funds Cap, the excess of
(i) the amount of interest the Class IIM-2 Certificates would otherwise be
entitled to receive on such Distribution Date had such rate been calculated as
the sum of One-Month LIBOR and the applicable Class IIM-2 Margin for such
Distribution Date, up to the Group II Weighted Maximum Rate Cap, over (ii) the
amount of interest payable on the Class IIM-2 Certificates at the Group II
Available Funds Cap for such Distribution Date, up to the Group II Weighted
Maximum Rate Cap and (B) the Class IIM-2 Interest Carryover Amount for all
previous Distribution Dates not previously paid pursuant to Section 4.04(f)(vi),
together with interest thereon at a rate equal to the sum of One-Month LIBOR and
the applicable Class IIM-2 Margin for such Distribution Date.
Class IIM-2 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Group II Certificates, 1.30% per annum and, as
of any Distribution Date after such Optional Termination Date, 1.95% per annum.
Class IIM-2 Pass-Through Rate: For the first Distribution Date, 3.825%
per annum. As of any Distribution Date thereafter, the least of (i) One-Month
LIBOR plus the Class IIM-2 Margin, (ii) the Group II Weighted Maximum Rate Cap
and (iii) the Group II Available Funds Cap for such Distribution Date.
Class IIM-2 Unpaid Realized Loss Amount: As of any Distribution Date,
the excess of (i) the Class IIM-2 Applied Realized Loss Amount over (ii) the sum
of all distributions in reduction of the Class IIM-2 Applied Realized Loss
Amounts on all previous Distribution Dates.
Class IP Certificate: Any Certificate designated as a "Class IP
Certificate" on the face thereof, in the form of Exhibit C hereto, representing
the right to distributions as set forth herein.
Class IIP Certificate: Any Certificate designated as a "Class IIP
Certificate" on the face thereof, in the form of Exhibit C hereto, representing
the right to distributions as set forth herein.
Class P Certificate: Any one of the Class P Certificates executed by
the Depositor and authenticated by the Authenticating Agent in substantially the
form set forth in Exhibit C.
Class R Certificate: The Class R Certificate executed by the Depositor
and authenticated by the Authenticating Agent in substantially the form set
forth in Exhibit D.
Closing Date: October 15, 2001.
Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Collection Account: The separate Eligible Account created and initially
maintained by the Servicer pursuant to Section 3.05(b) in the name of the
Trustee for the benefit of the Certificateholders and designated "Citibank,
N.A., as trustee, in trust for registered holders of Chase Funding Mortgage Loan
Asset-Backed Certificates, Series 0000-XX0, Xxxxx Xxxxxxxxx Mortgage Corporation
as Servicer". Funds in the Collection Account shall be held in trust for the
Certificateholders for the uses and purposes set forth in this Agreement.
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Compensating Interest: With respect to any Mortgage Loan, an amount
equal to the amount set forth in Section 4.02 hereof, to be applied to the
interest portion of a Prepayment Interest Shortfall on such Mortgage Loan
pursuant to Section 4.02 hereof.
Corporate Trust Office: The designated office of the Trustee in the
State of New York where 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 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000.
Corresponding Certificates: For each of the Upper-Tier REMIC Group II
Regular Interests, the Corresponding Certificate is as set forth below:
Upper-Tier REMIC IIA-1 Interest Class IIA-1 Certificate
Upper-Tier REMIC IIM-1 Interest Class IIM-1 Certificate
Upper-Tier REMIC IIM-2 Interest Class IIM-2 Certificate
Upper-Tier REMIC IIB Interest Class IIB Certificate
Current Interest: Any of the Class IA-1 Current Interest, the Class
IA-2 Current Interest, the Class IA-3 Current Interest, the Class IA-4 Current
Interest, the Class IA-5 Current Interest, the Class IA-6 Current Interest, the
Class IIA-1 Current Interest, the Class IB Current Interest, the Class IIB
Current Interest, the Class IM-1 Current Interest, the Class IIM-1 Current
Interest, the Class IM-2 Current Interest , the Class IIM-2 Current Interest or
the Class C Current Interest.
Custodian: The custodian for the Mortgage Files appointed by the
Trustee. The initial Custodian shall be Bank One Trust Company, N.A.
Cut-off Date: With respect to each Mortgage Loan, October 1, 2001.
Cut-off Date Principal Balance: As to any Mortgage Loan, the unpaid
principal balance thereof as of the close of business on the calendar day
immediately preceding the Cut-off Date after application of all payments of
principal received prior to the Cut-off Date.
Definitive Certificates: As defined in Section 5.06.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced by a
Replacement Mortgage Loan.
Delinquent: A Mortgage Loan is "delinquent" if any payment due thereon
is not made pursuant to the terms of such Mortgage Loan by the close of business
on the day such payment is scheduled to be due. A Mortgage Loan is "30 days
delinquent" if such payment has not been received by the close of business on
the corresponding day of the month immediately succeeding the month in which
such payment was due, or, if there is no such corresponding day (e.g., as when a
30-day month follows a 31-day month in which a payment was due on the 31st day
of such month), then on the last day of such immediately succeeding month.
Similarly for "60 days delinquent," "90 days delinquent" and so on.
Denomination: With respect to each Certificate, the amount set forth on
the face thereof as the "Initial Principal Balance of this Certificate."
Depositor: Chase Funding, Inc., a New York corporation, or its
successor in interest.
Depository: The initial Depository shall be The Depository Trust
Company ("DTC"), the nominee of which is Cede & Co., or any other organization
registered as a "clearing agency" pursuant to Section 17A of the Securities
-15-
Exchange Act of 1934, as amended. The Depository shall initially be the
registered Holder of the Book-Entry Certificates. The Depository shall at all
times be a "clearing corporation" as defined in Section 8-102(3) of the Uniform
Commercial Code of the State of New York.
Depository Agreement: With respect to Classes of Book-Entry
Certificates, the agreement among the Depositor, the Trustee and the initial
Depository.
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Designated Transaction: For Certificates transferred on or after August
23, 2000, a transaction in which the assets underlying the Certificates consist
of single-family residential, multi-family residential, home equity,
manufactured housing and/or commercial mortgage obligations that are secured by
single-family residential, multi-family residential, commercial real property or
leasehold interests therein.
Determination Date: With respect to any Distribution Date, the 15th day
of the month of such Distribution Date or, if such 15th day is not a Business
Day, the immediately preceding Business Day.
Distribution Account: The separate Eligible Account created and
maintained by the Servicer pursuant to Section 3.05(d) in the name of the
Trustee for the benefit of the Certificateholders and designated "Citibank,
N.A., as trustee, in trust for registered holders of Chase Funding Mortgage Loan
Asset-Backed Certificates, Series 2001-AD1". Funds in the Distribution Account
shall be held in trust for the Certificateholders for the uses and purposes set
forth in this Agreement.
Distribution Date: The 25th day of each calendar month after the
initial issuance of the Certificates, or if such 25th day is not a Business Day,
the next succeeding Business Day, commencing in November 2001.
Due Date: With respect to any Distribution Date and any Mortgage Loan,
the day during the related Due Period on which a Scheduled Payment is due.
Due Period: With respect to any Distribution Date, the period beginning
on the second day of the calendar month preceding the calendar month in which
such Distribution Date occurs (or, in the case of the first Distribution Date,
beginning on the Cut-off Date) and ending on the first day of the month in which
such Distribution Date occurs.
Eligible Account: An account that is (i) maintained with a depository
institution the long-term unsecured debt obligations of which are rated by each
Rating Agency in one of its two highest rating categories, or (ii) maintained
with the corporate trust department of a bank which (a) has a rating of at least
Baa3 or P-3 by Xxxxx'x and (b) is either Chase or the corporate trust department
of a national bank or banking corporation which has a rating of at least A-1 or
F1 by Fitch, or (iii) an account or accounts the deposits in which are fully
insured by the FDIC, or (iv) an account or accounts, acceptable to each Rating
Agency without reduction or withdrawal of the rating of any Class of
Certificates, as evidenced in writing in a depository institution in which such
accounts are insured by the FDIC (to the limit established by the FDIC), the
uninsured deposits in which accounts are otherwise secured such that, as
evidenced by an Opinion of Counsel delivered to and acceptable to the Trustee
and each Rating Agency, the Certificateholders have a claim with respect to the
funds in such account and a perfected first security interest against any
collateral (which shall be limited to Permitted Investments) securing such funds
that is superior to claims of any other depositors or creditors of the
depository institution with which such account is maintained, (v) maintained at
an eligible institution whose commercial paper, short-term debt or other
short-term deposits are rated at least A-1+ by S&P, (vi) maintained with a
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federal or state chartered depository institution the deposits in which are
insured by the FDIC to the applicable limits and the short-term unsecured debt
obligations of which (or, in the case of a depository institution that is a
subsidiary of a holding company, the short-term unsecured debt obligations of
such holding company) are rated A-1 by S&P or Prime-1 by Xxxxx'x at the time any
deposits are held on deposit therein, or (vii) otherwise acceptable to each
Rating Agency, as evidenced by a letter from each Rating Agency.
ERISA: The Employee Retirement Income Security Act of 1974, including
any successor or amendatory provisions.
ERISA Restricted Certificate: The Class C, Class L, Class P and Class R
Certificates and any other Certificate, unless such other Certificate shall have
received a rating from a Rating Agency at the time of a transfer of such other
Certificate that is in one of the three (or in the case of Designated
Transactions, four) highest generic rating categories.
Event of Default: As defined in Section 7.01 hereof.
Excess Interest: On any Distribution Date, for the Class IIA-1
Certificates, the Class IIM-1 Certificates, the Class IIM-2 Certificates and the
Class IIB Certificates, the excess of (i) the amount of interest each such Class
of Certificates is entitled to receive on such Distribution Date at its
Pass-Through Rate over (ii) the amount of interest each such Class of
Certificates would have been entitled to receive on such Distribution Date had
the Pass-Through Rate for such Class been the Group II Net Rate, up to but not
exceeding the Group II Weighted Maximum Rate Cap.
Excess Payments: On any Distribution Date, for the Class C
Certificates, the excess of (i) the amount that such Class is entitled to
receive on such Distribution Date over (ii) the amount that such Class would
have been entitled to receive had it borne interest (x) on a principal amount
equal to the principal amount of the Middle-Tier REMIC Group I Accrual Interest
at a rate equal to the excess of the Group I Net Rate over the weighted average
rate of the Middle-Tier REMIC Group I Regular Interests (other than the
Middle-Tier REMIC Group I Accrual Interest) and (y) on a principal amount equal
to the principal amount of the Middle-Tier REMIC Group II Accrual Interest at a
rate equal to the excess of the Group II Net Rate over the weighted average rate
of the Middle-Tier REMIC Group II Regular Interests (other than the Middle-Tier
REMIC Group II Accrual Interest).
Excess Proceeds: With respect to any Liquidated Loan, any Liquidation
Proceeds that are in excess of the sum of (i) the unpaid principal balance of
such Liquidated Loan as of the date of such liquidation plus (ii) interest at
the Mortgage Rate from the Due Date as to which interest was last paid or
advanced to Certificateholders (and not reimbursed to the Servicer) up to the
Due Date in the month in which such Liquidation Proceeds are required to be
distributed on the unpaid principal balance of such Liquidated Loan outstanding
during each Due Period as to which such interest was not paid or advanced.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
FHLMC: Xxxxxxx Mac, a corporate instrumentality of the United States
created and existing under Title III of the Emergency Home Finance Act of 1970,
as amended, or any successor thereto.
Fitch: Fitch, Inc.
FNMA: Xxxxxx Xxx, a federally chartered and privately owned corporation
organized and existing under the Federal National Mortgage Association Charter
Act, or any successor thereto.
Gross Margin: The percentage set forth in the related Mortgage Note for
each of the Mortgage Loans in Loan Group II which is to be added to the
applicable index for use in determining the Mortgage Rate on each Adjustment
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Date, and which is set forth in the Mortgage Loan Schedule for each of the Group
II Mortgage Loans.
Group Net Rate: With respect to Group I, the Group I Net Rate and, with
respect to Group II, the Group II Net Rate.
Group I Certificate Principal Balance: For any date of determination,
the sum of the Class IA-1 Certificate Principal Balance, the Class IA-2
Certificate Principal Balance, the Class IA-3 Certificate Principal Balance, the
Class IA-4 Certificate Principal Balance, the Class IA-5 Certificate Principal
Balance, the Class IA-6 Certificate Principal Balance, the Class IM-1
Certificate Principal Balance, the Class IM-2 Certificate Principal Balance, the
Class IB Certificate Principal Balance and the Class C Group I Certificate
Principal Balance, in each case for such date of determination.
Group I Certificates: Any of the Class IA-1, Class IA-2, Class IA-3,
Class IA-4, Class IA-5, Class IA-6, Class IM-1, Class IM-2, Class IB, Class IL
or Class IP Certificates.
Group I Class A Certificate Principal Balance: For any date of
determination, the sum of the Class IA-1 Certificate Principal Balance, the
Class IA-2 Certificate Principal Balance, the Class IA-3 Certificate Principal
Balance, the Class IA-4 Certificate Principal Balance, the Class IA-5
Certificate Principal Balance and the Class IA-6 Certificate Principal Balance,
in each case for such date of determination.
Group I Class A Certificates: Any of the Class IA-1, Class IA-2, Class
IA-3, Class IA-4, Class IA-5 or Class IA-6 Certificates.
Group I Class A Principal Distribution Amount: With respect to any
Distribution Date (i) prior to the Group I Stepdown Date or any Distribution
Date on which a Group I Trigger Event exists, 100% of the Group I Principal
Distribution Amount for such Distribution Date and (ii) on or after the Group I
Stepdown Date where a Group I Trigger Event does not exist, the excess of (A)
the Group I Class A Certificate Principal Balance immediately prior to such
Distribution Date over (B) the lesser of (i) 72.5% of the Stated Principal
Balance of the Group I Mortgage Loans as of the end of the immediately preceding
Due Period and (II) the excess of the Stated Principal Balance of the Group I
Mortgage Loans as of the end of the immediately preceding Due Period over
$3,080,000; provided, however, that in no event will the Group I Class A
Principal Distribution Amount with respect to any Distribution Date exceed the
Group I Class A Certificate Principal Balance.
Group I Class B Principal Distribution Amount: With respect to any
Distribution Date on or after the Group I Stepdown Date and as long as a Group I
Trigger Event does not exist, the excess of (i) the sum of (A) the Group I Class
A Certificate Principal Balance (after taking into account distribution of the
Group I Class A Principal Distribution Amount on such Distribution Date), (B)
the Class IM-1 Certificate Principal Balance (after taking into account
distribution of the Group I Class IM-1 Distribution Amount on such Distribution
Date), (C) the Class IM-2 Certificate Principal Balance (after taking into
account distribution of the Group I Class IM-2 Principal Distribution Amount for
such Distribution Date), and (D) the Class IB Certificate Principal Balance
immediately prior to such Distribution Date over (ii) the lesser of (A) 96.5% of
the Stated Principal Balance of the Group I Mortgage Loans as of the end of the
immediately preceding Due Period and (B) the excess of the Stated Principal
Balances of the Group I Mortgage Loans as of the end of the immediately
preceding Due Period over $3,080,000, provided, however, that after the Group I
Class A Certificate Principal Balance, the Class IM-1 Certificate Principal
Balance and the Class IM-2 Certificate Principal Balance has been reduced to
zero, the Group I Class B Principal Distribution Amount for such Distribution
Date will equal 100% of the Group I Principal Distribution Amount for such
Distribution Date remaining after any distributions on such Class A, Class M-1
and Class M-2 Certificates and provided, further, however, that in no event will
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the Group I Class B Principal Distribution Amount with respect to any
Distribution Date exceed the Class IB Certificate Principal Balance.
Group I Class IM-1 Principal Distribution Amount: With respect to any
Distribution Date on or after the Group I Stepdown Date, 100% of the Group I
Principal Distribution Amount for such Distribution Date if the Group I Class A
Certificate Principal Balance has been reduced to zero and a Group I Trigger
Event exists, or as long as a Group I Trigger Event does not exist, the excess
of (i) the sum of (A) the Group I Class A Certificate Principal Balance (after
taking into account distributions of the Group I Class A Principal Distribution
Amount on such Distribution Date) and (B) the Class IM-1 Certificate Principal
Balance immediately prior to such Distribution Date over (ii) the lesser of (A)
81.5% of the Stated Principal Balances of the Group I Mortgage Loans as of the
end of the immediately preceding Due Period and (B) the excess of the Stated
Principal Balances for the Group I Mortgage Loans as of the end of the
immediately preceding Due Period over $3,080,000. Notwithstanding the foregoing,
(i) on any Distribution Date prior to the Stepdown Date on which the Certificate
Principal Balance of each Class of Group I Class A Certificates has been reduced
to zero, the Group I Class IM-1 Principal Distribution Amount will equal the
lesser of (A) the outstanding Certificate Principal Balance of the Class IM-1
Certificates and (B) 100% of the Group I Principal Distribution Amount remaining
after any distributions on such Class A Certificates and (ii) in no event will
the Group I Class IM-I Principal Distribution Amount with respect to any
Distribution Date exceed the Class IM-1 Certificate Principal Balance.
Group I Class IM-2 Principal Distribution Amount: With respect to any
Distribution Date on or after the Group I Stepdown Date, 100% of the Group I
Principal Distribution Amount for such Distribution Date if the Group I Class A
Certificate Principal Balance and the Class IM-1 Certificate Principal Balance
have been reduced to zero and a Group I Trigger Event exists, or as long as a
Group I Trigger Event does not exist, the excess of (i) the sum of (A) the Group
I Class A Certificate Principal Balance (after taking into account distributions
of the Group I Class A Principal Distribution Amount on such Distribution Date),
(B) the Class IM-1 Certificate Principal Balance (after taking into account
distributions of the Group I Class IM-1 Principal Distribution Amount on such
Distribution Date) and (C) the Class IM-2 Certificate Principal Balance
immediately prior to such Distribution Date over (ii) the lesser of (A) 89.5% of
the Stated Principal Balances of the Group I Mortgage Loans as of the end of the
immediately preceding Due Period and (B) the excess of the Stated Principal
Balances for the Group I Mortgage Loans as of the end of the immediately
preceding Due Period over $3,080,000. Notwithstanding the foregoing, (i) on any
Distribution Date prior to the Stepdown Date on which the Certificate Principal
Balance of each Class of Group I Class A Certificates and the Class IM-1
Certificates has been reduced to zero, the Group I Class IM-2 Principal
Distribution Amount will equal the lesser of (A) the outstanding Certificate
Principal Balance of the Class IM-2 Certificates and (B) 100% of the Group I
Principal Distribution Amount remaining after any distributions on such Class A
and Class M-1 Certificates and (ii) in no event will the Group I Class IM-2
Principal Distribution Amount with respect to any Distribution Date exceed the
Class IM-2 Certificate Principal Balance.
Group I Extra Principal Distribution Amount: With respect to any
Distribution Date, an amount equal to (i) prior to the Group I Stepdown Date,
the excess of (A) the sum of (I) the Group I Certificate Principal Balance
(reduced by the Group I Principal Funds with respect to such Distribution Date)
exclusive of Class C Group I Certificate Principal Balance and (II) $10,780,000
over (B) the Stated Principal Balance of the Group I Mortgage Loans and (ii) on
and after the Group I Stepdown Date, (A) the sum of (I) the Group I Certificate
Principal Balance exclusive of Class C Group I Certificate Principal Balance and
(II) the greater of (x) 3.50% of the Stated Principal Balance of the Group I
Mortgage Loans as of the end of the immediately preceding Due Period and (y)
$3,080,000 less (B) the Stated Principal Balance of the Group I Mortgage Loans
as of the end of the immediately preceding Due Period, provided, however, that
if on any Distribution Date a Group I Trigger Event is in effect, the Group I
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Extra Principal Distribution Amount will not be reduced to the percentage of the
then current Stated Principal Balance of the Group I Mortgage Loans (and will
remain fixed at such percentage of the then current Stated Principal Balance of
the Group I Mortgage Loans as of the Due Date immediately prior to the
occurrence of the Group I Trigger Event) until the next Distribution Date on
which a Group I Trigger Event is not in effect.
Group I Interest Funds: With respect to Group I Mortgage Loans and any
Distribution Date, the sum, without duplication, of (i) all scheduled interest
due during the related Due Period and received before the related Servicer
Remittance Date or advanced on or before the related Servicer Remittance Date
less the Servicing Fee with respect to the Group I Mortgage Loans, (ii) all
Advances relating to interest with respect to the Group I Mortgage Loans, (iii)
all Compensating Interest with respect to the Group I Mortgage Loans, (iv)
Liquidation Proceeds with respect to the Group I Mortgage Loans (to the extent
such Liquidation Proceeds relate to interest), (v) proceeds of any purchase
pursuant to Sections 2.02, 2.03, 3.12 or 9.01 (to the extent such proceeds
relate to interest), and (vi) prepayment penalties and late payment fees
received with respect to the Group I Mortgage Loans during the related
Prepayment Period, less all Non-Recoverable Advances with respect to the Group I
Mortgage Loans relating to interest reimbursed during the related Due Period.
Group I Marker Interests: The Middle-Tier REMIC Group I Regular
Interests, other than the Middle-Tier REMIC Group I Accrual Interest.
Group I Mortgage Loans: The pool of Mortgage Loans identified in the
Mortgage Loan Schedule as having a Mortgage Rate which is fixed for the life of
the related Mortgage, including any Mortgage Loans delivered in replacement
thereof.
Group I Net Rate: With respect to any Distribution Date, the weighted
average Net Mortgage Rate for Mortgage Loans in Loan Group I (calculated based
upon the Stated Principal Balance of such Mortgage Loans as of the preceding
Distribution Date) as of the related Due Date.
Group I Principal Distribution Amount: With respect to each
Distribution Date, the sum of (i) the Group I Principal Funds for such
Distribution Date and (ii) any Group I Extra Principal Distribution Amount for
such Distribution Date.
Group I Principal Funds: With respect to the Group I Mortgage Loans and
any Distribution Date, the sum, without duplication, of (i) the scheduled
principal due during the related Due Period and received before the related
Servicer Remittance Date or Advanced on or before the related Servicer
Remittance Date, (ii) prepayments collected in the related Prepayment Period,
(iii) the Stated Principal Balance of each Mortgage Loan that was purchased by
the Depositor or the Servicer during the related Prepayment Period or in the
case of a purchase pursuant to Section 9.01, on the Business Day prior to such
Distribution Date, (iv) the amount, if any, by which the aggregate unpaid
principal balance of any Replacement Mortgage Loan is less than the aggregate
unpaid principal balance of the related Deleted Mortgage Loans delivered by the
Depositor in connection with a substitution of a Mortgage Loan pursuant to
Section 2.03(c) and (v) all Liquidation Proceeds collected during the related
Due Period (to the extent such Liquidation Proceeds related to principal), less
all Non-Recoverable Advances relating to principal with respect to the Group I
Mortgage Loans and all Non-Recoverable Advances reimbursed during the related
Due Period.
Group I Required Percentage: As of any Distribution Date following a
Group I Stepdown Date, the quotient of (i) the excess of (A) the Stated
Principal Balances of the Group I Mortgage Loans as of such Distribution Date
over (B) the Certificate Principal Balance of the most senior Class of Group I
Certificates outstanding, prior to giving effect to distributions to be made on
such Distribution Date and (ii) the Stated Principal Balance of the Group I
Mortgage Loans as of such Distribution Date.
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Group I Stepdown Date: The later to occur of (i) the Distribution Date
in November 2004 or (ii) the first Distribution Date on which the Group I Class
A Certificate Principal Balance (reduced by the Group I Principal Funds with
respect to such Distribution Date) is less than or equal to 72.5% of the Stated
Principal Balances of the Group I Mortgage Loans as of the Distribution Date.
Group I Subordinated Certificates: The Class IM-1, Class IM-2 and Class
IB Certificates.
Group I Trigger Event: With respect to the Group I Certificates after
the Group I Stepdown Date, a Distribution Date on which the product of (A) two
(2.0) and (B) the quotient of (i) the aggregate Stated Principal Balance of all
Group I Mortgage Loans which are 60 or more days Delinquent (including, for the
purposes of this calculation, Group I Mortgage Loans in foreclosure and REO
Properties) and (ii) the Stated Principal Balance of the Group I Mortgage Loans
as of the preceding Servicer Advance Date, equals or exceeds the Group I
Required Percentage.
Group II Available Funds Cap: As of any Distribution Date with respect
to the Group II Certificates, a per annum rate equal to 12 times the quotient of
(i) the total interest received or available as an Advance on the Mortgage Loans
in Loan Group II based on the Net Mortgage Rates on the related Due Date divided
by (ii) the aggregate principal balance of the Group II Certificates as of the
first day of the applicable Accrual Period.
Group II Certificates: Any of the Class IIA-1, Class IIM-1, Class
IIM-2, Class IIB, Class IIL and Class IIP Certificates.
Group II Certificate Principal Balance: For any date of determination,
the sum of the Class IIA-1 Certificate Principal Balance, the Class IIM-1
Certificate Principal Balance, the Class IIM-2 Certificate Principal Balance,
the Class IIB Certificate Principal Balance and the Class C Group II Certificate
Principal Balance, in each case as of such date of determination.
Group II Class A Certificate Principal Balance: For any date of
determination, the Class IIA-1 Certificate Principal Balance.
Group II Class A Certificates: Any of the Class IIA-1 Certificates.
Group II Class A Principal Distribution Amount: With respect to any
Distribution Date (i) prior to the Group II Stepdown Date or any Distribution
Date on which a Group II Trigger Event exists, 100% of the Group II Principal
Distribution Amount for such Distribution Date and (ii) on or after the Group II
Stepdown Date where a Group II Trigger Event does not exist, the excess of (A)
the Group II Class A Certificate Principal Balance immediately prior to such
Distribution Date over (B) the lesser of (i) 64.5% of the Stated Principal
Balance of the Group II Mortgage Loans as of the end of the immediately
preceding Due Period and (II) the excess of the Stated Principal Balance of the
Group II Mortgage Loans as of the end of the immediately preceding Due Period
over $910,000; provided, however, that in no event will the Group II Class A
Principal Distribution Amount with respect to any Distribution Date exceed the
Group II Class A Certificate Principal Balance.
Group II Class B Principal Distribution Amount: With respect to any
Distribution Date on or after the Group II Stepdown Date and as long as a Group
II Trigger Event does not exist, the excess of (i) the sum of (A) the Group II
Class A Certificate Principal Balance (after taking into account distribution of
the Group II Class A Principal Distribution Amount on such Distribution Date),
(B) the Class IIM-1 Certificate Principal Balance after taking into account
distribution of the Group II Class IIM-1 Principal Distribution Amount on such
Distribution Date), (C) the Class IIM-2 Certificate Principal Balance (after
taking into account distribution of the Group II Class IIM-2 Principal
Distribution Amount for such Distribution Date), and (D) the Class IIB
Certificate Principal Balance immediately prior to such Distribution Date over
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(ii) the lesser of (A) 94.5% of the Stated Principal Balance of the Group II
Mortgage Loans as of the end of the immediately preceding Due Period and (B) the
excess of the Stated Principal Balances of the Group II Mortgage Loans as of the
end of the immediately preceding Due Period over $910,000; provided, however,
that after the Group II Class A Certificate Principal Balance, the Class IIM-1
Certificate Principal Balance and the Class IIM-2 Certificate Principal Balance
has been reduced to zero, the Group II Class B Principal Distribution Amount for
such Distribution Date will equal 100% of the Group II Principal Distribution
Amount for such Distribution Date remaining after any distributions on such
Class A, Class M-1 and Class M-2 Certificates and provided, further, however,
that in no event will the Group II Class B Principal Distribution Amount with
respect to any Distribution Date exceed the Class IIB Certificate Principal
Balance.
Group II Class IIM-1 Principal Distribution Amount: With respect to any
Distribution Date on or after the Group II Stepdown Date, 100% of the Group II
Principal Distribution Amount for such Distribution Date if the Group II Class A
Certificate Principal Balance has been reduced to zero and a Group II Trigger
Event exists, or as long as a Group II Trigger Event does not exist, the excess
of (i) the sum of (A) the Group II Class A Certificate Principal Balance (after
taking into account distributions of the Group II Class A Principal Distribution
Amount on such Distribution Date) and (B) the Class IIM-1 Certificate Principal
Balance immediately prior to such Distribution Date over (ii) the lesser of (A)
76.0% of the Stated Principal Balances of the Group II Mortgage Loans as of the
end of the immediately preceding Due Period and (B) the excess of the Stated
Principal Balances for the Group II Mortgage Loans as of the end of the
immediately preceding Due Period over $910,000. Notwithstanding the foregoing,
(i) on any Distribution Date prior to the Stepdown Date on which the Certificate
Principal Balance of each Class of Group II Class A Certificates has been
reduced to zero, the Group II Class IIM-1 Principal Distribution Amount will
equal the lesser of (A) the outstanding Certificate Principal Balance of the
Class IIM-1 Certificates and (B) 100% of the Group II Principal Distribution
Amount remaining after any distributions on such Class A Certificates and (ii)
in no event will the Group II Class IIM-1 Principal Distribution Amount with
respect to any Distribution Date exceed the Class IIM-1 Certificate Principal
Balance.
Group II Class IIM-2 Principal Distribution Amount: With respect to any
Distribution Date on or after the Group II Stepdown Date, 100% of the Group II
Principal Distribution Amount for such Distribution Date if the Group II Class A
Certificate Principal Balance and the Class IIM-1 Certificate Principal Balance
have been reduced to zero and a Group II Trigger Event exists, or as long as a
Group II Trigger Event does not exist, the excess of (i) the sum of (A) the
Group II Class A Certificate Principal Balance (after taking into account
distributions of the Group II Class A Principal Distribution Amount on such
Distribution Date), (B) the Class IIM-1 Certificate Principal Balance (after
taking into account distributions of the Group II Class IIM-1 Principal
Distribution Amount on such Distribution Date) and (C) the Class IIM-2
Certificate Principal Balance immediately prior to such Distribution Date over
(ii) the lesser of (A) 86.5% of the Stated Principal Balances of the Group II
Mortgage Loans as of the end of the immediately preceding Due Period and (B) the
excess of the Stated Principal Balances of the Group II Mortgage Loans as of the
end of the immediately preceding Due Period over $910,000. Notwithstanding the
foregoing, (i) on any Distribution Date prior to the Stepdown Date on which the
Certificate Principal Balance of each Class of Group II Class A Certificates and
the Class IIM-1 Certificates has been reduced to zero, the Group II Class IIM-2
Principal Distribution Amount will equal the lesser of (A) the outstanding
Certificate Principal Balance of the Class IIM-2 Certificates and (B) 100% of
the Group II Principal Distribution Amount remaining after any distributions on
such Class A and Class M-1 Certificates and (ii) in no event will the Group II
Class IIM-2 Principal Distribution Amount with respect to any Distribution Date
exceed the Class IIM-2 Certificate Principal Balance.
Group II Extra Principal Distribution Amount: With respect to any
Distribution Date, an amount equal to (i) prior to the Group II Stepdown Date,
the excess of (A) the sum of (I) the Group II Certificate Principal Balance
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(reduced by the Group II Principal Funds with respect to such Distribution Date)
exclusive of the Class C Group II Certificate Principal Balance and (II)
$5,005,000 over (B) the Stated Principal Balance of the Group II Mortgage Loans
as of such Distribution Date and (ii) on and after the Group II Stepdown Date,
(A) the sum of (I) the Group II Certificate Principal Balance, exclusive of the
Class C Group II Certificate Principal Balance and (II) the greater of (x) 5.50%
of the Stated Principal Balance of the Group II Mortgage Loans as of the end of
the immediately preceding Due Period and (y) $910,000 less (B) the Stated
Principal Balance of the Group II Mortgage Loans as of the end of the
immediately preceding Due Period; provided, however, that if on any Distribution
Date, a Group II Trigger Event is in effect, the Group II Extra Principal
Distribution Amount will not be reduced to the percentage of the then current
Stated Principal Balance of the Group II Mortgage Loans (and will remain fixed
at such percentage of the then current Stated Principal Balance of the Group II
Mortgage Loans as of the Due Date immediately prior to the occurrence of the
Group II Trigger Event) until the next Distribution Date on which a Group II
Trigger Event is not in effect.
Group II Interest Funds: With respect to Group II Mortgage Loans and
any Distribution Date, the sum, without duplication, of (i) all scheduled
interest due during the related Due Period and received before the related
Servicer Remittance Date or advanced on or before the related Servicer
Remittance Date less the Servicing Fee with respect to the Group II Mortgage
Loans, (ii) all Advances relating to interest with respect to the Group II
Mortgage Loans, (iii) all Compensating Interest with respect to the Group II
Mortgage Loans, (iv) Liquidation Proceeds with respect to the Group II Mortgage
Loans (to the extent such Liquidation Proceeds relate to interest), (v) proceeds
of any purchase pursuant to Sections 2.02, 2.03, 3.12 or 9.01 (to the extent
such proceeds relate to interest) and (vi) prepayment penalties and late payment
fees received with respect to the Group II Mortgage Loans during the related
Prepayment Period, less all Non-Recoverable Advances with respect to the Group
II Mortgage Loans relating to interest reimbursed during the related Due Period.
Group II Marker Interests: The Middle-Tier REMIC Group II Regular
Interests, other than the Middle-Tier REMIC Group II Accrual Interest.
Group II Mortgage Loans: The pool of Mortgage Loans identified in the
Mortgage Loan Schedule as having a Mortgage Rate which is adjustable, including
any Mortgage Loans delivered in replacement thereof.
Group II Net Rate: With respect to any Distribution Date, the weighted
average Net Mortgage Rate for Mortgage Loans in Group II (calculated based upon
the Stated Principal Balance of such Mortgage Loans as of the preceding
Distribution Date) as of the related Due Date.
Group II Principal Distribution Amount: With respect to each
Distribution Date, the sum of (i) the Group II Principal Funds for such
Distribution Date and (ii) any Group II Extra Principal Distribution Amount for
such Distribution Date.
Group II Principal Funds: With respect to the Group II Mortgage Loans
and any Distribution Date, the sum, without duplication, of (i) the scheduled
principal due during the related Due Period and received before the related
Servicer Remittance Date or advanced on or before the related Servicer
Remittance Date, (ii) prepayments collected in the related Prepayment Period,
(iii) the Stated Principal Balance of each Mortgage Loan that was purchased by
the Depositor or the Servicer during the related Prepayment Period or, in the
case of a purchase pursuant to Section 9.01, on the Business Day prior to such
Distribution Date, (iv) the amount, if any, by which the aggregate unpaid
principal balance of any Replacement Mortgage Loan is less than the aggregate
unpaid principal of the related Deleted Mortgage Loans delivered by the
Depositor in connection with a substitution of a Mortgage Loan pursuant to
Section 2.03(c) and (v) all Liquidation Proceeds collected during the related
Due Period (to the extent such Liquidation Proceeds related to principal), less
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all Non-Recoverable Advances relating to principal with respect to the Group II
Mortgage Loans and all Non-Recoverable Advances reimbursed during the related
Due Period.
Group II Required Percentage: As of any Distribution Date following a
Group II Stepdown Date, the quotient of (i) the excess of (A) the Stated
Principal Balances of the Group II Mortgage Loans as of such Distribution Date,
over (B) the Certificate Principal Balance of the most senior Class of Group II
Certificates outstanding, prior to giving effect to distributions to be made on
such Distribution Date and (ii) the Stated Principal Balance of the Group II
Mortgage Loans as of such Distribution Date.
Group II Stepdown Date: The later to occur of (i) the Distribution Date
in November 2004 or (ii) the first Distribution Date on which (A) the Group II
Class A Certificate Principal Balance (reduced by the Group II Principal Funds
with respect to such Distribution Date) is less than or equal to (B) 64.5% of
the Stated Principal Balances of the Group II Mortgage Loans as of such
Distribution Date.
Group II Subordinated Certificates: The Class IIM-1, Class IIM-2 and
Class IIB Certificates.
Group II Trigger Event: With respect to the Group II Certificates after
the Group II Stepdown Date, a Distribution Date on which the product of (A) two
and one-half (2.50) and (B) the quotient of (i) the aggregate Stated Principal
Balance of all Group II Mortgage Loans which are 60 or more days Delinquent
(including, for the purposes of this calculation, Group II Mortgage Loans in
foreclosure and REO Properties) and (ii) the Stated Principal Balance of the
Group II Mortgage Loans as of the preceding Servicer Advance Date, equals or
exceeds the Group II Required Percentage.
Group II Weighted Maximum Rate Cap: As of any Distribution Date, a rate
equal to (i) the weighted average of the Maximum Mortgage Rates on the Group II
Mortgage Loans (calculated based upon the Stated Principal Balance of such
Mortgage Loans as of the preceding Distribution Date) on such Distribution Date
minus (ii) the Servicing Fee Rate.
Indenture: An indenture relating to the issuance of notes guaranteed by
the NIMs Insurer.
Initial Adjustment Date: As to any Mortgage Loan in Loan Group II, the
first Adjustment Date following the origination of such Mortgage Loan.
Initial Certificate Principal Balance: With respect to any Certificate,
the Certificate Principal Balance of such Certificate or any predecessor
Certificate on the Closing Date as set forth in Section 5.01 hereof.
Initial Mortgage Rate: As to each Mortgage Loan, the Mortgage Rate in
effect prior to the Initial Adjustment Date.
Insurance Policy: With respect to any Mortgage Loan included in the
Trust Fund, any insurance policy, including all riders and endorsements thereto
in effect with respect to such Mortgage Loan, including any replacement policy
or policies for any insurance policies.
Insurance Proceeds: Proceeds paid in respect of the Mortgage Loans
pursuant to any Insurance Policy or any other insurance policy covering a
Mortgage Loan, to the extent such proceeds are payable to the mortgagee under
the Mortgage, the Servicer or the trustee under the deed of trust and are not
applied to the restoration of the related Mortgaged Property or released to the
Mortgagor in accordance with the procedures that the Servicer would follow in
servicing mortgage loans held for its own account, in each case other than any
amount included in such Insurance Proceeds in respect of Insured Expenses.
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Insured Expenses: Expenses covered by an Insurance Policy or any other
insurance policy with respect to the Mortgage Loans.
Interest Carryforward Amount: Any of the Class IA-1 Interest
Carryforward Amount, the Class IA-2 Interest Carryforward Amount, the Class IA-3
Interest Carryforward Amount, the Class IA-4 Interest Carryforward Amount, the
Class IA-5 Interest Carryforward Amount, the Class IA-6 Interest Carryforward
Amount, the Class IM-1 Interest Carryforward Amount, the Class IM-2 Interest
Carryforward Amount, the Class IB Interest Carryforward Amount, the Class C
Group I Interest Carryforward Amount, the Class IIA-1 Interest Carryforward
Amount, the Class IIM-1 Interest Carryforward Amount, the Class IIM-2 Interest
Carryforward Amount, the Class IIB Interest Carryforward Amount or the Class C
Group II Interest Carryforward Amount, as the case may be.
Interest Carryover Amount: Any of the Class IIA-1 Interest Carryover
Amount, the Class IIM-1 Interest Carryover Amount, the Class IIM-2 Interest
Carryover Amount or the Class IIB Interest Carryover Amount, as the case may be.
Interest Determination Date: With respect to the Group II Certificates
and the Class IA-1 Certificates, (i) for any Accrual Period other than the first
Accrual Period, the second LIBOR Business Day preceding the commencement of such
Accrual Period and (ii) for the first Accrual Period, October 11, 2001.
Latest Possible Maturity Date: The first Distribution Date following
the third anniversary of the scheduled maturity date of the Mortgage Loan in the
Trust Fund having the latest scheduled maturity date as of the Cut-off Date.
LIBOR Business Day: Any day on which banks in the City of London,
England and New York City, U.S.A. are open and conducting transactions in
foreign currency and exchange.
Liquidated Loan: With respect to any Distribution Date, a defaulted
Mortgage Loan that has been liquidated through deed-in-lieu of foreclosure,
foreclosure sale, trustee's sale or other realization as provided by applicable
law governing the real property subject to the related Mortgage and any security
agreements and as to which the Servicer has certified (in accordance with
Section 3.12) in the related Prepayment Period that it has received all amounts
it expects to receive in connection with such liquidation.
Liquidation Proceeds: Amounts, including Insurance Proceeds, received
in connection with the partial or complete liquidation of Mortgage Loans,
whether through trustee's sale, foreclosure sale, sale by the Servicer pursuant
to this Agreement or otherwise or amounts received in connection with any
condemnation or partial release of a Mortgaged Property and any other proceeds
received in connection with an REO Property, less the sum of related
unreimbursed Advances, Servicing Fees, Servicing Advances and any other expenses
related to such Mortgage Loan.
Loan Group: Either of the Group I Mortgage Loans or the Group II
Mortgage Loans.
Loan Group I: The Group I Mortgage Loans.
Loan Group II: The Group II Mortgage Loans.
Loan-to-Value Ratio: The fraction, expressed as a percentage, the
numerator of which is the original principal balance of the related Mortgage
Loan and the denominator of which is the lesser of (X) the Appraised Value of
the related Mortgaged Property and (Y) the sales price of the related Mortgaged
Property at the time of origination.
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Lower-Tier REMIC: The REMIC described in Section 2.07 hereof which is
the issuer of the Lower-Tier REMIC Regular Interests and the LR Interest.
Lower-Tier REMIC Regular Interest I: An uncertificated regular interest
in the Lower-Tier REMIC having the characteristics described in Section 2.07.
Lower-Tier REMIC Regular Interest II: An uncertificated regular
interest in the Lower-Tier REMIC having the characteristics described in Section
2.07.
Lower-Tier REMIC Regular Interests: Lower-Tier REMIC Regular Interest I
and Lower-Tier REMIC Regular Interest II.
LR Interest: The sole class of "residual interest" in the Lower-Tier
REMIC.
Maximum Mortgage Rate: With respect to each Group II Mortgage Loan, the
maximum rate of interest set forth as such in the related Mortgage Note.
Middle-Tier REMIC: The REMIC described in Section 2.07 which is the issuer of
the Middle-Tier REMIC Regular Interests and the MR Interest.
Middle-Tier REMIC Accrual Interests: The Middle-Tier REMIC Group I
Accrual Interest and the Middle-Tier REMIC Group II Accrual Interest.
Middle-Tier REMIC Class IA-1 Interest: A regular interest in the
Middle-Tier REMIC having the characteristics described in Section 2.07.
Middle-Tier REMIC Class IA-2 Interest: A regular interest in the
Middle-Tier REMIC having the characteristics described in Section 2.07.
Middle-Tier REMIC Class IA-3 Interest: A regular interest in the
Middle-Tier REMIC having the characteristics described in Section 2.07.
Middle-Tier REMIC Class IA-4 Interest: A regular interest in the
Middle-Tier REMIC having the characteristics described in Section 2.07.
Middle-Tier REMIC Class IA-5 Interest: A regular interest in the
Middle-Tier REMIC having the characteristics described in Section 2.07.
Middle-Tier REMIC Class IA-6 Interest: A regular interest in the
Middle-Tier REMIC having the characteristics described in Section 2.07.
Middle-Tier REMIC Class IB Interest: A regular interest in the
Middle-Tier REMIC having the characteristics described in Section 2.07.
Middle-Tier REMIC Class IM-1 Interest: A regular interest in the
Middle-Tier REMIC having the characteristics described in Section 2.07.
Middle-Tier REMIC Class IM-2 Interest: A regular interest in the
Middle-Tier REMIC having the characteristics described in Section 2.07.
Middle-Tier REMIC Class IIA-1 Interest: A regular interest in the
Middle-Tier REMIC having the characteristics described in Section 2.07.
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Middle-Tier REMIC Class IIM-1 Interest: A regular interest in the
Middle-Tier REMIC having the characteristics described in Section 2.07.
Middle-Tier REMIC Class IIM-2 Interest: A regular interest in the
Middle-Tier REMIC having the characteristics described in Section 2.07.
Middle-Tier REMIC Class IIB Interest: A regular interest in the
Middle-Tier REMIC having the characteristics described in Section 2.07.
Middle-Tier REMIC Group I Accrual Interest: A regular interest in the
Middle-Tier REMIC having the characteristics described in Section 2.07.
Middle-Tier REMIC Group I Regular Interests: The Middle-Tier REMIC
Class IA-1 Interest, the Middle-Tier REMIC Class IA-2 Interest, the Middle-Tier
REMIC Class IA-3 Interest, the Middle-Tier REMIC Class IA-4 Interest, the
Middle-Tier REMIC Class IA-5 Interest, the Middle-Tier REMIC Class IA-6
Interest, the Middle-Tier REMIC Class IM-1 Interest, the Middle-Tier REMIC Class
IM-2 Interest, the Middle-Tier REMIC IB Interest and the Middle-Tier REMIC Group
I Accrual Interest.
Middle-Tier REMIC Group II Accrual Interest: A regular interest in the
Middle-Tier REMIC having the characteristics described in Section 2.07.
Middle-Tier REMIC Group II Regular Interests: The Middle-Tier REMIC
Class IIA-1 Interest, the Middle-Tier REMIC Class IIM-1 Interest, the
Middle-Tier REMIC Class IIM-2 Interest, the Middle-Tier REMIC Class IIB Interest
and the Middle-Tier REMIC Group II Accrual Interest.
Middle-Tier REMIC Regular Interests: Each of the Middle-Tier REMIC
Group I Regular Interests and the Middle-Tier REMIC Group II Regular Interests.
Minimum Mortgage Rate: With respect to each Group II Mortgage Loan, the
minimum rate of interest set forth as such in the related Mortgage Note.
Monthly Statement: The statement delivered to the Certificateholders
pursuant to Section 4.05.
Moody's: Xxxxx'x Investors Service, Inc.
Mortgage: The mortgage, deed of trust or other instrument creating a
first lien on or first priority ownership interest in an estate in fee simple in
real property securing a Mortgage Note.
Mortgage File: The mortgage documents listed in Section 2.01 hereof
pertaining to a particular Mortgage Loan and any additional documents delivered
to the Trustee to be added to the Mortgage File pursuant to this Agreement.
Mortgage Loans: Such of the Group I Mortgage Loans and Group II
Mortgage Loans transferred and assigned to the Trustee pursuant to the
provisions hereof as from time to time are held as a part of the Trust Fund
(including any REO Property), the mortgage loans so held being identified in the
Mortgage Loan Schedule, notwithstanding foreclosure or other acquisition of
title of the related Mortgaged Property. Any mortgage loan that was intended by
the parties hereto to be transferred to the Trust Fund as indicated by such
Mortgage Loan Schedule which is in fact not so transferred for any reason shall
continue to be a Mortgage Loan hereunder until the Purchase Price with respect
thereto has been paid to the Trust Fund.
Mortgage Loan Schedule: The list of Mortgage Loans (as from time to
time amended by the Trustee to reflect the deletion of Deleted Mortgage Loans
and the addition of Replacement Mortgage Loans pursuant to the provisions of
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this Agreement) transferred to the Trustee as part of the Trust Fund and from
time to time subject to this Agreement, attached hereto as Exhibit F, setting
forth the following information with respect to each Mortgage Loan:
(i) the loan number;
(ii) the Appraised Value;
(iii) the unpaid principal balance of the Mortgage Loan;
(iv) the Initial Mortgage Rate;
(v) the maturity date and the months remaining before maturity
date;
(vi) the original principal balance;
(vii) the Cut-off Date Principal Balance;
(viii) the first payment date of the Mortgage Loan;
(ix) the Scheduled Payment in effect as of the Cut-off Date;
(x) the Loan-to-Value Ratio at origination;
(xi) a code indicating whether the residential dwelling at the time
of origination was represented to be owner-occupied;
(xii) a code indicating the property type;
(xiii) with respect to each Group II Mortgage Loan;
(a) the frequency of each Adjustment Date;
(b) the next Adjustment Date;
(c) the Maximum Mortgage Rate;
(d) the Minimum Mortgage Rate;
(e) the Mortgage Rate as of the Cut-off Date;
(f) the related Periodic Rate Cap;
(g) the Gross Margin; and
(xiv) location of the related Mortgaged Property;
(xv) a code indicating whether a prepayment penalty is applicable
and, if so, the term of such prepayment penalty;
(xvi) the Credit Score and date obtained; and
(xvii) whether a Mortgage Loan is a Simple Interest Mortgage Loan.
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Mortgage Note: The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan
and all amendments, modifications and attachments thereto.
Mortgage Pool: The aggregate of the Mortgage Loans identified in the
Mortgage Loan Schedule.
Mortgage Rate: The annual rate of interest borne by a Mortgage Note
from time to time.
Mortgaged Property: The underlying property securing a Mortgage Loan.
Mortgagor: The obligor on a Mortgage Note.
MR Interest: The sole class of "residual interest" in the Middle-Tier
REMIC.
Net Mortgage Rate: As to each Mortgage Loan, and at any time, the per
annum rate equal to the then current Mortgage Rate less the Servicing Fee Rate.
NIM Notes: The notes to be insured pursuant to the Indenture.
NIMs Insurer: Any insurer that is guaranteeing certain payments under
notes issued by a trust, the principal assets of which include the Class C
Certificates and the Class P Certificates.
Non-Book-Entry Certificate: Any Certificate other than a Book-Entry
Certificate.
Non-Recoverable Advance: Any portion of an Advance previously made or
proposed to be made by the Servicer that, in the good faith judgment of the
Servicer, will not or, in the case of a current delinquency, would not, be
ultimately recoverable by the Servicer from the related Mortgagor, related
Liquidation Proceeds or otherwise.
Non-Recoverable Servicing Advance: Any portion of a Servicing Advance
previously made or proposed to be made by the Servicer that, in the good faith
judgment of the Servicer, will not be ultimately recoverable by the Servicer
from the related Mortgagor, related Liquidation Proceeds or otherwise.
Non-Supported Interest Shortfall: As defined in Section 4.02.
Officer's Certificate: A certificate (i) signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, a vice president (however
denominated), an Assistant Vice President, the Treasurer, the Secretary, or one
of the assistant treasurers or assistant secretaries of the Depositor, the
Servicer (or any other officer customarily performing functions similar to those
performed by any of the above designated officers and also to whom, with respect
to a particular matter, such matter is referred because of such officer's
knowledge of and familiarity with a particular subject) or (ii), if provided for
in this Agreement, signed by a Servicing Officer, as the case may be, and
delivered to the Depositor, the Servicer and the Trustee, as the case may be, as
required by this Agreement.
One-Month LIBOR: With respect to any Accrual Period, the rate
determined by the Servicer on the related Interest Determination Date on the
basis of (a) the offered rates for one-month United States dollar deposits, as
such rates appear on Telerate page 3750, as of 11:00 a.m. (London time) on such
Interest Determination Date or (b) if such rate does not appear on Telerate Page
3750 as of 11:00 a.m. (London time), the offered rates of the Reference Banks
for one-month United States dollar deposits, as such rates appear on the Reuters
Screen LIBO Page, as of 11:00 a.m. (London time) on such Interest Determination
Date. If One-Month LIBOR is determined pursuant to clause (b) above, on each
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Interest Determination Date, One-Month LIBOR for the related Accrual Period will
be established by the Servicer as follows:
(i) If on such Interest Determination Date two or more Reference
Banks provide such offered quotations, One-Month LIBOR for the
related Accrual Period shall be the arithmetic mean of such
offered quotations (rounded upwards if necessary to the
nearest whole multiple of 0.03125%).
(ii) If on such Interest Determination Date fewer than two
Reference Banks provide such offered quotations, One-Month
LIBOR for the related Accrual Period shall be the higher of
(i) One-Month LIBOR as determined on the previous Interest
Determination Date and (ii) the Reserve Interest Rate.
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Depositor or the Servicer, reasonably acceptable to each addressee of
such opinion; provided, however, that with respect to Section 6.04 or 10.01, or
the interpretation or application of the REMIC Provisions, such counsel must (i)
in fact be independent of the Depositor and the Servicer, (ii) not have any
direct financial interest in the Depositor or the Servicer or in any affiliate
of either, and (iii) not be connected with the Depositor or the Servicer as an
officer, employee, promoter, underwriter, trustee, partner, director or person
performing similar functions.
Optional Termination: The termination of either Loan Group hereunder
pursuant to the purchase of the Mortgage Loans pursuant to the last sentence of
Section 9.01 hereof.
Optional Termination Amounts: With respect to either Loan Group, the
Repurchase Price paid by the Servicer in connection with any repurchase of all
of the Mortgage Loans in such Loan Group pursuant to Section 9.01.
Optional Termination Date: With respect to either Loan Group, the
Distribution Date on which the aggregate Stated Principal Balance of the
Mortgage Loans in such Loan Group is less than or equal to 10% of the aggregate
Stated Principal Balance of the Mortgage Loans in such Loan Group as of the
Cut-off Date.
Original Mortgage Loan: The mortgage loan refinanced in connection with
the origination of a Refinancing Mortgage Loan.
OTS: The Office of Thrift Supervision.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except: (i) Certificates theretofore canceled by the Servicer or
delivered to the Servicer for cancellation; and (ii) Certificates in exchange
for which or in lieu of which other Certificates have been executed by the
Depositor and delivered by the Servicer pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Distribution Date, a Mortgage Loan
with a Stated Principal Balance greater than zero that was not the subject of a
Principal Prepayment in full, and that did not become a Liquidated Loan, prior
to the end of the related Due Period.
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Ownership Interest: As to any Certificate, any ownership interest in
such Certificate including any interest in such Certificate as the Holder
thereof and any other interest therein, whether direct or indirect, legal or
beneficial.
Pass-Through Rate: With respect to any Certificate, the interest rate
borne by such Certificate.
Paying Agent: As defined in Section 5.11 hereof.
Percentage Interest: With respect to:
(iii) any Class, the percentage interest in the undivided beneficial
ownership interest in the related Certificate Group evidenced
by such Class which shall be equal to the Class Certificate
Principal Balance of such Class divided by the Class Principal
Balance of all Classes in such Certificate Group; and
(iv) any Certificate, the Percentage Interest evidenced thereby of
the related Class shall equal the percentage obtained by
dividing the Denomination of such Certificate by the aggregate
of the Denominations of all Certificates of such Class; except
that in the case of any Class L, Class P or Class R
Certificate, the Percentage Interest with respect to such
Certificate shown on the face of such Certificate.
Periodic Rate Cap: As to each Group II Mortgage Loan and the related
Mortgage Note, the provision therein that limits permissible increases and
decreases in the Mortgage Rate on any Adjustment Date.
Permitted Activities: The primary activities of the trust created
pursuant to this Agreement which shall be:
(i) holding Mortgage Loans transferred from the Depositor and
other assets of the Trust Fund, including [any credit
enhancement and passive derivative financial instruments that
pertain to beneficial interests issued or sold to parties
other than the Depositor, its Affiliates, or its agents];
(ii) issuing Certificates and other interests in the assets of the
Trust Fund;
(iii) receiving collections on the Mortgage Loans and making
payments on such Certificates and interests in accordance with
the terms of this Agreement; and
(iv) engaging in other activities that are necessary or incidental
to accomplish these limited purposes, which activities cannot
be contrary to the status of the Trust Fund as a qualified
special purpose entity under existing accounting literature.
Permitted Investments: At any time, any one or more of the following
obligations and securities:
(v) obligations of the United States or any agency thereof,
provided such obligations are backed by the full faith and
credit of the United States;
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(vi) general obligations of or obligations guaranteed by any state
of the United States or the District of Columbia receiving the
highest long-term debt rating of each Rating Agency rating the
Certificates;
(vii) commercial or finance company paper, other than commercial or
finance company paper issued by Chase or any of its
Affiliates, which is then receiving the highest commercial or
finance company paper rating of each such Rating Agency;
(viii) certificates of deposit, demand or time deposits, or bankers'
acceptances (other than banker's acceptances issued by Chase
or any of its Affiliates) issued by any depository institution
or trust company incorporated under the laws of the United
States or of any state thereof and subject to supervision and
examination by federal and/or state banking authorities,
provided that the commercial paper and/or long term unsecured
debt obligations of such depository institution or trust
company are then rated one of the two highest long-term and
the highest short-term ratings of each such Rating Agency for
such securities;
(ix) demand or time deposits or certificates of deposit issued by
any bank or trust company or savings institution to the extent
that such deposits are fully insured by the FDIC;
(x) guaranteed reinvestment agreements issued by any bank,
insurance company or other corporation rated in the two
highest long-term or the highest short-term ratings of each
Rating Agency containing, at the time of the issuance of such
agreements, such terms and conditions as will not result in
the downgrading or withdrawal of the rating then assigned to
the Certificates by any such Rating Agency as evidenced by a
letter from each Rating Agency;
(xi) repurchase obligations with respect to any security described
in clauses (i) and (ii) above, in either case entered into
with a depository institution or trust company (acting as
principal) described in clause (v) above;
(xii) securities (other than stripped bonds, stripped coupons or
instruments sold at a purchase price in excess of 115% of the
face amount thereof) bearing interest or sold at a discount
issued by any corporation, other than Chase or any of its
Affiliates, incorporated under the laws of the United States
or any state thereof which, at the time of such investment,
have one of the two highest long term ratings of each Rating
Agency;
(xiii) interests in any money market fund which at the date of
acquisition of the interests in such fund and throughout the
time such interests are held in such fund has the highest
applicable long term rating by each such Rating Agency; and
(xiv) short term investment funds sponsored by any trust company or
national banking association incorporated under the laws of
the United States or any state thereof, other than Chase or
any of its Affiliates, which on the date of acquisition has
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been rated by each such Rating Agency in their respective
highest applicable rating category;
provided, that no such instrument shall be a Permitted Investment if such
instrument (i) evidences the right to receive interest only payments with
respect to the obligations underlying such instrument, (ii) is purchased at a
premium or above par or (iii) is purchased at a deep discount; provided,
further, that no such instrument shall be a Permitted Investment (A) if such
instrument evidences principal and interest payments derived from obligations
underlying such instrument and the interest payments with respect to such
instrument provide a yield to maturity of greater than 120% of the yield to
maturity at par of such underlying obligations, or (B) if it may be redeemed at
a price below the purchase price (the foregoing clause (B) not to apply to
investments in units of money market funds pursuant to clause (ix) above); and
provided, further, that no amount beneficially owned by any REMIC (including,
without limitation, any amounts collected by the Servicer but not yet deposited
in the Collection Account) may be invested in investments (other than money
market funds) treated as equity interests for Federal income tax purposes,
unless the Servicer shall receive an Opinion of Counsel, at the expense of the
party requesting that such investment be made, to the effect that such
investment will not adversely affect the status of any of the Lower Tier REMIC,
the Middle-Tier REMIC or the Upper-Tier REMIC as a REMIC under the Code or
result in imposition of a tax on the Trust Fund. Permitted Investments that are
subject to prepayment or call may not be purchased at a price in excess of par.
Permitted Transferee: Any Person other than (i) the United States, any
State or political subdivision thereof, or any agency or instrumentality of any
of the foregoing, (ii) a foreign government, International Organization or any
agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in section 521 of the Code) that
is exempt from tax imposed by Chapter 1 of the Code (including the tax imposed
by section 511 of the Code on unrelated business taxable income) on any excess
inclusions (as defined in section 860E(c)(1) of the Code) with respect to any
Class R Certificate, (iv) rural electric and telephone cooperatives described in
section 1381(a)(2)(C) of the Code, and (v) a Person that is not a citizen or
resident of the United States, a corporation or partnership (or other entity
treated as a corporation or partnership for United States 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 or an estate whose income from sources
without the United States is includible in gross income for United States
federal income tax purposes regardless of its connection with the conduct of a
trade or business within the United States, 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 United States persons have authority to control all
substantial decisions of the trust, unless such Person has furnished the
transferor, the Servicer and the Trustee with a duly completed Internal Revenue
Service Form W-8ECI or applicable successor form. The terms "United States,"
"State" and "International Organization" shall have the meanings set forth in
section 7701 of the Code. A corporation will not be treated as an
instrumentality of the United States or of any State thereof for these purposes
if all of its activities are subject to tax and, with the exception of the
Federal Home Loan Mortgage Corporation, a majority of its board of directors is
not selected by such government unit.
Person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government, or any agency or political subdivision thereof.
Pool Stated Principal Balance: As to any Distribution Date the
aggregate of the Stated Principal Balances, as of such Distribution Date, of the
Mortgage Loans that were Outstanding Mortgage Loans as of such date.
Prepayment Assumption: A rate of prepayment, as described in the
Prospectus Supplement in the definition of "Modeling Assumptions," relating to
the Certificates in a Certificate Group.
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Prepayment Interest Shortfall: With respect to any Distribution Date,
for each Mortgage Loan that was the subject of a partial Principal Prepayment or
a Principal Prepayment in full (other than a Principal Prepayment in full
resulting from the purchase of a Mortgage Loan pursuant to Section 2.02, 2.03,
3.12 or 9.01 hereof), the amount, if any, by which (i) one month's interest at
the applicable Net Mortgage Rate on the Stated Principal Balance of such
Mortgage Loan as of the preceding Distribution Date or in the case of a partial
Principal Prepayment on the amount of such prepayment exceeds (ii) the amount of
interest paid or collected in connection with such Principal Prepayment.
Prepayment Period: As to any Distribution Date, the period beginning
with the opening of business on the first day of the calendar month preceding
the month in which such Distribution Date occurs and ending on the close of
business on the last day of such month.
Principal Prepayment: Any Mortgagor payment or other recovery of (or
proceeds with respect to) principal on a Mortgage Loan (including Mortgage Loans
purchased or repurchased under Sections 2.02, 2.03, 3.12 and 9.01 hereof) that
is received in advance of its scheduled Due Date and is not accompanied by an
amount as to interest representing scheduled interest due on any date or dates
in any month or months subsequent to the month of prepayment. Partial Principal
Prepayments shall be applied by the Servicer in accordance with the terms of the
related Mortgage Note.
Prospectus Supplement: The Prospectus Supplement dated October 11, 2001
relating to the public offering of certain of the Group I Certificates and the
Group II Certificates.
PUD: A Planned Unit Development.
Purchase Price: With respect to any Mortgage Loan (x) required to be
repurchased by a Seller, pursuant to Section 2.02 or, 2.03 hereof or (y) that
the Servicer has a right to purchase pursuant to Section 3.12 hereof, an amount
equal to the sum of (i) 100% of the unpaid principal balance of the Mortgage
Loan as of the date of such purchase together with any unreimbursed Servicing
Advances and (ii) accrued interest thereon at the applicable Net Mortgage Rate
from (a) the date through which interest was last paid by the Mortgagor to (b)
the Due Date in the month in which the Purchase Price is to be distributed to
Certificateholders.
Rating Agency: Xxxxx'x and Fitch. If any such organization or its
successor is no longer in existence, "Rating Agency" shall be a nationally
recognized statistical rating organization, or other comparable Person,
designated by the Depositor, notice of which designation shall be given to the
Trustee. References herein to a given rating category of a Rating Agency shall
mean such rating category without giving effect to any modifiers.
Realized Loss: With respect to (i) a Liquidated Loan, the amount, if
any, by which the Stated Principal Balance and accrued interest thereon at the
Net Mortgage Rate exceeds the amount actually recovered by the Servicer with
respect thereto (net of reimbursement of Advances and Servicing Advances) at the
time such Mortgage Loan became a Liquidated Loan or (ii) with respect to a
Mortgage Loan which is not a Liquidated Loan, any amount of principal that the
Mortgagor is no longer legally required to pay (except for the extinguishment of
debt that results from the exercise of remedies due to default by the
Mortgagor).
Record Date: With respect to any Distribution Date, the close of
business on the last Business Day of the month preceding the month in which the
applicable Distribution Date occurs.
Reference Banks: Barclays Bank PLC, Chase, Citibank, N.A. and NatWest,
N.A.; provided that if any of the foregoing banks are not suitable to serve as a
Reference Bank, then any leading banks selected by the Servicer which are
engaged in transactions in Eurodollar deposits in the international Eurocurrency
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market (i) with an established place of business in London, England, (ii) whose
quotations appear on the Reuters Screen LIBO Page on the relevant Interest
Determination Date, (iii) which have been designated as such by the Servicer and
(iv) not controlling, controlled by, or under common control with the Depositor,
the Servicer, the Sellers or any successor Servicer.
Refinancing Mortgage Loan: Any Mortgage Loan originated in connection
with the refinancing of an existing mortgage loan.
Regular Certificate: Any one of the Group I Certificates or the Group
II Certificates.
Related Certificate: For each Middle-Tier REMIC Regular Interest, the
Certificate set forth below:
Middle-Tier REMIC Class IA-1 Interest Class IA-1 Certificates
Middle-Tier REMIC Class IA-2 Interest Class IA-2 Certificates
Middle-Tier REMIC Class IA-3 Interest Class IA-3 Certificates
Middle-Tier REMIC Class IA-4 Interest Class IA-4 Certificates
Middle-Tier REMIC Class IA-5 Interest Class IA-5 Certificates
Middle-Tier REMIC Class IA-6 Interest Class IA-6 Certificates
Middle-Tier REMIC Class IB Interest Class IB Certificates
Middle-Tier REMIC Class IM-1 Interest Class IM-1 Certificates
Middle-Tier REMIC Class IM-2 Interest Class IM-2 Certificates
Middle-Tier REMIC Class IIA-1 Interest Class IIA-1 Certificates
Middle-Tier REMIC Class IIB Interest Class IIB Certificates
Middle-Tier REMIC Class IIM-1 Interest Class IIM-1 Certificates
Middle-Tier REMIC Class IIM-2 Interest Class IIM-2 Certificates
REMIC: A "real estate mortgage investment conduit" within the meaning
of section 860D of the Code. References herein to "the REMIC" shall mean any of
(or, as the context requires, all of) the Lower-Tier REMIC, the Middle-Tier
REMIC or the Upper-Tier REMIC.
REMIC Provisions: Provisions of the federal income tax law relating to
real estate mortgage investment conduits, which appear at sections 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
proposed, temporary and final regulations and published rulings, notices and
announcements promulgated thereunder, as the foregoing may be in effect from
time to time as well as provisions of applicable state laws.
REMIC Regular Interests: The Class IA-1 Certificates, the Class IA-2
Certificates, the Class IA-3 Certificates, the Class IA-4 Certificates, the
Class IA-5 Certificates, the Class IA-6 Certificates, the Class IM-1
Certificates, the Class IM-2 Certificates, the Class IB Certificates, the
Upper-Tier REMIC IIA-1 Interest, the Upper-Tier REMIC IIM-1 Interest, the
Upper-Tier REMIC IIM-2 Interest, the Upper-Tier REMIC IIB Interest and the
Upper-Tier REMIC Class C Interest.
REO Property: A Mortgaged Property acquired by the Servicer through
foreclosure or deed-in-lieu of foreclosure in connection with a defaulted
Mortgage Loan.
Replacement Mortgage Loan: A Mortgage Loan substituted by the Depositor
for a Deleted Mortgage Loan, which must, on the date of such substitution, as
confirmed in a Request for Release, substantially in the form of Exhibit M, (i)
have a Stated Principal Balance, after deduction of the principal portion of the
Scheduled Payment due in the month of substitution, not in excess of, and not
less than 90% of the Stated Principal Balance of the Deleted Mortgage Loan; (ii)
with respect to any Group I Mortgage Loan, have a Mortgage Rate not less than or
no more than 1% per annum higher than the Mortgage Rate of the Deleted Mortgage
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Loan and, with respect to any Group II Mortgage Loan: (a) have a Maximum
Mortgage Rate no more than 1% per annum higher or lower than the Maximum
Mortgage Rate of the Deleted Mortgage Loan; (b) have a Minimum Mortgage Rate no
more than 1% per annum higher or lower than the Minimum Mortgage Rate of the
Deleted Mortgage Loan; (c) have the same index and Periodic Rate Cap as that of
the Deleted Mortgage Loan and a Gross Margin not more than 1% per annum higher
or lower than that of the Deleted Mortgage Loan; (d) not permit conversion of
the related Mortgage Rate to a fixed Mortgage Rate and (e) currently be accruing
interest at a rate not more than 1% per annum higher or lower than that of the
Deleted Mortgage Loan; (iii) have the same or higher credit quality
characteristics than that of the Deleted Mortgage Loan; (iv) have a
Loan-to-Value Ratio no higher than that of the Deleted Mortgage Loan; (v) have a
remaining term to maturity no greater than (and not more than one year less
than) that of the Deleted Mortgage Loan; (vi) provide for a prepayment charge on
terms substantially similar to those of the prepayment charge, if any, of the
Deleted Mortgage Loan; (vii) have the same lien priority as the Deleted Mortgage
Loan; (viii) constitute the same occupancy type as the Deleted Mortgage Loan;
and (ix) comply with each representation and warranty set forth in Section 2.03
hereof.
Repurchase Price: As defined in Section 9.01.
Request for Release: The Request for Release of Documents submitted by
the Servicer to the Trustee, substantially in the form of Exhibit M hereto.
Required Insurance Policy: With respect to any Mortgage Loan, any
insurance policy that is required to be maintained from time to time under this
Agreement.
Reserve Interest Rate: With respect to any Interest Determination Date
for the Group II Certificates and the Class IA-1 Certificates, the rate per
annum that the Servicer determines to be (i) the arithmetic mean (rounded
upwards if necessary to the nearest whole multiple of 0.03125%) of the one-month
United States dollar lending rates which New York City banks selected by the
Servicer are quoting on the relevant Interest Determination Date to the
principal London offices of leading banks in the London interbank market or (ii)
in the event that the Servicer can determine no such arithmetic mean, the lowest
one-month United States dollar lending rate which New York City banks selected
by the Servicer are quoting on such Interest Determination Date to leading
European banks.
Responsible Officer: When used with respect to the Trustee or Servicer,
any Vice President, any Assistant Vice President, the Secretary, any Assistant
Secretary, any Trust Officer or any other officer of the Trustee or Servicer
customarily performing functions similar to those performed by any of the above
designated officers and also to whom, with respect to a particular matter, such
matter is referred because of such officer's knowledge of and familiarity with
the particular subject.
Reuters Screen LIBO Page: The display designated as page "LIBO" on the
Reuters Monitor Money Rates Service (or such other page as may replace such LIBO
page on that service for the purpose of displaying London interbank offered
rates of major banks.
S&P: Standard & Poor's Ratings Services, a division of The XxXxxx-Xxxx
Companies, Inc.
Sale Agreement or Sale Agreements: Each of the Mortgage Loan Sale
Agreements dated as of October 15, 2001 between the Depositor and a Seller, as
applicable.
Scheduled Payment: The scheduled monthly payment on a Mortgage Loan due
on any Due Date allocable to principal and/or interest on such Mortgage Loan.
Securities Act: The Securities Act of 1933, as amended.
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Seller or Sellers: Chase Manhattan Bank USA, N.A., a national bank
association or Chase, or their respective succesors in interest, as applicable.
Servicer: Chase Manhattan Mortgage Corporation, a New Jersey
corporation, or its successor in interest.
Servicer Advance Date: As to any Distribution Date, the related
Servicer Remittance Date.
Servicer Remittance Date: With respect to any Distribution Date, the
day which is two Business Days prior to such Distribution Date.
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses incurred in the performance by the Servicer of its
servicing obligations hereunder, including, but not limited to, the cost of (i)
the preservation, restoration and protection of a Mortgaged Property, including
without limitation advances in respect of real estate taxes and assessments,
(ii) any collection, enforcement or judicial proceedings, including without
limitation foreclosures, collections and liquidations, (iii) the conservation,
management, sale and liquidation of any REO Property and (iv) compliance with
the obligations under Section 3.10.
Servicing Fee: As to each Mortgage Loan and any Distribution Date, an
amount equal to one month's interest at the Servicing Fee Rate on the Stated
Principal Balance of such Mortgage Loan as of the preceding Distribution Date
or, in the event of any payment of interest that accompanies a Principal
Prepayment in full made by the Mortgagor, interest at the Servicing Fee Rate on
the Stated Principal Balance of such Mortgage Loan as of the preceding
Distribution Date for the period covered by such payment of interest.
Servicing Fee Rate: With respect to each Mortgage Loan, 0.5065% per
annum.
Servicing Officer: Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and facsimile signature appear on a list of servicing officers furnished to
the Trustee by the Servicer on the Closing Date pursuant to this Agreement, as
such lists may from time to time be amended.
Simple Interest Mortgage Loan: A Mortgage Loan which provides that
interest is charged to the Mortgagor at the applicable interest rate on the
outstanding principal balance of the Mortgage Note and calculated based on the
number of days elapsed between receipt of the Mortgagor's last payment through
receipt of the Mortgagor's most current payment. The interest is deducted from
the Mortgagor's payment amount and the remainder, if any, of the payment is
applied as a reduction to the outstanding principal balance of the Mortgage
Note.
SFAS 140: Statement of Financial Accounting Standard No. 140,
Accounting for Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities dated September 2000, published by the Financial Accounting
Standards Board of the Financial Accounting Foundation.
Startup Date: As defined in Section 2.07 hereof.
Stated Principal Balance: With respect to any Mortgage Loan or related
REO Property (i) as of the Cut-off Date, the Cut-off Date Principal Balance
thereof, and (ii) as of any Distribution Date, such Cut-off Date Principal
Balance, minus the sum of (a) the principal portion of the Scheduled Payments
(x) due with respect to such Mortgage Loan during each Due Period ending prior
to such Distribution Date and (y) that were received by the Servicer as of the
close of business on the Determination Date related to such Distribution Date or
with respect to which Advances were made on each Servicer Advance Date prior to
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such Distribution Date and (b) all Principal Prepayments with respect to such
Mortgage Loan received on or prior to the last day of the related Prepayment
Period, and all Liquidation Proceeds to the extent applied by the Servicer as
recoveries of principal in accordance with Section 3.12 with respect to such
Mortgage Loan, that were received by the Servicer as of the close of business on
the last day of the related Due Period. Notwithstanding the foregoing, the
Stated Principal Balance of a Liquidated Loan shall be deemed to be zero.
Subservicing Agreement: As defined in Section 3.02(a).
Substitution Adjustment Amount: The meaning ascribed to such term
pursuant to Section 2.03(c).
Substitution Amount: With respect to any Mortgage Loan substituted
pursuant to Section 2.03(c), the excess of (x) the principal balance of the
Mortgage Loan that is substituted for, over (y) the principal balance of the
related substitute Mortgage Loan, each balance being determined as of the date
of substitution.
Tax Matters Person: The Person designated as "tax matters person" in
the manner provided under Treasury regulation Section 1.860F-4(d) and temporary
Treasury regulation Section 301.6231(a)(7)-1T.
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Certificate.
Trust Fund: The corpus of the trust (the "Chase Funding Loan
Acquisition Trust, Series 2001-AD1") created hereunder consisting of (i) the
Mortgage Loans and all interest and principal received on or with respect
thereto on and after the Cut-off Date to the extent not applied in computing the
Cut-off Date Principal Balance thereof, exclusive of interest not required to be
deposited in the Collection Account pursuant to Section 3.05(b)(ii); (ii) the
Collection Account, the Distribution Account and all amounts deposited therein
pursuant to the applicable provisions of this Agreement; (iii) property that
secured a Mortgage Loan and has been acquired by foreclosure, deed in lieu of
foreclosure or otherwise; (iv) the mortgagee's rights under the Insurance
Policies with respect to the Mortgage Loans; and (v) all proceeds of the
conversion, voluntary or involuntary, of any of the foregoing into cash or other
liquid property.
Trustee: Citibank, N.A., a national banking association, not in its
individual capacity, but solely in its capacity as trustee for the benefit of
the Certificateholders under this Agreement, and any successor thereto, and any
corporation or national banking association resulting from or surviving any
consolidation or merger to which it or its successors may be a party and any
successor trustee as may from time to time be serving as successor trustee
hereunder.
Upper-Tier REMIC: The REMIC described in Section 2.07 that issues the
REMIC Regular Interests and the UR Interest.
Upper-Tier REMIC Class C Interest: An uncertificated regular interest
in the Upper-Tier REMIC having the same rights to payments as the Class C
Certificates, except that such interest shall (i) not be treated as having any
obligations to make the payments described in Section 2.07(e) hereof, (ii) not
be treated as having the right to receive payments described in Section 2.07(f)
hereof and (iii) be treated as entitled to payments treated as distributed to
the Class C Certificates pursuant to Section 2.07(e) hereof.
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Upper-Tier REMIC Group II Regular Interests: The Upper-Tier REMIC IIA-1
Interest, the Upper-Tier REMIC IIM-1 Interest, the Upper-Tier REMIC IIM-2
Interest and the Upper-Tier REMIC IIB Interest.
Upper-Tier REMIC IIA-1 Interest: A regular interest in the Upper-Tier
REMIC having the characteristics described in Section 2.07 and represented by
the Class IIA-1 Certificate.
Upper-Tier REMIC IIB Interest: A regular interest in the Upper-Tier
REMIC having the characteristics described in Section 2.07 and represented by
the Class IIB Certificate.
Upper-Tier REMIC IIM-1 Interest: A regular interest in the Upper-Tier
REMIC having the characteristics described in Section 2.07 and represented by
the Class IIM-1 Certificate.
Upper-Tier REMIC IIM-2 Interest: A regular interest in the Upper-Tier
REMIC having the characteristics described in Section 2.07 and represented by
the Class IIM-2 Certificate.
UR Interest: The sole class of "residual interest" in the Upper-Tier
REMIC.
Voting Rights: The portion of the voting rights of all the Certificates
that is allocated to any of the Certificates for purposes of the voting
provisions hereunder. Voting Rights allocated to each Class of Certificates
shall be allocated 95% to the Group I Certificates and Group II Certificates,
and 2.5% to the Class C, Class L and Class P Certificates and 2.5% to the Class
R Certificates, with the allocation among the Group I Certificates and Group II
Certificates to be in proportion to the Class Certificate Principal Balance of
each Class relative to the Class Certificate Principal Balance of all other
Classes. Voting Rights will be allocated among the Certificates of each such
Class in accordance with their respective Percentage Interests.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
SECTION 2.01. Conveyance of Mortgage Loans
The Depositor, concurrently with the execution and delivery hereof,
does hereby sell, transfer, assign, set over and convey to the Trustee without
recourse all the right, title and interest of the Depositor in and to the assets
of the Trust Fund. Such assignment includes all interest and principal received
on or with respect to the Mortgage Loans on or after the Cut-off Date (other
than the interest portion of Scheduled Payments due on the Mortgage Loans on or
before the Cut-off Date).
In connection with such assignment, the Depositor does hereby deliver
to, and deposit with, the Trustee the following documents or instruments with
respect to each Mortgage Loan so assigned:
(A) the original Mortgage Note, or if such Mortgage Note is
lost, a copy thereof along with a lost note affidavit from the
applicable Seller, bearing all intervening endorsements, endorsed "Pay
to the order of Citibank, N.A., as trustee, without recourse";
(B) the original of any guarantee executed in connection with
the Mortgage Note (if any);
(C) (i) the original Mortgage with evidence of recording
thereon or copies certified by the related recording office or, if the
original Mortgage has not yet been returned from the recording office,
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a certified copy of the Mortgage, or (ii) a certified copy of the
Mortgage or a copy of the Mortgage certified by the related recording
office in those instances where the original recorded mortgage has been
lost;
(D) the originals, or a certified copy thereof, of any
assumption, modification, consolidation or extension agreements;
(E) the originals of all intervening Assignments of Mortgage,
if any, showing a complete chain of assignment from origination to the
related Owner or other last holder of record; and
(F) the original Assignment of Mortgage of each Mortgage Loan,
or a certified copy of the Assignment of Mortgage to "Citibank, N.A.,
as trustee, without recourse".
If in connection with any Mortgage Loan the Depositor cannot deliver
the Mortgage, Assignments of Mortgage or assumption, consolidation or
modification, as the case may be, with evidence of recording thereon
concurrently with the execution and delivery of this Agreement solely because of
a delay caused by the public recording office where such Mortgage, Assignments
of Mortgage or assumption, consolidation or modification, as the case may be,
has been delivered for recordation, the Depositor shall deliver or cause to be
delivered to the Trustee written notice stating that such Mortgage, Assignments
of Mortgage or assumption, consolidation or modification, as the case may be,
has been delivered to the appropriate public recording office for recordation.
Thereafter, the Depositor shall deliver or cause to be delivered to the Trustee
such Mortgage, Assignments of Mortgage or assumption, consolidation or
modification, as the case may be, with evidence of recording indicated thereon
upon receipt thereof from the public recording office.
With respect to any Mortgage Loans as to which the related Mortgaged
Property is located in the State of Florida, the Servicer shall cause to be
recorded in the appropriate public recording office for real property records
each Assignment of Mortgage referred to in this Section 2.01 as soon as
practicable. With respect to any Mortgage Loans as to which the related
Mortgaged Property is located outside the State of Florida, the Servicer shall
not be obligated to cause to be recorded the Assignment of Mortgage referred to
in this Section 2.01. While each Assignment of Mortgage to be recorded is being
recorded, the Servicer shall deliver to the Trustee a photocopy of such
document. If any such Assignment of Mortgage is returned unrecorded to the
Servicer because of any defect therein, the Servicer shall cause such defect to
be cured and such document to be recorded in accordance with this paragraph. The
Depositor shall deliver or cause to be delivered each original recorded
Assignment of Mortgage and intermediate assignment to the Trustee within 270
days of the Closing Date or shall deliver to the Trustee on or before such date
an Officer's Certificate stating that such document has been delivered to the
appropriate public recording office for recordation, but has not been returned
solely because of a delay caused by such recording office. In any event, the
Depositor shall use all reasonable efforts to cause each such document with
evidence of recording thereon to be delivered to the Trustee within 300 days of
the Closing Date.
The ownership of each Mortgage Note, the Mortgage and the contents of
the related Mortgage File is vested in the Trustee. Neither the Depositor nor
the Servicer shall take any action inconsistent with such ownership and shall
not claim any ownership interest therein. The Depositor and the Servicer shall
respond to any third party inquiries with respect to ownership of the Mortgage
Loans by stating that such ownership is held by the Trustee on behalf of the
Certificateholders. Mortgage documents relating to the Mortgage Loans not
delivered to the Trustee are and shall be held in trust by the Servicer, for the
benefit of the Trustee as the owner thereof, and the Servicer's possession of
the contents of each Mortgage File so retained is for the sole purpose of
servicing the related Mortgage Loan, and such retention and possession by the
Servicer is in a custodial capacity only. The Depositor agrees to take no action
inconsistent with the Trustee's ownership of the Mortgage Loans, to promptly
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indicate to all inquiring parties that the Mortgage Loans have been sold and to
claim no ownership interest in the Mortgage Loans.
It is the intention of this Agreement that the conveyance of the
Depositor's right, title and interest in and to the Trust Fund pursuant to this
Agreement shall constitute a purchase and sale and not a loan. If a conveyance
of Mortgage Loans from the applicable Seller to the Depositor is characterized
as a pledge and not a sale, then the Depositor shall be deemed to have
transferred to the Trustee all of the Depositor's right, title and interest in,
to and under the obligations of such Seller deemed to be secured by said pledge;
and it is the intention of this Agreement that the Depositor shall also be
deemed to have granted to the Trustee a first priority security interest in all
of the Depositor's right, title, and interest in, to and under the obligations
of such Seller to the Depositor deemed to be secured by said pledge and that the
Trustee shall be deemed to be an independent custodian for purposes of
perfection of the security interest granted to the Depositor. If the conveyance
of the Mortgage Loans from the Depositor to the Trustee is characterized as a
pledge, it is the intention of this Agreement that this Agreement shall
constitute a security agreement under applicable law, and that the Depositor
shall be deemed to have granted to the Trustee a first priority security
interest in all of the Depositor's right, title and interest in, to and under
the Mortgage Loans, all payments of principal of or interest on such Mortgage
Loans, all other rights relating to and payments made in respect of the Trust
Fund, and all proceeds of any thereof. If the trust created by this Agreement
terminates prior to the satisfaction of the claims of any Person in any
Certificates, the security interest created hereby shall continue in full force
and effect and the Trustee shall be deemed to be the collateral agent for the
benefit of such Person.
In addition to the conveyance made in the first paragraph of this
Section 2.01, the Depositor does hereby convey, assign and set over to the
Trustee for the benefit of the Certificateholders all of its right, title and
interest in those representations and warranties of the Sellers contained in the
Sale Agreements and the benefit of the repurchase obligations and the obligation
of each of the Seller's contained in the Sale Agreements to take, at the request
of the Depositor or the Trustee, all action on its part which is reasonably
necessary to ensure the enforceability of a Mortgage Loan.
SECTION 2.02. Acceptance by Trustee of the Mortgage Loans
Except as set forth in the Exception Report delivered contemporaneously
herewith (the "Exception Report"), the Trustee acknowledges receipt of the
Mortgage Note for each Mortgage Loan and delivery of a Mortgage File (but does
not acknowledge receipt of all documents required to be included in such
Mortgage File) with respect to each Mortgage Loan and declares that it holds and
will hold such documents and any other documents constituting a part of the
Mortgage Files delivered to it in trust for the use and benefit of all present
and future Certificateholders. The Depositor will cause the applicable Seller to
repurchase any Mortgage Loan to which an exception was taken in the Exception
Report unless such exception is cured to the satisfaction of the Trustee within
45 Business Days of the Closing Date.
The Trustee agrees, for the benefit of Certificateholders, to review
each Mortgage File delivered to it within 270 days after the Closing Date to
ascertain that all documents required by Section 2.01 have been executed and
received, and that such documents relate to the Mortgage Loans identified in
Exhibit F that have been conveyed to it. If the Trustee finds any document or
documents constituting a part of a Mortgage File to be missing or defective
(that is, mutilated, damaged, defaced or unexecuted) in any material respect,
the Trustee shall promptly (and in any event within no more than five Business
Days) after such finding so notify the Servicer, each Seller, the Depositor and
the NIMs Insurer. In addition, the Trustee shall also notify the Servicer, each
Seller, the Depositor and the NIMs Insurer, if (a) in examining the Mortgage
Files, the documentation shows on its face (i) any adverse claim, lien or
encumbrance, (ii) that any Mortgage Note was overdue or had been dishonored,
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(iii) any evidence on the face of any Mortgage Note or Mortgage of any security
interest or other right or interest therein, or (iv) any defense against or
claim to the Mortgage Note by any party or (b) the original Mortgage with
evidence of recording thereon with respect to a Mortgage Loan is not received
within 270 days of the Closing Date; provided, however, that if the Depositor
cannot deliver the original Mortgage with evidence of recording thereon because
of a delay caused by the public recording office where such Mortgage has been
delivered for recordation, the Depositor shall deliver or cause to be delivered
to the Trustee written notice stating that such Mortgage has been delivered to
the appropriate public recording officer for recordation and thereafter the
Depositor shall deliver or cause to be delivered such Mortgage with evidence of
recording thereon upon receipt thereof from the public recording office. The
Trustee shall request that the applicable Seller correct or cure such omission,
defect or other irregularity, or substitute a Mortgage Loan pursuant to the
provisions of Section 2.03(c), within 90 days from the date the applicable
Seller was notified of such omission or defect and, if such Seller does not
correct or cure such omission or defect within such period, that such Seller
purchase such Mortgage Loan from the Trustee within 90 days from the date the
Trustee notified such Seller of such omission, defect or other irregularity at
the Purchase Price of such Mortgage Loan. The Purchase Price for any Mortgage
Loan purchased pursuant to this Section 2.02 shall be paid to the Servicer and
deposited by the Servicer in the Collection Account promptly upon receipt, and,
upon receipt by the Trustee of written notification of such deposit signed by a
Servicing Officer, the Trustee shall promptly release to the applicable Seller
the related Mortgage File and the Trustee shall execute and deliver such
instruments of transfer or assignment, without recourse, as shall be necessary
to vest in the applicable Seller or its designee, as the case may be, any
Mortgage Loan released pursuant hereto, and the Trustee shall have no further
responsibility with regard to such Mortgage Loan. It is understood and agreed
that the obligation of the applicable Seller to purchase, cure or substitute any
Mortgage Loan as to which a material defect in or omission of a constituent
document exists shall constitute the sole remedy respecting such defect or
omission available to the Trustee on behalf of Certificateholders. The Trustee
shall be under no duty or obligation to inspect, review and examine such
documents, instruments, certificates or other papers to determine that they are
genuine, enforceable or appropriate to the represented purpose, or that they
have actually been recorded, or that they are other than what they purport to be
on their face. The Trustee shall keep confidential the name of each Mortgagor
and the Trustee shall not solicit any such Mortgagor for the purpose of
refinancing the related Mortgage Loan. It is understood and agreed that all
rights and benefits relating to the solicitation of any Mortgagors and the
attendant rights, title and interest in and to the list of Mortgagors and data
relating to their Mortgages shall be retained by the Servicer.
Within 280 days of the Closing Date, the Trustee shall deliver to the
Depositor, the Servicer and the NIMs Insurer the Trustee's certificate
substantially in the form of Exhibit H attached hereto, setting forth the status
of the Mortgage Files as of such date.
SECTION 2.03. Representations, Warranties and Covenants of the
Depositor.
(a) The Depositor hereby represents and warrants to the Servicer and
the Trustee as follows, as of the date hereof:
(i) The Depositor is duly organized and is validly existing as
a corporation in good standing under the laws of the State of New York
and has full power and authority (corporate and other) necessary to own
or hold its properties and to conduct its business as now conducted by
it and to enter into and perform its obligations under this Agreement.
(ii) The Depositor has the full corporate power and authority
to execute, deliver and perform, and to enter into and consummate the
transactions contemplated by, this Agreement and has duly authorized,
by all necessary corporate action on its part, the execution, delivery
and performance of this Agreement; and this Agreement, assuming the due
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authorization, execution and delivery hereof by the other parties
hereto, constitutes a legal, valid and binding obligation of the
Depositor, enforceable against the Depositor in accordance with its
terms, subject, as to enforceability, to (i) bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and (ii) general principles of equity, regardless of
whether enforcement is sought in a proceeding in equity or at law.
(iii) The execution and delivery of this Agreement by the
Depositor, the consummation of the transactions contemplated by this
Agreement, and the fulfillment of or compliance with the terms hereof
are in the ordinary course of business of the Depositor and will not
(A) result in a material breach of any term or provision of the charter
or by-laws of the Depositor or (B) materially conflict with, result in
a violation or acceleration of, or result in a material default under,
the terms of any other material agreement or instrument to which the
Depositor is a party or by which it may be bound or (C) constitute a
material violation of any statute, order or regulation applicable to
the Depositor of any court, regulatory body, administrative agency or
governmental body having jurisdiction over the Depositor; and the
Depositor is not in breach or violation of any material indenture or
other material agreement or instrument, or in violation of any statute,
order or regulation of any court, regulatory body, administrative
agency or governmental body having jurisdiction over it which breach or
violation may materially impair the Depositor's ability to perform or
meet any of its obligations under this Agreement.
(iv) No litigation is pending, or, to the best of the
Depositor's knowledge, threatened, against the Depositor that would
materially and adversely affect the execution, delivery or
enforceability of this Agreement or the ability of the Depositor to
perform its obligations under this Agreement in accordance with the
terms hereof.
(v) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery
and performance by the Depositor of, or compliance by the Depositor
with, this Agreement or the consummation of the transactions
contemplated hereby, or if any such consent, approval, authorization or
order is required, the Depositor has obtained the same. The Depositor
hereby represents and warrants to the Trustee with respect to each
Mortgage Loan as of the Closing Date, and following the transfer of the
Mortgage Loans to it by the Sellers, the Depositor had good title to
the Mortgage Loans and the Mortgage Notes were subject to no offsets,
claims, defenses or counterclaims.
(vi) The Depositor hereby represents and warrants to the
Trustee for the benefit of the Certificateholders that on the Closing
Date it has entered into the Sale Agreements with the Sellers, that
each Seller has made the following representations and warranties with
respect to each Mortgage Loan in the applicable Sale Agreement as of
the Closing Date, which representations and warranties run to and are
for the benefit of the Depositor and the Trustee for the benefit of the
Certificateholders, and as to which the Depositor has assigned to the
Trustee for the benefit of the Certificateholders, pursuant to Section
2.01 hereof, the right to cause the applicable Seller to repurchase a
Mortgage Loan as to which there has occurred an uncured breach of
representations and warranties in accordance with the provisions of the
applicable Sale Agreement.
(1) The Seller is an approved seller of conventional
mortgage loans for FNMA or FHLMC and is a mortgagee
approved by the Secretary of Housing and Urban
Development pursuant to sections 203 and 211 of the
National Housing Act.
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(2) The information set forth on the Mortgage Loan
Schedule is true and correct in all material respects
as of the Closing Date.
(3) The Seller will treat the transfer of the Mortgage
Loans to the Depositor as a sale of the Mortgage
Loans for all accounting and tax purposes.
(4) No Mortgage Loan is more than 59 days Delinquent in
payment of principal and interest, and no more than
1.5% of the Mortgage Loans (taken as a whole) are
30-59 days Delinquent in the payment of principal and
interest.
(5) No Group I Mortgage Loan had a Loan-to-Value Ratio at
origination in excess of 95.00% and no Group II
Mortgage Loan had a Loan-to-Value Ratio at
origination in excess of 95.00%.
(6) Each Mortgage is a valid and enforceable first or
second lien on the Mortgaged Property subject only to
(a) the lien of non-delinquent 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, such
exceptions appearing of record being acceptable to
mortgage lending institutions generally, specifically
referred to in the lender's title insurance policy
referred to in (14) below or referred to or otherwise
considered in the appraisal made in connection with
the origination of the related Mortgage Loan, and (c)
other matters to which like properties are commonly
subject that do not materially interfere with the
benefits of the security intended to be provided by
such Mortgage.
(7) Immediately prior to the assignment of the Mortgage
Loans to the Depositor, the Seller had good title to,
and was the sole owner of, each Mortgage Loan free
and clear of any pledge, lien, encumbrance or
security interest and had full right and authority,
subject to no interest or participation of, or
agreement with, any other party, to sell and assign
the same pursuant to this Agreement.
(8) There is no delinquent tax or assessment lien against
any Mortgaged Property.
(9) There is no valid offset, claim, defense or
counterclaim to any Mortgage Note or Mortgage,
including the obligation of the Mortgagor to pay the
unpaid principal of or interest on such Mortgage
Note.
(10) There are no mechanics' liens or claims for work,
labor or material affecting any Mortgaged Property
that are or may be a lien prior to, or equal with,
the lien of such Mortgage, except those that are
insured against by the title insurance policy
referred to in item (14) below.
(11) As of the Closing Date, to the best of the Seller's
knowledge, each Mortgaged Property is undamaged by
waste, fire, earthquake or earth movement, flood,
tornado or other casualty so as to affect adversely
the value of the Mortgaged Property as security for
the Mortgage Loan or the use for which the premises
were intended.
(12) Each Mortgage Loan at origination complied in all
material respects with applicable state and federal
laws, including, without limitation, usury, equal
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credit opportunity, real estate settlement
procedures, truth-in-lending and disclosure laws and
laws governing prepayment penalties, and consummation
of the transactions contemplated hereby will not
involve the violation of any such laws.
(13) As of the Closing Date, neither the Seller nor any
prior holder of any Mortgage has modified the
Mortgage Loan in any material respect including as to
prepayment penalties (except that a Mortgage Loan may
have been modified by a written instrument that has
been recorded or submitted for recordation, if
necessary, to protect the interests of the
Certificateholders and the original or a copy of
which has been delivered to the Trustee and is
reflected in the Mortgage Loan Schedule); satisfied,
canceled or subordinated such Mortgage Loan in whole
or in part; released the related Mortgaged Property
in whole or in part from the lien of such Mortgage
Loan; or executed any instrument of release,
cancellation, modification (except as expressly
permitted above) or satisfaction with respect
thereto.
(14) A title search or a lender's title insurance policy,
issued in standard California Land Title Association
form or American Land Title Association form, or
other form acceptable in a particular jurisdiction by
a title insurance company authorized to transact
business in the state in which the related Mortgaged
Property is situated, in an amount at least equal to
the original principal amount of such Mortgage Loan
insuring the mortgagee's interest under the related
Mortgage Loan as the holder of a valid first or
second mortgage lien of record on the Mortgage
Property described in the related Mortgage, as the
case may be, subject only to exceptions of the
character referred to in paragraph (6) above, was
effective on the date of the origination of such
Mortgage Loan, and, as of the Cut-Off Date such
policy, if issued was or upon its issuance will be,
valid and in full force and effect and a copy of such
title search or title insurance policy (or if not yet
issued, a written commitment or interim binder or
preliminary report of title issued by the title
insurance or escrow company) is contained in the
applicable Mortgage File.
(15) To the best of the Seller's knowledge, as of the date
of origination all of the improvements that were
included for the purpose of determining the Appraised
Value of the Mortgaged Property lie wholly within the
boundaries and building restriction lines of such
property, and no improvements on adjoining properties
encroach upon the Mortgaged Property.
(16) To the best of the Seller's knowledge, as of the date
of origination no improvement located on or being
part of the Mortgaged Property is in violation of any
applicable zoning law or regulation. To the best of
the Seller's knowledge, as of the date of origination
all inspections, licenses and certificates required
to be made or issued with respect to all occupied
portions of the Mortgaged Property and, with respect
to the use and occupancy of the same, including but
not limited to certificates of occupancy and fire
underwriting certificates, have been made or obtained
from the appropriate authorities, unless the lack
thereof would not have a material adverse effect on
the value of such Mortgaged Property, and the
Mortgaged Property is lawfully occupied under
applicable law.
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(17) The Mortgage Note and the related Mortgage are
genuine, and each is the legal, valid and binding
obligation of the maker thereof, enforceable
(including as to any prepayment penalty) in
accordance with its terms and under applicable law,
except that (a) the enforceability thereof may be
limited by bankruptcy, insolvency, moratorium,
receivership and other similar laws relating to
creditors' rights generally and (b) the remedy of
specific performance and injunctive and other forms
of equitable relief may be subject to equitable
defenses and to the discretion of the court before
which any proceeding therefor may be brought. To the
best of the Seller's knowledge, all parties to the
Mortgage Note and the Mortgage had legal capacity to
execute the Mortgage Note and the Mortgage and each
Mortgage Note and Mortgage have been duly and
properly executed by such parties.
(18) The proceeds of the Mortgage Loan have been fully
disbursed, there is no requirement for future
advances thereunder and completion of any on-site or
off-site improvements and as to disbursements of any
escrow funds therefor have been complied with. All
costs, fees and expenses incurred in making, or
closing or recording the Mortgage Loans were paid.
(19) The related Mortgage contains customary and
enforceable provisions that render the rights and
remedies of the holder thereof adequate for the
realization against the Mortgaged Property of the
benefits of the security, including, (i) in the case
of a Mortgage designated as a deed of trust, by
trustee's sale, and (ii) otherwise by judicial
foreclosure.
(20) There exist no deficiencies with respect to escrow
deposits and payments, if such are required, for
which customary arrangements for repayment thereof
have not been made.
(21) There is no pledged account or other security other
than real estate securing the Mortgagor's
obligations.
(22) Each Mortgage Loan contains a customary "due on sale"
clause.
(23) The improvements upon each Mortgaged Property are
covered by a valid and existing hazard insurance
policy (which may be a blanket policy) with a
generally acceptable carrier that provides for fire
and extended coverage representing coverage not less
than the least of (A) the Stated Principal Balance of
the related Mortgage Loan (together, in the case of a
Mortgage Loan secured by a second lien, with the
outstanding principal balance of any mortgage with a
lien senior in priority to such Mortgage Loan), (B)
the minimum amount required to compensate for damage
or loss on a replacement cost basis or (C) the full
insurable value of the Mortgaged Property;
(24) To the best of the Seller's knowledge, there is no
proceeding occurring, pending or threatened for the
total or partial condemnation of the Mortgaged
Property.
(25) There is no material monetary default existing under
any Mortgage or the related Mortgage Note and, to the
best of the Seller's knowledge, there is no material
event that, 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
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acceleration under the Mortgage or the related
Mortgage Note; and the Seller has not waived any
default, breach, violation or event of acceleration.
(26) Each Mortgaged Property is of a type described in the
Prospectus Supplement.
(27) Each Mortgage Loan is being serviced by the Servicer.
(28) None of the Mortgage Loans is a growing equity
mortgage loan, and no Mortgage Loan is subject to a
buydown or similar arrangement.
(29) The Mortgage Loans, individually and in the
aggregate, conform in all material respects to the
descriptions thereof in the Prospectus Supplement.
(30) Each Mortgage Loan represents a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code
(but without regard to the rule in Treasury
Regulation Section 1.860G-2(f)(2) that treats a
defective obligation as a qualified mortgage, or any
substantially similar successor provision) and
applicable Treasury regulations promulgated
thereunder.
(31) With respect to each Mortgage Loan, if the related
Mortgaged Note or Mortgage or any other material
document or instrument relating to such Mortgage Loan
has been signed by a person on behalf of the
Mortgagor, the related Mortgage File contains the
original power of attorney or other instrument that
authorized and empowered such person to sign bearing
evidence that such instrument has been recorded, if
so required in the appropriate jurisdiction where the
Mortgaged Property is located (or, in lieu thereof, a
duplicate or conformed copy of such instrument,
together with a certificate of receipt from the
recording office, certifying that such copy
represents a true and complete copy of the original
and that such original has been or is currently
submitted to be recorded in the appropriate
governmental recording office of the jurisdiction
where the Mortgaged Property is located), or if the
original power of attorney or other such instrument
has been delivered for recording in the appropriate
public recording office of the jurisdiction in which
the Mortgaged Property is located.
(32) Each Assignment of Mortgage, or a certified copy of
the Assignment of Mortgage to "Citibank, N.A., as
trustee, without recourse" is in form and substance
acceptable for recording, or a copy certified by the
applicable Seller as a true and correct copy of the
original Assignment has been sent for recordation.
(b) [Reserved].
(c) Upon discovery by any of the parties hereto of a breach of a
representation or warranty set forth in Section 2.03(a) that materially and
adversely affects the interests of the Certificateholders in any Mortgage Loan,
the party discovering such breach shall give prompt notice thereof to the other
parties and to the applicable Seller. Pursuant to the applicable Sale Agreement,
the Seller thereunder shall within 90 days of the earlier of the discovery by or
receipt of written notice by such Seller from any party of a breach of any
representation or warranty set forth herein made that materially and adversely
affects the interests of the Certificateholders in any Mortgage Loan, it shall
cure such breach in all material respects and, if such breach is not so cured,
shall, (i) if such 90-day period expires prior to the second anniversary of the
Closing Date, remove such Deleted Mortgage Loan from the Trust Fund and
substitute in its place a Replacement Mortgage Loan, in the manner and subject
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to the conditions set forth in this Section; or (ii) repurchase the affected
Mortgage Loan or Mortgage Loans from the Trustee at the Purchase Price in the
manner set forth below; provided, however, that any such substitution pursuant
to (i) above shall not be effected prior to the additional delivery to the
Trustee of a Request for Release substantially in the form of Exhibit M and
shall not be effected unless it is within two years of the Startup Date. The
applicable Seller shall promptly reimburse the Trustee for any expenses
reasonably incurred by the Trustee in respect of enforcing the remedies for such
breach. To enable the Servicer to amend the Mortgage Loan Schedule, unless it
cures such breach in a timely fashion pursuant to this Section 2.03, the
applicable Seller shall promptly notify the Servicer whether such Seller intends
either to repurchase, or to substitute for, the Mortgage Loan affected by such
breach. With respect to the representations and warranties described in this
Section that are made to the best of the Seller's knowledge, if it is discovered
by any of the applicable Seller, the Servicer or the Trustee that the substance
of such representation and warranty is inaccurate and such inaccuracy materially
and adversely affects the value of the related Mortgage Loan, notwithstanding
such Seller's lack of knowledge with respect to the substance of such
representation or warranty, such inaccuracy shall be deemed a breach of the
applicable representation or warranty.
With respect to any Replacement Mortgage Loan or Loans, the applicable
Seller shall deliver to the Trustee for the benefit of the Certificateholders
the related Mortgage Note, Mortgage and assignment of the Mortgage, and such
other documents and agreements as are required by Section 2.01, with the
Mortgage Note endorsed and the Mortgage assigned as required by Section 2.01. No
substitution will be made in any calendar month after the Determination Date for
such month. Scheduled Payments due with respect to Replacement Mortgage Loans in
the Due Period related to the Distribution Date on which such proceeds are to be
distributed shall not be part of the Trust Fund and will be retained by the
applicable Seller on such Distribution Date. For the month of substitution,
Certificateholders are entitled to the Scheduled Payment due on any Deleted
Mortgage Loan for the related Due Period and thereafter the applicable Seller
shall be entitled to retain all amounts received in respect of such Deleted
Mortgage Loan. The Trustee shall amend the Mortgage Loan Schedule for the
benefit of the Certificateholders to reflect the removal of such Deleted
Mortgage Loan and the substitution of the Replacement Mortgage Loan or Loans.
Upon such substitution, the Replacement Mortgage Loan or Loans shall be subject
to the terms of this Agreement in all respects, and the applicable Seller shall
be deemed to have made with respect to such Replacement Mortgage Loan or Loans,
as of the date of substitution, the representations and warranties set forth in
Section 2.03(a) with respect to such Mortgage Loan. Upon any such substitution
and the deposit to the Collection Account of the amount required to be deposited
therein in connection with such substitution as described in the following
paragraph, the Trustee shall release to the applicable Seller the Mortgage File
relating to such Deleted Mortgage Loan and held for the benefit of the
Certificateholders and shall execute and deliver at such Seller's direction such
instruments of transfer or assignment as have been prepared by such Seller, in
each case without recourse, as shall be necessary to vest in such Seller, or its
respective designee, title to the Trustee's interest in any Deleted Mortgage
Loan substituted for pursuant to this Section 2.03.
For any month in which a Seller substitutes one or more Replacement
Mortgage Loans for one or more Deleted Mortgage Loans, such Seller will
determine the amount (if any) by which the aggregate principal balance of all
such Replacement Mortgage Loans as of the date of substitution and the aggregate
prepayment penalties with respect to such Replacement Mortgage Loans is less
than the aggregate Stated Principal Balance (after application of the principal
portion of the Scheduled Payment due in the month of substitution) and aggregate
prepayment penalties of all such Deleted Mortgage Loans. An amount equal to the
aggregate of the deficiencies described in the preceding sentence (such amount,
the "Substitution Adjustment Amount") shall be deposited into the Collection
Account by applicable Seller on the Determination Date for the Distribution Date
relating to the Prepayment Period during which the related Mortgage Loan became
required to be purchased or replaced hereunder.
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In the event that a Seller shall have repurchased a Mortgage Loan, the
Purchase Price therefor shall be deposited in the Collection Account pursuant to
Section 3.08 on the Determination Date for the Distribution Date in the month
following the month during which such Seller became obligated to repurchase or
replace such Mortgage Loan and upon such deposit of the Purchase Price and the
receipt of a Request for Release in the form of Exhibit M hereto, the Trustee
shall release the related Mortgage File held for the benefit of the
Certificateholders to the applicable Seller, and the Trustee shall execute and
deliver at such Person's direction the related instruments of transfer or
assignment prepared by the applicable Seller, in each case without recourse, as
shall be necessary to transfer title from the Trustee for the benefit of the
Certificateholders and transfer the Trustee's interest to the applicable Seller
to any Mortgage Loan purchased pursuant to this Section 2.03. It is understood
and agreed that the obligation under this Agreement of a Seller to cure,
repurchase or replace any Mortgage Loan as to which a breach has occurred and is
continuing shall constitute the sole remedy against the Depositor respecting
such breach available to Certificateholders, the Depositor or the Trustee.
(d) The representations and warranties set forth in this Section 2.03
shall survive delivery of the respective Mortgage Files to the Trustee for the
benefit of the Certificateholders.
SECTION 2.04. Representations and Warranties of the Servicer.
The Servicer hereby represents and warrants to the Depositor and the
Trustee as follows, as of the date hereof:
(i) The Servicer is a duly organized corporation and is
validly existing and in good standing under the laws of the state of
its incorporation and is duly authorized and qualified to transact any
and all business contemplated by this Agreement to be conducted by the
Servicer in any state in which a Mortgaged Property is located or is
otherwise not required under applicable law to effect such
qualification and, in any event, is in compliance with the doing
business laws of any such state, to the extent necessary to ensure its
ability to enforce each Mortgage Loan to service the Mortgage Loans in
accordance with the terms of this Agreement and to perform any of its
other obligations under this Agreement in accordance with the terms
hereof.
(ii) The Servicer has the full corporate power and authority
to service each Mortgage Loan, and to execute, deliver and perform, and
to enter into and consummate the transactions contemplated by this
Agreement and has duly authorized by all necessary corporate action on
the part of the Servicer the execution, delivery and performance of
this Agreement; and this Agreement, assuming the due authorization,
execution and delivery hereof by the other parties hereto, constitutes
a legal, valid and binding obligation of the Servicer, enforceable
against the Servicer in accordance with its terms, except that (a) the
enforceability hereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to creditors'
rights generally and (b) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(iii) The execution and delivery of this Agreement by the
Servicer, the servicing of the Mortgage Loans under this Agreement, the
consummation of any other of the transactions contemplated by this
Agreement, and the fulfillment of or compliance with the terms hereof
are in the ordinary course of business of the Servicer and will not (A)
result in a material breach of any term or provision of the charter or
by-laws of the Servicer or (B) materially conflict with, result in a
material breach, violation or acceleration of, or result in a material
default under, the terms of any other material agreement or instrument
to which the Servicer is a party or by which it may be bound, or (C)
constitute a material violation of any statute, order or regulation
applicable to the Servicer of any court, regulatory body,
administrative agency or governmental body having jurisdiction over the
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Servicer; and the Servicer is not in breach or violation of any
material indenture or other material agreement or instrument, or in
violation of any statute, order or regulation of any court, regulatory
body, administrative agency or governmental body having jurisdiction
over it which breach or violation may materially impair the Servicer's
ability to perform or meet any of its obligations under this Agreement.
(iv) The Servicer is an approved servicer of conventional
mortgage loans for FNMA or FHLMC.
(v) No litigation is pending or, to the best of the Servicer's
knowledge, threatened, against the Servicer that would materially and
adversely affect the execution, delivery or enforceability of this
Agreement or the ability of the Servicer to service the Mortgage Loans
or to perform any of its other obligations under this Agreement in
accordance with the terms hereof.
(vi) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery
and performance by the Servicer of, or compliance by the Servicer with,
this Agreement or the consummation of the transactions contemplated
hereby, or if any such consent, approval, authorization or order is
required, the Servicer has obtained the same.
SECTION 2.05. Substitutions and Repurchases of Mortgage Loans which are
not "Qualified Mortgages".
Upon discovery by the Depositor, the Servicer or the Trustee that any
Mortgage Loan does not constitute a "qualified mortgage" within the meaning of
section 860G(a)(3) of the Code, the party discovering such fact shall promptly
(and in any event within 5 Business Days of discovery) give written notice
thereof to the other parties. In connection therewith, the Trustee shall require
the Depositor, at the Depositor's option, to either (i) substitute, if the
conditions in Section 2.03(c) with respect to substitutions are satisfied, a
Replacement Mortgage Loan for the affected Mortgage Loan, or (ii) repurchase the
affected Mortgage Loan within 90 days of such discovery in the same manner as it
would a Mortgage Loan for a breach of representation or warranty contained in
Section 2.03. The Trustee shall reconvey to the Depositor the Mortgage Loan to
be released pursuant hereto in the same manner, and on the same terms and
conditions, as it would a Mortgage Loan repurchased for breach of a
representation or warranty contained in Section 2.03.
SECTION 2.06. Authentication and Delivery of Certificates.
The Trustee acknowledges the transfer and assignment to it of the Trust
Fund and, concurrently with such transfer and assignment, has caused to be
authenticated and delivered to or upon the order of the Depositor, in exchange
for the Mortgage Loans, Certificates duly authenticated by the Authenticating
Agent in authorized denominations evidencing ownership of the entire Trust Fund.
The Trustee agrees to hold the Trust Fund and exercise the rights referred to
above for the benefit of all present and future Holders of the Certificates and
to perform the duties set forth in this Agreement to the best of its ability, to
the end that the interests of the Holders of the Certificates may be adequately
and effectively protected.
SECTION 2.07. REMIC Elections.
(a) The Depositor hereby instructs and authorizes the Trustee to make
an appropriate election to treat each of the Upper-Tier REMIC, the Middle-Tier
REMIC and the Lower-Tier REMIC as a REMIC. This Agreement shall be construed so
as to carry out the intention of the parties that each of the Upper-Tier REMIC,
the Middle-Tier REMIC and the Lower-Tier REMIC be treated as a REMIC at all
times prior to the date on which the Trust Fund is terminated.
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(b) The Lower-Tier REMIC will consist of all of the assets of the Trust
Fund (other than any proceeds of prepayment penalties or late payment charges,
the assets held by the Middle-Tier REMIC or the Upper-Tier REMIC and the grantor
trusts described in Section 2.07) and will be evidenced by the Lower-Tier REMIC
Regular Interests (which will be uncertificated and will represent the "regular
interests" in the Lower-Tier REMIC) and the LR Interest as the single "residual
interest" in the Lower-Tier REMIC. The Trustee will hold the Lower-Tier REMIC
Regular Interests. The Middle-Tier REMIC will consist of the Lower-Tier REMIC
Regular Interests and will be evidenced by the Middle-Tier REMIC Regular
Interests (which will represent the "regular interests" in the Middle Tier
REMIC) and the MR Interest as the single "residual interest" in the Middle-Tier
REMIC. The Upper-Tier REMIC will consist of the Middle-Tier REMIC Regular
Interests and will be evidenced by the REMIC Regular Interests (which will
represent the "regular interests" in the Upper-Tier REMIC) and the UR Interest
as the single "residual interest" in the Upper-Tier REMIC. The Class R
Certificates initially will represent beneficial ownership of the LR Interest,
the MR Interest and the UR Interest.
The "latest possible maturity date" for federal income tax
purposes of all of the interests created hereby will be the Latest Possible
Maturity Date. The "Startup Date" for purposes of the REMIC provisions shall be
the Closing Date. Each REMIC's fiscal year shall be the calendar year.
(c) Lower-Tier REMIC Regular Interest I shall have an initial principle
balance equal to the principal balance of the Group I Mortgage Loans as of the
Cut-Off Date, an interest rate equal to the Group I Net Rate and pay on each
Distribution Date. All Realized Losses from the Group I Mortgage Loans shall be
allocated to Lower-Tier REMIC Regular Interest I and all payments of principal
and interest (net of fees and expenses) received from the Group I Mortgage Loans
shall be paid to Lower-Tier REMIC Regular Interest I in payment of accrued
interest and principal until the principal balance of such interest is reduced
to zero and any losses allocated to Lower-Tier REMIC Regular Interest I have
been reimbursed. Any excess funds attributable to the Group I Mortgage Loans
shall first be applied to reimburse prior losses on the Group II Mortgage Loans
and then distributed to the LR Interest.
Lower-Tier REMIC Regular Interest II shall have an initial principle
balance equal to the principal balance of the Group II Mortgage Loans as of the
Cut-Off Date, an interest rate equal to the Group II Net Rate and pay on each
Distribution Date. All Realized Losses from the Group II Mortgage Loans shall be
allocated to Lower-Tier REMIC Regular Interest II and all payments of principal
and interest (net of fees and expenses) received from the Group II Mortgage
Loans shall be paid to Lower-Tier REMIC Regular Interest II in payment of
accrued interest and principal until the principal balance of such interest is
reduced to zero and any losses allocated to Lower-Tier REMIC Regular Interest II
have been reimbursed. Any excess funds attributable to the Group II Mortgage
Loans shall first be applied to reimburse prior losses on the Group I Mortgage
Loans and then distributed to the LR Interest.
Each of the Middle-Tier REMIC Group I Regular Interests (other than the
Middle-Tier REMIC Group I Accrual Interest) shall have an initial principal
balance equal to .001% of the principal balance of its Related Certificate
(expressed to eight decimal places). Each of the Middle-Tier REMIC Group I
Regular Interests (other than the Middle-Tier REMIC Group I Accrual Interest)
shall have an interest rate equal to the Pass-Through Rate of its Related
Certificate.
The Middle-Tier REMIC Group I Accrual Interest shall have an initial
principal balance equal to the excess of the principal balance of the Group I
Mortgage Loans as of the Cut-Off Date over the aggregate initial principal
balance of the Middle-Tier REMIC Group I Regular Interests (other than the
Middle-Tier REMIC Group I Accrual Interest). The Middle-Tier REMIC Group I
Accrual Interest shall have an interest rate equal to the Group I Net Rate.
Each of the Middle-Tier REMIC Group II Regular Interests (other than
the Middle-Tier REMIC Group II Accrual Interest) shall have an initial principal
balance equal to .001% of the principal balance of its Related Certificate
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(expressed to eight decimal places). Each of the Middle-Tier REMIC Group II
Regular Interests (other than the Middle-Tier REMIC Group II Accrual Interest)
shall have an interest rate equal to the Pass-Through Rate of its Related
Certificate, subject to a cap equal to the Group II Net Rate.
The Middle-Tier REMIC Group II Accrual Interest shall have an initial
principal balance equal to the excess of the principal balance of the Group II
Mortgage Loans as of the Cut-Off Date over the aggregate initial principal
balance of the Middle-Tier REMIC Group II Regular Interests (other than the
Middle-Tier REMIC Group II Accrual Interest). The Middle-Tier REMIC Group II
Accrual Interest shall have an interest rate equal to the Group II Net Rate.
Each of the Upper-Tier REMIC Group II Regular Interests shall have a
principal balance equal to the principal balance of the Corresponding
Certificate and shall have an interest rate equal to the Pass-Through Rate on
the Corresponding Certificate, subject to a cap equal to the Group II Net Rate.
On each Distribution Date the Upper-Tier REMIC Class C Interest shall
accrue interest in an amount equal to the aggregate of (i) the accrual on a
principal amount equal to the principal amount of the Middle-Tier REMIC Group I
Accrual Interest at a rate equal to the excess of (x) the Group I Net Rate over
(y) the weighted average rate of the Middle-Tier REMIC Group I Regular Interests
(other than the Middle-Tier REMIC Group I Accrual Interest) and (ii) the accrual
on a principal amount equal to the principal amount of the Middle-Tier REMIC
Group II Accrual Interest at a rate equal to the excess of (x) the Group II Net
Rate over (y) the weighted average rate of the Middle-Tier REMIC Group II
Regular Interests (other than the Middle-Tier REMIC Group II Accrual Interest).
On each Distribution Date (i) there shall be treated as having been a
payment in respect of principal of each of the Middle-Tier REMIC Regular
Interests (other than the Middle-Tier REMIC Accrual Interests) in an amount
equal to .001% of the amount distributed in respect of principal on the Related
Certificate on such Distribution Date, (ii) there shall be treated as having
been distributed in respect of each of the Middle-Tier REMIC Regular Interests
(other than the Middle-Tier REMIC Accrual Interests) an amount equal to .001% of
the amount distributed to the Related Certificate on such Distribution Date in
respect of unreimbursed amounts of Realized Losses previously allocated to such
Related Certificate, (iii) there shall be treated as having been a payment of
principal on the Middle-Tier REMIC Group I Accrual Interest equal to 99.999% of
the amount distributed in respect of principal on the Group I Certificates, (iv)
there shall be treated as having been distributed in respect of the Middle-Tier
REMIC Group I Accrual Interest an amount equal to 99.999% of the amounts
distributed on the Group I Certificates in respect of unreimbursed amounts of
Realized Losses previously allocated to the Group I Certificates, (v) there
shall be treated as having been a payment of principal on the Middle-Tier REMIC
Group II Accrual Interest equal to 99.999% of the amount distributed in respect
of principal on the Group II Certificates and (iv) there shall be treated as
having been distributed in respect of the Middle-Tier REMIC Group II Accrual
Interest an amount equal to 99.999% of the amounts distributed on the Group II
Certificates in respect of unreimbursed amounts of Realized Losses previously
allocated to the Group II Certificates.
On each Distribution Date (i) there shall be treated as having been
distributed on the Middle-Tier REMIC Group I Accrual Interest in respect of
principal an amount equal to the portion of any distribution in respect of
principal on the Class C Certificate that reflects a decrease in the excess of
the aggregate principal balance of the Group I Mortgage Loans over the aggregate
principal balance of the Group I Certificates, (ii) there shall be treated as
having been distributed in respect of the Middle-Tier REMIC Group I Accrual
Interest an amount equal to the amounts distributed on the Class C Certificate
in respect of unreimbursed amounts of Realized Losses on Group I Mortgage Loans
previously allocated to the Class C Certificate, (iii) there shall be treated as
having been distributed on the Middle-Tier REMIC Group II Accrual Interest in
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respect of principal an amount equal to the portion of any distribution in
respect of principal on the Class C Certificate that reflects a decrease in the
excess of the aggregate principal balance of the Group II Mortgage Loans over
the aggregate principal balance of the Group II Certificates, and (iv) there
shall be treated as having been distributed in respect of the Middle-Tier REMIC
Group II Accrual Interest an amount equal to the amounts distributed on the
Class C Certificate in respect of unreimbursed amounts of Realized Losses on
Group II Mortgage Loans previously allocated to the Class C Certificate.
On each Distribution Date, (i) accrued interest in respect of the
Middle-Tier REMIC Group I Accrual Interest will be added to the principal amount
of that interest to the extent necessary to ensure that immediately following
such Distribution Date, the principal amount of the Middle-Tier REMIC Group I
Accrual Interest equals the excess of aggregate principal amount of the Group I
Mortgage Loans over the aggregate principal amount of the Middle-Tier REMIC
Group I Regular Interests other than the Middle-Tier REMIC Group I Accrual
Interest and (ii) accrued interest in respect of the Middle-Tier REMIC Group II
Accrual Interest will be added to the principal amount of that interest to the
extent necessary to ensure that immediately following such Distribution Date,
the principal amount of the Middle-Tier REMIC Group II Accrual Interest equals
the excess of aggregate principal amount of the Group II Mortgage Loans over the
aggregate principal amount of the Middle-Tier REMIC Group II Regular Interests
other than the Middle-Tier REMIC Group II Accrual Interest.
The principal amount of each Middle-Tier REMIC Regular Interest (other
than the Middle-Tier REMIC Accrual Interests) will be reduced by .001% of the
Applied Realized Loss Amount allocated to the Related Certificate. The principal
amount of the Middle-Tier REMIC Group I Accrual Interest will be reduced by
99.999% of the Applied Realized Loss Amount allocated to the Group I
Certificates and by 100% of any Realized Losses on Group I Mortgage Loans
allocated to the Class C Certificate. The principal amount of the Middle-Tier
REMIC Group II Accrual Interest will be reduced by 99.999% of the Applied
Realized Loss Amount allocated to the Group II Certificates and by 100% of any
Realized Losses on Group II Mortgage Loans allocated to the Class C Certificate.
Calculations in connection with this Section 2.07(c) shall be carried
out to eight decimal places.
The beneficial ownership of the LR Interest, the MR Interest and the UR
Interest shall be represented by the Class R Certificate. None of the LR
Interest, the MR Interest or the UR Interest shall have a principal balance or
bear interest.
(d) The "tax matters person" with respect to each REMIC for purposes of
the REMIC provisions shall be the beneficial owner of the Class R Certificate;
provided, however, that each holder of a Class R Certificate, by its acceptance
thereof, irrevocably appoints the Servicer as its agent and attorney-in-fact to
act as "tax matters person" with respect to each REMIC for purposes of the REMIC
Provisions.
(e) It is intended that the rights of the Class IIA-1 Certificates, the
Class IIM-1 Certificates, the Class IIM-2 Certificates and the Class IIB
Certificates to receive payments in respect of Excess Interest shall be treated
as a right in interest rate cap contracts written by the Class C
Certificateholders in favor of the holders of the Class IIA-1 Certificates, the
Class IIM-1 Certificates, the Class IIM-2 Certificates and the Class IIB
Certificates, and shall be accounted for as property held separate and apart
from the regular interests in the Upper-Tier REMIC held by the holders of the
Class IIA-1 Certificates, the Class IIM-1 Certificates, the Class IIM-2
Certificates and the Class IIB Certificates. This provision is intended to
satisfy the requirements of Treasury Regulations Section 1.860G-2(i) for the
treatment of property rights coupled with regular interests to be separately
respected and shall be interpreted consistently with such regulation. On each
Distribution Date, to the extent that any of the Class IIA-1 Certificates, the
Class IIM-1 Certificates, the Class IIM-2 Certificates or the Class IIB
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Certificates receives payments of Excess Interest, such amount will be treated
as distributed to the Class C Certificates and then paid to the relevant class
of Group II Certificates pursuant to the related interest rate cap agreement.
(f) It is intended that the rights of the Class C Certificates to
receive Excess Payments shall be treated as a right in contracts written by the
Class R Certificateholders in favor of the holders of the Class C Certificates
and shall be accounted for as property held separate and apart from the regular
interests in the Upper-Tier REMIC held by the holders of the Class C
Certificates. This provision is intended to satisfy the requirements of Treasury
Regulations Section 1.860G-2(i) for the treatment of property rights coupled
with regular interests to be separately respected and shall be interpreted
consistently with such regulation. On each Distribution Date, to the extent that
the Class C Certificates receive or are deemed under Section 2.07(e) to receive
Excess Payments, such amounts will be treated as distributed to the Class R
Certificates and then paid to the Class C Certificate pursuant to the related
contractual agreement.
(g) The parties intend that the portion of the Trust Fund consisting of
the Upper-Tier REMIC Class C Interest, together with (x) the obligation of the
holders of the Class C Certificates to pay amounts of Excess Interest to the
holders of the Class IIA-1 Certificates, the Class IIM-1 Certificates, the Class
IIM-2 Certificates and the Class IIB Certificates and (y) the right to receive
Excess Payments from the holder of the Class R Certificate, shall be treated as
a "grantor trust" under the Code, and the provisions hereof shall be interpreted
consistently with this intention. In furtherance of such intention, the Trustee
shall (i) furnish or cause to be furnished to the holders of the Class C
Certificates information regarding their allocable share of the income with
respect to such grantor trust, (ii) file or cause to be filed with the Internal
Revenue Service Form 1041 (together with any necessary attachments) or such
other form as may be applicable and (iii) comply with such information reporting
obligations with respect to payments from such grantor trust as may be
applicable under the Code.
(h) The parties intend that the portion of the Trust Fund consisting of
the right to receive proceeds from prepayment penalties and late payment charges
collected on the Mortgage Loans shall be treated as a "grantor trust" under the
Code, and the provisions hereof shall be interpreted consistently with this
intention. In furtherance of such intention, the Trustee shall (i) furnish or
cause to be furnished to the holders of the Class P Certificates and the Class L
Certificates information regarding their allocable share of the income with
respect to such grantor trust and (ii) file or cause to be filed with the
Internal Revenue Service Form 1041 (together with any necessary attachments) or
such other form as may be applicable.
SECTION 2.08. Covenants of the Servicer.
The Servicer hereby covenants to each of the other parties to this
Agreement as follows:
(a) the Servicer shall comply in the performance of its obligations
under this Agreement with all reasonable rules and requirements of the insurer
under each Required Insurance Policy; and
(b) no written information, certificate of an officer, statement
furnished in writing or written report delivered to the Depositor or the
Trustee, any affiliate of the Depositor or the Trustee and prepared by the
Servicer pursuant to this Agreement will be inaccurate in any material respect.
SECTION 2.09. [RESERVED].
SECTION 2.10. [RESERVED].
SECTION 2.11. Permitted Activities of the Trust. The Trust is created
for the object and purpose of engaging in the Permitted Activities.
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SECTION 2.12. Qualifying Special Purpose Entity. For purposes of SFAS
140, the parties hereto intend that the Trust shall be treated as a "qualifying
special purpose entity" as such term is used in SFAS 140 and any successor rule
thereto and its power and authority as stated in Section 2.11 of this Agreement
shall be limited in accordance with paragraph 35 thereof.
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
SECTION 3.01. Servicer to Service Mortgage Loans.
For and on behalf of the Certificateholders, the Servicer shall service
and administer the Mortgage Loans in accordance with Accepted Servicing
Practices. In connection with such servicing and administration, the Servicer
shall have full power and authority, acting alone and/or through subservicers as
provided in Section 3.02 hereof, to do or cause to be done any and all things
that it may deem necessary or desirable in connection with such servicing and
administration, including but not limited to, the power and authority, subject
to the terms hereof (i) to execute and deliver, on behalf of the
Certificateholders and the Trustee, customary consents or waivers and other
instruments and documents, (ii) to consent to transfers of any Mortgaged
Property and assumptions of the Mortgage Notes and related Mortgages (but only
in the manner provided in this Agreement), (iii) to collect any Insurance
Proceeds and other Liquidation Proceeds and (iv) subject to Section 3.12(a), to
effectuate foreclosure or other conversion of the ownership of the Mortgaged
Property securing any Mortgage Loan; provided that, subject to Section 6.03, the
Servicer shall not take any action that is inconsistent with or prejudices the
interests of the Trust Fund or the Certificateholders in any Mortgage Loan
serviced by it under this Agreement or the rights and interests of the other
parties to this Agreement. The Servicer shall represent and protect the interest
of the Trust Fund in the same manner as it currently protects its own interest
in mortgage loans in its own portfolio in any claim, proceeding or litigation
regarding a Mortgage Loan and shall not make or permit any modification, waiver
or amendment of any term of any Mortgage Loan which would cause any of the
Lower-Tier REMIC, the Middle-Tier REMIC or the Upper-Tier REMIC to fail to
qualify as a REMIC or result in the imposition of any tax under Section 860G(a)
or 860G(d) of the Code, but in any case not in any manner that is a lesser
standard than that provided in the first sentence of this Section 3.01. Without
limiting the generality of the foregoing, the Servicer, in its own name or in
the name of the Depositor and the Trustee, is hereby authorized and empowered by
the Depositor and the Trustee, when the Servicer believes it appropriate in its
reasonable judgment, to execute and deliver, on behalf of the Trustee, the
Depositor, the Certificateholders or any of them, any and all instruments of
satisfaction or cancellation, or of partial or full release or discharge and all
other comparable instruments, with respect to the Mortgage Loans, and with
respect to the Mortgaged Properties held for the benefit of the
Certificateholders. The Servicer shall prepare and deliver to the Depositor
and/or the Trustee such documents requiring execution and delivery by any or all
of them as are necessary or appropriate to enable the Servicer to service and
administer the Mortgage Loans, including without limitation, any powers of
attorney. Upon receipt of such documents, the Depositor and/or the Trustee shall
execute such documents and deliver them to the Servicer.
In accordance with the standards of the preceding paragraph, the
Servicer shall advance or cause to be advanced funds as necessary for the
purpose of effecting the payment of taxes and assessments on the Mortgaged
Properties, which advances shall be reimbursable in the first instance from
related collections from the Mortgagors pursuant to Section 3.06, and further as
provided in Section 3.08. All costs incurred by the Servicer, if any, in
effecting the timely payments of taxes and assessments on the Mortgaged
Properties and related insurance premiums shall not, for the purpose of
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calculating monthly distributions to the Certificateholders, be added to the
Stated Principal Balance under the related Mortgage Loans, notwithstanding that
the terms of such Mortgage Loans so permit.
The Servicer shall deliver a list of Servicing Officers to the Trustee
by the Closing Date.
SECTION 3.02. Servicing and Subservicing; Enforcement of the
Obligations of Servicer.
(a) The Servicer may arrange for the subservicing of any Mortgage Loan
by a subservicer, which may be an affiliate (each, a "subservicer") pursuant to
a subservicing agreement (each, a "Subservicing Agreement"); provided, however,
that such subservicing arrangement and the terms of the related subservicing
agreement must provide for the servicing of such Mortgage Loans in a manner
consistent with the servicing arrangements contemplated hereunder.
Notwithstanding the provisions of any subservicing agreement, any of the
provisions of this Agreement relating to agreements or arrangements between the
Servicer and a subservicer or reference to actions taken through a subservicer
or otherwise, the Servicer shall remain obligated and liable to the Depositor,
the Trustee and the Certificateholders for the servicing and administration of
the Mortgage Loans in accordance with the provisions of this Agreement without
diminution of such obligation or liability by virtue of such subservicing
agreements or arrangements or by virtue of indemnification from the subservicer
and to the same extent and under the same terms and conditions as if the
Servicer alone were servicing and administering the Mortgage Loans. Every
subservicing agreement entered into by the Servicer shall contain a provision
giving any successor Servicer the option to terminate such agreement in the
event a successor Servicer is appointed. All actions of the each subservicer
performed pursuant to the related subservicing agreement shall be performed as
an agent of the Servicer with the same force and effect as if performed directly
by the Servicer.
(b) For purposes of this Agreement, the Servicer shall be deemed to
have received any collections, recoveries or payments with respect to the
Mortgage Loans that are received by a subservicer regardless of whether such
payments are remitted by the subservicer to the Servicer.
SECTION 3.03. Rights of the Depositor and the Trustee in Respect of the
Servicer.
Neither the Trustee nor the Depositor shall have any responsibility or
liability for any action or failure to act by the Servicer, and neither of them
is obligated to supervise the performance of the Servicer hereunder or
otherwise.
SECTION 3.04. Trustee to Act as Servicer.
In the event that the Servicer shall for any reason no longer be the
Servicer hereunder (including by reason of an Event of Default), the Trustee or
its designee shall thereupon assume all of the rights and obligations of the
Servicer hereunder arising thereafter (except that the Trustee shall not be (i)
liable for losses of the Servicer pursuant to Section 3.10 hereof or any acts or
omissions of such predecessor Servicer hereunder, (ii) obligated to make
Advances if it is prohibited from doing so by applicable law, (iii) obligated to
effectuate repurchases or substitutions of Mortgage Loans hereunder, including
pursuant to Section 2.02 or 2.03 hereof, (iv) responsible for expenses of the
Servicer pursuant to Section 2.03 or (v) deemed to have made any representations
and warranties hereunder, including pursuant to Section 2.03 or the first
paragraph of Section 6.02 hereof. If the Servicer shall for any reason no longer
be the Servicer (including by reason of any Event of Default), the Trustee (or
any other successor servicer) may, at its option, succeed to any rights and
obligations of the Servicer under any subservicing agreement in accordance with
the terms thereof; provided, however, that the Trustee (or any other successor
servicer) shall not incur any liability or have any obligations in its capacity
as servicer under a subservicing agreement arising prior to the date of such
succession unless it expressly elects to succeed to the rights and obligations
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of the Servicer thereunder; and the Servicer shall not thereby be relieved of
any liability or obligations under the subservicing agreement arising prior to
the date of such succession.
The Servicer shall, upon request of the Trustee, but at the expense of
the Servicer, deliver to the assuming party all documents and records relating
to each subservicing agreement and the Mortgage Loans then being serviced and
otherwise use its best efforts to effect the orderly and efficient transfer of
the subservicing agreement to the assuming party.
SECTION 3.05. Collection of Mortgage Loan Payments; Collection Account;
Distribution Account.
(a) The Servicer shall make reasonable efforts in accordance with
Accepted Servicing Practices to collect all payments called for under the terms
and provisions of the Mortgage Loans to the extent such procedures shall be
consistent with this Agreement and the terms and provisions of any related
Required Insurance Policy. Consistent with the foregoing, the Servicer may in
its discretion (i) waive any late payment charge or any prepayment charge or
penalty interest in connection with the prepayment of a Mortgage Loan (provided
that the Servicer shall not waive any prepayment charge or penalty interest in
connection with the prepayment of a Mortgage Loan without the prior written
consent of the Holders of the Class P Certificate or, after the issuance of
notes pursuant to an Indenture, the written consent of the NIMs Insurer (which
consent shall be automatically deemed to have been given in the case of certain
waivers specified by the NIMs Insurer and the Servicer at the time such
Indenture is executed); provided, further, that if the Holder of the Class P
Certificate does not respond within 3 Business Days after notice from the
Servicer, the Holder of the Class P Certificate shall be deemed to have
consented to any action taken by the Servicer with respect to such prepayment
charges or penalty interest and (ii) extend the due dates for payments due on a
Mortgage Note for a period not greater than 270 days; provided, however, that
the NIMs Insurer's prior written consent shall be required for any modification,
waiver or amendment if the aggregate number of outstanding Mortgage Loans which
have been modified, waived or amended exceeds 5% of the number of Mortgage Loans
as of the Cut-Off Date. In the event of any such arrangement, subject to Section
4.01, the Servicer shall make any Advances on the related Mortgage Loan during
the scheduled period in accordance with the amortization schedule of such
Mortgage Loan without modification thereof by reason of such arrangements. The
Servicer shall not be required to institute or join in litigation with respect
to collection of any payment (whether under a Mortgage, Mortgage Note or
otherwise or against any public or governmental authority with respect to a
taking or condemnation) if it reasonably believes that enforcing the provision
of the Mortgage or other instrument pursuant to which such payment is required
is prohibited by applicable law.
(b) The Servicer shall establish and initially maintain, on behalf of
the Certificateholders, the Collection Account. The Servicer shall deposit into
the Collection Account daily, within two Business Days of receipt thereof, in
immediately available funds, the following payments and collections received or
made by it on and after the Cut-Off Date with respect to the Mortgage Loans:
(i) all payments on account of principal, including
Principal Prepayments, on the Mortgage Loans, other than principal
received on the Mortgage Loans prior to the Cut-off Date;
(ii) all payments on account of interest on the Mortgage
Loans net of the related Servicing Fee permitted under Section 3.15,
other than interest due on the Mortgage Loans on or prior to the
Cut-off Date;
(iii) all Liquidation Proceeds, other than proceeds to be
applied to the restoration or repair of the Mortgaged Property or
released to the Mortgagor in accordance with the Servicer's normal
servicing procedures;
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(iv) all Compensating Interest;
(v) any amount required to be deposited by the Servicer
pursuant to Section 3.05(e) in connection with any losses on Permitted
Investments;
(vi) any amounts required to be deposited by the Servicer
pursuant to Section 3.10 hereof;
(vii) the Purchase Price and any Substitution Adjustment
Amount;
(viii) all Advances made by the Servicer pursuant to Section
4.01;
(ix) all prepayment penalties and late payment charges; and
(x) any other amounts required to be deposited hereunder.
The foregoing requirements for remittance by the Servicer into the
Collection Account shall be exclusive, it being understood and agreed that,
without limiting the generality of the foregoing, payments in the nature of
assumption fees (i.e. fees related to the assumption of a Mortgage Loan upon the
purchase of the related Mortgaged Property) if collected, need not be remitted
by the Servicer. In the event that the Servicer shall remit any amount not
required to be remitted and not otherwise subject to withdrawal pursuant to
Section 3.08 hereof, it may at any time withdraw or direct the Trustee, or such
other institution maintaining the Collection Account, to withdraw such amount
from the Collection Account, any provision herein to the contrary
notwithstanding. Such withdrawal or direction may be accomplished by delivering
written notice thereof to the Trustee, or such other institution maintaining the
Collection Account, that describes the amounts deposited in error in the
Collection Account. The Servicer shall maintain adequate records with respect to
all withdrawals made pursuant to this Section. All funds deposited in the
Collection Account shall be held in trust for the Certificateholders until
withdrawn in accordance with Section 3.08. In no event shall the Trustee incur
liability for withdrawals from the Collection Account at the direction of the
Servicer.
The Servicer shall give notice to the NIMs Insurer of the location of
the Collection Account maintained by it when established and prior to any change
thereof.
(c) [RESERVED].
(d) The Servicer shall establish and maintain, on behalf of the
Certificateholders, the Distribution Account. The Servicer shall, promptly upon
receipt, deposit in the Distribution Account and retain therein the following:
(i) the aggregate amount withdrawn by the Servicer pursuant
to the second paragraph of Section 3.08(b);
(ii) any amount required to be deposited by the Servicer
pursuant to Section 3.05(e) in connection with any losses on Permitted
Investments; and
(iii) the Repurchase Price paid by the Servicer pursuant to
Section 9.01.
The foregoing requirements for remittance by the Servicer and deposit
by the Servicer into the Distribution Account shall be exclusive. In the event
that the Servicer shall remit any amount not required to be remitted and not
otherwise subject to withdrawal pursuant to Section 3.08 hereof, it may at any
time withdraw such amount from the Distribution Account, any provision herein to
the contrary notwithstanding. All funds deposited in the Distribution Account
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shall be held by the Trustee in trust for the Certificateholders until disbursed
in accordance with this Agreement or withdrawn in accordance with Section 3.08.
In no event shall the Trustee incur liability for withdrawals from the
Distribution Account at the direction of the Servicer. The Servicer shall give
notice to the NIMs Insurer of the location of the Distribution Account when
established and prior to any change thereof.
(e) Each institution that maintains the Collection Account or the
Distribution Account may invest the funds in each such account, as directed by
the Servicer with respect to the Collection Account and the Distribution
Account, in Permitted Investments, which shall mature not later than (i) in the
case of the Collection Account, the Business Day preceding the related Servicer
Remittance Date (except that if such Permitted Investment is an obligation of
the institution that maintains such Collection Account or is otherwise
immediately available, then such Permitted Investment shall mature not later
than the Servicer Remittance Date) and (ii) in the case of the Distribution
Account, the Business Day immediately preceding the first Distribution Date that
follows the date of such investment (except that if such Permitted Investment is
an obligation of the institution that maintains such Distribution Account or is
otherwise immediately available, then such Permitted Investment shall mature not
later than such Distribution Date) and, in each case, shall not be sold or
disposed of prior to its maturity. All such Permitted Investments shall be made
in the name of the Trustee, for the benefit of the Certificateholders. All
income and gain net of any losses realized from amounts on deposit in the
Collection Account shall be for the benefit of the Servicer as servicing
compensation and shall be remitted to it monthly as provided herein. The amount
of any losses incurred in the Collection Account in respect of any such
investments shall be deposited by the Servicer in the Collection Account out of
the Servicer's own funds immediately as realized. All income and gain net of any
losses realized from amounts on deposit in the Distribution Account shall be for
the benefit of the Servicer as compensation and shall be remitted to it monthly
as provided herein. The amount of any losses incurred in the Distribution
Account in respect of any such investments shall be deposited by the Servicer,
or the Trustee upon receipt from the Servicer, in the Distribution Account out
of the Servicer's own funds immediately as realized. The Trustee shall not be
liable for the amount of any loss incurred in respect of any investment or lack
of investment of funds held in the Collection Account or the Distribution
Account and made in accordance with this Section 3.05.
(f) The party maintaining the Collection Account or the Distribution
Account, as the case may be, shall give at least 30 days advance notice to each
of the other parties to this Agreement and each Rating Agency of any proposed
change of the location of the Collection Account or the Distribution Account
prior to any change thereof.
SECTION 3.06. Collection of Taxes, Assessments and Similar Items;
Escrow Accounts.
To the extent required by the related Mortgage Note, the Servicer shall
establish and maintain one or more accounts (each, an "Escrow Account") and
deposit and retain therein all collections from the Mortgagors (or advances by
the Servicer) for the payment of taxes, assessments, hazard insurance premiums
or comparable items for the account of the Mortgagors. Nothing herein shall
require the Servicer to compel a Mortgagor to establish an Escrow Account in
violation of applicable law.
Withdrawals of amounts so collected from the Escrow Accounts may be
made only to effect timely payment of taxes, assessments, hazard insurance
premiums, condominium or PUD association dues, or comparable items, to reimburse
the Servicer out of related collections for any payments made pursuant to
Sections 3.01 hereof (with respect to taxes and assessments and insurance
premiums) and 3.10 hereof (with respect to hazard insurance), to refund to any
Mortgagors any sums as may be determined to be overages, to pay interest, if
required by law or the terms of the related Mortgage or Mortgage Note, to
Mortgagors on balances in the Escrow Account or to clear and terminate the
Escrow Account at the termination of this Agreement in accordance with Section
9.01 hereof. The Escrow Accounts shall not be a part of the Trust Fund.
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SECTION 3.07. Access to Certain Documentation and Information Regarding
the Mortgage Loans.
The Servicer shall afford the Depositor, the NIMs Insurer and the
Trustee reasonable access to all records and documentation regarding the
Mortgage Loans and all accounts, insurance policies and other matters relating
to this Agreement, such access being afforded without charge, but only upon
reasonable request and during normal business hours at the offices of the
Servicer designated by it.
Upon reasonable advance notice in writing if required by federal
regulation, the Servicer will provide to each Certificateholder that is a
savings and loan association, bank or insurance company certain reports and
reasonable access to information and documentation regarding the Mortgage Loans
sufficient to permit such Certificateholder to comply with applicable
regulations of the OTS or other regulatory authorities with respect to
investment in the Certificates; provided, that the Servicer shall be entitled to
be reimbursed by each such Certificateholder for actual expenses incurred by the
Servicer in providing such reports and access.
SECTION 3.08. Permitted Withdrawals from the Collection Account and
Distribution Account.
(a) The Servicer (or the Depositor in the case of clauses (vi) and
(vii) below) may from time to time, make withdrawals from the related Collection
Account for the following purposes:
(i) to pay to the Servicer (to the extent not previously
paid to or withheld by the Servicer), as servicing compensation in
accordance with Section 3.15, that portion of any payment of interest
that equals the Servicing Fee for the period with respect to which such
interest payment was made, and, as additional servicing compensation,
those other amounts set forth in Section 3.15;
(ii) to reimburse the Servicer for Advances made by it with
respect to the Mortgage Loans, such right of reimbursement pursuant to
this subclause (ii) being limited to amounts received on particular
Mortgage Loan(s) (including, for this purpose, Liquidation Proceeds)
that represent late recoveries of payments of principal and/or interest
on such particular Mortgage Loan(s) in respect of which any such
Advance was made;
(iii) to reimburse the Servicer for any Non-Recoverable
Advance previously made and any Non-Recoverable Servicing Advance;
(iv) to reimburse the Servicer from Insurance Proceeds for
Insured Expenses covered by the related Insurance Policy;
(v) pay the Servicer any unpaid Servicing Fees and to
reimburse it for any unreimbursed Servicing Advances, the Servicer's
right to reimbursement of Servicing Advances pursuant to this subclause
(v) with respect to any Mortgage Loan being limited to amounts received
on particular Mortgage Loan(s)(including, for this purpose, Liquidation
Proceeds and purchase and repurchase proceeds) that represent late
recoveries of the payments for which such advances were made pursuant
to Section 3.01 or Section 3.06;
(vi) to pay to the Depositor or the Servicer, as applicable,
with respect to each Mortgage Loan or property acquired in respect
thereof that has been purchased pursuant to Section 2.02, 2.03 or 3.12,
all amounts received thereon and not taken into account in determining
the related Stated Principal Balance of such repurchased Mortgage Loan;
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(vii) to reimburse the Servicer or the Depositor for expenses
incurred by any of them in connection with the Mortgage Loans or
Certificates and reimbursable pursuant to Section 6.03 hereof;
(viii) to withdraw pursuant to Section 3.05 any amount
deposited in the Collection Account and not required to be deposited
therein; and
(ix) to clear and terminate the Collection Account upon
termination of this Agreement pursuant to Section 9.01 hereof.
In addition, no later than 12:00 noon Pacific Standard Time on the
Servicer Remittance Date (or such earlier time on the Servicer Remittance Date
as the Servicer or the Paying Agent requires as specified in writing not later
than two Business Days prior to the Servicer Remittance Date, such earlier time
requirement being due to the operations of the Servicer's or Paying Agent's
designated Permitted Investment closing early on the Servicer Remittance Date),
the Servicer shall cause to be withdrawn from the Collection Account the Group I
Interest Funds (other than the amounts subtracted from such funds in such
definition) and the Group I Principal Funds (other than Non-Recoverable Advances
specified in item (v) of such definition), the Group II Interest Funds (other
than the amounts subtracted from such funds in such definition), the Group II
Principal Funds (other than Non-Recoverable Advances specified in item (v) of
such definition), to the extent on deposit, and such amount shall be deposited
in the Distribution Account.
The Servicer shall keep and maintain separate accounting, on a Mortgage
Loan by Mortgage Loan basis, for the purpose of justifying any withdrawal from
the Collection Account.
(b) The Servicer shall withdraw funds from the Distribution Account for
distribution to the Certificateholders in the manner specified in this Agreement
(and to withhold from the amounts so withdrawn, the amount of any taxes that it
is authorized to retain pursuant to the last paragraph of Section 8.11). In
addition, the Servicer may from time to time make withdrawals from the
Distribution Account for the following purposes:
(i) to pay to the Servicer, as additional compensation,
earnings on or investment income with respect to funds in or credited
to the Distribution Account;
(ii) to withdraw pursuant to Section 3.05 any amount
deposited in the Distribution Account and not required to be deposited
therein; and
(iii) to clear and terminate the Distribution Account upon
termination of the Agreement pursuant to Section 9.01 hereof.
SECTION 3.09. [RESERVED].
SECTION 3.10. Maintenance of Hazard Insurance.
The Servicer shall cause to be maintained, for each Mortgage Loan,
hazard insurance with extended coverage in an amount that is at least equal to
the lesser of (i) the replacement value of the improvements that are part of
such Mortgaged Property and (ii) the greater of (a) the outstanding principal
balance of the Mortgage Loan and (b) an amount such that the proceeds of such
policy shall be sufficient to prevent the related Mortgagor and/or mortgagee
from becoming a co-insurer. Each such policy of standard hazard insurance shall
contain, or have an accompanying endorsement that contains, a standard mortgagee
clause. The Servicer shall also cause flood insurance to be maintained on
property acquired upon foreclosure or deed in lieu of foreclosure of any
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Mortgage Loan, to the extent described below. Pursuant to Section 3.05 hereof,
any amounts collected by the Servicer under any such policies (other than the
amounts to be applied to the restoration or repair of the related Mortgaged
Property or property thus acquired or amounts released to the Mortgagor in
accordance with the Servicer's normal servicing procedures) shall be deposited
in the Collection Account. Any cost incurred by the Servicer in maintaining any
such insurance shall not, for the purpose of calculating monthly distributions
to the Certificateholders or remittances to the Trustee for their benefit, be
added to the principal balance of the Mortgage Loan, notwithstanding that the
terms of the Mortgage Loan so permit. Such costs shall be recoverable by the
Servicer out of late payments by the related Mortgagor or out of Liquidation
Proceeds to the extent permitted by Section 3.08 hereof. It is understood and
agreed that no earthquake or other additional insurance is to be required of any
Mortgagor or maintained on property acquired in respect of a Mortgage other than
pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance. If the Mortgaged Property
is located at the time of origination of the Mortgage Loan in a federally
designated special flood hazard area and such area is participating in the
national flood insurance program, the Servicer shall cause flood insurance to be
maintained with respect to such Mortgage Loan. Such flood insurance shall be in
an amount equal to the lesser of (i) the original principal balance of the
related Mortgage Loan, (ii) the replacement value of the improvements that are
part of such Mortgaged Property, or (iii) the maximum amount of such insurance
available for the related Mortgaged Property under the Flood Disaster Protection
Act of 1973, as amended.
In the event that the Servicer shall obtain and maintain a blanket
policy insuring against hazard losses on all of the Mortgage Loans, it shall
conclusively be deemed to have satisfied its obligations as set forth in the
first sentence of this Section 3.10, it being understood and agreed that such
policy may contain a deductible clause on terms substantially equivalent to
those commercially available and maintained by comparable servicers. If such
policy contains a deductible clause, the Servicer shall, in the event that there
shall not have been maintained on the related Mortgaged Property a policy
complying with the first sentence of this Section 3.10, and there shall have
been a loss that would have been covered by such policy, deposit in the
Collection Account the amount not otherwise payable under the blanket policy
because of such deductible clause. In connection with its activities as servicer
of the Mortgage Loans, the Servicer agrees to present, on behalf of itself, the
Depositor and the Trustee for the benefit of the Certificateholders, claims
under any such blanket policy.
SECTION 3.11. Enforcement of Due-On-Sale Clauses; Assumption
Agreements.
(a) Except as otherwise provided in this Section 3.11(a), when any
property subject to a Mortgage has been or is about to be conveyed by the
Mortgagor, the Servicer shall to the extent that it has knowledge of such
conveyance, enforce any due-on-sale clause contained in any Mortgage Note or
Mortgage, to the extent permitted under applicable law and governmental
regulations, but only to the extent that such enforcement will not adversely
affect or jeopardize coverage under any Required Insurance Policy.
Notwithstanding the foregoing, the Servicer is not required to exercise such
rights with respect to a Mortgage Loan if the Person to whom the related
Mortgaged Property has been conveyed or is proposed to be conveyed satisfies the
terms and conditions contained in the Mortgage Note and Mortgage related thereto
and the consent of the mortgagee under such Mortgage Note or Mortgage is not
otherwise so required under such Mortgage Note or Mortgage as a condition to
such transfer. In the event that the Servicer is prohibited by law from
enforcing any such due-on-sale clause, or if coverage under any Required
Insurance Policy would be adversely affected, or if nonenforcement is otherwise
permitted hereunder, the Servicer is authorized, subject to Section 3.11(b), to
take or enter into an assumption and modification agreement from or with the
person to whom such property has been or is about to be conveyed, pursuant to
which such person becomes liable under the Mortgage Note and, unless prohibited
by applicable state law, the Mortgagor remains liable thereon, provided that the
Mortgage Loan shall continue to be covered (if so covered before the Servicer
enters such agreement) by the applicable Required Insurance Policies. The
Servicer, subject to Section 3.11(b), is also authorized with the prior approval
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of the insurers under any Required Insurance Policies to enter into a
substitution of liability agreement with such Person, pursuant to which the
original Mortgagor is released from liability and such Person is substituted as
Mortgagor and becomes liable under the Mortgage Note. Notwithstanding the
foregoing, the Servicer shall not be deemed to be in default under this Section
3.11(a) by reason of any transfer or assumption that the Servicer reasonably
believes it is restricted by law from preventing.
(b) Subject to the Servicer's duty to enforce any due-on-sale clause to
the extent set forth in Section 3.11(a) hereof, in any case in which a Mortgaged
Property has been conveyed to a Person by a Mortgagor, and such Person is to
enter into an assumption agreement or modification agreement or supplement to
the Mortgage Note or Mortgage that requires the signature of the Trustee, or if
an instrument of release signed by the Trustee is required releasing the
Mortgagor from liability on the Mortgage Loan, the Servicer shall prepare and
deliver or cause to be prepared and delivered to the Trustee for signature and
shall direct, in writing, the Trustee to execute the assumption agreement with
the Person to whom the Mortgaged Property is to be conveyed and such
modification agreement or supplement to the Mortgage Note or Mortgage or other
instruments as are reasonable or necessary to carry out the terms of the
Mortgage Note or Mortgage or otherwise to comply with any applicable laws
regarding assumptions or the transfer of the Mortgaged Property to such Person.
In connection with any such assumption, no material term of the Mortgage Note
(including, but not limited to, the Mortgage Rate, the amount of the Scheduled
Payment, the Maximum Rate, the Minimum Rate, the Gross Margin, the Periodic Rate
Cap, the Adjustment Date, any prepayment penalty and any other term affecting
the amount or timing of payment on the Mortgage Loan) may be changed. The
Servicer shall notify the Trustee that any such substitution or assumption
agreement has been completed by forwarding to the Trustee the original of such
substitution or assumption agreement, which in the case of the original shall be
added to the related Mortgage File and shall, for all purposes, be considered a
part of such Mortgage File to the same extent as all other documents and
instruments constituting a part thereof. Any fee collected by the Servicer for
entering into an assumption or substitution of liability agreement will be
retained by the Servicer as additional servicing compensation.
SECTION 3.12. Realization Upon Defaulted Mortgage Loans; Determination
of Excess Proceeds; Repurchase of Certain Mortgage Loans.
(a) The Servicer shall use reasonable efforts to foreclose upon or
otherwise comparably convert the ownership of properties securing such of the
Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of Delinquent payments. In
connection with such foreclosure or other conversion, the Servicer shall follow
such practices and procedures as it shall deem necessary or advisable and as
shall be normal and usual in its general mortgage servicing activities and the
requirements of the insurer under any Required Insurance Policy; provided,
however, that the Servicer shall not be required to expend its own funds in
connection with any foreclosure or towards the restoration of any property
unless it shall determine (i) that such restoration and/or foreclosure will
increase the proceeds of liquidation of the Mortgage Loan after reimbursement to
itself of such expenses and (ii) that such expenses will be recoverable to it
through Liquidation Proceeds (respecting which it shall have priority for
purposes of withdrawals from the Collection Account pursuant to Section 3.08
hereof). 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 from the proceeds of liquidation of the
related Mortgaged Property, as contemplated in Section 3.08 hereof. If the
Servicer has knowledge that a Mortgaged Property that the Servicer is
contemplating acquiring in foreclosure or by deed-in-lieu of foreclosure is
located within a one-mile radius of any site with environmental or hazardous
waste risks known to the Servicer, the Servicer will, prior to acquiring the
Mortgaged Property, consider such risks and only take action in accordance with
Accepted Servicing Practices.
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With respect to any REO Property, the deed or certificate of sale shall
be taken in the name of "Citibank, N.A. as trustee." 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 REO
Property is located and may, incident to its conservation and protection of the
interests of the Certificateholders, rent the same, or any part thereof, as the
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. The
Servicer shall prepare a statement with respect to each REO Property that has
been rented showing the aggregate rental income received and all expenses
incurred in connection with the management and maintenance of such REO Property
at such times as is necessary to enable the Servicer to comply with the
reporting requirements of the REMIC Provisions. The net monthly rental income,
if any, from such REO Property shall be deposited in the Collection Account no
later than the close of business on each Determination Date. The Servicer shall
perform the tax reporting and withholding related to foreclosures, abandonments
and cancellation of indebtedness income as specified by Sections 1445, 6050J and
6050P of the Code by preparing and filing such tax and information returns, as
may be required.
In the event that the Trust Fund acquires any Mortgaged Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the Servicer shall dispose of such Mortgaged Property prior to
the expiration of three years from the end of the year of its acquisition by the
Trust Fund or, at the expense of the Trust Fund, request more than 60 days prior
to the day on which such three-year period would otherwise expire, an extension
of the three-year grace period unless the Trustee shall have been supplied with
an Opinion of Counsel (such Opinion of Counsel not to be an expense of the
Trustee) to the effect that the holding by the Trust Fund of such Mortgaged
Property subsequent to such three-year period will not result in the imposition
of taxes on "prohibited transactions" of the Trust Fund as defined in section
860F of the Code or cause any of the Lower-Tier REMIC, the Middle-Tier REMIC or
the Upper-Tier REMIC to fail to qualify as a REMIC at any time that any
Certificates are outstanding, in which case the Trust Fund may continue to hold
such Mortgaged Property (subject to any conditions contained in such Opinion of
Counsel). Notwithstanding any other provision of this Agreement, no Mortgaged
Property acquired by the Trust Fund shall be rented (or allowed to continue to
be rented) or otherwise used for the production of income by or on behalf of the
Trust Fund in such a manner or pursuant to any terms that would (i) cause such
Mortgaged Property to fail to qualify as "foreclosure property" within the
meaning of section 860G(a)(8) of the Code or (ii) subject the Trust Fund to the
imposition of any federal, state or local income taxes on the income earned from
such Mortgaged Property under section 860G(c) of the Code or otherwise, unless
the Servicer or the Depositor has agreed to indemnify and hold harmless the
Trust Fund with respect to the imposition of any such taxes.
The decision of the Servicer to foreclose on a defaulted Mortgage Loan
shall be subject to a determination by the Servicer that the proceeds of such
foreclosure would exceed the costs and expenses of bringing such a proceeding.
The income earned from the management of any Mortgaged Properties acquired
through foreclosure or other judicial proceeding, net of reimbursement to the
Servicer for expenses incurred (including any property or other taxes) in
connection with such management and net of unreimbursed Servicing Fees,
Advances, Servicing Advances and any management fee paid or to be paid with
respect to the management of such Mortgaged Property, shall be applied to the
payment of principal of, and interest on, the related defaulted Mortgage Loans
(with interest accruing as though such Mortgage Loans were still current) and
all such income shall be deemed, for all purposes in this Agreement, to be
payments on account of principal and interest on the related Mortgage Notes and
shall be deposited into the Collection Account. To the extent the income
received during a Prepayment Period is in excess of the amount attributable to
amortizing principal and accrued interest at the related Mortgage Rate on the
related Mortgage Loan, such excess shall be considered to be a partial Principal
Prepayment for all purposes hereof.
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The Liquidation Proceeds from any liquidation of a Mortgage Loan, net
of any payment to the Servicer as provided above, shall be deposited in the
Collection Account on the next succeeding Determination Date following receipt
thereof for distribution on the related Distribution Date.
The proceeds of any Liquidated Loan, as well as any recovery resulting
from a partial collection of Liquidation Proceeds or any income from an REO
Property, will be applied in the following order of priority: first, to
reimburse the Servicer for any related unreimbursed Servicing Advances and
Servicing Fees, pursuant to Section 3.08(a)(v) or this Section 3.12; second, to
reimburse the Servicer for any unreimbursed Advances, pursuant to Section
3.08(a)(ii) or this Section 3.12; third, to any prepayment penalties and then to
accrued and unpaid interest (to the extent no Advance has been made for such
amount) on the Mortgage Loan or related REO Property, at the Net Mortgage Rate
to the Due Date occurring in the month in which such amounts are required to be
distributed; and fourth, as a recovery of principal of the Mortgage Loan.
(b) On each Determination Date, the Servicer shall determine the
respective aggregate amounts of Excess Proceeds, if any, that occurred in the
related Prepayment Period.
(c) The Servicer, in its sole discretion, shall have the right to elect
(by written notice sent to the Trustee) to purchase for its own account from the
Trust Fund any Mortgage Loan that is 91 days or more Delinquent at a price equal
to the Purchase Price; provided, however, that the Servicer's right to purchase
any such Mortgage Loan which is 91 days or more Delinquent will exist from and
including the first day of the first month (i.e., January, April, July or
October) in the calendar quarter beginning after the month in which such
Mortgage Loan becomes 91 days or more Delinquent to and including the eighteenth
day of the last month (i.e., March, June, September or December) in such
calendar quarter. The Purchase Price for any Mortgage Loan purchased hereunder
shall be delivered to the Trustee for deposit in the Collection Account and the
Trustee, upon receipt of such deposit and a Request for Release from the
Depositor in the form of Exhibit M hereto, shall release or cause to be released
to the purchaser of such Mortgage Loan the related Mortgage File and shall
execute and deliver such instruments of transfer or assignment prepared by the
purchaser of such Mortgage Loan, in each case without recourse, as shall be
necessary to vest in the purchaser of such Mortgage Loan any Mortgage Loan
released pursuant hereto and the purchaser of such Mortgage Loan shall succeed
to all the Trustee's right, title and interest in and to such Mortgage Loan and
all security and documents related thereto. Such assignment shall be an
assignment outright and not for security. The purchaser of such Mortgage Loan
shall thereupon own such Mortgage Loan, and all security and documents, free of
any further obligation to the Trustee or the Certificateholders with respect
thereto.
In addition, the Servicer shall deliver to the Trustee a Request for
Release to cause sales of Mortgage Loans 91 days or more Delinquent pursuant to
this Agreement.
SECTION 3.13. Trustee to Cooperate; Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Servicer will promptly notify the Trustee or
its designee by delivering a Request for Release substantially in the form of
Exhibit M. Upon receipt of such request, the Trustee or its designee shall
promptly release the related Mortgage File to the Servicer, and the Trustee or
its designee shall at the Servicer's written direction execute and deliver to
the Servicer the request for reconveyance, deed of reconveyance or release or
satisfaction of mortgage or such instrument releasing the lien of the Mortgage
in each case provided by the Servicer, together with the Mortgage Note with
written evidence of cancellation thereon. No expenses incurred in connection
with any instrument of satisfaction or deed of reconveyance shall be chargeable
to the Collection Account, the Distribution Account or the related subservicing
account. From time to time and as shall be appropriate for the servicing or
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foreclosure of any Mortgage Loan, including for such purpose, collection under
any policy of flood insurance, any fidelity bond or errors or omissions policy,
or for the purposes of effecting a partial release of any Mortgaged Property
from the lien of the Mortgage or the making of any corrections to the Mortgage
Note or the Mortgage or any of the other documents included in the Mortgage
File, the Trustee or its designee shall, upon delivery to the Trustee or its
designee of a Request for Release in the form of Exhibit M signed by a Servicing
Officer, release the Mortgage File to the Servicer. Subject to the further
limitations set forth below, the Servicer shall cause the Mortgage File or
documents so released to be returned to the Trustee or its designee when the
need therefor by the Servicer no longer exists, unless the Mortgage Loan is
liquidated and the proceeds thereof are deposited in the Collection Account, in
which case the Trustee or its designee shall deliver the Request for Release to
the Servicer.
Each Request for Release may be delivered to the Trustee or its
designee (i) via mail or courier, (ii) via facsimile or (iii) by such other
means, including, without limitation, electronic or computer readable medium, as
the Servicer and the Trustee or its designee shall mutually agree. The Trustee
or its designee shall promptly release the related Mortgage File(s) within five
(5) to seven (7) Business Days of receipt of a properly completed Request for
Release pursuant to clauses (i), (ii) or (iii) above. Receipt of a properly
completed Request for Release shall be authorization to the Trustee or its
designee to release such Mortgage Files, provided the Trustee or its designee
has determined that such Request for Release has been executed, with respect to
clauses (i) or (ii) above, or approved, with respect to clause (iii) above, by
an authorized Servicing Officer of the Servicer, and so long as the Trustee or
its designee complies with its duties and obligations under the agreement. If
the Trustee or its designee is unable to release the Mortgage Files within the
period previously specified, the Trustee or its designee shall immediately
notify the Servicer indicating the reason for such delay, but in no event shall
such notification be later than five Business Days after receipt of a Request
for Release. If the Servicer is required to pay penalties or damages due to the
Trustee or its designee's negligent failure to release the related Mortgage File
or the Trustee or its designee's negligent failure to execute and release
documents in a timely manner, the Trustee or its designee, shall be liable for
such penalties or damages respectively caused by it.
On each day that the Servicer remits to the Trustee or its designee
Requests for Releases pursuant to clauses (ii) or (iii) above, the Servicer
shall also submit to the Trustee or its designee a summary of the total amount
of such Requests for Releases requested on such day by the same method as
described in such clauses (ii) and (iii) above.
If the Servicer at any time seeks to initiate a foreclosure proceeding
in respect of any Mortgaged Property as authorized by this Agreement, the
Servicer shall deliver or cause to be delivered to the Trustee or its designee,
for signature, as appropriate, any court pleadings, requests for trustee's sale
or other documents necessary to effectuate such foreclosure or any legal action
brought to obtain judgment against the Mortgagor on the Mortgage Note or the
Mortgage or to obtain a deficiency judgment or to enforce any other remedies or
rights provided by the Mortgage Note or the Mortgage or otherwise available at
law or in equity. Notwithstanding the foregoing, the Servicer shall cause
possession of any Mortgage File or of the documents therein that shall have been
released by the Trustee or its designee to be returned to the Custodian promptly
after possession thereof shall have been released by the Trustee or its designee
unless (i) the Mortgage Loan has been liquidated and the Liquidation Proceeds
relating to the Mortgage Loan have been deposited in the Collection Account, and
the Servicer shall have delivered to the Trustee or its designee a Request for
Release in the form of Exhibit M or (ii) the Mortgage File or document shall
have been delivered to an attorney or to a public trustee or other public
official as required by law for purposes of initiating or pursuing legal action
or other proceedings for the foreclosure of the Mortgaged Property and the
Servicer shall have delivered to the Trustee or its designee an Officer's
Certificate of a Servicing Officer certifying as to the name and address of the
Person to which the Mortgage File or the documents therein were delivered and
the purpose or purposes of such delivery.
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SECTION 3.14. Documents, Records and Funds in Possession of Servicer to
be Held for the Trustee.
All Mortgage Files and funds collected or held by, or under the control
of, the Servicer in respect of any Mortgage Loans, whether from the collection
of principal and interest payments or from Liquidation Proceeds, including but
not limited to, any funds on deposit in the Collection Account, shall be held by
the Servicer for and on behalf of the Trustee and shall be and remain the sole
and exclusive property of the Trustee, subject to the applicable provisions of
this Agreement. The Servicer also agrees that it shall not create, incur or
subject any Mortgage File or any funds that are deposited in the Collection
Account or Distribution Account or in any Escrow Account (as defined in Section
3.06), or any funds that otherwise are or may become due or payable to the
Trustee for the benefit of the Certificateholders, to any claim, lien, security
interest, judgment, levy, writ of attachment or other encumbrance, or assert by
legal action or otherwise any claim or right of set off against any Mortgage
File or any funds collected on, or in connection with, a Mortgage Loan, except,
however, that the Servicer shall be entitled to set off against and deduct from
any such funds any amounts that are properly due and payable to the Servicer
under this Agreement.
SECTION 3.15. Servicing Compensation.
As compensation for its activities hereunder, the Servicer shall be
entitled to retain or withdraw from the Collection Account out of each payment
of interest on a Mortgage Loan included in the Trust Fund an amount equal to
interest at the applicable Servicing Fee Rate on the Stated Principal Balance of
the related Mortgage Loan as of the immediately preceding Distribution Date,
plus any sums due to the Servicer pursuant to clause (ii) of the definition of
"Servicing Fee."
Additional servicing compensation in the form of any Excess Proceeds,
assumption fees (i.e. fees related to the assumption of a Mortgage Loan upon the
purchase of the related Mortgaged Property), and all income and gain net of any
losses realized from Permitted Investments in the Collection Account and the
Distribution Account shall be retained by the Servicer to the extent not
required to be deposited in the Collection Account pursuant to Sections 3.05, or
3.12(a) hereof. The Servicer shall be required to pay all expenses incurred by
it in connection with its servicing activities hereunder (including payment of
any premiums for hazard insurance, as required by Section 3.10 hereof and
maintenance of the other forms of insurance coverage required by Section 3.10
hereof) and shall not be entitled to reimbursement therefor except as
specifically provided in Sections 3.08 and 3.12 hereof.
SECTION 3.16. Access to Certain Documentation.
The Servicer shall provide to the OTS and the FDIC and to comparable
regulatory authorities supervising Holders of the Certificates and the examiners
and supervisory agents of the OTS, the FDIC and such other authorities, access
to the documentation regarding the Mortgage Loans required by applicable
regulations of the OTS and the FDIC. Such access shall be afforded without
charge, but only upon reasonable and prior written request and during normal
business hours at the offices of the Servicer designated by it. Nothing in this
Section shall limit the obligation of the Servicer to observe any applicable law
prohibiting disclosure of information regarding the Mortgagors and the failure
of the Servicer to provide access as provided in this Section as a result of
such obligation shall not constitute a breach of this Section.
SECTION 3.17. Annual Statement as to Compliance.
The Servicer shall deliver to the Depositor, the Trustee and the NIMs
Insurer on or before April 15 of each year, an Officer's Certificate stating, as
to the signer thereof, that (i) a review of the activities of the Servicer
during the preceding calendar year and of the performance of the Servicer under
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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 its obligations under this Agreement throughout such year, or, if
there has been a default in the fulfillment of any such obligation, specifying
each such default known to such officer and the nature and status thereof and
(iii) to the best of such officer's knowledge, each subservicer has fulfilled
all its obligations under its Subservicing Agreement throughout such year, or,
if there has been a default in the fulfillment of any such obligation specifying
each such default known to such officer and the nature and status thereof. The
Trustee shall forward a copy of each such statement to each Rating Agency.
Copies of such statement shall be provided by the Trustee to any
Certificateholder upon request at the Certificateholder's expense, provided such
statement is delivered by the Servicer to the Trustee.
SECTION 3.18. Annual Independent Public Accountants' Servicing
Statement; Financial Statements.
On or before the later of (i) April 15 of each year or (ii) within 30
days of the issuance of the annual audited financial statements beginning with
the audit for the period ending in 2001, the Servicer at its expense shall cause
a nationally recognized firm of independent public accountants (who may also
render other services to the Servicer or any affiliate thereof) that is a member
of the American Institute of Certified Public Accountants to furnish a report to
the Trustee and the Depositor in compliance with the Uniform Single Attestation
Program for Mortgage Bankers. Copies of such report shall be provided by the
Trustee to any Certificateholder upon request at the Certificateholder's
expense, provided such report is delivered by the Servicer to the Trustee.
SECTION 3.19. Rights of the NIMs Insurer.
Each of the rights of the NIMs Insurer set forth in this agreement
shall exist so long as the notes issued pursuant to the Indenture remain
outstanding or the NIMs Insurer is owed amounts in respect of its guarantee of
payment on such notes.
ARTICLE IV
DISTRIBUTIONS;
ADVANCES BY THE SERVICER
SECTION 4.01. Advances.
Subject to the conditions of this Article IV, the Servicer, as required
below, shall make an Advance and deposit such Advance in the Collection Account.
Each such Advance shall be remitted to the Collection Account no later than 1:00
p.m. California time on the Servicer Advance Date in immediately available
funds. The Servicer shall be obligated to make any such Advance only to the
extent that such advance would not be a Non-Recoverable Advance. If the Servicer
shall have determined that it has made a Non-Recoverable Advance or that a
proposed Advance or a lesser portion of such Advance would constitute a
Non-Recoverable Advance, the Servicer shall deliver (i) to the Trustee for the
benefit of the Certificateholders funds constituting the remaining portion of
such Advance, if applicable, and (ii) to the Depositor, each Rating Agency and
the Trustee an Officer's Certificate setting forth the basis for such
determination. The Servicer may, in its sole discretion, make an Advance with
respect to the principal portion of the final Scheduled Payment on a Balloon
Loan, but the Servicer is under no obligation to do so; provided, however, that
nothing in this sentence shall affect the Servicer's obligation under this
Section 4.01 to Advance the interest portion of the final Scheduled Payment with
respect to a Balloon Loan as if such Balloon Loan were a fully amortizing
Mortgage Loan. If a Mortgagor does not pay its final Scheduled Payment on a
Balloon Loan when due, the Servicer shall Advance (unless it determines in its
good faith judgment that such amounts would constitute a Non-Recoverable
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Advance) a full month of interest (net of the Servicing Fee) on the Stated
Principal Balance thereof each month until its Stated Principal Balance is
reduced to zero. Notwithstanding anything to the contrary herein, the Servicer
need not make any Advances with respect to any Simple Interest Mortgage Loans.
In lieu of making all or a portion of such Advance from its own funds,
the Servicer may (i) cause to be made an appropriate entry in its records
relating to the Collection Account that any Amount Held for Future Distribution
has been used by the Servicer in discharge of its obligation to make any such
Advance and (ii) transfer such funds from the Collection Account to the
Distribution Account. Any funds so applied and transferred shall be replaced by
the Servicer by deposit in the Collection Account no later than the close of
business on the Servicer Advance Date on which such funds are required to be
distributed pursuant to this Agreement. The Servicer shall be entitled to be
reimbursed from the Collection Account for all Advances of its own funds made
pursuant to this Section as provided in Section 3.08. The obligation to make
Advances with respect to any Mortgage Loan shall continue until such Mortgage
Loan is paid in full or the related Mortgaged Property or related REO Property
has been liquidated or until the purchase or repurchase thereof (or substitution
therefor) from the Trust Fund pursuant to any applicable provision of this
Agreement, except as otherwise provided in this Section 4.01.
SECTION 4.02. Reduction of Servicing Compensation in Connection with
Prepayment Interest Shortfalls.
In the event that any Mortgage Loan is the subject of a Prepayment
Interest Shortfall, the Servicer shall, from amounts in respect of the Servicing
Fee for such Distribution Date, deposit into the Collection Account, as a
reduction of the Servicing Fee for such Distribution Date, no later than the
Servicer Advance Date immediately preceding such Distribution Date, an amount up
to the Prepayment Interest Shortfall; provided, however, that with respect to
any Distribution Date, the Servicer's obligation to deposit any such amount is
limited to an amount equal to the product of (i) one-twelfth of 0.35% and (ii)
the aggregate Stated Principal Balance of the Mortgage Loans with respect to
such Distribution Date; and in case of such deposit, the Servicer shall not be
entitled to any recovery or reimbursement from the Depositor, the Trustee, the
Trust Fund or the Certificateholders. With respect to any Distribution Date, to
the extent that the Prepayment Interest Shortfall exceeds Compensating Interest
(such excess, a "Non-Supported Interest Shortfall"), such Non-Supported Interest
Shortfall shall reduce the Current Interest with respect to each Class of Group
I Certificates and Group II Certificates, pro rata based upon the amount of
interest each such Class would otherwise be entitled to receive on such
Distribution Date.
SECTION 4.03. Distributions on the REMIC Interests.
On each Distribution Date, amounts on deposit in the Distribution
Account shall be treated for federal income tax purposes as applied to
distributions on the interests in the Lower-Tier REMIC and the Middle-Tier
REMIC, in each case in an amount sufficient to make the distributions on the
respective Certificates on such Distribution Date in accordance with the
provisions of Section 4.04.
SECTION 4.04. Distributions.
(a) On each Distribution Date, the Paying Agent shall make the
following distributions from the Distribution Account of an amount equal to the
Group I Interest Funds in the following order of priority:
(i) (A) to the Class IP Certificates, an amount equal to
any prepayment penalties collected on the Group I Mortgage Loans during
the related Prepayment Period;
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(B) to the Class IL Certificates, an amount equal to
any late payment charges collected on the Group I Mortgage Loans during
the related Prepayment Period; and
(C) to the Class R Certificate, in respect of the MR
Interest, an amount equal to the accrual on a principal amount equal to
.001% of the aggregate principal amount of the Group I Certificates
(other than the Class C Certificate) at a rate equal to the excess, if
any, of the Group I Net Rate over the weighted average rate of the
Group I Marker Interests.
(ii) to each Class of Group I Class A Certificates, the
Current Interest and any Interest Carryforward Amount with respect to
such Class; provided, however, if such amount is not sufficient to make
a full distribution of the Current Interest and any Interest
Carryforward Amount with respect to all the Group I Class A
Certificates, such amount will be distributed pro rata among each Class
of the Group I Class A Certificates based on the ratio of (x) the
Current Interest and Interest Carryforward Amount for each Class of the
Group I Class A Certificates to (y) the total amount of Current
Interest and any Interest Carryforward Amount for the Group I Class A
Certificates;
(iii) to the Class IM-1 Certificates, the Class IM-1 Current
Interest and any Class IM-1 Interest Carryforward Amount;
(iv) to the Class IM-2 Certificates, the Class IM-2 Current
Interest and any Class IM-2 Interest Carryforward Amount;
(v) to the Class IB Certificates, the Class IB Current
Interest and any Class IB Interest Carryforward Amount; and
(vi) any remainder pursuant to Section 4.04(e) hereof.
(b) On each Distribution Date, the Paying Agent shall make the
following distributions from the Distribution Account of an amount equal to the
Group II Interest Funds in the following order of priority:
(i) (A) to the Class IIP Certificates, an amount equal to
any prepayment penalties collected on the Group II Mortgage Loans
during the related Prepayment Period;
(B) to the Class IIL Certificates, an amount equal to
any late payment charges collected on the Group II Mortgage Loans
during the related Prepayment Period; and
(C) to the Class R Certificates, in respect of the MR
Interest, an amount equal to the accrual on a principal amount equal to
.001% of the aggregate principal amount of the Group II Certificates
(other than the Class C Certificate) at a rate equal to the excess, if
any, of the Group II Net Rate over the weighted average rate of the
Group II Marker Interests.
(ii) to each Class of Group II Class A Certificates, the
Current Interest and any Interest Carryforward Amount with respect to
such Class; provided, however, if such amount is not sufficient to make
a full distribution of the Current Interest and any Interest
Carryforward Amount with respect to all the Group II Class A
Certificates, such amount will be distributed pro rata among each Class
of the Group II Class A Certificates based on the ratio of (x) the
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Current Interest and Interest Carryforward Amount for each Class of the
Group II Class A Certificates to (y) the total amount of Current
Interest and any Interest Carryforward Amount for the Group II Class A
Certificates;
(iii) to the Class IIM-1 Certificates, the Class IIM-1
Current Interest and any Class IIM-1 Interest Carryforward Amount;
(iv) to the Class IIM-2 Certificates, the Class IIM-2
Current Interest and any Class IIM-2 Interest Carryforward Amount;
(v) to the Class IIB Certificates, the Class IIB Current
Interest and any Class IIB Interest Carryforward Amount; and
(vi) any remainder pursuant to Section 4.04(f) hereof.
(c) On each Distribution Date, the Paying Agent shall make the
following distributions from the Distribution Account of an amount equal to the
Group I Principal Distribution Amount in the following order of priority, and
each such distribution shall be made only after all distributions pursuant to
Section 4.04(a) above shall have been made until such amount shall have been
fully distributed for such Distribution Date:
(i) to the Group I Class A Certificates, the Group I Class
A Principal Distribution Amount to be distributed first, to the Class
IA-6 Certificates, the Class IA-6 Principal Distribution Amount, and
then the remainder sequentially to the Class IA-1, Class IA-2, Class
IA-3, Class IA-4, Class IA-5 and Class IA-6 Certificates, until the
Certificate Principal Balances thereof have been reduced to zero;
provided, however, that, on any Distribution Date on which the Group I
Class A Certificate Principal Balance is equal to or greater than the
Stated Principal Balances of Group I Mortgage Loans, the Group I Class
A Principal Distribution Amount will be distributed pro rata based upon
the Certificate Principal Balance of each such Class and not
sequentially;
(ii) to the Class IM-1 Certificates, the Class IM-1
Principal Distribution Amount;
(iii) to the Class IM-2 Certificates, the Class IM-2
Principal Distribution Amount;
(iv) to the Class IB Certificates, the Class IB Principal
Distribution Amount; and
(v) any remainder pursuant to Section 4.04(e) hereof.
(d) On each Distribution Date, the Paying Agent shall make the
following distributions from the Distribution Account of an amount equal to the
Group II Principal Distribution Amount in the following order of priority, and
each such distribution shall be made only after all distributions pursuant to
Section 4.04(b) above shall have been made until such amount shall have been
fully distributed for such Distribution Date:
(i) to the Class IIA-1 Certificates, the Group II Class A
Principal Distribution Amount, until the Certificate Principal Balances
thereof have been reduced to zero;
(ii) to the Class IIM-1 Certificates, the Class IIM-1
Principal Distribution Amount;
(iii) to the Class IIM-2 Certificates, the Class IIM-2
Principal Distribution Amount;
(iv) to the Class IIB Certificates, the Class IIB Principal
Distribution Amount; and
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(v) any remainder pursuant to Section 4.04(f) hereof.
(e) On each Distribution Date, the Paying Agent shall make the
following distributions up to the following amounts from the Distribution
Account of the remainders pursuant to Section 4.04(a)(vi) and (c)(v) and, to the
extent required to make the distributions set forth below in clauses (i) through
(iv) of this Section 4.04(e), Section 4.04(f)(v) hereof in the following order
of priority, and each such distribution shall be made only after all
distributions pursuant to Sections 4.04(a) and (c) above shall have been made
until such remainders shall have been fully distributed for such Distribution
Date; provided, however, that no Optional Termination Amounts for Loan Group I
shall be used to make the distributions described in clause (v) of this Section
4.04(e):
(i) for distribution as part of the Group I Principal
Distribution Amount, the Group I Extra Principal Distribution Amount;;
(ii) to the Class IM-1 Certificates, the Class IM-1 Unpaid
Realized Loss Amount;
(iii) to the Class IM-2 Certificates, the Class IM-2 Unpaid
Realized Loss Amount;
(iv) to the Class IB Certificates, the Class IB Unpaid
Realized Loss Amount;
(v) to the extent required to make the allocations set
forth below, in the following order of priority:
(A) to the Class IIA-1 Certificates, the Class IIA-1
Current Interest and the Class IIA-1 Interest Carryforward Amount;
(B) for distribution as part of the Group II
Principal Distribution Amount, the Group II Extra Principal
Distribution Amount, to the extent not distributed pursuant to
(f)(i) below; provided, however, that amounts distributed
pursuant to this clause (B) for any period cannot exceed the
amount that would have accrued on a certificate having a
principal balance equal to 99.999% of the aggregate principal
balance of the Group II Mortgage Loans at a rate equal to the
Group II Net Rate;
(C) to the Class IIM-1 Certificates, the Class IIM-1
Current Interest, the Class IIM-1 Interest Carryforward Amount
and the Class IIM-1 Unpaid Realized Loss Amount;
(D) to the Class IIM-2 Certificates, the Class IIM-2
Current Interest, the Class IIM-2 Interest Carryforward Amount
and the Class IIM-2 Unpaid Realized Loss Amount;
(E) to the Class IIB Certificates, the Class IIB
Current Interest, the Class IIB Interest Carryforward Amount
and the Class IIB Unpaid Realized Loss Amount
(vi) the remainder pursuant to Section 4.04(g) hereof.
(f) On each Distribution Date, the Paying Agent shall make the
following distributions up to the following amounts from the Distribution
Account of the remainders pursuant to Section 4.04(b)(vi) and (d)(v) hereof and,
to the extent required to make the distributions set forth below in clauses (i)
through (iv) of this Section 4.04(f), Section 4.04(e)(v) hereof in the following
order of priority, and each such distribution shall be made only after all
distributions pursuant to Sections 4.04(b) and (d) above shall have been made
until such remainders shall have been fully distributed for such Distribution
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Date; provided, however, that no Optional Termination Amounts for Loan Group II
shall be used to make the distributions described in clause (v) of this Section
4.04(f):
(i) for distribution as part of the Group II Principal
Distribution Amount, the Group II Extra Principal Distribution Amount;
(ii) to the Class IIM-1 Certificates, the Class IIM-1 Unpaid
Realized Loss Amount;
(iii) to the Class IIM-2 Certificates, the Class IIM-2 Unpaid
Realized Loss Amount;
(iv) to the Class IIB Certificates, the Class IIB Unpaid
Realized Loss Amount;
(v) to the extent required to make the allocations set
forth below, in the following order of priority (provided, however,
that to the extent the amounts to be allocated pursuant to clauses (A)
through (F) are insufficient to make all payments of Current Interest
and Interest Carryforward Amounts for such Class IA Certificates, the
distribution made to clauses (A) through (F) shall be made on a pro
rata basis and not sequentially):
(A) to the Class IA-1 Certificates, the Class IA-1
Current Interest and the Class IA-1 Interest Carryforward
Amount;
(B) to the Class IA-2 Certificates, the Class IA-2
Current Interest and the Class IA-2 Interest Carryforward
Amount;
(C) to the Class IA-3 Certificates, the Class IA-3
Current Interest and the Class IA-3 Interest Carryforward
Amount;
(D) to the Class IA-4 Certificates, the Class IA-4
Current Interest and the Class IA-4 Interest Carryforward
Amount;
(E) to the Class IA-5 Certificates, the Class IA-5
Current Interest and the Class IA-5 Interest Carryforward
Amount;
(F) to the Class IA-6 Certificates, the Class IA-6
Current Interest and the Class IA-6 Interest Carryforward
Amount;
(G) for distribution as part of the Group I Principal
Distribution Amount, the Group I Extra Principal Distribution
Amount, to the extent not distributed pursuant to clause
(e)(i) above; provided, however, that amounts distributed
pursuant to this clause (G) cannot exceed the amount that
would have accrued on a certificate having a principal balance
equal to 99.999% of the aggregate principal balance of the
Group I Mortgage Loans at the Group I Net Rate;
(H) to the Class IM-1 Certificates, the Class IM-1
Current Interest, the Class IM-1 Interest Carryforward Amount
and the Class IM-1 Unpaid Realized Loss Amount;
(I) to the Class IM-2 Certificates, the Class IM-2
Current Interest, the Class IM-2 Interest Carryforward Amount
and the Class IM-2 Unpaid Realized Loss Amount;
(J) to the Class IB Certificates, the Class IB
Current Interest, the Class IB Interest Carryforward Amount
and the Class IB Unpaid Realized Loss Amount;
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(vi) to the (i) Class IIA-1 Certificates, the Interest
Carryover Amount for the Class IIA-1 Certificates, (ii) Class IIM-1
Certificates, the Class IIM-1 Certificate Interest Carryover Amount,
(iii) Class IIM-2 Certificates, the Class IIM-2 Certificate Interest
Carryover Amount, and (iv) Class IIB Certificates, the Class IIB
Certificate Interest Carryover Amount, on a pro rata basis based upon
the amount of unreimbursed Certificate Interest Carryover Amount for
each Class; and
(vii) the remainder pursuant to Section 4.04(g) hereof.
(g) (i) On each Distribution Date, the Paying Agent shall
allocate the remainders pursuant to Section 4.04(e)(vi) as follows:
(A) to the Class C Certificates in the following
order of priority, (I) the Class C Group I Current Interest,
(II) the Class C Group I Interest Carryforward Amount, (III)
as principal on the Class C Certificate in respect of the
Class C Group I Certificate Principal Balance until the Class
C Group I Certificate Principal Balance has been reduced to
zero and (IV) the Class C Group I Unpaid Realized Loss Amount;
and
(B) the remainder pursuant to Section 4.04(h) hereof.
(ii) On each Distribution Date, the Paying Agent shall
allocate the remainders pursuant to Section 4.04(f)(vii) as follows:
(A) to the Class C Certificates in the following
order of priority, (I) the Class C Group II Current Interest,
(II) the Class C Group II Interest Carryforward Amount, (III)
as principal on the Class C Certificate in respect of the
Class C Group II Certificate Principal Balance until the Class
C Group II Certificate Principal Balance has been reduced to
zero and (IV) the Class C Group II Unpaid Realized Loss
Amount; and
(B) the remainder pursuant to Section 4.04(h) hereof.
(h) On each Distribution Date, the Paying Agent shall allocate the
remainders pursuant to Section 4.04(g)(i)(B) and 4.04(g)(ii)(B) hereof, to the
Class R Certificates, in respect of the UR Interest, any remaining funds, and
such distribution shall be made only after all preceding distributions shall
have been made until such remainders shall have been fully distributed.
(i) On each Distribution Date, after giving effect to distributions on
such Distribution Date, the Paying Agent shall allocate the Applied Realized
Loss Amount for the Group I Certificates to reduce the Certificate Principal
Balances of the Group I Subordinated Certificates and the Class C Certificates
in the following order of priority:
(i) to the Class C Certificates until the Class C Group I
Certificate Principal Balance is reduced to zero;
(ii) to the Class IB Certificates until the Class IB
Certificate Principal Balance is reduced to zero;
(iii) to the Class IM-2 Certificates until the Class IM-2
Certificate Principal Balance is reduced to zero; and
(iv) to the Class IM-1 Certificates until the Class IM-1
Certificate Principal Balance is reduced to zero.
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(j) On each Distribution Date, after giving effect to distributions on
such Distribution Date, the Paying Agent shall allocate the Applied Realized
Loss Amount for the Group II Certificates to reduce the Certificate Principal
Balances of the Group II Subordinated Certificates and the Class C Certificates
in the following order of priority:
(i) to the Class C Certificates until the Class C Group II
Certificate Principal Balance is reduced to zero;
(ii) to the Class IIB Certificates until the Class IIB
Certificate Principal Balance is reduced to zero;
(iii) to the Class IIM-2 Certificates until the Class IIM-2
Certificate Principal Balance is reduced to zero; and
(iv) to the Class IIM-1 Certificates until the Class IIM-1
Certificate Principal Balance is reduced to zero.
(k) Subject to Section 9.02 hereof respecting the final distribution,
on each Distribution Date the Paying Agent shall make distributions to each
Certificateholder of record on the preceding Record Date either by wire transfer
in immediately available funds to the account of such holder at a bank or other
entity having appropriate facilities therefor, if (i) such Holder has so
notified the Trustee at least 5 Business Days prior to the related Record Date
and (ii) such Holder shall hold 100% of a Class of Regular Certificates or
Certificates with an aggregate Initial Certificate Balance of $1,000,000 or
more, or, if not, by check mailed by first Class mail to such Certificateholder
at the address of such holder appearing in the Certificate Register.
Notwithstanding the foregoing, but subject to Section 9.02 hereof respecting the
final distribution, distributions with respect to Certificates registered in the
name of a Depository shall be made to such Depository in immediately available
funds.
On or before 5:00 p.m. California time on the second Business Day
following each Determination Date, the Servicer shall prepare and deliver a
report to the Paying Agent and the NIMs Insurer in the form of a computer
readable magnetic tape (or by such other means as the Servicer, Paying Agent and
NIMs Insurer may agree from time to time) containing such data and information
such as to permit the Servicer or the Paying Agent to prepare the Monthly
Statement to Certificateholders and make the required distributions for the
related Distribution Date (the "Remittance Report").
SECTION 4.05. Monthly Statements to Certificateholders.
(a) Not later than each Distribution Date, the Servicer shall prepare
and cause to be forwarded or made available on its designee's website located at
xxx.xxxxx.xxx/xxxxxx to each Holder of a Class of Certificates of the Trust
Fund, the Servicer, the NIMs Insurer and the Depositor a statement setting forth
for the Certificates:
(i) the amount of the related distribution to Holders of
each Class allocable to principal, separately identifying (A) the
aggregate amount of any Principal Prepayments included therein and(B)
the aggregate of all scheduled payments of principal included therein,
(C) the Extra Principal Distribution Amount, if any, (D) the aggregate
amount of prepayment penalties, if any and (E) the aggregate amount of
late payment charges;
(ii) the amount of such distribution to Holders of each
Class allocable to interest, together with any Non-Supported Interest
Shortfalls allocated to each Class;
(iii) any Interest Carryforward Amount;
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(iv) the Class Certificate Principal Balance of each Class
after giving effect (i) to all distributions allocable to principal on
such Distribution Date and (ii) the allocation of any Applied Realized
Loss Amounts for such Distribution Date;
(v) the Pool Stated Principal Balance for such Distribution
Date;
(vi) the related amount of the Servicing Fee paid to or
retained by the Servicer;
(vii) the Pass-Through Rate for each Class of Certificates
for such Distribution Date;
(viii) the Net Mortgage Rates for each of the Group I Mortgage
Loans and the Group II Mortgage Loans;
(ix) the amount of Advances for each Certificate Group
included in the distribution on such Distribution Date;
(x) the cumulative amount of (A) Realized Losses and (B)
Applied Realized Loss Amounts for each Certificate Group to date;
(xi) the amount of (A) Realized Losses and (B) Applied
Realized Loss Amounts for each Certificate Group with respect to such
Distribution Date;
(xii) the number and aggregate principal amounts of Mortgage
Loans in each Loan Group (A) Delinquent (exclusive of Mortgage Loans in
foreclosure) (1) 31 to 60 days, (2) 61 to 90 days and (3) 91 or more
days, and (B) in foreclosure and Delinquent (1) 31 to 60 days, (2) 61
to 90 days and (3) 91 or more days, in each case as of the close of
business on the last day of the calendar month preceding such
Distribution Date;
(xiii) with respect to any Mortgage Loan that became an REO
Property during the preceding calendar month in each Loan Group, the
loan number and Stated Principal Balance of such Mortgage Loan as of
the close of business on the last day of the calendar month preceding
such Distribution Date and the date of acquisition thereof;
(xiv) the total number and principal balance of any REO
Properties in each Loan Group as of the close of business on the last
day of the calendar month preceding such Distribution Date;
(xv) the aggregate Stated Principal Balance of all
Liquidated Loans in each Loan Group as of the preceding Distribution
Date;
(xvi) with respect to any Liquidated Loan in each Loan Group,
the loan number and Stated Principal Balance relating thereto as of the
preceding Distribution Date;
(xvii) with respect to each Loan Group, whether a Group I
Trigger Event or a Group II Trigger Event has occurred;
(xviii) with respect to each Class of Certificates, any
Interest Carryforward Amount with respect to such Distribution Date for
each such Class, any Interest Carryforward Amount paid for each such
Class and any remaining Interest Carryforward Amount for each such
Class;
(xix) with respect to each Class of Group II Certificates any
Interest Carryover Amount with respect to such Distribution Date for
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each such Class, any Interest Carryover Amount paid for each such Class
and any remaining Interest Carryover Amount for each such Class;
(xx) the number and Stated Principal Balance (as of the
preceding Distribution Date) of any Mortgage Loans with respect to each
Loan Group which were purchased or repurchased during the preceding Due
Period and since the Cut-off Date;
(xxi) the aggregate number of Mortgage Loans (a) which have
been modified, (b) which are subject to a deed-in-lieu of foreclosure
and (c) for which a short-payoff has occurred;
(xxii) the year-to-date numbers for 4.05(a)(xxi)(a), (b) and
(c) above, by number of loans;
(xxiii) the number of Mortgage Loans in each Loan Group for
which prepayment penalties or late payment fees were received during
the related Prepayment Period and, for each such Mortgage Loan in each
Loan Group, the amount of prepayment penalties and late payment fees
received during the related Prepayment Period and in the aggregate of
such amounts for all such Mortgage Loans since the Cut-off Date;
(xxiv) the amount and purpose of any withdrawal from the
Collection Account pursuant to Section 3.08(a)(vii); and
(xxv) as of each Distribution Date, the interest rate cap
agreement payments that have accrued in favor of or been paid to each
class of Certificates for federal income tax purposes under Section
2.07 hereof and the interest rate cap agreement payments that each
class of Certificates has accrued an obligation to make or has made for
federal income tax purposes.
(b) The Servicer will send a copy of each statement provided pursuant
to this Section 4.05 to each Rating Agency.
(c) Within a reasonable period of time after the end of each calendar
year, the Servicer shall cause to be furnished to each Person who at any time
during the calendar year was a Certificateholder, a statement containing the
information set forth in clauses (a)(i) and (a)(ii) of this Section 4.05
aggregated for such calendar year or applicable portion thereof during which
such Person was a Certificateholder. Such obligation of the Servicer shall be
deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Servicer pursuant to any requirements of
the Code as from time to time in effect.
(d) Upon filing with the Internal Revenue Service, the Servicer shall
furnish to the Holders of the Class R Certificates the Forms 1066 and each Form
1066Q and shall respond promptly to written requests made not more frequently
than quarterly by any Holder of Class R Certificates with respect to the
following matters:
(i) The original projected principal and interest cash
flows on the Closing Date on each Class of regular and residual
interests created hereunder and on the Mortgage Loans, based on the
Prepayment Assumption;
(ii) The projected remaining principal and interest cash
flows as of the end of any calendar quarter with respect to each Class
of regular and residual interests created hereunder and the Mortgage
Loans, based on the Prepayment Assumption;
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(iii) The Prepayment Assumption and any interest rate
assumptions used in determining the projected principal and interest
cash flows described above;
(iv) The original issue discount (or, in the case of the
Mortgage Loans, market discount) or premium accrued or amortized
through the end of such calendar quarter with respect to each Class of
regular or residual interests created hereunder and to the Mortgage
Loans, together with each constant yield to maturity used in computing
the same;
(v) The treatment of losses realized with respect to the
Mortgage Loans or the regular interests created hereunder, including
the timing and amount of any cancellation of indebtedness income of the
REMICs with respect to such regular interests or bad debt deductions
claimed with respect to the Mortgage Loans;
(vi) The amount and timing of any non-interest expenses of
the REMICs; and
(vii) Any taxes (including penalties and interest) imposed on
the REMICs, including, without limitation, taxes on "prohibited
transactions," "contributions" or "net income from foreclosure
property" or state or local income or franchise taxes.
The information pursuant to clauses (i), (ii), (iii) and (iv) above
shall be provided by the Depositor pursuant to Section 8.11.
ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates.
The Certificates shall be substantially in the forms attached hereto as
exhibits. The Certificates shall be issuable in registered form, in the minimum
dollar denominations, integral dollar multiples in excess thereof (except that
one Certificate of each Class may be issued in a different amount which must be
in excess of the applicable minimum dollar denomination) and aggregate dollar
denominations as set forth in the following table:
Minimum Integral Multiples in Original Certificate
Class Denomination Excess of Minimum Principal Balance
----- ------------ --------------------- --------------------
IA-1 $25,000.00 $1.00 $225,000,000
IA-2 $25,000.00 $1.00 $48,500,000
IA-3 $25,000.00 $1.00 $81,500,000
IA-4 $25,000.00 $1.00 $74,000,000
IA-5 $25,000.00 $1.00 $58,872,000
IA-6 $25,000.00 $1.00 $54,208,000
IM-1 $25,000.00 $1.00 $27,720,000
IM-2 $25,000.00 $1.00 $24,640,000
IB $25,000.00 $1.00 $21,560,000
IP (1) (1) (1)
IL (1) (1) (1)
IIA-1 $25,000.00 $1.00 $154,700,000
IIM-1 $25,000.00 $1.00 $10,465,000
IIM-2 $25,000.00 $1.00 $9,555,000
IIB $25,000.00 $1.00 $7,280,000
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Minimum Integral Multiples in Original Certificate
Class Denomination Excess of Minimum Principal Balance
----- ------------ --------------------- --------------------
IIP (1) (1) (1)
IIL (1) (1) (1)
C $250,000 $1,000.00 $0
R (1) (1) (1)
-------------------
(1) The Class R, IP, Class IIP, Class IL, and Class IIL shall not have
minimum dollar denominations or Certificate Principal Balances and
shall be issued in a minimum percentage interest of 100%.
The Certificates shall be executed by manual or facsimile signature on
behalf of the Depositor by an authorized officer. Certificates bearing the
manual or facsimile signatures of individuals who were, at the time when such
signatures were affixed, authorized to sign on behalf of the Depositor shall
bind the Depositor, notwithstanding that such individuals or any of them have
ceased to be so authorized prior to the authentication and delivery of such
Certificates or did not hold such offices at the date of such authentication and
delivery. 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 set forth as attached
hereto executed by the Authenticating Agent by manual signature, and such
certificate of authentication 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. On the Closing Date, the Authenticating Agent shall authenticate
the Certificates to be issued at the written direction of the Depositor, or any
affiliate thereof.
SECTION 5.02. Certificate Register; Registration of Transfer and
Exchange of Certificates.
(a) The Servicer shall maintain, or cause to be maintained in
accordance with the provisions of Section 5.09 hereof, a Certificate Register
for the Trust Fund in which, subject to the provisions of subsections (b) and
(c) below and to such reasonable regulations as it may prescribe, the Servicer
shall provide for the registration of Certificates and of Transfers and
exchanges of Certificates as herein provided. Upon surrender for registration of
Transfer of any Certificate, the Authenticating Agent shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Certificates of the same Class and of like aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged for
other Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest upon surrender of the Certificates to be
exchanged at the office or agency of the Servicer. Whenever any Certificates are
so surrendered for exchange, the Depositor shall execute and the Authenticating
Agent shall authenticate and deliver the Certificates that the Certificateholder
making the exchange is entitled to receive. Every Certificate presented or
surrendered for registration of Transfer or exchange shall be accompanied by a
written instrument of Transfer in form satisfactory to the Servicer duly
executed by the holder thereof or his attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for any
registration of Transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any Transfer or exchange of Certificates may be required. All
Certificates surrendered for registration of Transfer or exchange shall be
canceled and subsequently destroyed by the Servicer in accordance with the
Servicer's customary procedures.
(b) No Transfer of a Class C, Class L, Class P or Class R Certificate
shall be made unless such Transfer is made pursuant to an effective registration
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statement under the Securities Act and any applicable state securities laws or
is exempt from the registration requirements under the Securities Act and such
state securities laws. In the event that a Transfer is to be made in reliance
upon an exemption from the Securities Act and such laws, in order to assure
compliance with the Securities Act and such laws, the Certificateholder desiring
to effect such Transfer and such Certificateholder's prospective transferee
shall (except with respect to the initial transfer of a Class C, Class L or
Class P Certificate by the initial Certificateholder thereof) each certify to
the Servicer in writing the facts surrounding the Transfer in substantially the
forms set forth in Exhibit J (the "Transferor Certificate") and (i) deliver a
letter in substantially the form of either Exhibit K (the "Investment Letter")
or Exhibit L (the "Rule 144A Letter") or (ii) there shall be delivered to the
Servicer an Opinion of Counsel that such Transfer may be made pursuant to an
exemption from the Securities Act, which Opinion of Counsel shall not be an
expense of the Depositor, the Servicer or the Trustee. The Depositor shall
provide to any Holder of a Class C, Class L, Class P or Class R Certificate and
any prospective transferee designated by any such Holder, information regarding
the related Certificates and the Mortgage Loans and such other information as
shall be necessary to satisfy the condition to eligibility set forth in Rule
144A(d)(4) for Transfer of any such Certificate without registration thereof
under the Securities Act pursuant to the registration exemption provided by Rule
144A. The Servicer shall cooperate with the Depositor in providing the Rule 144A
information referenced in the preceding sentence, including providing to the
Depositor such information regarding the Certificates, the Mortgage Loans and
other matters regarding the Trust Fund as the Depositor shall reasonably request
to meet its obligation under the preceding sentence. Each Holder of a Class R
Certificate desiring to effect such Transfer shall, and does hereby agree to,
indemnify the Trustee, the Depositor and the Servicer against any liability that
may result if the Transfer is not so exempt or is not made in accordance with
such federal and state laws.
No Transfer of an ERISA Restricted Certificate shall be made unless the
Servicer shall have received either (i) a representation from the transferee of
such Certificate acceptable to and in form and substance satisfactory to the
Servicer, to the effect that such transferee is not an employee benefit plan
subject to Section 406 of ERISA or a plan subject to Section 4975 of the Code or
any applicable Federal, state or local law materially similar to the foregoing
provisions of ERISA and the Code ("Similar Law"), or a Person acting on behalf
of any such plan or using the assets of any such plan (except pursuant to clause
(ii) below), (ii) if such purchaser is an insurance company, a representation
that the purchaser is an insurance company that is purchasing such Certificates
with funds contained in an "insurance company general account" (as such term is
defined in Section V(e) of Prohibited Transaction Class Exemption 95-60, 60 Fed.
Reg. 35925 (July 12, 1995) ("PTCE 95-60")) and that the purchase and holding of
such Certificates is exempt under PTCE 95-60, or (iii) in the case of any such
ERISA Restricted Certificate presented for registration in the name of an
employee benefit plan subject to ERISA, a plan subject to Section 4975 of the
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Code, or a plan subject to Similar Law (or comparable provisions of any
subsequent enactments), or a trustee of any such plan or any other Person acting
on behalf of any such plan, an Opinion of Counsel satisfactory to the Servicer
to the effect that the purchase and holding of such ERISA Restricted Certificate
will not result in the assets of the Trust Fund being deemed to be "plan assets"
pursuant to the Department of Labor regulations set forth in 29 C.F.R.
ss.2510.3-101 or to be subject to the fiduciary responsibility provisions of
ERISA or the prohibited transaction provisions of the Code or to cause a
violation under Similar Law, will not constitute or result in a prohibited
transaction under ERISA or the Code or Similar Law and will not subject the
Servicer to any obligation in addition to those expressly undertaken in this
Agreement, which Opinion of Counsel shall not be an expense of the Servicer. For
purposes of clause (i) of the preceding sentence, such representation shall be
deemed to have been made to the Servicer by the transferee's acceptance of an
ERISA Restricted Certificate (or the acceptance by a Certificate Owner of the
beneficial interest in any Class of ERISA Restricted Certificates) unless the
Servicer shall have received from the transferee an alternative representation
acceptable in form and substance to the Servicer. Notwithstanding anything else
to the contrary herein, any purported transfer of an ERISA Restricted
Certificate to or on behalf of an employee benefit plan subject to Section 406
of ERISA, a plan subject to Section 4975 of the Code, or a plan subject to
Similar Law without the delivery to the Servicer of an Opinion of Counsel
satisfactory to the Servicer as described above shall be void and of no effect.
The Servicer shall be under no liability to any Person for any registration of
transfer of any ERISA Restricted Certificate that is in fact not permitted by
this Section 5.02(b) or for making any payments due on such Certificate to the
Holder thereof or taking any other action with respect to such Holder under the
provisions of this Agreement so long as the transfer was registered by the
Servicer in accordance with the foregoing requirements. The Servicer shall be
entitled, but not obligated, to recover from any Holder of any ERISA Restricted
Certificate that was in fact an employee benefit plan subject to Section 406 of
ERISA, a plan subject to Section 4975 of the Code, or a plan subject to Similar
Law or a Person acting on behalf of any such plan at the time it became a Holder
or, at such subsequent time as it became such a plan or Person acting on behalf
of such a plan, all payments made on such ERISA Restricted Certificate at and
after either such time. Any such payments so recovered by the Servicer shall be
paid and delivered by the Servicer to the last preceding Holder of such
Certificate that is not such a plan or Person acting on behalf of a plan.
(c) Each Person who has or who acquires any Ownership Interest in a
Class R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Class R
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in
a Class R Certificate shall be a Permitted Transferee and shall
promptly notify the Servicer of any change or impending change in its
status as a Permitted Transferee.
(ii) No Ownership Interest in a Class R Certificate may be
registered on the Closing Date or thereafter transferred, and the
Servicer shall not register the Transfer of any Class R Certificate
unless, in addition to the certificates required to be delivered to the
Servicer under subparagraph (b) above, the Servicer shall have been
furnished with an affidavit (a "Transfer Affidavit") of the initial
owner or the proposed transferee in the form attached hereto as Exhibit
I. In the absence of a contrary instruction from the transferor of a
Class R Certificate, declaration (11) in Appendix A of the Transfer
Affidavit may be left blank. If the transferor requests by written
notice to the Servicer prior to the date of the proposed transfer that
one of the two other forms of declaration (11) in Appendix A of the
Transfer Affidavit be used, then the requirements of this Section
5.02(c)(ii) shall not have been satisfied unless the Transfer Affidavit
includes such other form of declaration.
(iii) Each Person holding or acquiring any Ownership Interest
in a Class R Certificate shall agree (A) to obtain a Transfer Affidavit
from any other Person to whom such Person attempts to Transfer its
Ownership Interest in a Class R Certificate, (B) to obtain a Transfer
Affidavit from any Person for whom such Person is acting as nominee,
trustee or agent in connection with any Transfer of a Class R
Certificate and (C) not to Transfer its Ownership Interest in a Class R
Certificate or to cause the Transfer of an Ownership Interest in a
Class R Certificate to any other Person if it has actual knowledge that
such Person is not a Permitted Transferee. Further, no transfer, sale
or other disposition of any Ownership Interest in a Class R Certificate
may be made to a person who is not a U.S. Person (within the meaning of
section 7701 of the Code) unless such person furnishes the transferor
and the Trustee with a duly completed and effective Form W-8ECI (or any
successor thereto) or an Opinion of Counsel to the effect that the
transfer is in accordance with the requirements of the Code and the
regulations promulgated thereunder and will not be disregarded for
federal income tax purposes.
(iv) Any attempted or purported Transfer of any Ownership
Interest in a Class R Certificate in violation of the provisions of
this Section 5.02(c) shall be absolutely null and void and shall vest
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no rights in the purported Transferee. If any purported transferee
shall become a Holder of a Class R Certificate in violation of the
provisions of this Section 5.02(c), then the last preceding Permitted
Transferee shall be restored to all rights as Holder thereof
retroactive to the date of registration of Transfer of such Class R
Certificate. The Servicer shall be under no liability to any Person for
any registration of Transfer of a Class R Certificate that is in fact
not permitted by Section 5.02(b) and this Section 5.02(c) or for making
any payments due on such Certificate to the Holder thereof or taking
any other action with respect to such Holder under the provisions of
this Agreement so long as the Transfer was registered after receipt of
the related Transfer Affidavit, Transferor Certificate and either the
Rule 144A Letter or the Investment Letter. The Servicer shall be
entitled but not obligated to recover from any Holder of a Class R
Certificate that was in fact not a Permitted Transferee at the time it
became a Holder or, at such subsequent time as it became other than a
Permitted Transferee, all payments made on such Class R Certificate at
and after either such time. Any such payments so recovered by the
Servicer shall be paid and delivered by the Servicer to the last
preceding Permitted Transferee of such Certificate.
(v) At the option of the Holder of the Class R Certificate,
the LR Interest, the MR Interest and the UR Interest may be severed and
represented by separate certificates; provided, however, that such
separate certification may not occur until the Trustee receives an
Opinion of Counsel to the effect that separate certification in the
form and manner proposed would not result in the imposition of federal
tax upon any of the Lower-Tier REMIC, the Middle-Tier REMIC or the
Upper-Tier REMIC or cause any of the Lower-Tier REMIC, the Middle-Tier
REMIC or the Upper-Tier REMIC to fail to qualify as a REMIC; and
provided further, that the provisions of Sections 5.02(b) and (c) will
apply to each such separate certificate as if the separate certificate
were a Class R Certificate. If, as evidenced by an Opinion of Counsel,
it is necessary to preserve the REMIC status of any of the Lower-Tier
REMIC, the Middle-Tier REMIC or the Upper-Tier REMIC, the LR Interest,
the MR Interest and the UR Interest shall be severed and represented by
separate Certificates.
The restrictions on Transfers of a Class R Certificate set forth in
this Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Class R Certificate may be deleted) with respect to Transfers
occurring after delivery to the Servicer of an Opinion of Counsel, which Opinion
of Counsel shall not be an expense of the Servicer or the Depositor to the
effect that the elimination of such restrictions will not cause any of the
Lower-Tier REMIC, the Middle-Tier REMIC or the Upper-Tier REMIC to fail to
qualify as a REMIC at any time that the Certificates are outstanding or result
in the imposition of any tax on the Trust Fund, a Certificateholder or another
Person. Each Person holding or acquiring any Ownership Interest in a Class R
Certificate hereby consents to any amendment of this Agreement that, based on an
Opinion of Counsel furnished to the Servicer, is reasonably necessary (a) to
ensure that the record ownership of, or any beneficial interest in, a Class R
Certificate is not transferred, directly or indirectly, to a Person that is not
a Permitted Transferee and (b) to provide for a means to compel the Transfer of
a Class R Certificate that is held by a Person that is not a Permitted
Transferee to a Holder that is a Permitted Transferee.
(d) The transferor of the Class R Certificate shall notify the Servicer
in writing upon the transfer of the Class R Certificate.
(e) The preparation and delivery of all certificates, opinions and
other writings referred to above in this Section 5.02 shall not be an expense of
the Trust Fund, the Depositor, the Trustee or the Servicer.
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SECTION 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificate is surrendered to the Servicer, or the
Servicer receives evidence to its satisfaction of the destruction, loss or theft
of any Certificate and of the ownership thereof and (b) there is delivered to
the Servicer and the NIM's Insurer such security or indemnity as may be required
by them to save each of them harmless, then, in the absence of notice to the
Servicer that such Certificate has been acquired by a bona fide purchaser, the
Servicer shall execute, authenticate and deliver, in exchange for or in lieu of
any such mutilated, destroyed, lost or stolen Certificate, a new Certificate of
like Class, tenor and Percentage Interest. In connection with the issuance of
any new Certificate under this Section 5.03, the Servicer 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 Servicer) connected therewith. Any replacement Certificate
issued pursuant to this Section 5.03 shall constitute complete and indefeasible
evidence of ownership in the Trust Fund, as if originally issued, whether or not
the lost, stolen or destroyed Certificate shall be found at any time. All
Certificates surrendered to the Servicer under the terms of this Section 5.03
shall be canceled and destroyed by the Servicer in accordance with its standard
procedures without liability on its part.
SECTION 5.04. Persons Deemed Owners.
The Servicer, the NIMs Insurer, and any agent of the Servicer or the
NIMs Insurer may treat the Person in whose name any Certificate is registered as
the owner of such Certificate for the purpose of receiving distributions as
provided in this Agreement and for all other purposes whatsoever, and neither
the Servicer, the NIMs Insurer, nor any agent of the Servicer, the NIMs Insurer
shall be affected by any notice to the contrary.
SECTION 5.05. Access to List of Certificateholders' Names and
Addresses.
If three or more Certificateholders (a) request such information in
writing from the Servicer, (b) state that such Certificateholders desire to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates, and (c) provide a copy of the
communication that such Certificateholders propose to transmit or if the
Depositor, the NIMs Insurer or a Servicer shall request such information in
writing from the Servicer, then the Servicer shall, within ten Business Days
after the receipt of such request, provide the Depositor, the NIMs Insurer, or
such Certificateholders at such recipients' expense the most recent list of the
Certificateholders of the Trust Fund held by the Servicer, if any. The Depositor
and every Certificateholder, by receiving and holding a Certificate, agree that
the Servicer shall not be held accountable by reason of the disclosure of any
such information as to the list of the Certificateholders hereunder, regardless
of the source from which such information was derived.
SECTION 5.06. Book-Entry Certificates.
The Regular Certificates, upon original issuance, shall be issued in
the form of one or more typewritten Certificates representing the Book-Entry
Certificates, to be delivered to the Depository by or on behalf of the
Depositor. The Book-Entry Certificates shall initially be registered on the
Certificate Register in the name of the Depository or its nominee, and no
Certificate Owner of a Book-Entry Certificate will receive a definitive
certificate representing such Certificate Owner's interest in such Certificates,
except as provided in Section 5.08. Unless and until definitive, fully
registered Certificates ("Definitive Certificates") have been issued to the
Certificate Owners of the Book-Entry Certificates pursuant to Section 5.08:
(a) the provisions of this Section shall be in full force and effect;
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(b) the Depositor, the Servicer, the Trustee and the NIMs Insurer may
deal with the Depository and the Depository Participants for all purposes
(including the making of distributions) as the authorized representative of the
respective Certificate Owners of the Book-Entry Certificates;
(c) registration of the Book-Entry Certificates may not be transferred
by the Servicer except to another Depository;
(d) the rights of the respective Certificate Owners of the Book-Entry
Certificates shall be exercised only through the Depository and the Depository
Participants and shall be limited to those established by law and agreements
between the Owners of the Book-Entry Certificates and the Depository and/or the
Depository Participants. Pursuant to the Depository Agreement, unless and until
Definitive Certificates are issued pursuant to Section 5.08, the Depository will
make book-entry transfers among the Depository Participants and receive and
transmit distributions of principal and interest on the related Certificates to
such Depository Participants;
(e) the Depository may collect its usual and customary fees, charges
and expenses from its Depository Participants;
(f) the Servicer may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its Depository
Participants; and
(g) to the extent that the provisions of this Section conflict with any
other provisions of this Agreement, the provisions of this Section shall
control.
For purposes of any provision of this Agreement requiring or permitting
actions with the consent of, or at the direction of, Certificateholders
evidencing a specified percentage of the aggregate unpaid principal amount of
any Class of Certificates, such direction or consent may be given by Certificate
Owners (acting through the Depository and the Depository Participants) owning
Book-Entry Certificates evidencing the requisite percentage of principal amount
of such Class of Certificates.
SECTION 5.07. Notices to Depository.
Whenever any notice or other communication is required to be given to
Certificateholders of the Class with respect to which Book-Entry Certificates
have been issued, unless and until Definitive Certificates shall have been
issued to the related Certificate Owners, the Servicer and the Trustee shall
give all such notices and communications to the Depository.
SECTION 5.08. Definitive Certificates.
If, after Book-Entry Certificates have been issued with respect to any
Certificates, (a) the Depository or the Depositor advises the Servicer that the
Depository is no longer willing, qualified or able to discharge properly its
responsibilities under the Depository Agreement with respect to such
Certificates and the Servicer or the Depositor is unable to locate a qualified
successor, (b) the Depositor, at its sole option, advises the Servicer that it
elects to terminate the book-entry system with respect to such Certificates
through the Depository or (c) after the occurrence and continuation of an Event
of Default, Certificate Owners of such Book-Entry Certificates having not less
than 51% of the Voting Rights evidenced by any Class of Book-Entry Certificates
advise the Servicer and the Depository in writing through the Depository
Participants that the continuation of a book-entry system with respect to
Certificates of such Class through the Depository (or its successor) is no
longer in the best interests of the Certificate Owners of such Class, then the
Servicer shall notify all Certificate Owners of such Book-Entry Certificates,
through the Depository, of the occurrence of any such event and of the
availability of Definitive Certificates to Certificate Owners of such Class
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requesting the same. The Depositor shall provide the Servicer with an adequate
inventory of certificates to facilitate the issuance and transfer of Definitive
Certificates. Upon surrender to the Servicer of any such Certificates by the
Depository, accompanied by registration instructions from the Depository for
registration, the Authenticating Agent shall authenticate and the Servicer shall
deliver such Definitive Certificates. Neither the Depositor nor the Servicer
shall be liable for any delay in delivery of such instructions and each may
conclusively rely on, and shall be protected in relying on, such instructions.
Upon the issuance of such Definitive Certificates, all references herein to
obligations imposed upon or to be performed by the Depository shall be deemed to
be imposed upon and performed by the Servicer, to the extent applicable with
respect to such Definitive Certificates and the Servicer shall recognize the
Holders of such Definitive Certificates as Certificateholders hereunder.
SECTION 5.09. Maintenance of Office or Agency.
The Servicer will maintain or cause to be maintained at its expense an
office or offices or agency or agencies in New York City where Certificates may
be surrendered for registration of transfer or exchange. The Servicer initially
designates its offices at x/x Xxx Xxxxx Xxxxxxxxx Bank, 000 Xxxx 00xx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, as offices for such purposes. The Servicer will give
prompt written notice to the Certificateholders of any change in such location
of any such office or agency.
SECTION 5.10. Authenticating Agents.
(a) The Trustee may appoint one or more Authenticating Agents (each, an
"Authenticating Agent") which shall be authorized to act on behalf of the
Trustee in authenticating the 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 an Authenticating Agent and a
certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent must be an entity organized and
doing business under the laws of the United States of America or of any state,
having a combined capital and surplus of at least $15,000,000, authorized under
such laws to do a trust business and subject to supervision or examination by
federal or state authorities. If the Authenticating Agent is a party other than
the Trustee, the Trustee shall have no liability in connection with the
performance or failure of performance of the Authenticating Agent. The Trustee
hereby appoints Chase as the initial Authenticating Agent. The Trustee shall be
the Authenticating Agent during any such time as no other Authenticating Agent
has been appointed.
(b) Any Person into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which any Authenticating Agent shall be a
party, or any Person succeeding to the corporate agency business of any
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) Any Authenticating Agent may at any time resign by giving at least
30 days' advance written notice of resignation to the Trustee and the Depositor.
The Trustee may at any time terminate the agency of any Authenticating Agent by
giving written notice of termination to such Authenticating Agent and the
Depositor. Upon receiving a notice of resignation or upon such a termination, or
in case at any time any Authenticating Agent shall cease to be eligible in
accordance within the provisions of this Section 5.10, the Trustee may appoint a
successor Authenticating Agent, shall give written notice of such appointment to
the Depositor and shall mail notice of such appointment to all Holders of
Certificates. 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. No successor Authenticating Agent
shall be appointed unless eligible under the provisions of this Section 5.10. No
Authenticating Agent shall have responsibility or liability for any action taken
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by it as such at the direction of the Trustee. Any Authenticating Agent shall be
entitled to reasonable compensation for its services and any such compensation
shall be payable solely by the Trustee, without any right of reimbursement from
the Depositor, the Servicer or the Trust Fund.
SECTION 5.11. Appointment of Paying Agent.
The Servicer may appoint a Paying Agent hereunder (the "Paying Agent").
In the event of any such appointment, the Servicer shall cause the Paying Agent
to perform each of the obligations of the Paying Agent set forth herein and
shall be liable to the Trustee and the Certificateholders for failure of the
Paying Agent to perform such obligations. If the Paying Agent is a party other
than the Trustee, the Trustee shall have no liability in connection with the
performance or failure of performance of the Paying Agent. The Servicer
designates the Institutional Trust Services Department of Chase as the initial
Paying Agent.
The Servicer shall cause each Paying Agent other than the Trustee to
execute and deliver to the Servicer and the Trustee on the Closing Date or, if
subsequently appointed, on the date of appointment, a written instrument
executed by an officer of the Paying Agent in which such Paying Agent shall
agree with the Servicer and the Trustee that such Paying Agent will hold all
sums held by it for the payment to Certificateholders in trust for the benefit
of the Certificateholders entitled thereto until such sums shall be paid to such
Certificateholders.
ARTICLE VI
THE DEPOSITOR AND THE SERVICER
SECTION 6.01. Respective Liabilities 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 and respectively
imposed upon and undertaken by them herein.
SECTION 6.02. Merger or Consolidation of the Depositor or the Servicer.
The Depositor and the Servicer will each keep in full effect its
existence, rights and franchises as a corporation under the laws of the United
States or under the laws of one of the States thereof and will each obtain and
preserve its qualification to do business as a foreign corporation in each
jurisdiction in which such qualification is or shall be necessary to protect the
validity and enforceability of this Agreement, or any of the Mortgage Loans and
to perform its respective duties under this Agreement.
Any Person into which the Depositor or Servicer may be merged or
consolidated, or 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, as the case may be, hereunder, without the execution or filing of
any paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding (except for the execution of an
assumption agreement where such succession is not effected by operation of law);
provided, however, that the successor or surviving Person to a Servicer shall be
qualified to sell mortgage loans to, and to service mortgage loans on behalf of,
FNMA or FHLMC.
SECTION 6.03. Limitation on Liability of the Depositor, the Servicer
and Others.
None of the Depositor, the Servicer nor any of the directors, officers,
employees or agents of the Depositor or 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
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Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Depositor, the Servicer or any such Person against any
breach of representations or warranties made by it herein or protect the
Depositor, the Servicer or any such Person from any liability that would
otherwise be imposed by reasons of willful misfeasance, bad faith or negligence
in the performance of duties or by reason of reckless disregard of obligations
and duties hereunder. The Depositor, the Servicer and any director, officer,
employee or agent of the Depositor or 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 Depositor, the Servicer and any
director, officer, employee or agent of the Depositor or the Servicer shall be
indemnified by the Trust Fund and held harmless against any loss, liability or
expense incurred in connection with any audit, controversy or judicial
proceeding relating to a governmental taxing authority or any legal action
relating to this Agreement or the Certificates, other than any loss, liability
or expense related to any specific Mortgage Loan or Mortgage Loans (except as
any such loss, liability or expense shall be otherwise reimbursable pursuant to
this Agreement) and any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or negligence in the performance of duties hereunder or
by reason of reckless disregard of obligations and duties hereunder. None of the
Depositor nor the Servicer shall be under any obligation to appear in, prosecute
or defend any legal action that is not incidental to its respective duties
hereunder and that in its opinion may involve it in any expense or liability;
provided, however, that any of the Depositor or the Servicer may, in its
discretion undertake any such action that it may deem necessary or desirable in
respect of this Agreement and the rights and duties of the parties hereto and
interests of the Trustee and the Certificateholders hereunder. In such event,
the legal expenses and costs of such action and any liability resulting
therefrom shall be, expenses, costs and liabilities of the Trust Fund, and the
Depositor and the Servicer shall be entitled to be reimbursed therefor out of
the Collection Account as provided by Section 3.08 hereof.
SECTION 6.04. Limitation on Resignation of Servicer.
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. Any such determination permitting the
resignation of a Servicer shall be evidenced by an Opinion of Counsel to such
effect delivered to the Trustee. No such resignation shall become effective
until the Trustee or a successor servicer appointed in accordance with section
7.02 shall have assumed the Servicer's responsibilities, duties, liabilities and
obligations hereunder.
SECTION 6.05. Errors and Omissions Insurance; Fidelity Bonds.
The Servicer shall, for so long as it acts as servicer under this
Agreement, obtain and maintain in force (a) a policy or policies of insurance
covering errors and omissions in the performance of its obligations as servicer
hereunder, and (b) a fidelity bond in respect of its officers, employees and
agents. Each such policy or policies and bond shall, together, comply with the
requirements from time to time of FNMA or FHLMC for Persons performing servicing
for mortgage loans purchased by FNMA or FHLMC. In the event that any such policy
or bond ceases to be in effect, the Servicer shall use its reasonable best
efforts to obtain a comparable replacement policy or bond from an insurer or
issuer meeting the requirements set forth above as of the date of such
replacement.
ARTICLE VII
DEFAULT; TERMINATION OF SERVICER
SECTION 7.01. Events of Default.
"Event of Default," wherever used herein, means any one of the
following events:
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(i) any failure by the Servicer to deposit in the
Collection Account or the Distribution Account or remit to the Trustee
or any Paying Agent any payment (excluding a payment required to be
made under Section 4.01 hereof) required to be made under the terms of
this Agreement, which failure shall continue unremedied for five
calendar days and, with respect to a payment required to be made under
Section 4.01 hereof, for one calendar day, after the date on which
written notice of such failure shall have been given to the Servicer by
the Trustee or the Depositor, or to the Trustee and the Servicer by the
NIMs Insurer or the Holders of Certificates evidencing not less than
25% of the Voting Rights evidenced by the Certificates; or
(ii) any failure by the Servicer to observe or perform in
any material respect any other of the covenants or agreements on the
part of the Servicer contained in this Agreement or any representation
or warranty shall prove to be untrue, which failure or breach shall
continue unremedied for a period of 60 days after the date on which
written notice of such failure shall have been given to the Servicer by
the Trustee or the Depositor, or to the Trustee by the NIMs Insurer or
the Holders of Certificates evidencing not less than 25% of the Voting
Rights evidenced by the Certificates; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a 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 consecutive days; or
(iv) consent by the Servicer to the appointment of a
receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or
relating to the Servicer or all or substantially all of the property of
the Servicer; or
(v) admission by a Servicer in writing of its inability to
pay its debts generally as they become due, file a petition to take
advantage of, or commence a voluntary case under, any applicable
insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its
obligations.
If an Event of Default shall occur with respect to the Servicer, then,
and in each and every such case, so long as such Event of Default shall not have
been remedied, the Trustee may, or at the direction of the NIMs Insurer or the
Holders of Certificates evidencing not less than 25% (or 51%, in the case of the
Event of Default specified in (vi) above) of the Voting Rights evidenced by the
Certificates, shall, by notice in writing to the Servicer (with a copy to each
Rating Agency), terminate all of the rights and obligations of the Servicer
under this Agreement and in and to the Mortgage Loans and the proceeds thereof,
other than its rights as a Certificateholder hereunder. On or after the receipt
by the Servicer of such written notice, all authority and power of the Servicer
hereunder, whether with respect to the Mortgage Loans or otherwise, shall pass
to and be vested in the Trustee. The Trustee shall thereupon make any Advance
described in Section 4.01 hereof subject to Section 3.04 hereof. The Trustee is
hereby authorized and empowered to execute and deliver, on behalf of the
Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise. Unless expressly provided in such written
notice, no such termination shall affect any obligation of the Servicer to pay
amounts owed pursuant to Article VIII. The Servicer agrees to cooperate with the
Trustee in effecting the termination of the Servicer's responsibilities and
rights hereunder, including, without limitation, the transfer to the Trustee of
all cash amounts which shall at the time be credited to the Collection Account,
or thereafter be received with respect to the Mortgage Loans. The Servicer and
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the Trustee shall promptly notify the Rating Agencies of the occurrence of an
Event of Default or an event that, with notice, passage of time, other action or
any combination of the foregoing would be an Event of Default, such notice to be
provided in any event within two Business Days of such occurrence.
Notwithstanding any termination of the activities of the Servicer
hereunder, the Servicer shall be entitled to receive, out of any late collection
of a Scheduled Payment on a Mortgage Loan that was due prior to the notice
terminating the Servicer's rights and obligations as Servicer hereunder and
received after such notice, that portion thereof to which the Servicer would
have been entitled pursuant to Sections 3.08(a)(i) through (viii), and any other
amounts payable to the Servicer hereunder the entitlement to which arose prior
to the termination of its activities hereunder.
SECTION 7.02. Trustee to Act; Appointment of Successor.
On and after the time the Servicer receives a notice of termination
pursuant to Section 7.01 hereof, the Trustee shall, to the extent provided in
Section 3.04, be the successor to the Servicer in its capacity as servicer under
this Agreement and the transactions set forth or provided for herein and shall
be subject to all the responsibilities, duties and liabilities relating thereto
placed on the Servicer by the terms and provisions hereof and applicable law
including the obligation to make advances pursuant to Section 4.01. As
compensation therefor, subject to the last paragraph of Section 7.01, the
Trustee shall be entitled to all fees, costs and expenses relating to the
Mortgage Loans that the Servicer would have been entitled to if the Servicer had
continued to act hereunder. Notwithstanding the foregoing, if the Trustee has
become the successor to the Servicer in accordance with Section 7.01 hereof, the
Trustee may, if it shall be unwilling to so act, or shall, if it is prohibited
by applicable law from making Advances pursuant to Section 4.01 hereof or if it
is otherwise unable to so act, appoint, or petition a court of competent
jurisdiction to appoint, any established mortgage loan servicing institution the
appointment of which does not adversely affect the then current rating of the
Certificates by each Rating Agency as the successor to the Servicer hereunder in
the assumption of all or any part of the responsibilities, duties or liabilities
of the Servicer hereunder. Any successor Servicer shall be an institution that
is a FNMA and FHLMC approved seller/servicer in good standing, that has a net
worth of at least $15,000,000, and that is willing to service the Mortgage Loans
and executes and delivers to the Depositor and the Trustee an agreement
accepting such delegation and assignment, that contains an assumption by such
Person of the rights, powers, duties, responsibilities, obligations and
liabilities of the Servicer (other than liabilities of the Servicer under
Section 6.03 hereof incurred prior to termination of the Servicer under Section
7.01), with like effect as if originally named as a party to this Agreement; and
provided further that each Rating Agency acknowledges that its rating of the
Certificates in effect immediately prior to such assignment and delegation will
not be qualified or reduced as a result of such assignment and delegation. No
appointment of a successor to the Servicer hereunder shall be effective until
the Trustee shall have consented thereto, and written notice of such proposed
appointment shall have been provided by the Trustee to each Certificateholder.
The Trustee shall not resign as servicer until a successor servicer has been
appointed and has accepted such appointment. Pending appointment of a successor
to the Servicer hereunder, the Trustee, unless the Trustee is prohibited by law
from so acting, shall, subject to Section 3.04 hereof, act in such capacity as
hereinabove provided. In connection with such appointment and assumption, the
Trustee may make such arrangements for the compensation of such successor out of
payments on Mortgage Loans as it and such successor shall agree; provided,
however, that no such compensation shall be in excess of that permitted the
Servicer hereunder. The Trustee and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession. Neither the Trustee nor any other successor servicer shall be deemed
to be in default hereunder by reason of any failure to make, or any delay in
making, any distribution hereunder or any portion thereof or any failure to
perform, or any delay in performing, any duties or responsibilities hereunder,
in either case caused by the failure of the Servicer to deliver or provide, or
any delay in delivering or providing, any cash, information, documents or
records to it.
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Any successor to the Servicer as servicer shall give notice to the
Mortgagors of such change of servicer and shall, during the term of its service
as servicer maintain in force the policy or policies that the Servicer is
required to maintain pursuant to Section 6.05.
SECTION 7.03. Notification to Certificateholders.
(a) Upon any termination of or appointment of a successor to the
Servicer, the Trustee shall give prompt written notice thereof to
Certificateholders and to each Rating Agency.
(b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Certificateholders notice of each such
Event of Default hereunder known to the Trustee, unless such Event of Default
shall have been cured or waived.
ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01. Duties of Trustee.
The Trustee, prior to the occurrence of an Event of Default and after
the curing of all Events of Default that may have occurred, shall undertake to
perform such duties and only such duties as are specifically set forth in this
Agreement. In case an Event of Default has occurred and remains uncured, the
Trustee shall exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee that are specifically required to be furnished pursuant to any provision
of this Agreement shall examine them to determine whether they conform to the
requirements of this Agreement. 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.
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 misconduct, its negligent failure to perform its obligations
in compliance with this Agreement, or any liability that would be imposed by
reason of its willful misfeasance or bad faith; provided, however, that:
(i) prior to the occurrence of an Event of Default, and
after the curing of all such Events of Default that 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, individually or as Trustee, except for the performance of such
duties and obligations as are specifically set forth in this Agreement,
no implied covenants or obligations shall be read into this Agreement
against the Trustee and the Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee and
conforming to the requirements of this Agreement that it reasonably
believed in good faith to be genuine and to have been duly executed by
the proper authorities respecting any matters arising hereunder;
(ii) the Trustee shall not be liable, individually or as
Trustee, for an error of judgment made in good faith by a Responsible
Officer or Responsible Officers of the Trustee, unless the Trustee was
negligent or acted in bad faith or with willful misfeasance; and
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(iii) the Trustee shall not be liable, individually or as
Trustee, with respect to any action taken, suffered or omitted to be
taken by it in good faith in accordance with the direction of Holders
of each Class of Certificates evidencing not less than 25% of the
Voting Rights of such Class relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee under this
Agreement.
SECTION 8.02. Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 8.01:
(i) the Trustee may request and rely upon and shall be
protected in acting or refraining from acting upon any resolution,
Officer's Certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond or other paper or document believed by
it to be genuine and to have been signed or presented by the proper
party or parties;
(ii) the Trustee may consult with counsel of its choice and
any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such Opinion of Counsel;
(iii) the Trustee shall not be liable, individually or as
Trustee, 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) prior to the occurrence of an Event of Default
hereunder and after the curing of all Events of Default that may have
occurred, the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or document, unless requested in writing so to do
by Holders of each Class of Certificates evidencing not less than 25%
of the Voting Rights of such Class;
(v) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents, accountants or attorneys;
(vi) the Trustee shall not be required to expend its own
funds or otherwise incur any financial liability in the performance of
any of its duties hereunder if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against
such liability is not assured to it;
(vii) the Trustee shall not be liable, individually or as
Trustee, for any loss on any investment of funds pursuant to this
Agreement (other than as issuer of the investment security);
(viii) the Trustee shall not be deemed to have knowledge of an
Event of Default until a Responsible Officer of the Trustee shall have
received written notice thereof;
(ix) the Trustee shall be under no obligation to exercise
any of the trusts or powers vested in it by this Agreement or to make
any investigation of matters arising hereunder or to institute, conduct
or defend any litigation hereunder or in relation hereto at the
request, order or direction of any of the Certificateholders, pursuant
to the provisions of this Agreement, unless such Certificateholders
shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities that may be incurred
therein or thereby; and
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(x) if requested by the Servicer, the Trustee may appoint
the Servicer as the trustee's attorney-in-fact in order to carry out
and perform certain activities that are necessary or appropriate for
the servicing and administration of the Mortgage Loans pursuant to this
Agreement. Such appointment shall be evidenced by a power of attorney
in such form as may be agreed to by the Trustee and the Servicer.
(b) All rights of action under this Agreement or under any of the
Certificates, enforceable by the Trustee, may be enforced by the Trustee without
the possession of any of the Certificates, or the production thereof at the
trial or other proceeding relating thereto, and any such suit, action or
proceeding instituted by the Trustee shall be brought in its name for the
benefit of all the Holders of the Certificates, subject to the provisions of
this Agreement.
SECTION 8.03. Trustee Not Liable for Mortgage Loans.
The recitals contained herein shall be taken as the statements of the
Depositor or the Servicer, as the case may be, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Agreement or of any Mortgage Loan or related
document other than with respect to the Trustee's execution and authentication
of the Certificates. The Trustee shall not be accountable for the use or
application by the Depositor or the Servicer of any funds paid to the Depositor
or the Servicer in respect of the Mortgage Loans or deposited in or withdrawn
from the Collection Account or Distribution Account by the Depositor or the
Servicer.
SECTION 8.04. Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Certificates with the same rights as it would have if it
were not the Trustee.
SECTION 8.05. Servicer to Pay Certain Trustee's Fees and Expenses.
The Servicer covenants and agrees (i) to pay to the Trustee from time
to time, and the Trustee shall be entitled to, such compensation as shall be
agreed in writing by the Servicer and the Trustee (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 (ii) to pay or reimburse the Trustee, upon its
request, for all reasonable expenses, disbursements and advances incurred or
made by the Trustee on behalf of the Trust Fund in accordance with any of the
provisions of this Agreement (including, without limitation: (A) the reasonable
compensation and the expenses and disbursements of its counsel, but only for
representation of the Trustee acting in its capacity as Trustee hereunder and
(B) to the extent that the Trustee must engage persons not regularly in its
employ to perform acts or services on behalf of the Trust Fund, which acts or
services are not in the ordinary course of the duties of a trustee, paying agent
or certificate registrar, in the absence of a breach or default by any party
hereto, the reasonable compensation, expenses and disbursements of such persons,
except any such expense, disbursement or advance as may arise from its
negligence, bad faith or willful misconduct). The Trustee and any director,
officer, employee or agent of the Trustee shall be indemnified by the Servicer
and held harmless against any loss, liability or expense (i) incurred in
connection with any legal action relating to this Agreement or the Certificates,
or in connection with the performance of any of the Trustee's duties hereunder,
other than any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or negligence in the performance of any of the Trustee's
duties hereunder or by reason of reckless disregard of the Trustee's obligations
and duties hereunder and (ii) resulting from any error in any tax or information
return prepared by the Servicer. Such indemnity shall survive the termination of
this Agreement or the resignation or removal of the Trustee hereunder.
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SECTION 8.06. Eligibility Requirements for Trustee.
The Trustee hereunder shall, at all times, be a corporation or
association organized and doing business under the laws of a state or the United
States of America, authorized under such laws to exercise corporate trust powers
reasonably acceptable to the NIMs Insurer, having a combined capital and surplus
of at least $50,000,000, subject to supervision or examination by federal or
state authority and with a credit rating that would not cause any of the Rating
Agencies to reduce their respective ratings of any Class of Certificates below
the ratings issued on the Closing Date (or having provided such security from
time to time as is sufficient to avoid such reduction). If such corporation or
association publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then
for the purposes of this Section 8.06 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 8.06, the Trustee shall resign immediately in the
manner and with the effect specified in Section 8.07 hereof. The corporation or
national banking association serving as Trustee may have normal banking and
trust relationships with the Depositor, the NIMs Insurer and the Servicer and
their respective Affiliates; provided, however, that such corporation cannot be
an affiliate of the Servicer other than the Trustee in its role as successor to
a Servicer.
SECTION 8.07. Resignation and Removal of Trustee.
The Trustee may at any time resign and be discharged from the trusts
hereby created by (1) giving written notice of resignation to the Depositor, the
Servicer, the NIMs Insurer and by mailing notice of resignation by first Class
mail, postage prepaid, to the Certificateholders at their addresses appearing on
the Certificate Register and each Rating Agency, not less than 60 days before
the date specified in such notice when, subject to Section 8.08, such
resignation is to take effect, and (2) acceptance of appointment by a successor
trustee in accordance with Section 8.08 and meeting the qualifications set forth
in Section 8.06. If no successor trustee shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice or
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.
If at any time (i) the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.06 hereof and shall fail to resign after
written request thereto by the Depositor or the NIMs Insurer, (ii) the Trustee
shall become incapable of acting, or shall be adjudged as bankrupt or insolvent,
or a receiver of the Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, or
(iii)(A) a tax is imposed with respect to the Trust Fund by any state in which
the Trustee or the Trust Fund is located, (B) the imposition of such tax would
be avoided by the appointment of a different trustee and (C) the Trustee fails
to indemnify the Trust Fund against such tax, then the Depositor may remove the
Trustee and appoint a successor trustee by written instrument, in triplicate,
one copy of which instrument shall be delivered to the Trustee, one copy of
which shall be delivered to the Servicer and one copy of which shall be
delivered to the successor trustee.
The Holders evidencing at least 51% of the Voting Rights of all Classes
of 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
instruments shall be delivered by the successor Trustee to the Servicer, one
complete set to the Trustee so removed and one complete set to the successor so
appointed. Notice of any removal of the Trustee shall be given to each Rating
Agency by the Successor Trustee.
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Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.07 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 8.08 hereof.
SECTION 8.08. Successor Trustee.
Any successor trustee appointed as provided in Section 8.07 hereof
shall execute, acknowledge and deliver to the Depositor and to its predecessor
trustee and the Servicer an instrument accepting such appointment hereunder and
thereupon the resignation or removal of the predecessor trustee shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as trustee herein.
No successor trustee shall accept appointment as provided in this
Section 8.08 unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 8.06 hereof and its appointment
shall not adversely affect the then current rating of the Certificates.
Upon acceptance of appointment by a successor trustee as provided in
this Section 8.08, the Depositor shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates. If the Depositor fails to mail
such notice within 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 Depositor.
SECTION 8.09. Merger or Consolidation of Trustee.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to substantially all of the corporate trust business of
the Trustee, shall be the successor of the Trustee hereunder, provided that such
corporation shall be eligible under the provisions of Section 8.06 hereof
without the execution or filing of any paper or further act on the part of any
of the parties hereto, anything herein to the contrary notwithstanding (except
for the execution of an assumption agreement where such succession is not
effected by operation of law).
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust Fund or property securing any Mortgage Note may at the
time be located, the Servicer and the Trustee acting jointly shall have the
power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee to act as co-trustee or co-trustees jointly with
the Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders, such title to the Trust Fund or any part
thereof, whichever is applicable, and, subject to the other provisions of this
Section 8.10, such powers, duties, obligations, rights and trusts as the
Servicer and the Trustee may consider necessary or desirable. The Trustee shall
be ultimately liable for the actions of any co-trustee. If the Servicer shall
not have joined in such appointment within 15 days after the receipt by it of a
request to do so, or in the case an Event of Default shall have occurred and be
continuing, the Trustee alone shall have the power to make such appointment. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 8.06 and no notice to
Certificateholders of the appointment of any co-trustee or separate trustee
shall be required under Section 8.08.
Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
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(i) All rights, powers, duties and obligations conferred or
imposed upon the Trustee, except for the obligation of the Trustee
under this Agreement to advance funds on behalf of the Servicer, shall
be conferred or imposed upon and exercised or performed by the Trustee
and such separate trustee or co-trustee jointly (it being understood
that such separate trustee or co-trustee is not authorized to act
separately without the Trustee joining in such act), except to the
extent that under any law of any jurisdiction in which any particular
act or acts are to be performed (whether as Trustee hereunder or as
successor to the 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 any portion thereof in any such jurisdiction) shall be
exercised and performed singly by such separate trustee or co-trustee,
but solely at the direction of the Trustee;
(ii) No trustee hereunder shall be held personally liable by
reason of any act or omission of any other trustee hereunder; and
(iii) The Trustee may at any time accept the resignation of
or remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the 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 and a copy thereof given to the
Servicers and the Depositor.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
SECTION 8.11. Tax Matters.
It is intended that each of the Lower-Tier REMIC, the Middle-Tier REMIC
and the Upper-Tier REMIC shall constitute, and that the affairs of the Trust
Fund shall be conducted so as to allow each of the Lower-Tier REMIC, the
Middle-Tier REMIC and the Upper-Tier REMIC to qualify as, a "real estate
mortgage investment conduit" as defined in and in accordance with the REMIC
Provisions. In furtherance of such intention, the Servicer covenants and agrees
that it shall act as agent (and the Servicer is hereby appointed to act as
agent) on behalf of each of the Lower-Tier REMIC, the Middle-Tier REMIC and the
Upper-Tier REMIC and that in such capacity it shall: (a) prepare and file, or
cause to be prepared and filed, in a timely manner, a U.S. Real Estate Mortgage
Investment Conduit Income Tax Return (Form 1066 or any successor form adopted by
the Internal Revenue Service) and prepare and file or cause to be prepared and
filed with the Internal Revenue Service and applicable state or local tax
authorities income tax or information returns for each taxable year with respect
to each of the Lower-Tier REMIC, the Middle-Tier REMIC and the Upper-Tier REMIC,
containing such information and at the times and in the manner as may be
required by the Code or state or local tax laws, regulations, or rules, and
furnish or cause to be furnished to Certificateholders the schedules, statements
or information at such times and in such manner as may be required thereby; (b)
within thirty days of the Closing Date, furnish or cause to be furnished to the
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Internal Revenue Service, on Forms 8811 or as otherwise may be required by the
Code, the name, title, address, and telephone number of the person that the
holders of the Certificates may contact for tax information relating thereto,
together with such additional information as may be required by such Form, and
update such information at the time or times in the manner required by the Code
for each of the Lower-Tier REMIC, the Middle-Tier REMIC and the Upper-Tier
REMIC; (c) make or cause to be made elections, on behalf of each of the
Lower-Tier REMIC, the Middle-Tier REMIC and the Upper-Tier REMIC to be treated
as a REMIC on the federal tax return of each of the Lower-Tier REMIC, the
Middle-Tier REMIC and the Upper-Tier REMIC for its first taxable year (and, if
necessary, under applicable state law); (d) prepare and forward, or cause to be
prepared and forwarded, to the Certificateholders and to the Internal Revenue
Service and, if necessary, state tax authorities, all information returns and
reports as and when required to be provided to them in accordance with the REMIC
Provisions, including without limitation, the calculation of any original issue
discount using the Prepayment Assumption; (e) provide information necessary for
the computation of tax imposed on the transfer of a Class R Certificate to a
Person that is not a Permitted Transferee, or an agent (including a broker,
nominee or other middleman) of a Non-Permitted Transferee, or a pass-through
entity in which a Non-Permitted Transferee is the record holder of an interest
(the reasonable cost of computing and furnishing such information may be charged
to the Person liable for such tax); (f) to the extent that they are under its
control conduct the affairs of each of the Lower-Tier REMIC, the Middle-Tier
REMIC and the Upper-Tier REMIC at all times that any Certificates are
outstanding so as to maintain the status of each of the Lower-Tier REMIC, the
Middle-Tier REMIC and the Upper-Tier REMIC as a REMIC under the REMIC
Provisions; (g) not knowingly or intentionally take any action or omit to take
any action that would cause the termination of the REMIC status of the
Lower-Tier REMIC, the Middle-Tier REMIC or the Upper-Tier REMIC; (h) pay, from
the sources specified in the last paragraph of this Section 8.11, the amount of
any federal, state and local taxes, including prohibited transaction taxes as
described below, imposed on each of the Lower-Tier REMIC, the Middle-Tier REMIC
and the Upper-Tier REMIC prior to the termination of the Trust Fund when and as
the same shall be due and payable (but such obligation shall not prevent the
Trustee or any other appropriate Person from contesting any such tax in
appropriate proceedings and shall not prevent the Trustee from withholding
payment of such tax, if permitted by law, pending the outcome of such
proceedings); (i) sign or cause to be signed federal, state or local income tax
or information returns; (j) maintain records relating to each of the Lower-Tier
REMIC, the Middle-Tier REMIC and the Upper-Tier REMIC, including but not limited
to the income, expenses, assets and liabilities of each of the Lower-Tier REMIC,
the Middle-Tier REMIC and the Upper-Tier REMIC, and the fair market value and
adjusted basis of the Trust Fund property determined at such intervals as may be
required by the Code, as may be necessary to prepare the foregoing returns,
schedules, statements or information; and (k) as and when necessary and
appropriate, represent each of the Lower-Tier REMIC, the Middle-Tier REMIC and
the Upper-Tier REMIC in any administrative or judicial proceedings relating to
an examination or audit by any governmental taxing authority, request an
administrative adjustment as to any taxable year of each of the Lower-Tier
REMIC, the Middle-Tier REMIC and the Upper-Tier REMIC, enter into settlement
agreements with any governmental taxing agency, extend any statute of
limitations relating to any tax item of any of the Lower-Tier REMIC, the
Middle-Tier REMIC or the Upper-Tier REMIC, and otherwise act on behalf of any of
the Lower-Tier REMIC, the Middle-Tier REMIC or the Upper-Tier REMIC in relation
to any tax matter involving any of the Lower-Tier REMIC, the Middle-Tier REMIC
or the Upper-Tier REMIC or controversy involving the Trust Fund.
In order to enable the Servicer to perform its duties as set forth
herein, the Depositor shall provide, or cause to be provided, to the Servicer
within 10 days after the Closing Date all information or data that the Servicer
requests in writing and determines to be relevant for tax purposes to the
valuations and offering prices of the Certificates, including, without
limitation, the price, yield, prepayment assumption and projected cash flows of
the Certificates and the Mortgage Loans. Thereafter, the Depositor shall provide
to the Servicer promptly upon written request therefor, any such additional
information or data that the Servicer may, from time to time, request in order
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to enable the Servicer to perform its duties as set forth herein. The Depositor
hereby agrees to indemnify the Servicer for any losses, liabilities, damages,
claims or expenses of the Servicer arising from any errors or miscalculations of
the Servicer that result from any failure of the Depositor to provide, or to
cause to be provided, accurate information or data to the Servicer on a timely
basis.
In the event that any tax is imposed on "prohibited transactions" of
any of the Lower-Tier REMIC, the Middle-Tier REMIC or the Upper-Tier REMIC as
defined in Section 860F(a)(2) of the Code, on the "net income from foreclosure
property" of the Trust Fund as defined in Section 860G(c) of the Code, on any
contribution to the Trust Fund after the Startup Day pursuant to Section 860G(d)
of the Code, or any other tax is imposed, if not paid as otherwise provided for
herein, such tax shall be paid by (i) the Servicer, if any such tax arises out
of or results from a breach by the Servicer of any of its obligations under this
Agreement, (ii) any party hereto (other than the Servicer) to the extent any
such tax arises out of or results from a breach by such other party of any of
its obligations under this Agreement or (iii) in all other cases, or in the
event that any liable party here fails to honor its obligations under the
preceding clauses (i) or (ii), any such tax will be paid first with amounts
otherwise to be distributed to the Class R Certificateholders (pro rata), and
second with amounts otherwise to be distributed to all other Certificateholders
in the following order of priority: first, to the Class C Certificates (pro
rata), second, to the Class IB and Class IIB Certificates (pro rata), third, to
the Class IM-2 and IIM-2 Certificates (pro rata), fourth, to the Class IM-1 and
IIM-1 Certificates (pro rata), and fifth, to the Group I Class A Certificates
and the Group II Class A Certificates (pro rata). Notwithstanding anything to
the contrary contained herein, to the extent that such tax is payable by the
Class R Certificates, the Servicer is hereby authorized to instruct the Trustee
or Paying Agent, as applicable and the Trustee or Paying Agent, as applicable is
hereby authorized pursuant to such instruction to retain on any Distribution
Date, from the Holders of the Class R Certificates (and, if necessary, second,
from the Holders of all other Certificates in the priority specified in the
preceding sentence), funds otherwise distributable to such Holders in an amount
sufficient to pay such tax. The Servicer agrees to promptly notify in writing
the party liable for any such tax of the amount thereof and the due date for the
payment thereof.
ARTICLE IX
TERMINATION
SECTION 9.01. Termination upon Liquidation or Repurchase of all
Mortgage Loans.
Subject to Section 9.03, the obligations and responsibilities of the
Depositor, the Servicer and the Trustee created hereby with respect to the Trust
Fund shall terminate upon the earlier of (a) the repurchase by the Servicer of
all of the Mortgage Loans (and REO Properties) remaining in either Loan Group at
the price (the "Repurchase Price") equal to the sum of (i) 100% of the Stated
Principal Balance of each Mortgage Loan in such Loan Group (other than in
respect of REO Property), (ii) accrued interest thereon at the applicable
Mortgage Rate, (iii) the appraised value of any REO Property in such Loan Group
(up to the Stated Principal Balance of the related Mortgage Loan), such
appraisal to be conducted by an appraiser mutually agreed upon by the Depositor
and the Trustee and (iv) any unreimbursed Servicing Fees, Advances and Servicing
Advances with respect to the Mortgage Loans in such Loan Group prior to the
exercise of such repurchase, together with any unreimbursed Servicing Fees; and
(b) the later of (i) the maturity or other liquidation (or any Advance with
respect thereto) of the last Mortgage Loan remaining in the Trust Fund and the
disposition of all REO Property and (ii) the distribution to Certificateholders
of all amounts required to be distributed to them pursuant to this Agreement, as
applicable. In no event shall the trusts created hereby continue beyond the
earlier of (i) 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. James's, living on the date hereof and (ii) the Latest
Possible Maturity Date.
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The right to repurchase all Mortgage Loans and REO Properties in a Loan
Group pursuant to clause (a) above shall be conditioned upon the aggregate
Stated Principal Balance of the Mortgage Loans in such Loan Group, at the time
of any such repurchase, aggregating ten percent or less of the aggregate Initial
Certificate Principal Balance of the Certificates in such Loan Group.
SECTION 9.02. Final Distribution on the Certificates.
If on any Determination Date, (i) the Servicer determines that there
are no Outstanding Mortgage Loans and no other funds or assets in the Trust Fund
other than the funds in the Collection Account, the Trustee, the Servicer or
Paying Agent shall send a final distribution notice promptly to each
Certificateholder or (ii) the Servicer determines that a Class of Certificates
shall be retired after a final distribution on such Class, the Trustee shall
notify the Certificateholders within seven (7) Business Days after such
Determination Date that the final distribution in retirement of such Class of
Certificates is scheduled to be made on the immediately following Distribution
Date. Any final distribution made pursuant to the immediately preceding sentence
will be made only upon presentation and surrender of the Certificates at the
office of the Servicer. If the Servicer elects to terminate the Trust Fund
pursuant to clause (a) of Section 9.01, at least 10 days prior to the date
notice is to be mailed to the affected Certificateholders, the Servicer shall
notify the Depositor and the Trustee of the date such electing party intends to
terminate the Trust Fund and of the applicable repurchase price of the Mortgage
Loans and REO Properties.
Notice of any termination of the Trust Fund, specifying the
Distribution Date on which Certificateholders may surrender their Certificates
for payment of the final distribution and cancellation, shall be given promptly
by the Trustee or the Servicer or Paying Agent by letter to Certificateholders
mailed not earlier than the 10th day and no later than the 15th day of the month
immediately preceding the month of such final distribution. Any such notice
shall specify (a) the Distribution Date upon which final distribution on the
Certificates will be made upon presentation and surrender of Certificates at the
office therein designated, (b) the location of the office or agency at which
such presentation and surrender must be made, and (c) that the Record Date
otherwise applicable to such Distribution Date is not applicable, distributions
being made only upon presentation and surrender of the Certificates at the
office therein specified. The Servicer will give such notice to each Rating
Agency at the time such notice is given to Certificateholders.
In the event such notice is given, the Servicer shall cause all funds
in the Collection Account to be deposited in the Distribution Account on the
Business Day prior to the applicable Distribution Date in an amount equal to the
final distribution in respect of the Certificates. Upon such final deposit with
respect to the Trust Fund and the receipt by the Trustee of a Request for
Release therefor, the Trustee shall promptly release to the Servicer the
Mortgage Files for the Mortgage Loans.
Upon presentation and surrender of the Certificates, the Trustee shall
cause to be distributed to Certificateholders of each Class the amounts
allocable to such Certificates held in the Distribution Account in the order and
priority set forth in Section 4.04 hereof on the final Distribution Date and in
proportion to their respective Percentage Interests.
In the event that any affected Certificateholders shall not surrender
Certificates for cancellation within six months after the date specified in the
above mentioned written notice, the Trustee shall give a second written notice
to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
six months after the second notice all the applicable Certificates shall not
have been surrendered for cancellation, the Trustee may take appropriate steps,
or may appoint an agent to take appropriate steps, to contact the remaining
Certificateholders concerning surrender of their Certificates, and the cost
thereof shall be paid out of the funds and other assets that remain a part of
the Trust Fund. If within one year after the second notice all Certificates
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shall not have been surrendered for cancellation, the Class R Certificateholders
shall be entitled to all unclaimed funds and other assets of the Trust Fund that
remain subject hereto. Upon payment to the Class R Certificateholders of such
funds and assets, the Trustee shall have no further duties or obligations with
respect thereto.
SECTION 9.03. Additional Termination Requirements.
(a) In the event the Servicer exercises its purchase option on both of
the Group I Mortgage Loans and the Group II Mortgage Loans as provided in
Section 9.01, the Trust Fund shall be terminated in accordance with the
following additional requirements, unless the Trustee has been supplied with an
Opinion of Counsel, at the expense of the Servicer, to the effect that the
failure of the Trust Fund to comply with the requirements of this Section 9.03
will not (i) result in the imposition of taxes on "prohibited transactions" of
any of the Lower-Tier REMIC, the Middle-Tier REMIC or the Upper-Tier REMIC as
defined in section 860F of the Code, or (ii) cause any of the Lower-Tier REMIC,
the Middle-Tier REMIC or the Upper-Tier REMIC to fail to qualify as a REMIC at
any time that any Certificates are outstanding:
(i) The Depositor shall establish a 90-day liquidation
period and notify the Trustee and the Servicer thereof, which shall in
turn specify the first day of such period in a statement attached to
the Trust Fund's final Tax Return pursuant to Treasury Regulation
Section 1.860F-1. The Depositor shall satisfy all the requirements of a
qualified liquidation under Section 860F of the Code and any
regulations thereunder, as evidenced by an Opinion of Counsel obtained
at the expense of the Servicer;
(ii) During such 90-day liquidation period, and at or prior
to the time of making the final payment on the Certificates, the
Depositor as agent of the Trustee shall sell all of the assets of the
Trust Fund for cash; and
(iii) At the time of the making of the final payment on the
Certificates, the Trustee or the Servicer shall distribute or credit,
or cause to be distributed or credited, to the Class R
Certificateholders all cash on hand (other than cash retained to meet
outstanding claims known to the Trustee), and the Trust Fund shall
terminate at that time, whereupon the Trustee shall have no further
duties or obligations with respect to sums distributed or credited to
the Class R Certificateholders.
(b) By their acceptance of the Certificates, the Holders thereof hereby
authorize the Depositor to specify the 90-day liquidation period for the Trust
Fund, which authorization shall be binding upon all successor
Certificateholders.
(c) The Servicer as agent for each REMIC hereby agrees to adopt and
sign such a plan of complete liquidation upon the written request of the
Depositor, and the receipt of the Opinion of Counsel referred to in Section 9.03
and to take such other action in connection therewith as may be reasonably
requested by the Depositor.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01. Amendment.
This Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee, without the consent of any of the Certificateholders
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to cure any ambiguity, to correct or supplement any provisions herein, or to
make such other provisions with respect to matters or questions arising under
this Agreement, as shall not be inconsistent with any other provisions herein if
such action shall not, as evidenced by an Opinion of Counsel, adversely affect
in any material respect the interests of any Certificateholder; provided,
however, that any such amendment shall be deemed not to adversely affect in any
material respect the interests of the Certificateholders and no such Opinion of
Counsel shall be required if the Person requesting such amendment obtains a
letter from each Rating Agency stating that such amendment would not result in
the downgrading or withdrawal of the respective ratings then assigned to the
Certificates, it being understood and agreed that any such letter in and of
itself will not represent a determination as to the materiality of any such
amendment and will represent a determination only as to the credit issues
affecting any such rating.
Notwithstanding the foregoing, without the consent of the
Certificateholders, the Trustee, the Depositor and the Servicer may at any time
and from time to time amend this Agreement to modify, eliminate or add to any of
its provisions to such extent as shall be necessary or appropriate to maintain
the qualification of each of the Lower-Tier REMIC, the Middle-Tier REMIC and the
Upper-Tier REMIC as a REMIC under the Code or to avoid or minimize the risk of
the imposition of any tax on the Trust Fund pursuant to the Code that would be a
claim against the Trust Fund at any time prior to the final redemption of the
Certificates, provided that the Trustee has been provided an Opinion of Counsel,
which opinion shall be an expense of the party requesting such opinion but in
any case shall not be an expense of the Trustee or the Servicer, to the effect
that such action is necessary or appropriate to maintain such qualification or
to avoid or minimize the risk of the imposition of such a tax.
This Agreement may also be amended from time to time by the Depositor,
the Servicer and the Trustee and the Holders of each Class of Certificates
affected thereby evidencing not less than 66 2/3% of the Voting Rights of such
Class for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Holders of Certificates; provided, however, that no
such amendment shall (i) reduce in any manner the amount of, or delay the timing
of, payments required to be distributed on any Certificate without the consent
of the Holder of such Certificate, (ii) adversely affect in any material respect
the interests of the Holders of any Class of Certificates in a manner other than
as described in (i), without the consent of the Holders of Certificates of such
Class evidencing 66 2/3% or more of the Voting Rights of such Class or (iii)
reduce the aforesaid percentages of Certificates the Holders of which are
required to consent to any such amendment without the consent of the Holders of
all such Certificates then outstanding.
Notwithstanding anything to the contrary in this Agreement, this
Agreement may be amended from time to time by the Depositor, the Servicer and
the Trustee with the consent of Certificateholders evidencing not less than 66
2/3% of the Voting Rights of each Class of Certificates (excluding the Voting
Rights of the Depositor, its Affiliates or its agents) for the purpose of
significantly changing the Permitted Activities of the Trust.
Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel, which opinion shall be an expense of the party
requesting such amendment but in any case shall not be an expense of the
Trustee, to the effect that such amendment will not cause the imposition of any
tax on the Trust Fund or the Certificateholders or cause any of the Lower-Tier
REMIC, the Middle-Tier REMIC or the Upper-Tier REMIC to fail to qualify as a
REMIC at any time that any Certificates are outstanding.
Promptly after the execution of any amendment to this Agreement
requiring the consent of Certificateholders, the Trustee or upon the written
request of the Trustee to the Servicer, the Servicer shall furnish written
notification of the substance of such amendment to each Certificateholder and
each Rating Agency.
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It shall not be necessary for the consent of Certificateholders under
this Section to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee or the Servicer to
enter into an amendment without receiving an Opinion of Counsel, satisfactory to
the Trustee or the Servicer that (i) such amendment is permitted and is not
prohibited by this Agreement and that all requirements for amending this
Agreement have been complied with; and (ii) either (A) the amendment does not
adversely affect in any material respect the interests of any Certificateholder
or (B) the conclusion set forth in the immediately preceding clause (A) is not
required to be reached pursuant to this Section 10.01.
SECTION 10.02. 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 10.03. Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND
TO BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES
THEREOF.
SECTION 10.04. Intention of Parties.
It is the express intent of the parties hereto that the conveyance of
the Mortgage Notes, Mortgages, assignments of Mortgages, title insurance
policies and any modifications, extensions and/or assumption agreements and
private mortgage insurance policies relating to the Mortgage Loans by the
Depositor to the Trustee be, and be construed as, an absolute sale thereof to
the Trustee. It is, further, not the intention of the parties that such
conveyance be deemed a pledge thereof by the Depositor to the Trustee. However,
in the event that, notwithstanding the intent of the parties, such assets are
held to be the property of the Depositor, or if for any other reason this
Agreement is held or deemed to create a security interest in such assets, then
(i) this Agreement shall be deemed to be a security agreement within the meaning
of the Uniform Commercial Code of the State of New York and (ii) the conveyance
provided for in this Agreement shall be deemed to be an assignment and a grant
by the Depositor to the Trustee, for the benefit of the Certificateholders, of a
security interest in all of the assets that constitute the Trust Fund, whether
now owned or hereafter acquired.
The Depositor for the benefit of the Certificateholders shall, to the
extent consistent with this Agreement, take such actions as may be necessary to
ensure that, if this Agreement were deemed to create a security interest in the
assets of the Trust Fund, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of the Agreement. The Depositor shall
arrange for filing any Uniform Commercial Code continuation statements in
connection with any security interest granted or assigned to the Trustee for the
benefit of the Certificateholders.
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SECTION 10.05. Notices.
(a) The Servicer shall use its best efforts to promptly provide notice
to each Rating Agency and the NIMs Insurer with respect to each of the following
of which it has actual knowledge:
(i) Any material change or amendment to this Agreement;
(ii) The occurrence of any Event of Default that has not
been cured;
(iii) The resignation or termination of the Servicer, the
Servicer or the Trustee and the appointment of any successor;
(iv) The repurchase or substitution of Mortgage Loans
pursuant to Sections 2.02, 2.03 and 3.12; and
(v) The final payment to Certificateholders.
The Servicer shall promptly furnish to each Rating Agency copies of the
following:
(i) Each report to Certificateholders described in Section
4.05;
(ii) Each annual statement as to compliance described in
Section 3.17; and
(iii) Each annual independent public accountants' servicing
report described in Section 3.18.
(b) All directions, demands and notices hereunder shall be in writing
and shall be deemed to have been duly given when delivered to (a) in the case of
the Depositor, Chase Funding, Inc., 000 Xxxx Xxxxxxxxx, 0xx Xxxxx Xxxxx,
Xxxxxxxxx Lake, New Jersey 07675, Attention: Structured Finance; (b) in the case
of the Trustee, Citibank, N.A., 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxxx 0, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Agency and Trust; (c) in the case of the Servicer,
Chase Manhattan Mortgage Corporation, 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxx Xxxxxx
00000, Attention: Structured Finance (with a copy to The Chase Manhattan Bank,
000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Structured Finance
Services); (d) in the case of the Rating Agencies, (i) Fitch, Inc., 0 Xxxxx
Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; (ii) Xxxxx'x Investors Service, Inc., 00
Xxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; and (e) in the case of the
NIMs Insurer to such address provided to the other parties hereto by the NIMs
Insurer and in the case of any of the foregoing Persons, such other addresses as
may hereafter be furnished by any such Persons to the other parties to this
Agreement. Notices to Certificateholders shall be deemed given when mailed,
first class postage prepaid, to their respective addresses appearing in the
Certificate Register.
SECTION 10.06. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
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SECTION 10.07. Assignment.
Notwithstanding anything to the contrary contained herein, except as
provided pursuant to Section 6.02, this Agreement may not be assigned by the
Servicer without the prior written consent of the Trustee and Depositor.
SECTION 10.08. Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal representative or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a petition or winding up of the Trust
Fund, or otherwise affect the rights, obligations and liabilities of the parties
hereto or any of them.
No Certificateholder shall have any right to vote (except as provided
herein) or in any manner otherwise control the operation and management of the
Trust Fund, or the obligations of the parties hereto, nor shall anything herein
set forth or contained in the terms of the Certificates be construed so as to
constitute the Certificateholders from time to time as partners or members of an
association; nor shall any Certificateholder be under any liability to any third
party by reason of any action taken by the parties to this Agreement pursuant to
any provision hereof.
No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Agreement,
unless such Holder previously shall have given to the Trustee a written notice
of an Event of Default and of the continuance thereof, as hereinbefore provided,
the Holders of Certificates evidencing not less than 25% of the Voting Rights
evidenced by the Certificates shall also have made written request to the
Trustee to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses, and liabilities to be incurred therein
or thereby, and the Trustee, for 60 days after its receipt of such notice,
request and offer of indemnity shall have neglected or refused to institute any
such action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates and/or the NIMs
Insurer, or to obtain or seek to obtain priority over or preference to any other
such Holder and/or the NIMs Insurer or to enforce any right under this
Agreement, except in the manner herein provided and for the common benefit of
all Certificateholders. For the protection and enforcement of the provisions of
this Section 10.08, each and every Certificateholder and the Trustee shall be
entitled to such relief as can be given either at law or in equity.
SECTION 10.09. Inspection and Audit Rights.
The Servicer agrees that, on reasonable prior notice, it will permit
any representative of the Depositor or the Trustee during the Servicer's normal
business hours, to examine all the books of account, records, reports and other
papers of the Servicer relating to the Mortgage Loans, to make copies and
extracts therefrom, to cause such books to be audited by independent certified
public accountants selected by the Depositor or the Trustee and to discuss its
affairs, finances and accounts relating to the Mortgage Loans with its officers,
employees and independent public accountants (and by this provision the Servicer
hereby authorizes such accountants to discuss with such representative such
affairs, finances and accounts), all at such reasonable times and as often as
may be reasonably requested. Any out-of-pocket expense incident to the exercise
by the Depositor or the Trustee of any right under this Section 10.09 shall be
borne by the party requesting such inspection; all other such expenses shall be
borne by the Servicer.
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SECTION 10.10. Certificates Nonassessable and Fully Paid.
It is the intention of the Depositor that Certificateholders shall not
be personally liable for obligations of the Trust Fund, that the interests in
the Trust Fund represented by the Certificates shall be nonassessable for any
reason whatsoever, and that the Certificates, upon due authentication thereof by
the Authenticating Agent pursuant to this Agreement, are and shall be deemed
fully paid.
SECTION 10.11. Third Party Rights.
The NIMs Insurer shall be deemed a third-party beneficiary of this
Agreement to the same extent as if it were a party hereto, and shall have the
right to enforce the provisions of this Agreement.
SECTION 10.12. Additional Rights of the NIMs Insurer.
(a) Each party to this Agreement, any agent thereof and any successor
thereto shall furnish to the NIMs Insurer a copy of any notice, direction,
demand, opinion, schedule, list, certificate, report, statement, filing,
information, data or other communication provided by it or on its behalf to any
other Person pursuant to this Agreement at the same time, in the same form and
in the same manner as such communication is so provided and shall address or
cause such communication to be addressed to the NIMs Insurer in addition to any
other addressee thereof. Each Servicer shall cause the NIMs Insurer to be an
addressee of any report furnished in respect of the Servicer pursuant to Section
3.18.
(b) Wherever in this Agreement there shall be a requirement that there
be no downgrade, reduction, withdrawal or qualification of or other effect on
the rating of any Class of Certificates by any Rating Agency as of any date,
there also shall be deemed to be a requirement that there be no such effect on
any class of notes issued pursuant to the Indenture and guaranteed by the NIMs
Insurer as of such date. Further, wherever in this Agreement there shall be a
requirement that any Person or any communication, object or other matter be
acceptable or satisfactory to or otherwise receive the consent or other approval
of any other Person (whether as a condition to the eligibility of such Person to
act in any capacity, as a condition to any circumstance or state of affairs
related to such matter, or otherwise), there also shall be deemed to be a
requirement that such Person or matter be approved in writing by the NIMs
Insurer, which approval shall not be unreasonably withheld or delayed.
* * *
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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 as of the day and year first above written.
CHASE FUNDING, INC.,
as Depositor
By:
--------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
CHASE MANHATTAN MORTGAGE CORPORATION,
as Servicer
By:
--------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
CITIBANK, N.A.,
not in its individual capacity,
but solely as Trustee
By:
--------------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Assistant Vice President
EXHIBIT A
[FOR USE WITH GROUP I CERTIFICATES:
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT", AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTION 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED.]
[FOR USE WITH GROUP II CERTIFICATES:
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS (I) A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT", AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED, AND (II) RIGHTS TO PAYMENTS UNDER AN INTEREST
RATE CAP AGREEMENT.]
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN CHASE
FUNDING, INC. ("CHASE FUNDING"), THE SERVICER, OR THE TRUSTEE REFERRED TO BELOW
OR ANY OF THEIR AFFILIATES. NEITHER THIS CERTIFICATE, THE REMIC REGULAR INTEREST
REPRESENTED HEREBY NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR INSURED
BY CHASE FUNDING, CHASE MANHATTAN MORTGAGE CORPORATION, chase manhattan bank
usa, n.a., the chase manhattan bank, THE TRUSTEE OR BY ANY OF THEIR AFFILIATES
OR BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE PRINCIPAL BALANCE OF
THIS CERTIFICATE MAY BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN BELOW.
ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL BALANCE BY
INQUIRY OF THE SERVICER.
CLASS IA-1 CERTIFICATE
Number 01-AD1-IA-1-1 Original Denomination
$
-------------
Cut-off Date: October 1, 2001 Last Scheduled
Distribution Date: _________, 2016
First Distribution Date: Aggregate Initial Certificate
November 25, 2001
Balance of all
Class IA-1
Certificates: $_____________
Pass-Through Rate: ______ CUSIP: 161542 __ _
A-1
CHASE FUNDING LOAN ACQUISITION TRUST
MORTGAGE LOAN ASSET-BACKED CERTIFICATE
Series 2001-AD1
evidencing an ownership interest in distributions allocable to the Class IA-1
Certificates with respect to a pool of conventional, sub-prime mortgage loans
formed and sold by
CHASE FUNDING, INC.
Unless this Certificate is presented by an authorized representative of
the Depository Trust Company, a New York corporation ("DTC"), to the Servicer
for registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co. has an interest
herein.
This certifies that CEDE & CO. is the registered owner of the ownership
interest (the "Ownership Interest") evidenced by this Certificate (obtained by
dividing the Original Denomination of this Certificate by the aggregate Initial
Certificate Balance of all Class IA-1 Certificates) in certain distributions
with respect to a pool of conventional, sub-prime mortgage loans (the "Mortgage
Loans") formed and sold by Chase Funding, Inc. (hereinafter called the
"Depositor"), and certain other property held in trust for the benefit of
Certificateholders (collectively, the "Trust Fund"). The Mortgage Loans are
serviced by Chase Manhattan Mortgage Corporation (the "Servicer") and are
secured by first mortgages on Mortgaged Properties. The Trust Fund was created
pursuant to a pooling and servicing agreement (the "Agreement"), dated as of
October 1, 2001, among the Depositor, the Servicer and Citibank, N.A., 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 Agreement.
This Certificate is one of a duly authorized issue of Certificates,
designated as Chase Funding Loan Acquisition Trust, Mortgage Loan Asset-Backed
Certificates, Series 2001-AD1, Class IA-1 (the "Class IA-1 Certificates") and is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which Agreement such Holder is bound. Also
issued under the Agreement are Certificates designated as Chase Funding Loan
Acquisition Trust, Mortgage Loan Asset-Backed Certificates, Series 2001-AD1,
Class IA-2, Class IA-3, Class IA-4, Class IA-5 and Class IA-6 Certificates
(collectively, with the Class IA-1 Certificates, the "Group I Class A
Certificates"), Class IIA-1 Certificates (the "Group II Class A Certificates"),
Class IM-1 and Class IM-2 Certificates (together, the "Mezzanine Group I
Certificates"), Class IIM-1 and Class IIM-2 Certificates (together, the
"Mezzanine Group II Certificates"), Class IB Certificates (the "Class IB
Certificates"), Class IIB Certificates (the "Class IIB Certificates"), Class IL
Certificates (the "Class IL Certificates"), Class IIL Certificates (the "Class
IIL Certificates"), Class IP Certificates (the "Class IP Certificates"), Class
IIP Certificates (the "Class IIP Certificates"), Class C Certificates (the
A-2
"Class C Certificates") and the Class R Certificate (the "Class R Certificate"
or the "Residual Certificate").
The Group I Class A Certificates, the Group II Class A Certificates,
the Mezzanine Group I Certificates, the Mezzanine Group II Certificates, the
Class IB Certificates, the Class IIB Certificates, the Class IL Certificates,
the Class IIL Certificates, the Class IP Certificates, the Class IIP
Certificates, the Class C Certificates and the Class R Certificate are
collectively referred to herein as the "Certificates."
Pursuant to the terms of the Agreement, the Paying Agent will
distribute from funds in the Distribution Account the amounts described in the
Pooling and Servicing 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 November 25, 2001. Such distributions will
be made to the Person in whose name this Certificate is registered at the close
of business on the last Business Day of the month preceding the month in which
such payment is made, or if such last day is not a Business Day, the Business
Day immediately preceding such last day.
Distributions on this Certificate will be made either by check mailed
to the address of the Person entitled thereto, as such name and address shall
appear on the Certificate Register, or by wire transfer in immediately available
funds to the account of such Holder at a bank or other financial or depository
institution having appropriate facilities therefor, if such Holder has so
notified the Servicer in writing at least 5 Business Days prior to the first
Distribution Date for which distribution by wire transfer is to be made, and
such Holder's Certificates evidence an aggregate original principal balance of
not less than $1,000,000 or such Holder holds a 100% Percentage Interest of such
Class. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Servicer, of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office of the Servicer or at such other office as may be designated by such
notice of final distribution.
The Servicer will maintain or cause to be maintained a Certificate
Register in which, subject to such reasonable regulations as it may prescribe,
the Servicer will provide for the registration of Certificates and of transfers
and exchanges of Certificates. Upon surrender for registration of transfer of
any Certificate at any office or agency of the Servicer, or, if an
Authenticating Agent has been appointed under the Agreement, the Authenticating
Agent, maintained for such purpose, the Servicer, or, if an Authenticating Agent
has been appointed under the Agreement, the Authenticating Agent, will, subject
to the limitations set forth in the Agreement, authenticate and deliver, in the
name of the designated transferee or transferees, a Certificate of a like class
and dated the date of authentication by the Authenticating Agent.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Servicer, of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Servicer, for that purpose and specified in such notice of
final distribution.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof which further provisions shall for all purposes
have the same effect as if set forth at this place.
A-3
Unless the certificate of authentication has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-4
IN WITNESS WHEREOF, the Depositor has caused this Certificate to be
duly executed.
Dated: October 15, 2001 CHASE FUNDING, INC.
By:
---------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class IA-1
Certificates referred to
in the within-mentioned
Agreement.
THE CHASE MANHATTAN BANK
as Authenticating Agent
By:
---------------------------------
Authorized Signatory
A-5
REVERSE OF CERTIFICATE
CHASE FUNDING LOAN ACQUISITION TRUST
MORTGAGE LOAN ASSET-BACKED CERTIFICATE
SERIES 2001-AD1
This Certificate is one of a duly authorized issue of Certificates,
designated as Chase Funding Loan Acquisition Trust, Mortgage Loan Asset-Backed
Certificates, Series 2001-AD1, issued in six Classes of Group I Class A
Certificates, one Class of Group II Class A Certificates, two Classes of
Mezzanine Group I Certificates, two Classes of Mezzanine Group II Certificates,
one Class of Class IB Certificates, one Class of Class IIB Certificates, one
Class of Class IL Certificates, one Class of Class IIL Certificates, one Class
of Class IP Certificates, one Class of Class IIP Certificates, one Class of
Class C Certificates and one Class R Certificate, each evidencing an interest in
certain distributions with respect to a pool of conventional, sub-prime Mortgage
Loans formed and sold by the Depositor and certain other property conveyed by
the Depositor to the Trustee.
Following the initial issuance of the Certificates, the principal
balance of this Certificate will be different from the Original Denomination
shown above. Anyone acquiring this Certificate may ascertain its current
principal balance by inquiry of the Servicer.
The Holder, by its acceptance of this Certificate, agrees that it will
look solely to the Trust Fund and certain amounts resulting from credit
enhancements for payment hereunder and that the Trustee is not liable to the
Holders for any amount payable under this Certificate or the Agreement or,
except as expressly provided in the Agreement, subject to any liability under
the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
No service charge will be made to the Holder for any transfer or
exchange of the Certificate, but the Servicer may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of the Certificate. Prior to due
presentation of a Certificate for registration of transfer, the Depositor, the
Servicer and the Trustee may treat the person in whose name any Certificate is
registered as the owner of such Certificate and the Percentage Interest in the
Trust Fund evidenced thereby for the purpose of receiving distributions pursuant
to the Agreement and for all other purposes whatsoever, and neither the
Depositor, the Servicer nor the Trustee will be affected by notice to the
contrary.
The Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee, without the consent of any of the Certificateholders,
to cure any ambiguity, to correct or supplement any provisions therein which may
be inconsistent with the other provisions therein, to ensure continuing
treatment of each REMIC included in the Trust Fund as a REMIC, or to make any
other provisions with respect to matters or questions arising under the
Agreement which are not materially inconsistent with the provisions of the
A-6
Agreement, provided that such action does not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any
Certificateholder.
The Agreement may also be amended from time to time by the Depositor,
the Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66 2/3% of the Percentage Interests of
each Class of Certificates affected thereby for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Agreement or of modifying in any manner the rights of the Holders of
Certificates of such Class; provided, however, that no such amendment may (i)
reduce in any manner the amount of, or delay the timing of, payments received on
Mortgage Loans which are required to be distributed on any Certificate without
the consent of the Holder of such Certificate, (ii) adversely affect in any
material respect the interests of the Holders of any Class of Certificates in a
manner other than as described in clause (i), without the consent of the Holders
of Certificates of such Class evidencing 66 2/3% or more of the Voting Rights of
such Class or (iii) change the percentage specified in clause (ii) of the third
paragraph of Section 10.01 of the Agreement, without the consent of the Holders
of all Certificates of such Class then outstanding.
For federal income tax purposes, the Trust Fund includes three
segregated asset pools. The Depositor intends to make an election to treat each
as a "real estate mortgage investment conduit" (a "REMIC"). The Certificates
(other than the Class R Certificate, Class L Certificates and Class P
Certificates) will represent "regular interests" in the Upper-Tier REMIC. The
Residual Certificate will represent the sole class of "residual interest" in
each of the three REMICs.
The respective obligations and responsibilities of the Depositor, the
Servicer and the Trustee under the Agreement will terminate upon (i) the later
of the final payment or other liquidation (or any Advance with respect thereto)
of the last Mortgage Loan or the disposition of all property acquired upon the
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and the
remittance of all funds due thereunder; or (ii) at the option of the Servicer,
on any Distribution Date on which the aggregate Stated Principal Balances of the
Mortgage Loans in the applicable Loan Group is equal to or less than 10% of the
aggregate Stated Principal Balance of the Mortgage Loans in such Loan Group as
of the Cut-Off Date so long as the Servicer deposits or causes to be deposited
in the Distribution Account during the Principal Prepayment Period related to
such Distribution Date an amount equal to the sum of (i) 100% of the Stated
Principal Balance of each Mortgage Loan in such Loan Group (other than in
respect of REO Property), (ii) accrued interest thereon at the applicable
Mortgage Rate, (iii) the appraised value of any REO Property in such Loan Group
(up to the Stated Principal Balance of the related Mortgage Loan), such
appraisal to be conducted by an appraiser mutually agreed upon by the Depositor
and the Trustee and (iv) any unreimbursed Servicing Fees, Advances and Servicing
Advances, and the principal portion of any unreimbursed Advances, made on the
Mortgage Loans in such Loan Group prior to such termination; provided, however,
that in no event shall the trust created hereby continue beyond the earlier of
(i) 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. James's, living on the date hereof and (ii) the Latest Possible
Maturity Date.
A-7
[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF ASSIGNEE)
-----------------------------------------
-------------------------------------------------------
(Please Print or Type Name and Address of Assignee)
--------------------------------------------------------
the within Certificate, and all rights thereunder, and hereby does irrevocably
constitute and appoint
________________________________________________________Attorney to transfer the
within Certificate on the books kept for the registration thereof, with full
power of substitution in the premises.
Dated:
(Signature guaranty)
----------------------------------------------------
NOTICE: The signature to this assignment must
correspond with the name as it appears upon the face
of the within Certificate in every particular,
without alteration or enlargement or any change
whatever.
(*This information, which is voluntary, is being requested to ensure that the
assignee will not be subject to backup withholding under Section 3406 of the
Code.)
A-8
EXHIBIT B
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN INTEREST
IN A GRANTOR TRUST THAT HOLDS (i) A "REGULAR INTEREST" IN A "REAL ESTATE
MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, AND
(II) THE RIGHT TO RECEIVE PAYMENTS UNDER AN INTEREST RATE CAP AGREEMENT AND IS
TREATED AS HAVING ENTERED INTO CERTAIN INTEREST RATE CAP AGREEMENTS.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN CHASE
FUNDING, INC. ("CHASE FUNDING"), THE SERVICER OR THE TRUSTEE REFERRED TO BELOW
OR ANY OF THEIR AFFILIATES. NEITHER THIS CERTIFICATE, THE REMIC REGULAR INTEREST
REPRESENTED HEREBY NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR INSURED
BY CHASE FUNDING, CHASE MANHATTAN MORTGAGE CORPORATION, CHASE manhattan bank
usa, n.a., the chase manhattan bank, THE TRUSTEE OR BY ANY OF THEIR AFFILIATES
OR BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
THIS CLASS C CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS SOLD OR TRANSFERRED IN TRANSACTIONS
WHICH ARE EXEMPT FROM REGISTRATION UNDER SUCH ACT OR UNDER APPLICABLE STATE LAW
AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE TRUSTEE SHALL HAVE
RECEIVED EITHER (I) A REPRESENTATION LETTER FROM THE TRANSFEREE OF THIS
CERTIFICATE TO THE EFFECT THAT SUCH TRANSFEREE EITHER (A) IS NOT AN EMPLOYEE
BENEFIT PLAN WITHIN THE MEANING OF SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA") OR SECTION 4975 OF THE CODE OR ANY
APPLICABLE FEDERAL, STATE, OR LOCAL LAW MATERIALLY SIMILAR TO THE FOREGOING
PROVISIONS OF ERISA AND THE CODE ("SIMILAR LAW") (A "PLAN"), AND IS NOT DIRECTLY
OR INDIRECTLY PURCHASING ANY CERTIFICATE ON BEHALF OF, AS INVESTMENT MANAGER OF,
AS NAMED FIDUCIARY OF, AS TRUSTEE OF OR WITH ASSETS OF A PLAN OR, IN THE CASE OF
AN INSURANCE COMPANY, THE ASSETS OF ANY SEPARATE ACCOUNTS TO EFFECT SUCH
ACQUISITION OR (B) THE SOURCE OF FUNDS FOR THE PURCHASE OF THE CERTIFICATES IS
AN "INSURANCE COMPANY GENERAL ACCOUNT" WITHIN THE MEANING OF PROHIBITED
TRANSACTION CLASS EXEMPTION 95-60 ("PTCE 95-60"), 60 FED. REG. 35925 (JULY 12,
1995), AND THE PURCHASE AND HOLDING OF THE CERTIFICATES IS EXEMPT UNDER PTCE
95-60, OR (II) IF THIS CERTIFICATE IS PRESENTED FOR REGISTRATION IN THE NAME OF
A PLAN SUBJECT TO TITLE I OF ERISA, OR SECTION 4975 OF THE CODE OR SIMILAR LAW
(OR COMPARABLE PROVISIONS OF ANY SUBSEQUENT ENACTMENTS), OR A TRUSTEE OF ANY
SUCH PLAN, OR ANY OTHER PERSON WHO IS USING THE ASSETS OF ANY SUCH PLAN TO
EFFECT SUCH ACQUISITION, AN OPINION OF COUNSEL TO THE EFFECT THAT THE PURCHASE
AND HOLDING OF THIS CERTIFICATE WILL NOT RESULT IN THE ASSETS OF THE TRUST FUND
BEING DEEMED TO BE "PLAN ASSETS" PURSUANT TO THE DEPARTMENT OF LABOR REGULATIONS
SET FORTH IN 29 C.F.R. ss.2510.3-101 OR TO BE SUBJECT TO THE FIDUCIARY
B-1
RESPONSIBILITY PROVISIONS OF ERISA OR THE PROHIBITED TRANSACTION PROVISIONS OF
THE CODE OR CAUSE A VIOLATION UNDER SIMILAR LAW, WILL NOT CONSTITUTE OR RESULT
IN A PROHIBITED TRANSACTION WITHIN THE MEANING OF SECTION 406 OR SECTION 407 OF
ERISA OR SECTION 4975 OF THE CODE OR SIMILAR LAW, AND WILL NOT SUBJECT THE
TRUSTEE, THE SERVICER, THE COMPANY OR ANY OF THEIR AFFILIATES TO ANY OBLIGATION
OR LIABILITY (INCLUDING OBLIGATIONS OR LIABILITIES UNDER ERISA OR SECTION 4975
OF THE CODE OR SIMILAR LAW) RELATING TO THE CERTIFICATES. FOR PURPOSES OF CLAUSE
(I)(A) ABOVE, SUCH REPRESENTATION SHALL BE DEEMED TO HAVE BEEN MADE TO THE
SERVICER BY THE TRANSFEREE'S ACCEPTANCE OF THIS CERTIFICATE OR A BENEFICIAL
INTEREST HEREIN UNLESS THE SERVICER SHALL HAVE RECEIVED FROM THE TRANSFEREE AN
ALTERNATIVE REPRESENTATION ACCEPTABLE IN FORM AND SUBSTANCE TO THE SERVICER.
CLASS C CERTIFICATE
Number 01-AD1-C-1 Original Denomination
$
-------------------
Cut-off Date: October 1, 2001
First Distribution Date: Aggregate Initial Certificate
Balance of all Class C
November 25, 2001 Certificates: $________
Pass-Through Rate: ________
B-2
CHASE FUNDING LOAN ACQUISITION TRUST
MORTGAGE LOAN ASSET-BACKED CERTIFICATE
Series 2001-AD1
evidencing an ownership interest in distributions allocable to the Class C
Certificates with respect to a pool of conventional, sub-prime mortgage loans
formed and sold by
CHASE FUNDING, INC.
This certifies that CHASE HOME MORTGAGE CORPORATION OF THE SOUTHEAST is
the registered owner of the ownership interest (the "Ownership Interest")
evidenced by this Certificate in certain distributions with respect to a pool of
conventional, sub-prime mortgage loans (the "Mortgage Loans") formed and sold by
Chase Funding, Inc. (hereinafter called the "Depositor"), and certain other
property held in trust for the benefit of Certificateholders (collectively, the
"Trust Fund"). The Mortgage Loans are serviced by Chase Manhattan Mortgage
Corporation (the "Servicer") and are secured by first mortgages on Mortgaged
Properties. The Trust Fund was created pursuant to a pooling and servicing
agreement (the "Agreement"), dated as of October 1, 2001, among the Depositor,
the Servicer and Citibank, N.A., 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 Agreement.
This Certificate is one of a duly authorized issue of Certificates,
designated as Chase Funding Loan Acquisition Trust, Mortgage Loan Asset-Backed
Certificates, Series 2001-AD1, Class C (the "Class C Certificates") and is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which Agreement such Holder is bound. Also
issued under the Agreement are Certificates designated as Chase Funding Loan
Acquisition Trust, Mortgage Loan Asset-Backed Certificates, Series 2001-AD1,
Class IA-1, Class IA-2, Class IA-3, Class IA-4, Class IA-5 and Class IA-6
Certificates (collectively, the "Group I Class A Certificates"), Class IIA-1
Certificates (the "Group II Class A Certificates"), Class IM-1 and Class IM-2
Certificates (together, the "Mezzanine Group I Certificates"), Class IIM-1 and
Class IIM-2 Certificates (together, the "Mezzanine Group II Certificates"),
Class IB Certificates (the "Class IB Certificates"), Class IIB Certificates (the
"Class IIB Certificates"), Class IL Certificates (the "Class IL Certificates"),
Class IIL Certificates (the "Class IIL Certificates"), Class IP Certificates
(the "Class IP Certificates"), Class IIP Certificates (the "Class IIP
Certificates") and the Class R Certificate (the "Class R Certificate" or the
"Residual Certificate").
The Group I Class A Certificates, the Group II Class A Certificates,
the Mezzanine Group I Certificates, the Mezzanine Group II Certificates, the
Class IB Certificates, the Class IIB Certificates, the Class IL Certificates,
the Class IIL Certificates, the Class IP Certificates, the Class IIP
Certificates, the Class C Certificates and the Class R Certificate are
collectively referred to herein as the "Certificates."
B-3
Pursuant to the terms of the Agreement, the Paying Agent will
distribute from funds in the Distribution Account the amounts described in the
Pooling and Servicing 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 November 25, 2001. Such distributions will
be made to the Person in whose name this Certificate is registered at the close
of business on the last Business Day of the month preceding the month in which
such payment is made, or if such last day is not a Business Day, the Business
Day immediately preceding such last day.
Distributions on this Certificate will be made either by check mailed
to the address of the Person entitled thereto, as such name and address shall
appear on the Certificate Register, or by wire transfer in immediately available
funds to the account of such Holder at a bank or other financial or depository
institution having appropriate facilities therefor, if such Holder has so
notified the Servicer in writing at least 5 Business Days prior to the first
Distribution Date for which distribution by wire transfer is to be made, and
such Holder's Certificates evidence an aggregate original principal balance of
not less than $1,000,000 or such Holder holds a 100% Percentage Interest of such
Class. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Servicer, of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office of the Servicer or at such other office as may be designated by such
notice of final distribution.
The Servicer will maintain or cause to be maintained a Certificate
Register in which, subject to such reasonable regulations as it may prescribe,
the Servicer will provide for the registration of Certificates and of transfers
and exchanges of Certificates. Upon surrender for registration of transfer of
any Certificate at any office or agency of the Servicer, or, if an
Authenticating Agent has been appointed under the Agreement, the Authenticating
Agent, maintained for such purpose, the Servicer, or, if an Authenticating Agent
has been appointed under the Agreement, the Authenticating Agent, will, subject
to the limitations set forth in the Agreement, authenticate and deliver, in the
name of the designated transferee or transferees, a Certificate of a like class
and dated the date of authentication by the Authenticating Agent.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Servicer, of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Servicer, for that purpose and specified in such notice of
final distribution.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
B-4
IN WITNESS WHEREOF, the Depositor has caused this Certificate to be
duly executed.
Dated: October 15, 2001 CHASE FUNDING, INC.
By:
-------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class C
Certificates referred to
in the within-mentioned
Agreement.
THE CHASE MANHATTAN BANK
as Authenticating Agent
By:
-------------------------------
Authorized Signatory
B-5
REVERSE OF CERTIFICATE
CHASE FUNDING LOAN ACQUISITION TRUST
MORTGAGE LOAN ASSET-BACKED CERTIFICATE
SERIES 2001-AD1
This Certificate is one of a duly authorized issue of Certificates,
designated as Chase Funding Loan Acquisition Trust, Mortgage Loan Asset-Backed
Certificates, Series 2001-AD1, issued in six Classes of Group I Class A
Certificates, one Class of Group II Class A Certificates, two Classes of
Mezzanine Group I Certificates, two Classes of Mezzanine Group II Certificates,
one Class of Class IB Certificates, one Class of Class IIB Certificates, one
Class of Class IL Certificates, one Class of Class IIL Certificates, one Class
of Class IP Certificates, one Class of Class IIP Certificates, one Class of
Class C Certificates and one Class R Certificate, each evidencing an interest in
certain Distributions with respect to a pool of conventional, sub-prime Mortgage
Loans formed and sold by the Depositor and certain other property conveyed by
the Depositor to the Trustee.
The Holder, by its acceptance of this Certificate, agrees that it will
look solely to the Trust Fund and certain amounts resulting from credit
enhancements for payment hereunder and that the Trustee is not liable to the
Holders for any amount payable under this Certificate or the Agreement or,
except as expressly provided in the Agreement, subject to any liability under
the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
No service charge will be made to the Holder for any transfer or
exchange of the Certificate, but the Servicer may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of the Certificate. Prior to due
presentation of a Certificate for registration of transfer, the Depositor, the
Servicer and the Trustee may treat the person in whose name any Certificate is
registered as the owner of such Certificate and the Percentage Interest in the
Trust Fund evidenced thereby for the purpose of receiving distributions pursuant
to the Agreement and for all other purposes whatsoever, and neither the
Depositor, the Servicer nor the Trustee will be affected by notice to the
contrary.
The Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee, without the consent of any of the Certificateholders,
to cure any ambiguity, to correct or supplement any provisions therein which may
be inconsistent with the other provisions therein, to ensure continuing
treatment of each REMIC included in the Trust Fund as a REMIC, or to make any
other provisions with respect to matters or questions arising under the
Agreement which are not materially inconsistent with the provisions of the
Agreement, provided that such action does not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any
Certificateholder.
B-6
The Agreement may also be amended from time to time by the Depositor,
the Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66 2/3% of the Percentage Interests of
each Class of Certificates affected thereby for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Agreement or of modifying in any manner the rights of the Holders of
Certificates of such Class; provided, however, that no such amendment may (i)
reduce in any manner the amount of, or delay the timing of, payments received on
Mortgage Loans which are required to be distributed on any Certificate without
the consent of the Holder of such Certificate, (ii) adversely affect in any
material respect the interests of the Holders of any Class of Certificates in a
manner other than as described in clause (i), without the consent of the Holders
of Certificates of such Class evidencing 66 2/3% or more of the Voting Rights of
such Class or (iii) change the percentage specified in clause (ii) of the third
paragraph of Section 10.01 of the Agreement, without the consent of the Holders
of all Certificates of such Class then outstanding.
For federal income tax purposes, the Trust Fund includes three
segregated asset pools. The Depositor intends to make an election to treat each
as a "real estate mortgage investment conduit" (a "REMIC"). The Certificates
(other than the Class R Certificate, Class L Certificates and Class P
Certificates) will represent "regular interests" in the Upper-Tier REMIC. The
Residual Certificate will represent the sole class of "residual interest" in
each of the three REMICs.
The respective obligations and responsibilities of the Depositor, the
Servicer and the Trustee under the Agreement will terminate upon (i) the later
of the final payment or other liquidation (or any Advance with respect thereto)
of the last Mortgage Loan or the disposition of all property acquired upon the
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and the
remittance of all funds due thereunder; or (ii) at the option of the Servicer,
on any Distribution Date on which the aggregate Stated Principal Balances of the
Mortgage Loans in the applicable Loan Group is equal to or less than 10% of the
aggregate Stated Principal Balance of the Mortgage Loans in such Loan Group as
of the Cut-Off Date, so long as the Servicer deposits or causes to be deposited
in the Distribution Account during the Principal Prepayment Period related to
such Distribution Date an amount equal to the sum of (i) 100% of the Stated
Principal Balance of each Mortgage Loan in such Loan Group (other than in
respect of REO Property), (ii) accrued interest thereon at the applicable
Mortgage Rate, (iii) the appraised value of any REO Property in such Loan Group
(up to the Stated Principal Balance of the related Mortgage Loan), such
appraisal to be conducted by an appraiser mutually agreed upon by the Depositor
and the Trustee and (iv) any unreimbursed Servicing Fees, Advances and Servicing
Advances, and the principal portion of any unreimbursed Advances, made on the
Mortgage Loans in such Loan Group prior to such termination; provided, however,
that in no event shall the trust created hereby continue beyond the earlier of
(I) 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. James's, living on the date hereof and (ii) the Latest Possible
Maturity Date.
B-7
[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF ASSIGNEE)
-------------------------------------------------------------------------------
(Please Print or Type Name and Address of Assignee)
-------------------------------------------------------------------------------
the within Certificate, and all rights thereunder, and hereby does irrevocably
constitute and appoint
__________________________________Attorney to transfer the within Certificate on
the books kept for the registration thereof, with full power of substitution in
the premises.
Dated:
(Signature guaranty)
-------------------------------------------
NOTICE: The signature to this assignment
must correspond with the name as it appears
upon the face of the within Certificate in
every particular, without alteration or
enlargement or any change whatever.
(*This information, which is voluntary, is being requested to ensure that the
assignee will not be subject to backup withholding under Section 3406 of the
Code.)
B-8
EXHIBIT C
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN CHASE
FUNDING, INC. ("CHASE FUNDING"), THE SERVICER OR THE TRUSTEE REFERRED TO BELOW
OR ANY OF THEIR AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE
LOANS ARE GUARANTEED OR INSURED BY CHASE FUNDING, CHASE MANHATTAN MORTGAGE
CORPORATION, chase manhattan bank usa, n.a., the chase manhattan bank, THE
TRUSTEE OR BY ANY OF THEIR AFFILIATES OR BY ANY GOVERNMENTAL AGENCY OR
INSTRUMENTALITY.
THIS CLASS IP CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS SOLD OR TRANSFERRED IN TRANSACTIONS
WHICH ARE EXEMPT FROM REGISTRATION UNDER SUCH ACT OR UNDER APPLICABLE STATE LAW
AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE TRUSTEE SHALL HAVE
RECEIVED EITHER (I) A REPRESENTATION LETTER FROM THE TRANSFEREE OF THIS
CERTIFICATE TO THE EFFECT THAT SUCH TRANSFEREE EITHER (A) IS NOT AN EMPLOYEE
BENEFIT PLAN WITHIN THE MEANING OF SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA") OR SECTION 4975 OF THE CODE OR ANY
APPLICABLE FEDERAL, STATE OR LOCAL LAW MATERIALLY SIMILAR TO THE FOREGOING
PROVISIONS OF ERISA AND THE CODE ("SIMILAR LAW") (THE "PLAN"), AND IS NOT
DIRECTLY OR INDIRECTLY PURCHASING ANY CERTIFICATE ON BEHALF OF, AS INVESTMENT
MANAGER OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF OR WITH ASSETS OF A PLAN OR, IN
THE CASE OF AN INSURANCE COMPANY, THE ASSETS OF ANY SEPARATE ACCOUNTS TO EFFECT
SUCH ACQUISITION OR (B) THE SOURCE OF FUNDS FOR THE PURCHASE OF THE CERTIFICATES
IS AN "INSURANCE COMPANY GENERAL ACCOUNT" WITHIN THE MEANING OF PROHIBITED
TRANSACTION CLASS EXEMPTION 95-60 ("PTCE 95-60"), 60 FED. REG. 35925 (JULY 12,
1995), AND THE PURCHASE AND HOLDING OF THE CERTIFICATES IS EXEMPT UNDER PTCE
95-60 OR (II) IF THIS CERTIFICATE IS PRESENTED FOR REGISTRATION IN THE NAME OF A
PLAN SUBJECT TO TITLE I OF ERISA, OR SECTION 4975 OF THE CODE OR SIMILAR LAW (OR
COMPARABLE PROVISIONS OF ANY SUBSEQUENT ENACTMENTS), OR A TRUSTEE OF ANY SUCH
PLAN, OR ANY OTHER PERSON WHO IS USING THE ASSETS OF ANY SUCH PLAN TO EFFECT
SUCH ACQUISITION, AN OPINION OF COUNSEL TO THE EFFECT THAT THE PURCHASE AND
HOLDING OF THIS CERTIFICATE WILL NOT RESULT IN THE ASSETS OF THE TRUST FUND
BEING DEEMED TO BE "PLAN ASSETS" PURSUANT TO THE DEPARTMENT OF LABOR REGULATIONS
SET FORTH IN 29 C.F.R. ss.2510.3-101 OR TO BE SUBJECT TO THE FIDUCIARY
RESPONSIBILITY PROVISIONS OF ERISA OR THE PROHIBITED TRANSACTION PROVISIONS OF
THE CODE OR CAUSE A VIOLATION UNDER SIMILAR LAW, WILL NOT CONSTITUTE OR RESULT
IN A PROHIBITED TRANSACTION WITHIN THE MEANING OF SECTION 406 OR SECTION 407 OF
ERISA OR SECTION 4975 OF THE CODE OR SIMILAR LAW, AND WILL NOT SUBJECT THE
TRUSTEE, THE SERVICER, THE COMPANY OR ANY OF THEIR AFFILIATES TO ANY OBLIGATION
OR LIABILITY (INCLUDING OBLIGATIONS OR LIABILITIES UNDER ERISA OR SECTION 4975
OF THE CODE OR SIMILAR LAW) RELATING TO THE CERTIFICATES. FOR PURPOSES OF CLAUSE
(I)(A) ABOVE, SUCH REPRESENTATION SHALL BE DEEMED TO HAVE BEEN MADE TO THE
C-1
Servicer BY THE TRANSFEREE'S ACCEPTANCE OF THIS CERTIFICATE OR A BENEFICIAL
INTEREST HEREIN UNLESS THE servicer SHALL HAVE RECEIVED FROM THE TRANSFEREE AN
ALTERNATIVE REPRESENTATION ACCEPTABLE IN FORM AND SUBSTANCE TO THE SERVICER.
CLASS IP CERTIFICATE
Number 01-AD1-IP-1 Percentage Interest: ________%
Cut-off Date: October 1, 2001
First Distribution Date: November 25, 2001
C-2
CHASE FUNDING LOAN ACQUISITION TRUST
MORTGAGE LOAN ASSET-BACKED CERTIFICATE
Series 2001-AD1
evidencing an ownership interest in distributions allocable to the Class IP
Certificates with respect to a pool of conventional, sub-prime mortgage loans
formed and sold by
CHASE FUNDING, INC.
This certifies that CHASE HOME MORTGAGE CORPORATION OF THE SOUTHEAST is
the registered owner of the ownership interest (the "Ownership Interest")
evidenced by this Certificate in certain distributions with respect to a pool of
conventional, sub-prime mortgage loans (the "Mortgage Loans") formed and sold by
Chase Funding, Inc. (hereinafter called the "Depositor"), and certain other
property held in trust for the benefit of Certificateholders (collectively, the
"Trust Fund"). The Mortgage Loans are serviced by Chase Manhattan Mortgage
Corporation, (the "Servicer") and are secured by first mortgages on Mortgaged
Properties. The Trust Fund was created pursuant to a pooling and servicing
agreement (the "Agreement"), dated as of October 1, 2001, among the Depositor,
the Servicer and Citibank, N.A., 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 Agreement.
This Certificate is one of a duly authorized issue of Certificates,
designated as Chase Funding Loan Acquisition Trust, Mortgage Loan Asset-Backed
Certificates, Series 2001-AD1, Class IP (the "Class IP Certificates") and is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which Agreement such Holder is bound. Also
issued under the Agreement are Certificates designated as Chase Funding Loan
Acquisition Trust, Mortgage Loan Asset-Backed Certificates, Series 2001-AD1,
Class IA-1, Class IA-2, Class IA-3, Class IA-4, Class IA-5 and Class IA-6
Certificates (collectively, the "Group I Class A Certificates"), Class IIA-1
Certificates (the "Group II Class A Certificates"), Class IM-1 and Class IM-2
Certificates (together, the "Mezzanine Group I Certificates"), Class IIM-1 and
Class IIM-2 Certificates (together, the "Mezzanine Group II Certificates"),
Class IB Certificates (the "Class IB Certificates"), Class IIB Certificates (the
"Class IIB Certificates"), Class IL Certificates (the "Class IL Certificates"),
Class IIL Certificates (the "Class IIL Certificates"), Class IIP Certificates
(the "Class IIP Certificates"), Class C Certificates (the "Class C
Certificates") and the Class R Certificate (the "Class R Certificate" or the
"Residual Certificate").
The Group I Class A Certificates, the Group II Class A Certificates,
the Mezzanine Group I Certificates, the Mezzanine Group II Certificates, the
Class IB Certificates, the Class IIB Certificates, the Class IL Certificates,
the Class IIL Certificates, the Class IP Certificates, the Class IIP
Certificates, the Class C Certificates and the Class R Certificate are
collectively referred to herein as the "Certificates."
C-3
Pursuant to the terms of the Agreement, the Paying Agent will
distribute from funds in the Distribution Account the amounts described in the
Pooling and Servicing 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 November 25, 2001. Such distributions will
be made to the Person in whose name this Certificate is registered at the close
of business on the last Business Day of the month preceding the month in which
such payment is made, or if such last day is not a Business Day, the Business
Day immediately preceding such last day.
Distributions on this Certificate will be made either by check mailed
to the address of the Person entitled thereto, as such name and address shall
appear on the Certificate Register, or by wire transfer in immediately available
funds to the account of such Holder at a bank or other financial or depository
institution having appropriate facilities therefor, if such Holder has so
notified the Servicer in writing at least 5 Business Days prior to the first
Distribution Date for which distribution by wire transfer is to be made, and
such Holder's Certificates evidence an aggregate original principal balance of
not less than $1,000,000 or such Holder holds a 100% Percentage Interest of such
Class. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Servicer, of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office of the Servicer or at such other office as may be designated by such
notice of final distribution.
The Servicer will maintain or cause to be maintained a Certificate
Register in which, subject to such reasonable regulations as it may prescribe,
the Servicer will provide for the registration of Certificates and of transfers
and exchanges of Certificates. Upon surrender for registration of transfer of
any Certificate at any office or agency of the Servicer, or, if an
Authenticating Agent has been appointed under the Agreement, the Authenticating
Agent, maintained for such purpose, the Servicer, or, if an Authenticating Agent
has been appointed under the Agreement, the Authenticating Agent, will, subject
to the limitations set forth in the Agreement, authenticate and deliver, in the
name of the designated transferee or transferees, a Certificate of a like class
and dated the date of authentication by the Authenticating Agent.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Servicer, of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Servicer, for that purpose and specified in such notice of
final distribution.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
C-4
IN WITNESS WHEREOF, the Depositor has caused this Certificate to be
duly executed.
Dated: October 15, 2001 CHASE FUNDING, INC.
By:
--------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class IP
Certificates referred to
in the within-mentioned
Agreement.
THE CHASE MANHATTAN BANK
as Authenticating Agent
By:
--------------------------------
Authorized Signatory
C-5
REVERSE OF CERTIFICATE
CHASE FUNDING LOAN ACQUISITION TRUST
MORTGAGE LOAN ASSET-BACKED CERTIFICATE
SERIES 2001-AD1
This Certificate is one of a duly authorized issue of Certificates,
designated as Chase Funding Loan Acquisition Trust, Mortgage Loan Asset-Backed
Certificates, Series 2001-AD1, issued in six Classes of Group I Class A
Certificates, one Class of Group II Class A Certificates, two Classes of
Mezzanine Group I Certificates, two Classes of Mezzanine Group II Certificates,
one Class of Class IB Certificates, one Class of Class IIB Certificates, one
Class of Class IL Certificates, one Class of Class IIL Certificates, one Class
of Class IP Certificates, one Class of Class IIP Certificates, one Class of
Class C Certificates and one Class R Certificate, each evidencing an interest in
certain Distributions with respect to a pool of conventional, sub-prime Mortgage
Loans formed and sold by the Depositor and certain other property conveyed by
the Depositor to the Trustee.
The Holder, by its acceptance of this Certificate, agrees that it will
look solely to the Trust Fund and certain amounts resulting from credit
enhancements for payment hereunder and that the Trustee is not liable to the
Holders for any amount payable under this Certificate or the Agreement or,
except as expressly provided in the Agreement, subject to any liability under
the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
No service charge will be made to the Holder for any transfer or
exchange of the Certificate, but the Servicer may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of the Certificate. Prior to due
presentation of a Certificate for registration of transfer, the Depositor, the
Servicer and the Trustee may treat the person in whose name any Certificate is
registered as the owner of such Certificate and the Percentage Interest in the
Trust Fund evidenced thereby for the purpose of receiving distributions pursuant
to the Agreement and for all other purposes whatsoever, and neither the
Depositor, the Servicer nor the Trustee will be affected by notice to the
contrary.
The Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee, without the consent of any of the Certificateholders,
to cure any ambiguity, to correct or supplement any provisions therein which may
be inconsistent with the other provisions therein, to ensure continuing
treatment of each REMIC included in the Trust Fund as a REMIC, or to make any
other provisions with respect to matters or questions arising under the
Agreement which are not materially inconsistent with the provisions of the
Agreement, provided that such action does not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any
Certificateholder.
C-6
The Agreement may also be amended from time to time by the Depositor,
the Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66 2/3% of the Percentage Interests of
each Class of Certificates affected thereby for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Agreement or of modifying in any manner the rights of the Holders of
Certificates of such Class; provided, however, that no such amendment may (i)
reduce in any manner the amount of, or delay the timing of, payments received on
Mortgage Loans which are required to be distributed on any Certificate without
the consent of the Holder of such Certificate, (ii) adversely affect in any
material respect the interests of the Holders of any Class of Certificates in a
manner other than as described in clause (i), without the consent of the Holders
of Certificates of such Class evidencing 66 2/3% or more of the Voting Rights of
such Class or (iii) change the percentage specified in clause (ii) of the third
paragraph of Section 10.01 of the Agreement, without the consent of the Holders
of all Certificates of such Class then outstanding.
For federal income tax purposes, the Trust Fund includes three
segregated asset pools. The Depositor intends to make an election to treat each
as a "real estate mortgage investment conduit" (a "REMIC"). The Certificates
(other than the Class R Certificate, Class L Certificates and Class P
Certificates) will represent "regular interests" in the Upper-Tier REMIC. The
Residual Certificate will represent the sole class of "residual interest" in
each of the three REMICs.
The respective obligations and responsibilities of the Depositor, the
Servicer and the Trustee under the Agreement will terminate upon (i) the later
of the final payment or other liquidation (or any Advance with respect thereto)
of the last Mortgage Loan or the disposition of all property acquired upon the
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and the
remittance of all funds due thereunder; or (ii) at the option of the Servicer,
on any Distribution Date on which the aggregate Stated Principal Balances of the
Mortgage Loans in the applicable Loan Group is equal to or less than 10% of the
aggregate Stated Principal Balance of the Mortgage Loans in such Loan Group as
of the Cut-Off Date, so long as the Servicer deposits or causes to be deposited
in the Distribution Account during the Principal Prepayment Period related to
such Distribution Date an amount equal to the sum of (i) 100% of the Stated
Principal Balance of each Mortgage Loan in such Loan Group (other than in
respect of REO Property), (ii) accrued interest thereon at the applicable
Mortgage Rate, (iii) the appraised value of any REO Property in such Loan Group
(up to the Stated Principal Balance of the related Mortgage Loan), such
appraisal to be conducted by an appraiser mutually agreed upon by the Depositor
and the Trustee and (iv) any unreimbursed Servicing Fees, Advances and Servicing
Advances, and the principal portion of any unreimbursed Advances, made on the
Mortgage Loans in such Loan Group prior to such termination; provided, however,
that in no event shall the trust created hereby continue beyond the earlier of
(i) 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. James's, living on the date hereof and (ii) the Latest Possible
Maturity Date.
C-7
[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF ASSIGNEE)
-------------------------------------------------------------------------------
(Please Print or Type Name and Address of Assignee)
-------------------------------------------------------------------------------
the within Certificate, and all rights thereunder, and hereby does irrevocably
constitute and appoint
_________________________________Attorney to transfer the within Certificate on
the books kept for the registration thereof, with full power of substitution in
the premises.
Dated:
(Signature guaranty)
-------------------------------------------
NOTICE: The signature to this assignment
must correspond with the name as it appears
upon the face of the within Certificate in
every particular, without alteration or
enlargement or any change whatever.
(*This information, which is voluntary, is being requested to ensure that the
assignee will not be subject to backup withholding under Section 3406 of the
Code.)
C-8
EXHIBIT D
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A "RESIDUAL
INTEREST" IN EACH OF THREE "REAL ESTATE MORTGAGE INVESTMENT CONDUITS," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), AND THE OBLIGATION TO MAKE
CERTAIN PAYMENTS UNDER AN INTEREST RATE CAP AGREEMENT.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN CHASE
FUNDING, INC. ("CHASE FUNDING"), THE SERVICER OR THE TRUSTEE REFERRED TO BELOW
OR ANY OF THEIR AFFILIATES. NEITHER THIS CERTIFICATE, THE REMIC RESIDUAL
INTERESTS REPRESENTED HEREBY NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR
INSURED BY CHASE FUNDING, CHASE MANHATTAN MORTGAGE CORPORATION, chase manhattan
bank usa, n.a., the chase manhattan bank, THE TRUSTEE OR BY ANY OF THEIR
AFFILIATES OR BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
THIS CLASS R CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS SOLD OR TRANSFERRED IN TRANSACTIONS
WHICH ARE EXEMPT FROM REGISTRATION UNDER SUCH ACT OR UNDER APPLICABLE STATE LAW
AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE TRUSTEE SHALL HAVE
RECEIVED EITHER (i) A REPRESENTATION LETTER FROM THE TRANSFEREE OF THIS
CERTIFICATE TO THE EFFECT THAT SUCH TRANSFEREE EITHER (A) IS NOT AN EMPLOYEE
BENEFIT PLAN (A "PLAN") WITHIN THE MEANING OF SECTION 406 OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA") OR SECTION 4975 OF
THE CODE OR ANY APPLICABLE FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW")
MATERIALLY SIMILAR TO THE FOREGOING PROVISIONS OF ERISA AND THE CODE, AND IS NOT
DIRECTLY OR INDIRECTLY PURCHASING ANY CERTIFICATE ON BEHALF OF, AS INVESTMENT
MANAGER OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF OR WITH ASSETS OF A PLAN OR, IN
THE CASE OF AN INSURANCE COMPANY, THE ASSETS OF ANY SEPARATE ACCOUNTS TO EFFECT
SUCH ACQUISITION OR (B) THE SOURCE OF FUNDS FOR THE PURCHASE OF THE CERTIFICATES
IS AN "INSURANCE COMPANY GENERAL ACCOUNT" WITHIN THE MEANING OF PROHIBITED
TRANSACTION CLASS EXEMPTION 95-60 ("PTCE 95-60"), 60 FED. REG. 35925 (JULY 12,
1995), AND THE PURCHASE AND HOLDING OF THE CERTIFICATE IS EXEMPT UNDER PTCE
95-60, OR (ii) IF THIS CERTIFICATE IS PRESENTED FOR REGISTRATION IN THE NAME OF
A PLAN SUBJECT TO TITLE I OF ERISA, OR SECTION 4975 OF THE CODE (OR COMPARABLE
PROVISIONS OF ANY SUBSEQUENT ENACTMENTS), OR A TRUSTEE OF ANY SUCH PLAN, OR ANY
OTHER PERSON WHO IS USING THE ASSETS OF ANY SUCH PLAN TO EFFECT SUCH
ACQUISITION, AN OPINION OF COUNSEL TO THE EFFECT THAT THE PURCHASE AND HOLDING
OF THIS CERTIFICATE WILL NOT RESULT IN THE ASSETS OF THE TRUST FUND BEING DEEMED
TO BE "PLAN ASSETS" PURSUANT TO THE DEPARTMENT OF LABOR PLAN ASSET REGULATIONS
SET FORTH IN 29 C.F.R. ss.2510.3-101 OR TO BE SUBJECT TO THE FIDUCIARY
RESPONSIBILITY PROVISIONS OF ERISA OR THE PROHIBITED TRANSACTION PROVISIONS OF
D-1
THE CODE OR CAUSE A VIOLATION UNDER SIMILAR LAW, WILL NOT CONSTITUTE OR RESULT
IN A PROHIBITED TRANSACTION WITHIN THE MEANING OF SECTION 406 OR SECTION 407 OF
ERISA OR SECTION 4975 OF THE CODE OR SIMILAR LAW, AND WILL NOT SUBJECT THE
TRUSTEE, THE SERVICER, THE COMPANY OR ANY OF THEIR AFFILIATES TO ANY OBLIGATION
OR LIABILITY (INCLUDING OBLIGATIONS OR LIABILITIES UNDER ERISA OR SECTION 4975
OF THE CODE OR SIMILAR LAW) RELATING TO THE CERTIFICATES. FOR PURPOSES OF CLAUSE
(i)(A) ABOVE, SUCH REPRESENTATION SHALL BE DEEMED TO HAVE BEEN MADE TO THE
SERVICER BY THE TRANSFEREE'S ACCEPTANCE OF THIS CERTIFICATE OR A BENEFICIAL
INTEREST HEREIN UNLESS THE SERVICER SHALL HAVE RECEIVED FROM THE TRANSFEREE AN
ALTERNATIVE REPRESENTATION ACCEPTABLE IN FORM AND SUBSTANCE TO THE SERVICER.
CLASS R CERTIFICATE
Number 01-3-R-1 Percentage Interest: _____%
Cut-off Date: October 1, 2001 Pass-Through Rate: ________
First Distribution Date: November 25, 2001
D-2
CHASE FUNDING LOAN ACQUISITION TRUST
MORTGAGE LOAN ASSET-BACKED CERTIFICATE
Series 2001-AD1
evidencing an ownership interest in distributions allocable to the Class R
Certificates with respect to a pool of conventional one- to four-family mortgage
loans formed and sold by
CHASE FUNDING, INC.
This certifies that CHASE HOME MORTGAGE CORPORATION OF THE SOUTHEAST is
the registered owner of the ownership interest (the "Ownership Interest")
evidenced by this Certificate (indicated by the Percentage Interest set forth on
the face of this Certificate) in certain distributions with respect to a pool of
conventional, sub-prime mortgage loans (the "Mortgage Loans") formed and sold by
Chase Funding, Inc. (hereinafter called the "Depositor"), and certain other
property held in trust for the benefit of Certificateholders (collectively, the
"Trust Fund"). The Mortgage Loans are serviced by Chase Manhattan Mortgage
Corporation (the "Servicer") and are secured by first mortgages on Mortgaged
Properties. The Trust Fund was created pursuant to a pooling and servicing
agreement (the "Agreement"), dated as of October 1, 2001 among the Depositor,
the Servicer and Citibank, N.A., 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 Agreement.
This Certificate is one of a duly authorized issue of Certificates,
designated as Chase Funding Loan Acquisition Trust, Mortgage Loan Asset-Backed
Certificates, Series 2001-AD1, Class R (the "Class R Certificates") and is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which Agreement such Holder is bound. Also
issued under the Agreement are Certificates designated as Chase Funding Loan
Acquisition Trust, Mortgage Loan Asset-Backed Certificates, Series 2001-AD1,
Class IA-1, Class IA-2, Class IA-3, Class IA-4, Class IA-5 and Class IA-6
Certificates (collectively, the "Group I Class A Certificates"), Class IIA-1
Certificates (the "Group II Class A Certificates"), Class IM-1 and Class IM-2
Certificates (together, the "Mezzanine Group I Certificates"), Class IIM-1 and
Class IIM-2 Certificates (together, the "Mezzanine Group II Certificates"),
Class IB Certificates (the "Class IB Certificates"), Class IIB Certificates (the
"Class IIB Certificates"), Class IL Certificates (the "Class IL Certificates"),
Class IIL Certificates (the "Class IIL Certificates"), Class IP Certificates
(the "Class IP Certificates"), Class IIP Certificates (the "Class IIP
Certificates") and Class C Certificates (the "Class C Certificates").
The Group I Class A Certificates, the Group II Class A Certificates,
the Mezzanine Group I Certificates, the Mezzanine Group II Certificates, the
Class IB Certificates, the Class IIB Certificates, the Class IL Certificates,
the Class IIL Certificates, the Class IP Certificates, the Class IIP
Certificates, the Class C Certificates and the Class R Certificate are
collectively referred to herein as the "Certificates."
Pursuant to the terms of the Agreement, the Paying Agent will
distribute from funds in the Distribution Account the amounts described in the
D-3
Pooling and Servicing 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 November 25, 2001. Such distributions will
be made to the Person in whose name this Certificate is registered at the close
of business on the last Business Day of the month preceding the month in which
such payment is made, or if such last day is not a Business Day, the Business
Day immediately preceding such last day.
Distributions on this Certificate will be made either by check mailed
to the address of the Person entitled thereto, as such name and address shall
appear on the Certificate Register, or by wire transfer in immediately available
funds to the account of such Holder at a bank or other financial or depository
institution having appropriate facilities therefor, if such Holder has so
notified the Paying Agent in writing at least 5 Business Days prior to the first
Distribution Date for which distribution by wire transfer is to be made, and
such Holder's Certificates evidence an aggregate original principal balance of
not less than $1,000,000 or such Holder holds a 100% Percentage Interest of such
Class. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Servicer of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office of the Servicer or at such other office as may be designated by such
notice of final distribution.
The Servicer will maintain or cause to be maintained a Certificate
Register in which, subject to such reasonable regulations as it may prescribe,
the Servicer will provide for the registration of Certificates and of transfers
and exchanges of Certificates. Upon surrender for registration of transfer of
any Certificate at any office or agency of the Servicer, or, if an
Authenticating has been appointed under the Agreement, the Authenticating Agent,
maintained for such purpose, the Servicer, or, if an Authenticating Agent has
been appointed under the Agreement, the Authenticating Agent, will, subject to
the limitations set forth in the Agreement, authenticate and deliver, in the
name of the designated transferee or transferees, a Certificate of a like class
and dated the date of authentication by the Authenticating Agent.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Servicer of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Servicer, for that purpose and specified in such notice of
final distribution.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
D-4
IN WITNESS WHEREOF, the Depositor has caused this Certificate to be
duly executed.
Dated: October 15, 2001 CHASE FUNDING, INC.
By:
--------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class R
Certificates referred to
in the within-mentioned
Agreement.
THE CHASE MANHATTAN BANK
as Authenticating Agent
By:
------------------------------------
Authorized Signatory
D-5
REVERSE OF CERTIFICATE
CHASE FUNDING LOAN ACQUISITION TRUST
MORTGAGE LOAN ASSET-BACKED CERTIFICATE
SERIES 2001-AD1
This Certificate is one of a duly authorized issue of Certificates,
designated as Chase Funding Loan Acquisition Trust, Mortgage Loan Asset-Backed
Certificates, Series 2001-AD1, issued in six Classes of Group I Class A
Certificates, one Class of Group II Class A Certificates, two Classes of
Mezzanine Group I Certificates, two Classes of Mezzanine Group II Certificates,
one Class of Class IB Certificates, one Class of Class IIB Certificates, one
Class of Class IL Certificates, one Class of Class IIL Certificates, one Class
of Class IP Certificates, one Class of Class IIP Certificates, one Class of
Class C Certificates and one Class R Certificate, each evidencing an interest in
certain Distributions with respect to a pool of conventional, sub-prime Mortgage
Loans formed and sold by the Depositor and certain other property conveyed by
the Depositor to the Trustee.
The Holder, by its acceptance of this Certificate, agrees that it will
look solely to the Trust Fund and certain amounts resulting from credit
enhancements for payment hereunder and that the Trustee is not liable to the
Holders for any amount payable under this Certificate or the Agreement or,
except as expressly provided in the Agreement, subject to any liability under
the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
No service charge will be made to the Holder for any transfer or
exchange of the Certificate, but the Trustee, or, or, if an Authenticating Agent
has been appointed under the Agreement, the Authenticating Agent, may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer or exchange of the Certificate. Prior to
due presentation of a Certificate for registration of transfer, the Depositor,
the Servicer and the Trustee may treat the person in whose name any Certificate
is registered as the owner of such Certificate and the Percentage Interest in
the Trust Fund evidenced thereby for the purpose of receiving distributions
pursuant to the Agreement and for all other purposes whatsoever, and neither the
Depositor, the Servicer nor the Trustee will be affected by notice to the
contrary.
The Agreement may be amended from time to time by the Depositor, the
Servicer, and the Trustee, without the consent of any of the Certificateholders,
to cure any ambiguity, to correct or supplement any provisions therein which may
be inconsistent with the other provisions therein, to ensure continuing
treatment of each REMIC included in the Trust Fund as a REMIC, or to make any
other provisions with respect to matters or questions arising under the
Agreement which are not materially inconsistent with the provisions of the
Agreement, provided that such action does not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any
Certificateholder.
D-6
The Agreement may also be amended from time to time by the Depositor,
the Servicer, and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66 2/3% of the Percentage Interests of
each Class of Certificates affected thereby for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Agreement or of modifying in any manner the rights of the Holders of
Certificates of such Class; provided, however, that no such amendment may (i)
reduce in any manner the amount of, or delay the timing of, payments received on
Mortgage Loans which are required to be distributed on any Certificate without
the consent of the Holder of such Certificate, (ii) adversely affect in any
material respect the interests of the Holders of any Class of Certificates in a
manner other than as described in clause (i), without the consent of the Holders
of Certificates of such Class evidencing 66 2/3% or more of the Voting Rights of
such Class or (iii) change the percentage specified in clause (ii) of the first
paragraph of Section 10.01 of the Agreement, without the consent of the Holders
of all Certificates of such Class then outstanding.
For federal income tax purposes, the Trust Fund includes three
segregated asset pools. The Depositor intends to make an election to treat each
as a "real estate mortgage investment conduit" (a "REMIC"). The Certificates
(other than the Class R Certificate, Class L Certificates and Class P
Certificates) will represent "regular interests" in the Upper-Tier REMIC. The
Residual Certificate will represent the sole class of "residual interest" in
each of the three REMICs.
The respective obligations and responsibilities of the Depositor, the
Servicer and the Trustee under the Agreement will terminate upon (i) the later
of the final payment or other liquidation (or any Advance with respect thereto)
of the last Mortgage Loan or the disposition of all property acquired upon the
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and the
remittance of all funds due thereunder; or (ii) at the option of the Servicer,
on any Distribution Date on which the aggregate Stated Principal Balances of the
Mortgage Loans in the applicable Loan Group is equal to or less than 10% of the
aggregate Stated Principal Balance of the Mortgage Loans in such Loan Group as
of the Cut-Off Date, so long as the Servicer deposits or causes to be deposited
in the Distribution Account during the Principal Prepayment Period related to
such Distribution Date an amount equal to the sum of (i) 100% of the Stated
Principal Balance of each Mortgage Loan in such Loan Group (other than in
respect of REO Property), (ii) accrued interest thereon at the applicable
Mortgage Rate, (iii) the appraised value of any REO Property in such Loan Group
(up to the Stated Principal Balance of the related Mortgage Loan), such
appraisal to be conducted by an appraiser mutually agreed upon by the Depositor
and the Trustee and (iv) any unreimbursed Servicing Fees, Advances and Servicing
Advances, and the principal portion of any unreimbursed Advances, made on the
Mortgage Loans in such Loan Group prior to such termination; provided, however,
that in no event shall the trust created hereby continue beyond the earlier of
(i) 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. James's, living on the date hereof and (ii) the Latest Possible
Maturity Date.
D-7
[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF ASSIGNEE)
---------------------------------
------------------------------------------------------
(Please Print or Type Name and Address of Assignee)
------------------------------------------------------
the within Certificate, and all rights thereunder, and hereby does irrevocably
constitute and appoint
________________________________________________Attorney to transfer the within
Certificate on the books kept for the registration thereof, with full power of
substitution in the premises.
Dated:
(Signature guaranty)
-------------------------------------------
NOTICE: The signature to this assignment
must correspond with the name as it appears
upon the face of the within Certificate in
every particular, without alteration or
enlargement or any change whatever.
(*This information, which is voluntary, is being requested to ensure that the
assignee will not be subject to backup withholding under Section 3406 of the
Code.)
D-8
EXHIBIT E
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN CHASE
FUNDING, INC. ("CHASE FUNDING"), THE SERVICER OR THE TRUSTEE REFERRED TO BELOW
OR ANY OF THEIR AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE
LOANS ARE GUARANTEED OR INSURED BY CHASE FUNDING, CHASE MANHATTAN MORTGAGE
CORPORATION, chase manhattan bank usa, n.a., the chase manhattan bank, THE
TRUSTEE OR BY ANY OF THEIR AFFILIATES OR BY ANY GOVERNMENTAL AGENCY OR
INSTRUMENTALITY.
THIS CLASS IL CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS SOLD OR TRANSFERRED IN TRANSACTIONS
WHICH ARE EXEMPT FROM REGISTRATION UNDER SUCH ACT OR UNDER APPLICABLE STATE LAW
AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE TRUSTEE SHALL HAVE
RECEIVED EITHER (I) A REPRESENTATION LETTER FROM THE TRANSFEREE OF THIS
CERTIFICATE TO THE EFFECT THAT SUCH TRANSFEREE EITHER (A) IS NOT AN EMPLOYEE
BENEFIT PLAN WITHIN THE MEANING OF SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA") OR SECTION 4975 OF THE CODE OR ANY
APPLICABLE FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") (A "PLAN") MATERIALLY
SIMILAR TO THE FOREGOING PROVISIONS OF ERISA AND THE CODE, AND IS NOT DIRECTLY
OR INDIRECTLY PURCHASING ANY CERTIFICATE ON BEHALF OF, AS INVESTMENT MANAGER OF,
AS NAMED FIDUCIARY OF, AS TRUSTEE OF OR WITH ASSETS OF A PLAN OR, IN THE CASE OF
AN INSURANCE COMPANY, THE ASSETS OF ANY SEPARATE ACCOUNTS TO EFFECT SUCH
ACQUISITION OR (B) THE SOURCE OF FUNDS FOR THE PURCHASE OF THE CERTIFICATES IS
AN "INSURANCE COMPANY GENERAL ACCOUNT" WITHIN THE MEANING OF PROHIBITED
TRANSACTION CLASS EXEMPTION 95-60 ("PTCE 95-60"), 60 FED. REG. 35925 (JULY 12,
1995), AND THE PURCHASE AND HOLDING OF THE CERTIFICATES IS EXEMPT UNDER PTCE
95-60, OR (II) IF THIS CERTIFICATE IS PRESENTED FOR REGISTRATION IN THE NAME OF
A PLAN SUBJECT TO TITLE I OF ERISA, OR SECTION 4975 OF THE CODE OR SIMILAR LAW
(OR COMPARABLE PROVISIONS OF ANY SUBSEQUENT ENACTMENTS), OR A TRUSTEE OF ANY
SUCH PLAN, OR ANY OTHER PERSON WHO IS USING THE ASSETS OF ANY SUCH PLAN TO
EFFECT SUCH ACQUISITION, AN OPINION OF COUNSEL TO THE EFFECT THAT THE PURCHASE
AND HOLDING OF THIS CERTIFICATE WILL NOT RESULT IN THE ASSETS OF THE TRUST FUND
BEING DEEMED TO BE "PLAN ASSETS" PURSUANT TO THE DEPARTMENT OF LABOR REGULATIONS
SET FORTH IN 29 C.F.R. ss.2510.3-101 OR TO BE SUBJECT TO THE FIDUCIARY
RESPONSIBILITY PROVISIONS OF ERISA OR THE PROHIBITED TRANSACTION PROVISIONS OF
THE CODE OR CAUSE A VIOLATION UNDER SIMILAR LAW, WILL NOT CONSTITUTE OR RESULT
IN A PROHIBITED TRANSACTION WITHIN THE MEANING OF SECTION 406 OR SECTION 407 OF
ERISA OR SECTION 4975 OF THE CODE OR SIMILAR LAW, AND WILL NOT SUBJECT THE
TRUSTEE, THE SERVICER, THE COMPANY OR ANY OF THEIR AFFILIATES TO ANY OBLIGATION
OR LIABILITY (INCLUDING OBLIGATIONS OR LIABILITIES UNDER ERISA OR SECTION 4975
OF THE CODE OR SIMILAR LAW) RELATING TO THE CERTIFICATES. FOR PURPOSES OF CLAUSE
(I)(A) ABOVE, SUCH REPRESENTATION SHALL BE DEEMED TO HAVE BEEN MADE TO THE
E-1
SERVICER BY THE TRANSFEREE'S ACCEPTANCE OF THIS CERTIFICATE OR A BENEFICIAL
INTEREST HEREIN UNLESS THE SERVICER SHALL HAVE RECEIVED FROM THE TRANSFEREE AN
ALTERNATIVE REPRESENTATION ACCEPTABLE IN FORM AND SUBSTANCE TO THE SERVICER.
CLASS IL CERTIFICATE
Number 01-AD1-IL-1 Initial Percentage:
___________%
Cut-off Date: October 1, 2001
First Distribution Date:
November 25, 2001
E-2
CHASE FUNDING LOAN ACQUISITION TRUST
MORTGAGE LOAN ASSET-BACKED CERTIFICATE
Series 2001-AD1
evidencing an ownership interest in distributions allocable to the Class IL
Certificates with respect to a pool of conventional, sub-prime mortgage loans
formed and sold by
CHASE FUNDING, INC.
This certifies that CHASE HOME MORTGAGE CORPORATION OF THE SOUTHEAST is
the registered owner of the ownership interest (the "Ownership Interest")
evidenced by this Certificate in certain distributions with respect to a pool of
conventional, sub-prime mortgage loans (the "Mortgage Loans") formed and sold by
Chase Funding, Inc. (hereinafter called the "Depositor"), and certain other
property held in trust for the benefit of Certificateholders (collectively, the
"Trust Fund"). The Mortgage Loans are serviced by Chase Manhattan Mortgage
Corporation (the "Servicer"), and are secured by first mortgages on Mortgaged
Properties. The Trust Fund was created pursuant to a pooling and servicing
agreement (the "Agreement"), dated as of October 1, 2001, among the Depositor,
the Servicer and Citibank, N.A., 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 Agreement.
This Certificate is one of a duly authorized issue of Certificates,
designated as Chase Funding Loan Acquisition Trust, Mortgage Loan Asset-Backed
Certificates, Series 2001-AD1, Class IL (the "Class IL Certificates") and is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which Agreement such Holder is bound. Also
issued under the Agreement are Certificates designated as Chase Funding Loan
Acquisition Trust, Mortgage Loan Asset-Backed Certificates, Series 2001-AD1,
Class IA-1, Class IA-2, Class IA-3, Class IA-4, Class IA-5 and Class IA-6
Certificates (collectively, the "Group I Class A Certificates"), Class IIA-1
Certificates (the "Group II Class A Certificates"), Class IM-1 and Class IM-2
Certificates (together, the "Mezzanine Group I Certificates"), Class IIM-1 and
Class IIM-2 Certificates (together, the "Mezzanine Group II Certificates"),
Class IB Certificates (the "Class IB Certificates"), Class IIB Certificates (the
"Class IIB Certificates"), Class IIL Certificates (the "Class IIL
Certificates"), Class IP Certificates (the "Class IP Certificates"), Class IIP
Certificates (the "Class IIP Certificates"), Class C Certificates (the "Class C
Certificates") and the Class R Certificate (the "Class R Certificate" or the
"Residual Certificate").
The Group I Class A Certificates, the Group II Class A Certificates,
the Mezzanine Group I Certificates, the Mezzanine Group II Certificates, the
Class IB Certificates, the Class IIB Certificates, the Class IL Certificates,
the Class IIL Certificates, the Class IP Certificates, the Class IIP
Certificates, the Class C Certificates and the Class R Certificate are
collectively referred to herein as the "Certificates."
E-3
Pursuant to the terms of the Agreement, the Paying Agent will
distribute from funds in the Distribution Account the amounts described in the
Pooling and Servicing 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 November 25, 2001. Such distributions will
be made to the Person in whose name this Certificate is registered at the close
of business on the last Business Day of the month preceding the month in which
such payment is made, or if such last day is not a Business Day, the Business
Day immediately preceding such last day.
Distributions on this Certificate will be made either by check mailed
to the address of the Person entitled thereto, as such name and address shall
appear on the Certificate Register, or by wire transfer in immediately available
funds to the account of such Holder at a bank or other financial or depository
institution having appropriate facilities therefor, if such Holder has so
notified the Servicer in writing at least 5 Business Days prior to the first
Distribution Date for which distribution by wire transfer is to be made, and
such Holder's Certificates evidence an aggregate original principal balance of
not less than $1,000,000 or such Holder holds a 100% Percentage Interest of such
Class. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Servicer, of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office of the Servicer or at such other office as may be designated by such
notice of final distribution.
The Servicer will maintain or cause to be maintained a Certificate
Register in which, subject to such reasonable regulations as it may prescribe,
the Servicer will provide for the registration of Certificates and of transfers
and exchanges of Certificates. Upon surrender for registration of transfer of
any Certificate at any office or agency of the Servicer, or, if an
Authenticating Agent has been appointed under the Agreement, the Authenticating
Agent, maintained for such purpose, the Servicer, or, if an Authenticating Agent
has been appointed under the Agreement, the Authenticating Agent, will, subject
to the limitations set forth in the Agreement, authenticate and deliver, in the
name of the designated transferee or transferees, a Certificate of a like class
and dated the date of authentication by the Authenticating Agent.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Servicer, of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Servicer, for that purpose and specified in such notice of
final distribution.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
E-4
IN WITNESS WHEREOF, the Depositor has caused this Certificate to be
duly executed.
Dated: October 15, 2001 CHASE FUNDING, INC.
By:
---------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class IL
Certificates referred to
in the within-mentioned
Agreement.
THE CHASE MANHATTAN BANK
as Authenticating Agent
By:
---------------------------------
Authorized Signatory
E-5
REVERSE OF CERTIFICATE
CHASE FUNDING LOAN ACQUISITION TRUST
MORTGAGE LOAN ASSET-BACKED CERTIFICATE
SERIES 2001-AD1
This Certificate is one of a duly authorized issue of Certificates,
designated as Chase Funding Loan Acquisition Trust, Mortgage Loan Asset-Backed
Certificates, Series 2001-AD1, issued in six Classes of Group I Class A
Certificates, one Class of Group II Class A Certificates, two Classes of
Mezzanine Group I Certificates, two Classes of Mezzanine Group II Certificates,
one Class of Class IB Certificates, one Class of Class IIB Certificates, one
Class of Class IL Certificates, one Class of Class IIL Certificates, one Class
of Class IP Certificates, one Class of Class IIP Certificates, one Class of
Class C Certificates and one Class R Certificate, each evidencing an interest in
certain Distributions with respect to a pool of conventional, sub-prime Mortgage
Loans formed and sold by the Depositor and certain other property conveyed by
the Depositor to the Trustee.
The Holder, by its acceptance of this Certificate, agrees that it will
look solely to the Trust Fund and certain amounts resulting from credit
enhancements for payment hereunder and that the Trustee is not liable to the
Holders for any amount payable under this Certificate or the Agreement or,
except as expressly provided in the Agreement, subject to any liability under
the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
No service charge will be made to the Holder for any transfer or
exchange of the Certificate, but the Servicer may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of the Certificate. Prior to due
presentation of a Certificate for registration of transfer, the Depositor, the
Servicer and the Trustee may treat the person in whose name any Certificate is
registered as the owner of such Certificate and the Percentage Interest in the
Trust Fund evidenced thereby for the purpose of receiving distributions pursuant
to the Agreement and for all other purposes whatsoever, and neither the
Depositor, the Servicer nor the Trustee will be affected by notice to the
contrary.
The Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee, without the consent of any of the Certificateholders,
to cure any ambiguity, to correct or supplement any provisions therein which may
be inconsistent with the other provisions therein, to ensure continuing
treatment of each REMIC included in the Trust Fund as a REMIC, or to make any
other provisions with respect to matters or questions arising under the
Agreement which are not materially inconsistent with the provisions of the
Agreement, provided that such action does not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any
Certificateholder.
E-6
The Agreement may also be amended from time to time by the Depositor,
the Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66 2/3% of the Percentage Interests of
each Class of Certificates affected thereby for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Agreement or of modifying in any manner the rights of the Holders of
Certificates of such Class; provided, however, that no such amendment may (i)
reduce in any manner the amount of, or delay the timing of, payments received on
Mortgage Loans which are required to be distributed on any Certificate without
the consent of the Holder of such Certificate, (ii) adversely affect in any
material respect the interests of the Holders of any Class of Certificates in a
manner other than as described in clause (i), without the consent of the Holders
of Certificates of such Class evidencing 66 2/3% or more of the Voting Rights of
such Class or (iii) change the percentage specified in clause (ii) of the third
paragraph of Section 10.01 of the Agreement, without the consent of the Holders
of all Certificates of such Class then outstanding.
For federal income tax purposes, the Trust Fund includes three
segregated asset pools. The Depositor intends to make an election to treat each
as a "real estate mortgage investment conduit" (a "REMIC"). The Certificates
(other than the Class R Certificate, Class L Certificates and Class P
Certificates) will represent "regular interests" in the Upper-Tier REMIC. The
Residual Certificate will represent the sole class of "residual interest" in
each of the three REMICs.
The respective obligations and responsibilities of the Depositor, the
Servicer and the Trustee under the Agreement will terminate upon (i) the later
of the final payment or other liquidation (or any Advance with respect thereto)
of the last Mortgage Loan or the disposition of all property acquired upon the
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and the
remittance of all funds due thereunder; or (ii) at the option of the Servicer,
on any Distribution Date on which the aggregate Stated Principal Balances of the
Mortgage Loans in the applicable Loan Group is equal to or less than 10% of the
aggregate Stated Principal Balance of the Mortgage Loans in such Loan Group as
of the Cut-Off Date, so long as the Servicer deposits or causes to be deposited
in the Distribution Account during the Principal Prepayment Period related to
such Distribution Date an amount equal to the sum of (i) 100% of the Stated
Principal Balance of each Mortgage Loan in such Loan Group (other than in
respect of REO Property), (ii) accrued interest thereon at the applicable
Mortgage Rate, (iii) the appraised value of any REO Property in such Loan Group
(up to the Stated Principal Balance of the related Mortgage Loan), such
appraisal to be conducted by an appraiser mutually agreed upon by the Depositor
and the Trustee and (iv) any unreimbursed Servicing Fees, Advances and Servicing
Advances, and the principal portion of any unreimbursed Advances, made on the
Mortgage Loans in such Loan Group prior to such termination; provided, however,
that in no event shall the trust created hereby continue beyond the earlier of
(i) 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. James's, living on the date hereof and (ii) the Latest Possible
Maturity Date.
E-7
[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF ASSIGNEE)
-------------------------------------------------------------------------------
(Please Print or Type Name and Address of Assignee)
-------------------------------------------------------------------------------
the within Certificate, and all rights thereunder, and hereby does irrevocably
constitute and appoint
_________________________________Attorney to transfer the within Certificate on
the books kept for the registration thereof, with full power of substitution in
the premises.
Dated:
(Signature guaranty)
-------------------------------------------
NOTICE: The signature to this assignment
must correspond with the name as it appears
upon the face of the within Certificate in
every particular, without alteration or
enlargement or any change whatever.
(*This information, which is voluntary, is being requested to ensure that the
assignee will not be subject to backup withholding under Section 3406 of the
Code.)
E-8
EXHIBIT F
MORTGAGE LOAN SCHEDULE
F-1
EXHIBIT G
[RESERVED]
G-1
EXHIBIT H
FORM OF TRUSTEE CERTIFICATION
[DATE]
Chase Funding, Inc.
300 Xxxx Boulevard, 0xx Xxxxx Xxxxx
Xxxxxxxxx Xxxx, Xxx Xxxxxx 00000
Re: Pooling and Servicing Agreement dated as of October 1, 2001 among Chase
Funding, Inc. as depositor, Chase Manhattan Mortgage Corporation, as
servicer, and Citibank, N.A., as trustee, Chase Funding Mortgage Loan
Asset-Backed Certificates, Series 2001-AD1
--------------------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that [,
except as set forth in Schedule A hereto,] as to each Mortgage Loan listed in
the Mortgage Loan Schedule attached hereto (other than any Mortgage Loan paid in
full or listed on the attachment hereto) it has reviewed the Mortgage File and
the Mortgage Loan Schedule and has determined that:
(i) All documents in the Mortgage File required to be delivered to
the Trustee pursuant to Section 2.01 of the Pooling and Servicing Agreement are
in its possession;
(ii) In connection with each Mortgage Loan or Assignment thereof as to
which documentary evidence of recording was not received on the Closing Date, it
has received evidence of such recording; and
(iii) Such documents have been reviewed by it and such documents do not
contain any material omissions or defects within the meaning of Section 2.01 or
2.02.
The Trustee further certifies that as to each Mortgage Loan, the
Trustee holds the Mortgage Note without any Responsible Officer of the Trustee
having received written notice (a) of any adverse claims, liens or encumbrances,
(b) that any Mortgage Note was overdue or has been dishonored, (c) of evidence
on the face of any Mortgage Note or Mortgage of any security interest therein,
or (d) of any defense against or claim to the Mortgage Note by any other party.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond confirming (i) that the Mortgage Loan
number and the name of the Mortgagor in each Mortgage File conform to the
respective Mortgage Loan number and name listed on the Mortgage Loan Schedule
and (ii) the existence in each Mortgage File of each of the documents listed in
subparagraphs (i)(A) through (F), inclusive, of Section 2.01 in the Agreement.
The Trustee makes no representations or warranties as to the validity, legality,
sufficiency, enforceability or genuineness of any of the documents contained in
each Mortgage Loan or the collectibility, insurability, effectiveness or
suitability of any such Mortgage Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
H-1
CITIBANK, N.A.,
as Trustee
By: ________________________________
Name: ________________________________
Title: ________________________________
H-2
EXHIBIT I
FORM OF TRANSFEREE'S LETTER
CHASE FUNDING, INC., CHASE FUNDING LOAN ACQUISITION MORTGAGE LOAN
ASSET-BACKED CERTIFICATES, SERIES 2001-AD1
[DATE]
Chase Funding, Inc.
000 Xxxx Xxxxxxxxx, 0xx Xxxxx Xxxxx
Xxxxxxxxx Lake, New Jersey 07675
Ladies and Gentlemen:
We propose to purchase Chase Funding, Inc., Chase Funding Mortgage Loan
Asset-Backed Certificates, Series 2001-AD1, Class R, described in the Prospectus
Supplement, dated October 11, 2001, and Prospectus, dated September 21, 2001.
1. We certify that (a) we are not a disqualified organization and (b)
we are not purchasing such Class R Certificates on behalf of a disqualified
organization; for this purpose the term "disqualified organization" means the
United States, any state or political subdivision thereof, any foreign
government, any international organization, any agency or instrumentality of any
of the foregoing (except any entity treated as other than an instrumentality of
the foregoing for purposes of Section 168(h)(2)(D) of the Internal Revenue Code
of 1986, as amended (the "Code")), any organization (other than a cooperative
described in Section 521 of the Code) that is exempt from taxation under the
Code (unless such organization is subject to tax on excess inclusions) and any
organization that is described in Section 1381(a)(2)(C) of the Code. We
understand that any breach by us of this certification may cause us to be liable
for an excise tax imposed upon transfers to disqualified organizations.
2. We certify that (a) we have historically paid our debts as they
became due, (b) we intend, and believe that we will be able, to continue to pay
our debts as they become due in the future, (c) we understand that, as
beneficial owner of the Class R Certificates, we may incur tax liabilities in
excess of any cash flows generated by the Class R Certificates, and (d) we
intend to pay any taxes associated with holding the Class R Certificates as they
become due.
3. We acknowledge that we will be the beneficial owner of the Class R
Certificates and:1/
______ The Class R Certificates will be registered in our name.
______ The Class R Certificates will be held in the name of our
nominee, _________________, which is not a disqualified
organization.
4. Unless Chase Funding, Inc. ("Chase Funding") has consented to the
transfer to us by executing the form of Consent affixed hereto as Appendix B, we
certify that we are a U.S. person; for this purpose the term "U.S. person" means
a citizen or resident of the United States, a corporation, or partnership
(unless, in the case of a partnership, Treasury regulations are adopted that
provide otherwise) created or organized in or under the laws of the United
States, any State thereof or the District of Columbia, including an entity
treated as a corporation or partnership for federal income tax purposes, an
estate whose income is subject to United States federal income tax regardless of
I-1
the source of its income, 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 (or, to the extent provided in applicable Treasury regulations,
certain trusts in existence on August 20, 1996 which are eligible to elect to be
treated as U.S. Persons). We agree that any breach by us of this certification
shall render the transfer of any interest in the Class R Certificates to us
absolutely null and void and shall cause no rights in the Class R Certificates
to vest in us.
5. We agree that in the event that at some future time we wish to
transfer any interest in the Class R Certificates, we will transfer such
interest in the Class R Certificates only (a) to a transferee that (i) is not a
disqualified organization and is not purchasing such interest in the Class R
Certificates on behalf of a disqualified organization, (ii) is a U.S. person and
(iii) has delivered to Chase Funding a letter in the form of this letter
(including the affidavit appended hereto) and, if requested by Chase Funding, an
opinion of counsel (in a form acceptable to Chase Funding) that the proposed
transfer will not cause the interest in the Class R Certificates to be held by a
disqualified organization or a person who is not a U.S. person or (b) with the
written consent of Chase Funding.
--------------------
1/ Check appropriate box and if necessary fill in the name of the Transferee's
nominee.
I-2
6. We hereby designate Chase Manhattan Mortgage Corporation as our
fiduciary to act as the tax matters person for the Chase Funding, Inc., Chase
Funding Mortgage Loan Asset-Backed Certificates, Series 2001-AD1 REMIC.
Very truly yours,
[PURCHASER]
By:___________________________________
Name:
Title:
Accepted as of __________ __, 200__
CHASE FUNDING, INC.
By:_____________________________
Name:
Title:
I-3
APPENDIX A
Affidavit pursuant to (i) Section 860E(e)(4)
of the Internal Revenue Code of 1986, as
amended, and (ii) certain provisions of the
Pooling and Servicing Agreement
Under penalties of perjury, the undersigned declares that the following is true:
(1) He or she is an officer of _________________________ (the
"Transferee"),
(2) the Transferee's Employer Identification number is __________,
(3) the Transferee is not a "disqualified organization" (as defined below),
has no plan or intention of becoming a disqualified organization, and
is not acquiring any of its interest in the Chase Funding, Inc., Chase
Funding Mortgage Loan Asset-Backed Certificates, Series 2001-AD1, Class
R on behalf of a disqualified organization or any other entity,
(4) unless Chase Funding, Inc. ("Chase Funding") has consented to the
transfer to the Transferee by executing the form of Consent affixed as
Appendix B to the Transferee's Letter to which this Certificate is
affixed as Appendix A, the Transferee is a "U.S. person" (as defined
below),
(5) that no purpose of the transfer is to avoid or impede the assessment or
collection of tax,
(6) the Transferee has historically paid its debts as they became due,
(7) the Transferee intends, and believes that it will be able, to continue
to pay its debts as they become due in the future,
(8) the Transferee understands that, as beneficial owner of the Class R
Certificates, it may incur tax liabilities in excess of any cash flows
generated by the Class R Certificates,
(9) the Transferee intends to pay any taxes associated with holding the
Class R Certificates as they become due,
(10) the Transferee consents to any amendment of the Pooling and Servicing
Agreement that shall be deemed necessary by Chase Funding (upon advice
of counsel) to constitute a reasonable arrangement to ensure that the
Class R Certificates will not be owned directly or indirectly by a
disqualified organization, and
(11) [the present value of the anticipated tax liabilities associated with
holding the Class R Certificates does not exceed the sum of:
(A) the present value of any consideration given to the Transferee
to acquire the Class R Certificates;
(B) the present value of the expected future distributions on the
Class R Certificates; and
I-4
(C) the present value of the anticipated tax savings associated
with holding the Class R Certificates as the Trust Fund
generates losses.
For purposes of this declaration, (i) the Transferee is assumed to pay
tax at a rate equal to the highest rate of tax specified in Section
11(b)(1) of the Code, and (ii) present values are computed using a
discount rate equal to the applicable Federal rate prescribed by
Section 1274(d) of the Code or a lower discount rate if the Transferee
can demonstrate that it regularly borrows, in the course of its trade
or business, substantial funds at such lower rate from unrelated third
parties;]
[(11) (A) at the time of the transfer, and at the close of each of the
Transferee's two fiscal years preceding the year of transfer,
the Transferee's gross assets for financial reporting purposes
exceed $100 million and its net assets for financial reporting
purposes exceed $10 million; and
(B) the Transferee is an eligible corporation as defined in
Section 860L(a)(2) of the Code and has made a written
agreement that any subsequent transfer of the Class R
Certificates will be to another eligible corporation that
satisfies Section 4 of Revenue Procedure 2001-12, and such
transfer will not be a transfer to a foreign branch of an
eligible corporation or any other arrangement by which the
Class R Certificates are at any time subject to net tax by a
country other than the United States or by a possession of the
United States.
For purposes of this declaration, the gross assets and net assets of the
Transferee do not include any obligation of any person related to the Transferee
(as defined in Section 860L(g) of the Code) or any other asset if a principal
purpose for holding or acquiring that asset is to permit the Transferee to make
this declaration or to satisfy the requirements of Section 6 of Revenue
Procedure 2001-12;]
For purpose of this affidavit, the term "disqualified organization" means the
United States, any state or political subdivision thereof, any foreign
government, any international organization, any agency or instrumentality of any
of the foregoing (except any entity treated as other than an instrumentality of
the foregoing for purposes of Section 168(h)(2)(D) of the Internal Revenue Code
of 1986, as amended (the "Code")), any organization (other than a cooperative
described in Section 521 of the Code) that is exempt from taxation under the
Code (unless such organization is subject to tax on excess inclusions) and any
organization that is described in Section 1381(a)(2)(C) of the Code and the term
"U.S. Person" means a citizen or resident of the United States, a corporation or
partnership (unless, in the case of a partnership, Treasury regulations are
adopted that provide otherwise) created or organized in or under the laws of the
United States, any state thereof or the District of Columbia, including an
entity treated as a corporation or partnership for federal income tax purposes,
an estate whose income is subject to Unites 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 such trust, and one or
more such U.S. Persons have the authority to control all substantial decisions
of such trust, (or, to the extent provided in applicable Treasury regulations,
certain trusts in existence on August 20, 1996 which are eligible to elect to be
treated as U.S. Persons).
---------------------------------
By:
------------------------------
---------------------------------
I-5
Address of Investor for receipt of distribution:
Address of Investor for receipt of tax information:
(Corporate Seal)
Attest:
----------------------------------
__________________________________, Secretary
I-6
Personally appeared before me the above-named ______________, known or
proved to me to be the same person who executed the foregoing
instrument and to be the _______ of the Investor, and acknowledged to
me that he executed the same as his free act and deed and the free act
and deed of the Investor.
Subscribed and sworn before me this day of
, 200_ .
--------------------------
Notary Public
County of ___________________
State of _____________________
My commission expires the ________ day of ______________
By: ___________________________
Name: ___________________
Title: ___________________
Dated: _____________
I-7
APPENDIX B
CONSENT
_________________________ (Transferee)
-------------------------
-------------------------
Ladies and Gentlemen:
Chase Funding, Inc. ("Chase Funding") hereby consents to the transfer
to, and registration in the name of, the Transferee (or, if applicable,
registration in the name of such Transferee's nominee of the Chase Funding Inc.,
Chase Funding Mortgage Loan Asset-Backed Certificates, Series 2001-AD1, Class R
described in the Transferee's Letter to which this Consent is appended,
notwithstanding Chase Funding's knowledge that the Transferee is not a U.S.
person (as defined in such Transferee's Letter).
CHASE FUNDING, INC.
Dated:__________________________ By:_______________________________
I-8
EXHIBIT J
FORM OF TRANSFEROR CERTIFICATE FOR
CLASS R CERTIFICATES
Chase Funding, Inc.
000 Xxxx Xxxxxxxxx
Xxxxxxxxx Xxxx, XX 00000
Citibank, N.A., as Trustee
000 Xxxx Xxxxxx
0xx Xxxxx, Xxxx 0
Xxx Xxxx, XX 00000
RE: Chase Funding, Inc., Chase Funding Mortgage Loan
Asset-Backed Certificates, Series 2001-AD1
------------------------------------------------
Ladies and Gentlemen:
In connection with our disposition of the Class R Certificate, we
certify that (a) we understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "Act"), and are being disposed
by us in a transaction that is exempt from the registration requirements of the
Act, (b) we have not offered or sold any Certificates to, or solicited offers to
buy any Certificates from, any person, or otherwise approached or negotiated
with any person with respect thereto, in a manner that would be deemed, or taken
any other action that would result in, a violation of Section 5 of the Act and
(c) if we are disposing of a Class R Certificate, we have no knowledge the
Transferee is not a Permitted Transferee. All capitalized terms used herein but
not defined herein shall have the meanings assigned to them in the Pooling and
Servicing Agreement dated as of October 1, 2001, among Chase Funding, Inc., as
depositor, Chase Manhattan Mortgage Corporation, as servicer, and Citibank,
N.A., as trustee.
Very truly yours,
------------------------------
Name of Transferor
By: ___________________________
Name:
Title
J-1
EXHIBIT K
FORM OF INVESTMENT LETTER
(Accredited Investor)
[DATE]
Chase Funding, Inc.
300 Xxxx Boulevard, 0xx Xxxxx Xxxxx
Xxxxxxxxx Xxxx, Xxx Xxxxxx 00000
Re: Pooling and Servicing Agreement dated as of October 1, 2001 among Chase
Funding, Inc. as depositor, Chase Manhattan Mortgage Corporation, as
servicer, and Citibank, N.A., as trustee, Chase Funding, Inc., Chase
Funding Mortgage Loan Asset-Backed Certificates, Series 2001-AD1 [Class R]
--------------------------------------------------------------------------
Ladies and Gentlemen:
______________ (the "Purchaser") intends to purchase from
________________ (the "Transferor") $_______ by original principal balance (the
"Transferred Certificates") of Mortgage Loan Asset-Backed Certificates, Series
2001-AD1, [Class R] (the "Certificates"), issued pursuant to a pooling and
servicing agreement, dated as of October 1, 2001 (the "Pooling and Servicing
Agreement"), among Chase Funding, Inc. as depositor (the "Depositor"), Chase
Manhattan Mortgage Corporation, as servicer (the "Servicer"), and Citibank,
N.A., as trustee (the "Trustee"). [The Purchaser intends to register the
Transferred Certificate in the name of ____________________, as nominee for
_________________.] All terms used and not otherwise defined herein shall have
the meanings set forth in the Pooling and Servicing Agreement.
For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Purchaser certifies, represents and warrants
to, and covenants with, the Depositor and the Trustee that:
1. The Purchaser understands that (a) the Certificates have not been
registered or qualified under the Securities Act of 1933, as amended (the
"Securities Act"), or the securities laws of any state, (b) neither the
Depositor nor the Trustee is required, and neither of them intends, to so
register or qualify the Certificates, (c) the Certificates cannot be resold
unless (i) they are registered and qualified under the Securities Act and the
applicable state securities laws or (ii) an exemption from registration and
qualification is available and (d) the Pooling and Servicing Agreement contains
restrictions regarding the transfer of the Certificates.
2. The Certificates will bear a legend to the following effect:
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), THE INVESTMENT COMPANY ACT OF 1940, AS
AMENDED (THE "1940 ACT") OR ANY STATE SECURITIES OR "BLUE SKY" LAWS,
AND MAY NOT, DIRECTLY OR INDIRECTLY, BE SOLD OR OTHERWISE TRANSFERRED,
OR OFFERED FOR SALE, UNLESS SUCH TRANSFER IS NOT SUBJECT TO
REGISTRATION UNDER THE ACT, THE 1940 ACT AND ANY APPLICABLE STATE
SECURITIES LAWS AND SUCH TRANSFER ALSO COMPLIES WITH THE OTHER
K-1
PROVISIONS OF SECTION 5.02 OF THE POOLING AND SERVICING AGREEMENT. NO
TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE SERVICER SHALL
HAVE RECEIVED, IN FORM AND SUBSTANCE SATISFACTORY TO THE SERVICER (A)
AN INVESTMENT LETTER FROM THE PROSPECTIVE INVESTOR; AND (B)
REPRESENTATIONS FROM THE TRANSFEROR REGARDING THE OFFERING AND SALE OF
THE CERTIFICATES.
NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE DEPOSITOR
SHALL HAVE RECEIVED EITHER (I) A REPRESENTATION LETTER FROM THE
TRANSFEREE OF THIS CERTIFICATE TO THE EFFECT THAT SUCH TRANSFEREE
EITHER (A) IS NOT AN EMPLOYEE BENEFIT PLAN (A "PLAN") WITHIN THE
MEANING OF SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT
OF 1974, AS AMENDED ("ERISA") OR SECTION 4975 OF THE CODE OR ANY
APPLICABLE FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") (A "PLAN")
MATERIALLY SIMILAR TO THE FOREGOING PROVISIONS OF ERISA AND THE CODE,
AND IS NOT DIRECTLY OR INDIRECTLY PURCHASING ANY CERTIFICATE ON BEHALF
OF, AS INVESTMENT MANAGER OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF OR
WITH ASSETS OF A PLAN OR, IN THE CASE OF AN INSURANCE COMPANY, THE
ASSETS OF ANY SEPARATE ACCOUNTS TO EFFECT SUCH ACQUISITION OR (B) THE
SOURCE OF FUNDS FOR THE PURCHASE OF THE CERTIFICATES IS AN "INSURANCE
COMPANY GENERAL ACCOUNT" WITHIN THE MEANING OF PROHIBITED TRANSACTION
CLASS EXEMPTION 95-60 ("PTCE 95-60"), 60 FED. REG. 35925 (JULY 12,
1995), AND THE PURCHASE AND HOLDING OF THE CERTIFICATE IS EXEMPT UNDER
PTCE 95-60, OR (II) IF THIS CERTIFICATE IS PRESENTED FOR REGISTRATION
IN THE NAME OF A PLAN SUBJECT TO TITLE I OF ERISA, OR SECTION 4975 OF
THE CODE OR SIMILAR LAW (OR COMPARABLE PROVISIONS OF ANY SUBSEQUENT
ENACTMENTS), OR A TRUSTEE OF ANY SUCH PLAN, OR ANY OTHER PERSON WHO IS
USING THE ASSETS OF ANY SUCH PLAN TO EFFECT SUCH ACQUISITION, AN
OPINION OF COUNSEL TO THE EFFECT THAT THE PURCHASE AND HOLDING OF THIS
CERTIFICATE WILL NOT RESULT IN THE ASSETS OF THE TRUST FUND BEING
DEEMED TO BE "PLAN ASSETS" PURSUANT TO THE DEPARTMENT OF LABOR
REGULATIONS SET FORTH IN 29 CFR ss.2510.3-101 OR TO BE SUBJECT TO THE
FIDUCIARY RESPONSIBILITY PROVISIONS OF ERISA OR THE PROHIBITED
TRANSACTION PROVISIONS OF THE CODE OR CAUSE A VIOLATION UNDER SIMILAR
LAW, WILL NOT CONSTITUTE OR RESULT IN A PROHIBITED TRANSACTION WITHIN
THE MEANING OF SECTION 406 OR SECTION 407 OF ERISA OR SECTION 4975 OF
THE CODE OR SIMILAR LAW, AND WILL NOT SUBJECT THE TRUSTEE, THE
SERVICERS, THE SERVICER, THE DEPOSITOR OR ANY OF THEIR AFFILIATES TO
ANY OBLIGATION OR LIABILITY (INCLUDING OBLIGATIONS OR LIABILITIES UNDER
ERISA OR SECTION 4975 OF THE CODE OR SIMILAR LAW) RELATING TO THE
CERTIFICATES.
3. The Purchaser is acquiring the Transferred Certificates for its own
account [for investment only]**/ and not with a view to or for sale or other
transfer in connection with any distribution of the Transferred Certificates in
any manner that would violate the Securities Act or any applicable state
securities laws, subject, nevertheless, to the understanding that disposition of
the Purchaser's property shall at all times be and remain within its control.
--------
**/ Not required of a broker/dealer purchaser.
K-2
4. The Purchaser (a) is a substantial, sophisticated institutional
investor having such knowledge and experience in financial and business matters,
and in particular in such matters related to securities similar to the
Certificates, such that it is capable of evaluating the merits and risks of
investment in the Certificates, (b) is able to bear the economic risks of such
an investment and (c) is an "accredited investor" within the meaning of Rule
501(a) promulgated pursuant to the Securities Act.
5. The Purchaser will not nor has it authorized nor will it authorize
any person to (a) offer, pledge, sell, dispose of or otherwise transfer any
Certificate, any interest in any Certificate or any other similar security to
any person in any manner, (b) solicit any offer to buy or to accept a pledge,
disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c)
otherwise approach or negotiate with respect to any Certificate, any interest in
any Certificate or any other similar security with any person in any manner, (d)
make any general solicitation by means of general advertising or in any other
manner, or (e) take any other action, that would constitute a distribution of
any Certificate under the Securities Act or the Investment Company Act of 1940,
as amended (the "1940 Act"), that would render the disposition of any
Certificate a violation of Section 5 of the Securities Act or any state
securities law, or that would require registration or qualification pursuant
thereto. Neither the Purchaser nor anyone acting on its behalf has offered the
Certificates for sale or made any general solicitation by means of general
advertising or in any other manner with respect to the Certificates. The
Purchaser will not sell or otherwise transfer any of the Certificates, except in
compliance with the provisions of the Pooling and Servicing Agreement.
6. [This paragraph may be deleted if the Purchaser provides the Opinion
of Counsel referred to in clause (ii) of Section 5.02(b) of the Pooling and
Servicing Agreement.] The Purchaser either (A) 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"), or a plan within the meaning of Section 4975
of the Internal Revenue Code of 1986, as amended (the "Code") or a plan subject
to federal state or local law materially similar to the foregoing provisions of
ERISA and the Code (each, a "Plan"), and is not directly or indirectly
purchasing any Certificate on behalf of, as investment manager of, as named
fiduciary of, as trustee of or with assets of a Plan or directly or indirectly
purchasing any certificates with the assets of any insurance company separate
account or of any Plan or (B) is an insurance company and the source of funds
for the purchase of the certificates is an "insurance company general account"
within the meaning of Prohibited Transaction Class Exemption 95-60 ("PTCE
95-60"), 60 Fed. Reg. 35925 (July 12, 1995), and the purchase and holding of the
Certificates is exempt under PTCE 95-60.
7. Prior to the sale or transfer by the Purchaser of any of the
Certificates, the Purchaser will obtain from any subsequent purchaser
substantially the same certifications, representations, warranties and covenants
contained in the foregoing paragraphs and in this letter or a letter
substantially in the form of Exhibit L to the Pooling and Servicing Agreement.
8. The Purchaser agrees to indemnify the Trustee, the Servicer and the
Depositor against any liability that may result from any misrepresentation made
herein.
Very truly yours,
[PURCHASER]
By:_______________________
Name:
Title:
K-3
EXHIBIT L
FORM OF RULE 144A INVESTMENT LETTER
(Qualified Institutional Buyer)
[DATE]
Chase Funding, Inc.
000 Xxxx Xxxxxxxxx, 0xx Xxxxx Xxxxx
Xxxxxxxxx Lake, New Jersey 07675
Chase Manhattan Mortgage Corporation
c/o The Chase Manhattan Bank
Global Trust Services
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Pooling and Servicing Agreement dated as of October 1, 2001 among Chase
Funding, Inc. as depositor, Chase Manhattan Mortgage Corporation, as
servicer, and Citibank, N.A., as trustee, Chase Funding, Inc., Chase
Funding Mortgage Loan Asset-Backed Certificates, Series 2001-AD1 [Class R]
--------------------------------------------------------------------------
Ladies and Gentlemen:
______________ (the "Purchaser") intends to purchase from
________________ (the "Transferor") $_______ by original principal balance (the
"Transferred Certificates") of Asset-Backed Certificates, Series 2001-AD1,
[Class R] (the "Certificates"), issued pursuant to a pooling and servicing
agreement, dated as of October 1, 2001 (the "Pooling and Servicing Agreement"),
among Chase Funding, Inc. as depositor (the "Depositor"), Chase Manhattan
Mortgage Corporation, as servicer (the "Servicer"), and Citibank, N.A., as
trustee (the "Trustee"). [The Purchaser intends to register the Transferred
Certificate in the name of ____________________, as nominee for
__________________.] All terms used and not otherwise defined herein shall have
the meanings set forth in the Trust Agreement.
For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Purchaser certifies, represents and warrants
to, and covenants with, the Depositor and the Trustee that:
In connection with our acquisition of the above Transferred
Certificates we certify that (a) we understand that the Certificates are not
being registered under the Securities Act of 1933, as amended (the "Act"), or
any state securities laws and are being transferred to us in a transaction that
is exempt from the registration requirements of the Act and any such laws, (b)
we have such knowledge and experience in financial and business matters that we
are capable of evaluating the merits and risks of investments in the
Certificates, (c) we have had the opportunity to ask questions of and receive
answers from the Depositor concerning the purchase of the Transferred
Certificates and all matters relating thereto or any additional information
deemed necessary to our decision to purchase the Transferred Certificates, (d)
we are not an employee benefit plan within the meaning of Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended, or a plan within
the meaning of Section 4975 of the Internal Revenue Code of 1986, as amended or
a plan subject to federal, state or local law materially similar to the
L-1
foregoing provisions of ERISA and the Code (each, a "Plan"), nor are we directly
or indirectly purchasing any Certificate on behalf of, as investment manager of,
as named fiduciary of, as trustee of or with assets of a Plan or directly or
indirectly purchasing any certificates with the assets of any insurance company
separate account or of any Plan [or alternatively, in the case of an insurance
company, is an insurance company and the source of funds for the purchase of the
certificates] is an "insurance company general account" within the meaning of
Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60"), 50 Fed. Reg. 35925
(July 12, 1995), and the purchase and holding of the Certificates is exempt
under PTCE 95-60, (e) we have not, nor has anyone acting on our behalf offered,
transferred, pledged, sold or otherwise disposed of the Certificates, any
interest in the Certificates or any other similar security to, or solicited any
offer to buy or accept a transfer, pledge or other disposition of the
Certificates, any interest in the Certificates or any other similar security
from, or otherwise approached or negotiated with respect to the Certificates,
any interest in the Certificates or any other similar security with, any person
in any manner, or made any general solicitation by means of general advertising
or in any other manner, or taken any other action, that would constitute a
distribution of the Certificates under the Securities Act or that would render
the disposition of the Certificates a violation of Section 5 of the Securities
Act or require registration pursuant thereto, nor will act, nor has authorized
or will authorize any person to act, in such manner with respect to the
Certificates, (f) we are a "qualified institutional buyer" as that term is
defined in Rule 144A under the Securities Act and have completed one of the
forms of certification to that effect attached hereto as Annex 1 or Annex 2. We
are aware that the sale of the Transferred Certificates to us is being made in
reliance on Rule 144A. We are acquiring the Transferred Certificates for our own
account or for resale pursuant to Rule 144A and further understand that such
Certificates may be resold, pledged or transferred only (i) to a person
reasonably believed by us, based upon certifications of such purchaser or
information we have in our possession, to be a qualified institutional buyer
that purchases for its own account or for the account of a qualified
institutional buyer to whom notice is given that the resale, pledge or transfer
is being made in reliance on Rule 144A, or (ii) pursuant to another exemption
from registration under the Securities Act.
We agree to indemnify the Trustee, the Servicer and the Depositor
against any liability that may result from any misrepresentation made herein.
Very truly yours,
[PURCHASER]
By:______________________________
Name:
Title:
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ANNEX 1
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with the purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned
and/or invested on a discretionary basis $____________*/ 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 of 1986, as amended.
____ Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the District
of Columbia, the business of which is substantially confined to
banking and is supervised by Federal, 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.
--------------------
* 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.
____ 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 such institution or is a foreign savings and loan
association or equivalent institution and (b) has an audited net
worth of at least $25,000,000 as demonstrated in its latest
annual financial statements, a copy of which is attached hereto.
____ Broker-dealer. The Buyer is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934, as amended.
____ 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
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companies and which is subject to supervision by the insurance
commissioner or a similar official or agency of the State,
territory or the District of Columbia.
____ State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any agency
or instrumentality of the State or its political subdivisions,
for the benefit of its employees.
____ ERISA Plan. The Buyer is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security Act
of 1974, as amended.
____ Investment Advisor. The Buyer is an investment advisor registered
under the Investment Advisors Act of 1940, as amended.
____ Small Business Investment Company. Buyer is a small business
investment company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958, as amended.
____ Business Development Company. Buyer is a business development
company as defined in Section 202(a)(22) of the Investment
Advisors Act of 1940, as amended.
3. The term "securities" as used for purposes of the calculation of the
dollar amount in paragraph 2 excludes: (i) securities of issuers that are
affiliated with the Buyer, (ii) securities that are part of an unsold allotment
to or subscription by the Buyer, if the Buyer is a dealer, (iii) securities
issued or guaranteed by the U.S. or any instrumentality thereof, (iv) bank
deposit notes and certificates of deposit, (v) loan participations, (vi)
repurchase agreements, (vii) securities owned but subject to a repurchase
agreement and (viii) currency, interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used the cost
of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities, the Buyer
will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
L-4
bank or savings and loan as provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
By:______________________________
Name:
Title:
Date:____________________________
L-5
ANNEX 2
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees That are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A"), because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.
____ The Buyer owned $___________ in securities (other than the
excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated in
accordance with Rule 144A).
____ The Buyer is part of a Family of Investment Companies which owned
in the aggregate $__________ in securities (other than the
excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated in
accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means two
or more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i) securities
of issuers that are affiliated with the Buyer or are part of the Buyer's Family
of Investment Companies, (ii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iii) bank deposit notes and certificates of deposit,
(iv) loan participations, (v) repurchase agreements, (vi) securities owned but
subject to a repurchase agreement and (vii) currency, interest rate and
commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
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6. Until the date of purchase of the Certificates, the undersigned will
notify the parties listed in the Rule 144A Transferee Certificate to which this
certification relates of any changes in the information and conclusions herein.
Until such notice is given, the Buyer's purchase of the Certificates will
constitute a reaffirmation of this certification by the undersigned as of the
date of such purchase.
By:__________________________________
Name:
Title:
IF AN ADVISER:
-------------------------------------
Print Name of Buyer
Date:_________________________________
L-7
EXHIBIT M
REQUEST FOR RELEASE OF DOCUMENTS
To: Citibank, N.A.
000 Xxxx Xxxxxx
5th Floor, Zone 1
Xxx Xxxx, XX 00000 Citibank, N.A.
[and/or its designee]
Re:
In connection with the administration of the Mortgage Loans held by
you, as Trustee, pursuant to the above-captioned Pooling and Servicing
Agreement, we request the release, and hereby acknowledge receipt, of the
Mortgage File for the Mortgage Loan described below, for the reason indicated.
Mortgage Loan Number:
--------------------
Mortgagor Name, Address & Zip Code:
----------------------------------
Reason for Requesting Documents (check one):
--------------------------------------------
_______ 1. Mortgage Loan Paid in Full (Servicer hereby certifies that all
amounts received in connection therewith have been credited to
the Collection Account)
_______ 2. Mortgage Loan Liquidated (Servicer hereby certifies that all
proceeds of foreclosure, insurance or other liquidation have been
received and credited to the Collection Account
_______ 3. Mortgage Loan Repurchased pursuant to Section 2.03(c) of the
Pooling and Servicing Agreement
_______ 4. Mortgage Loan in Foreclosure
_______ 5. Mortgage Loan Repurchased or Substituted pursuant to the terms of
the Pooling and Servicing Agreement (Servicer hereby certifies
that the Purchase Price or Substitution Adjustment Amount has
credited to the Collection Account)
_______ 6. Other
Reason: __________________________
By:________________________________
(authorized signer)
Address:___________________________
Date:______________________________
If box 1 or 2 above is checked, and if all or part of the Mortgage File was
previously released to us, please release to us our previous receipt on file
with you, as well as any additional documents in your possession relating to the
above specified Mortgage Loan.
M-1
If box 3, 4, 5 or 6 above is checked, upon our return of all of the above
documents to you as Trustee [or Trustee's designee], please acknowledge your
receipt by signing in the space indicated below, and returning this form.
Trustee
-------
Citibank, N.A.
Please acknowledge the execution of the above request by your signature and date
below:
--------------------------------- ---------------------------------
Signature Date
Documents returned to Trustee:
--------------------------------- ---------------------------------
Trustee Date
M-2
