Exhibit 4.1
CHASE MORTGAGE FINANCE CORPORATION,
DEPOSITOR,
JPMORGAN CHASE BANK, N.A.,
SERVICER
and
[TRUSTEE],
TRUSTEE
POOLING AND SERVICING AGREEMENT
Dated as of [DATE]
$--------------
Multi-Class Mortgage Pass-Through Certificates
Series [_______]
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS....................................................................................1
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; TRUST FUND......................................................24
Section 2.01. Conveyance of Mortgage Loans.....................................................24
Section 2.02. Acceptance by Trustee............................................................28
Section 2.03. Trust Fund; Authentication of Certificates.......................................29
Section 2.04. REMIC Election...................................................................30
Section 2.05. Permitted Activities of Trust....................................................31
Section 2.06. Qualifying Special Purpose Entity................................................31
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR AND THE SERVICER; REPURCHASE OF
MORTGAGE LOANS................................................................................31
Section 3.01. Representations and Warranties of the Depositor with respect to the
Mortgage Loans...................................................................31
Section 3.02. Representations and Warranties of the Servicer...................................32
Section 3.03. Option to Substitute.............................................................33
ARTICLE IV THE CERTIFICATES..............................................................................34
Section 4.01. The Certificates.................................................................34
Section 4.02. Registration of Transfer and Exchange of Certificates............................35
Section 4.03. Mutilated, Destroyed, Lost or Stolen Certificates................................38
Section 4.04. Persons Deemed Owners............................................................39
Section 4.05. Appointment of Paying Agent and Certificate Registrar; Certificate Account.......39
Section 4.06. Authenticating Agents............................................................40
ARTICLE V ADMINISTRATION AND SERVICING OF MORTGAGE LOANS................................................41
Section 5.01. Servicer to Service Mortgage Loans...............................................41
Section 5.02. Sub-Servicing Agreements Between Servicer and Sub-Servicers; Enforcement
of Sub-Servicer's Obligations....................................................42
Section 5.03. Successor Sub-Servicers..........................................................42
Section 5.04. Liability of the Servicer........................................................42
Section 5.05. No Contractual Relationship Between Sub-Servicer and Trustee or
Certificateholders...............................................................42
Section 5.06. Termination of Sub-Servicing Agreement...........................................43
Section 5.07. Collection of Mortgage Loan Payments.............................................43
Section 5.08. Establishment of Collection Account; Deposit in Collection Account...............43
Section 5.09. Permitted Withdrawals from the Collection Account................................44
Section 5.10. Establishment of Escrow Account; Deposits in Escrow Account......................45
Section 5.11. Permitted Withdrawals from Escrow Account........................................45
Section 5.12. Payment of Taxes, Insurance and Other Charges....................................46
Section 5.13. Transfer of Accounts.............................................................46
Section 5.14. [Reserved].......................................................................46
Section 5.15. Maintenance of the Primary Insurance Policies....................................46
Section 5.16. Maintenance of Standard Hazard Policies..........................................46
Section 5.17. [Reserved].......................................................................47
Section 5.18. [Reserved].......................................................................47
Section 5.19. Fidelity Bond and Errors and Omissions Insurance.................................47
Section 5.20. Collections under Insurance Policies; Enforcement of Due-On-Sale Clauses;
Assumption Agreements............................................................48
Section 5.21. Income and Realization from Defaulted Mortgage Loans.............................48
Section 5.22. Trustee to Cooperate; Release of Mortgage Files..................................50
Section 5.23. Servicing and Other Compensation.................................................51
Section 5.24. Reports..........................................................................51
Section 5.25. Annual Statement as to Compliance; Notification as to Certain Events.............51
Section 5.26. Annual Independent Public Accountants' Servicing Report..........................52
Section 5.27. Access to Certain Documentation; Rights of the Depositor in Respect of
the Servicer.....................................................................52
Section 5.28. REMIC-Related Covenants..........................................................52
ARTICLE VI PAYMENTS TO THE CERTIFICATEHOLDERS............................................................54
Section 6.01. Distributions....................................................................54
Section 6.02. Statements to the Certificateholders.............................................57
Section 6.03. Advances by the Servicer.........................................................58
Section 6.04. Allocation of Realized Losses....................................................59
Section 6.05. Compensating Interest; Allocation of Certain Interest Shortfalls.................60
Section 6.06. Subordination....................................................................60
ARTICLE VII REPORTS TO BE PREPARED BY THE SERVICER........................................................61
Section 7.01. Servicer Shall Provide Information as Reasonably Required........................61
Section 7.02. Federal Information Returns and Reports to Certificateholders....................61
ARTICLE VIII THE DEPOSITOR AND THE SERVICER................................................................62
Section 8.01. Indemnification; Third Party Claims..............................................62
Section 8.02. Merger or Consolidation of the Depositor or the Servicer.........................63
Section 8.03. Limitation on Liability of the Depositor, the Servicer, the Trustee and
Others...........................................................................63
Section 8.04. Depositor and Servicer Not to Resign.............................................64
Section 8.05. Successor to the Servicer........................................................64
Section 8.06. Maintenance of Ratings...........................................................65
ARTICLE IX DEFAULT.......................................................................................65
Section 9.01. Events of Default................................................................65
Section 9.02. Waiver of Defaults...............................................................66
Section 9.03. Trustee to Act; Appointment of Successor.........................................67
Section 9.04. Notification to Certificateholders and the Rating Agencies.......................67
ARTICLE X CONCERNING THE TRUSTEE........................................................................67
Section 10.01. Duties of Trustee................................................................67
Section 10.02. Certain Matters Affecting the Trustee............................................68
Section 10.03. Trustee Not Liable for Certificates or Mortgage Loans............................69
Section 10.04. Trustee May Own Certificates.....................................................69
Section 10.05. Fees and Expenses................................................................69
Section 10.06. Eligibility Requirements for Trustee.............................................69
Section 10.07. Resignation and Removal of the Trustee...........................................70
Section 10.08. Successor Trustee................................................................70
Section 10.09. Merger or Consolidation of Trustee...............................................71
Section 10.10. Appointment of Co-Trustee or Separate Trustee....................................72
Section 10.11. Appointment of Office or Agency..................................................72
ARTICLE XI TERMINATION...................................................................................72
Section 11.01. Termination......................................................................72
ARTICLE XII MISCELLANEOUS PROVISIONS......................................................................74
Section 12.01. Severability of Provisions.......................................................74
Section 12.02. Limitation on Rights of Certificateholders.......................................74
Section 12.03. Amendment........................................................................74
Section 12.04. Counterparts.....................................................................75
Section 12.05. Duration of Agreement............................................................75
Section 12.06. Governing Law....................................................................75
Section 12.07. Notices..........................................................................75
Section 12.08. Further Assurances...............................................................76
EXHIBIT A MORTGAGE LOAN SCHEDULE
EXHIBIT B CONTENTS OF MORTGAGE FILE
EXHIBIT C FORM OF CLASS A CERTIFICATES
EXHIBIT D FORM OF CLASS M CERTIFICATE
EXHIBIT E FORM OF CLASS B CERTIFICATES
EXHIBIT F FORM OF CLASS A-R CERTIFICATE
EXHIBIT G FORM OF TRUSTEE CERTIFICATION
EXHIBIT H FORM OF INVESTMENT LETTER
EXHIBIT I FORM OF RULE 144A INVESTMENT LETTER
EXHIBIT J FORM OF SPECIAL SERVICING AND COLLATERAL FUND AGREEMENT
EXHIBIT K FORM OF CLASS A-R TRANSFEREE LETTER
EXHIBIT L REQUEST FOR RELEASE OF DOCUMENTS
EXHIBIT M TRANSFEREE ERISA REPRESENTATION LETTER
EXHIBIT N FORM OF OFFICER'S CERTIFICATE (SERVICER)
EXHIBIT O FORM OF OFFICER'S CERTIFICATE (PAYING AGENT)
This Pooling and Servicing Agreement, dated as of [DATE] is executed
among Chase Mortgage Finance Corporation, as depositor (together with its
permitted successors and assigns, the "Depositor"), JPMorgan Chase Bank, N.A.,
as servicer (together with its permitted successors and assigns, the "Servicer")
and [TRUSTEE], as trustee (together with its permitted successors and assigns,
the "Trustee").
In consideration of the premises and the mutual agreements hereinafter
set forth, the Depositor, the Servicer and the Trustee agree as follows:
ARTICLE I
DEFINITIONS
Whenever used herein, the following words and phrases, unless the
context otherwise requires, shall have the following meanings:
ACCEPTED SERVICING PRACTICES: With respect to any Mortgage Loan, those
mortgage servicing practices (including collection procedures) of prudent
mortgage banking institutions which service mortgage loans of the same type as
such Mortgage Loan in the jurisdiction where the related Mortgaged Property (or
Underlying Mortgaged Property, in the case of a Co-op Loan), is located, and
which are in accordance with FNMA servicing practices and procedures for MBS
pool mortgages (as defined in the FNMA Guides, including future updates).
ADVANCE: The aggregate of the advances made by the Servicer with
respect to a particular Distribution Date pursuant to Section 6.03.
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.
AGENCY & TRUST OFFICE: The principal office of the Trustee at which at
any particular time its corporate trust business shall be administered, which
office at the date of execution of this instrument is located at [ADDRESS].
AGGREGATE CLASS A INTEREST ACCRUAL AMOUNT: On any Distribution Date, an
amount equal to the sum of the Class A-1 Interest Accrual Amount, the Class A-2
Interest Accrual Amount, the Class A-3 Interest Accrual Amount, the Class A-4
Interest Accrual Amount, the Class A-R Interest Accrual Amount and the Class A-X
Interest Accrual Amount.
AGGREGATE CLASS A INTEREST SHORTFALL: On any Distribution Date, an
amount equal to the sum of the Class A-1 Shortfall, the Class A-2 Shortfall, the
Class A-3 Shortfall, the Class A-4 Shortfall, the Class A-R Shortfall and the
Class A-X Shortfall.
AGREEMENT: This Pooling and Servicing Agreement and all amendments
hereof and supplements hereto.
APPRAISED VALUE: The value set forth in an appraisal or recertification
document made in connection with the origination of the related Mortgage Loan as
the value of the Mortgaged Property (or the related residential dwelling unit in
the Underlying Mortgaged Property, in the case of a Co-op Loan).
ASSIGNMENT OF MORTGAGE: An assignment of the Mortgage, notice of
transfer (or UCC-3 assignment (or equivalent instrument) with respect to each
Co-op Loan) or equivalent instrument, in recordable form (except in the case of
a Co-op Loan), sufficient under the laws of the jurisdiction where the related
Mortgaged Property (or Underlying Mortgaged Property, in the case of a Co-op
Loan), 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: The meaning specified in Section 4.06.
AVAILABLE DISTRIBUTION AMOUNT: On any Distribution Date, an amount
equal to the amount on deposit in the Collection Account as of the close of
business on the Business Day immediately preceding the related Distribution Date
except:
(a) amounts received on particular Mortgage Loans as late
payments or other recoveries of principal or interest (including
Liquidation Proceeds, Insurance Proceeds and condemnation awards) and
respecting which the Servicer previously made an unreimbursed Advance
of such amounts;
(b) reimbursement for Nonrecoverable Advances and other
amounts permitted to be withdrawn by the Servicer pursuant to Section
5.09 from, or not required to be deposited in, the Collection Account;
(c) amounts representing the Servicing Fee with respect to
such Distribution Date;
(d) amounts representing all or part of a Monthly Payment due
(i) after the related Due Period or (ii) on or prior to the Cut-off
Date;
(e) all Repurchase Proceeds, Principal Prepayments,
Liquidation Proceeds, Insurance Proceeds and condemnation awards with
respect to Mortgage Loans received after the related Principal
Prepayment Period, and all related payments of interest representing
interest for any period of time after the last day of the related Due
Period for such Mortgage Loans; and
(f) all income from Eligible Investments held in the
Collection Account for the account of the Servicer.
BANKRUPTCY AMOUNT: As of any date of determination, $__________ minus
all Bankruptcy Losses on the Mortgage Loans, if any, previously allocated to the
Certificates in accordance with Section 6.04.
BANKRUPTCY CODE: Title 11 of the United States Code, as the same may be
amended from time to time.
BANKRUPTCY LOSS: With respect to any Mortgage Loan, a Realized Loss
resulting from a Deficient Valuation or Debt Service Reduction.
BENEFICIAL HOLDERS: A Person holding a beneficial interest in any
Book-Entry Certificate through a Participant or an Indirect Participant or a
Person holding a beneficial interest in any Definitive Certificate.
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BOOK-ENTRY CERTIFICATES: The Class A Certificates (other than the Class
A-R and Class A-X Certificates), Class M Certificates, Class B-1 Certificates,
and Class B-2 Certificates, referred to collectively.
BUSINESS DAY: Any day other than (a) a Saturday or Sunday, (b) a legal
holiday in the State of New York or (c) a day on which banking institutions in
the State of New York are authorized or obligated by law or executive order to
be closed.
CARRY-OVER SUBORDINATED PRINCIPAL AMOUNT: As of any Distribution Date,
with respect to any Class of Subordinated Certificates, an amount, if any, equal
to the amount of principal distributable to such Class on any prior Distribution
Date that has not been so distributed.
CASH LIQUIDATION: Recovery of all cash proceeds by the Servicer with
respect to the liquidation of any Mortgage Loan, including Insurance Proceeds
and other payments or recoveries (whether made at one time or over a period of
time) which the Servicer deems to be finally recoverable, in connection with the
sale, assignment or satisfaction of such Mortgage Loan, trustee's sale,
foreclosure sale or otherwise, but only if title to the related Mortgaged
Property (or stock allocated to a dwelling unit, in the case of a Co-op Loan)
was not acquired by foreclosure or deed in lieu of foreclosure by the Servicer
pursuant to Section 5.21.
CERTIFICATE: Any Class A, Class M or Class B Certificate.
CERTIFICATE ACCOUNT: The account created and maintained pursuant to
Section 4.05.
CERTIFICATEHOLDER or HOLDER: The Person in whose name a Certificate is
registered in the Certificate Register, except that, solely for the purposes of
giving any consent, waiver, request or demand pursuant to this Agreement, any
Certificate registered in the name of the Depositor, the Servicer, any
Sub-Servicer, or any of their respective Affiliates shall be disregarded and the
undivided Percentage Interest evidenced thereby shall not be taken into account
in determining whether the requisite amount of Percentage Interests necessary to
effect any such consent, waiver, request or demand has been obtained. The
Trustee shall be entitled to conclusively rely upon the certificate of the
Depositor or the Servicer as to the determination of which Certificates are
registered in the name of such Affiliates.
CERTIFICATE OWNER: Any Person who is the beneficial owner of a
Book-Entry Certificate registered in the name of the Depository or its nominee.
CERTIFICATE RATE: The per annum rate of interest borne by each Class of
Certificates (other than the [Class ___, Class ___,] Class A-X and Class A-P
Certificates), which rate shall equal ____% with respect to the Class X-0, Xxxxx
X-0, Class A-3, Class A-4, Class A-R, Class M, Class B-1, Class B-2, Class B-3,
Class B-4 and Class B-5 Certificates, in each case on the Outstanding
Certificate Principal Balance of each Class. [In the case of the Class ___
Certificates, the Certificate Rate shall equal _____% with respect to the [DATE]
Distribution Date, and with respect to any Distribution Date thereafter, the
Certificate Rate with respect to the Class ___ Certificates shall equal the
lesser of (i) ____% plus LIBOR and (ii) _____%. In the case of the Class ___
Certificates, the Certificate Rate shall equal _______% with respect to the
[DATE] Distribution Date, and with respect to any Distribution Date thereafter,
the Certificate Rate with respect to the Class ___ Certificates shall equal
____% minus the product of (i) 3.000 and (ii) LIBOR, but not less than _____%.]
In the case of the Class A-X Certificates, the Certificate Rate shall equal,
with respect to any Distribution Date, the weighted average, expressed as a
percentage, of the Stripped Interest Rate on each Non-Discount Mortgage Loan
having a Stripped Interest Rate exceeding zero as of the Due Date in the month
immediately preceding the month in which such Distribution Date occurs, weighted
on the basis of the respective Principal Balances of the Non-Discount Mortgage
Loans, which Principal Balances shall be the Principal Balances of the
Non-Discount Mortgage Loans at the close of business on the immediately
preceding Distribution Date after giving effect to distributions thereon
allocable to principal (or, in the case of the Certificate Rate for the initial
Distribution Date, at the close of business on the Cut-off Date). With respect
to any Distribution Date, (i) interest will accrue on each Class of Certificates
from the first day of the calendar month preceding the month in which such
Distribution Date occurs through the last day of the month preceding the month
in which such Distribution Date occurs; provided, however with respect to the
[DATE] Distribution Date, interest will accrue on the Class ____ and Class ____
Certificates from [DATE] through [DATE]). Interest with respect to each Class of
Certificates (other than the Class A-P Certificates) at the Certificate Rate
shall be calculated based on a year of 360 days comprised of twelve 30-day
months.
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CERTIFICATE REGISTER: The register maintained pursuant to Section 4.02.
CERTIFICATE REGISTRAR. The Person appointed by the Trustee as
Certificate Registrar pursuant to Section 4.05.
CHASE: JPMorgan Chase Bank, a New York State banking corporation, or
its successor in interest.
CHF: Chase Home Finance LLC, a Delaware limited liability company, or
its successor in interest.
CLASS: Pertaining to the Class A-1, Class A-2, Class A-3, Class A-4,
Class A-P, Class A-R, Class A-X, Class M, Class B-1, Class B-2, Class B-3, Class
B-4 or Class B-5 Certificates, as the case may be.
CLASS A, CLASS M OR CLASS B: Pertaining to Class A Certificates, Class
M Certificates or Class B Certificates, as the case may be.
CLASS A-P AMOUNT: With respect to any Distribution Date, the applicable
PO Percentage of (i) all principal received on or in respect of each Discount
Mortgage Loan (exclusive of any amounts in respect of any Monthly Payment)
during the related Principal Prepayment Period and (ii) all principal received
as part of a Monthly Payment on or in respect of a Discount Mortgage Loan during
the related Due Period.
CLASS A CERTIFICATES: The Class A-1, Class A-2, Class A-3, Class A-4,
Class A-P, Class A-R and Class A-X Certificates, referred to collectively.
CLASS A-1 CERTIFICATE: Any one of the Class A-1 Certificates, executed
by the Depositor and authenticated by the Trustee, senior in right of payment to
the Class M and Class B Certificates, substantially in the form of the Class A
Certificate set forth in Exhibit C hereto.
CLASS A-2 CERTIFICATE: Any one of the Class A-2 Certificates, executed
by the Depositor and authenticated by the Trustee, senior in right of payment to
the Class M and Class B Certificates, substantially in the form of the Class A
Certificate set forth in Exhibit C hereto.
CLASS A-3 CERTIFICATE: Any one of the Class A-3 Certificates, executed
by the Depositor and authenticated by the Trustee, senior in right of payment to
the Class M and Class B Certificates, substantially in the form of the Class A
Certificate set forth in Exhibit C hereto.
CLASS A-4 CERTIFICATE: Any one of the Class A-4 Certificates, executed
by the Depositor and authenticated by the Trustee, senior in right of payment to
the Class M and Class B Certificates, substantially in the form of the Class A
Certificate set forth in Exhibit C hereto.
4
CLASS A-P CERTIFICATE: Any one of the Class A-P Certificates, executed
by the Depositor and authenticated by the Trustee, senior in right of payment to
the Class M and Class B Certificates, substantially in the form of the Class A
Certificate set forth in Exhibit C hereto.
CLASS A-R CERTIFICATE: The Class A-R Certificate executed by the
Depositor and authenticated by the Trustee, senior in right of payment to the
Class M and Class B Certificates and representing the Residual Interest,
substantially in the form of the Class A-R Certificate set forth in Exhibit F
hereto.
CLASS A-X CERTIFICATE: Any one of the Class A-X Certificates executed
by the Depositor and authenticated by the Trustee, senior in right of payment to
the Class M and Class B Certificates, substantially in the form of the Class A
Certificate set forth in Exhibit C hereto.
CLASS A-1 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class A-1 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class A-1 Certificates on such
Distribution Date pursuant to Section 6.05(b) and (ii) any Realized Loss
Interest Shortfall resulting from an Excess Loss allocated to the Class A-1
Certificates on such Distribution Date pursuant to Section 6.05(c).
CLASS A-2 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class A-2 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class A-2 Certificates on such
Distribution Date pursuant to Section 6.05(b) and (ii) any Realized Loss
Interest Shortfall resulting from an Excess Loss allocated to the Class A-2
Certificates on such Distribution Date pursuant to Section 6.05(c).
CLASS A-3 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class A-3 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class A-3 Certificates on such
Distribution Date pursuant to Section 6.05(b) and (ii) any Realized Loss
Interest Shortfall resulting from an Excess Loss allocated to the Class A-3
Certificates on such Distribution Date pursuant to Section 6.05(c).
CLASS A-4 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class A-4 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class A-4 Certificates on such
Distribution Date pursuant to Section 6.05(b) and (ii) any Realized Loss
Interest Shortfall resulting from an Excess Loss allocated to the Class A-4
Certificates on such Distribution Date pursuant to Section 6.05(c).
CLASS A-R INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class A-R Certificate minus (i) any
Compensating Interest Shortfall allocated to the Class A-R Certificate on such
Distribution Date pursuant to Section 6.05(b) and (ii) any Realized Loss
Interest Shortfall resulting from an Excess Loss allocated to the Class A-R
Certificate on such Distribution Date pursuant to Section 6.05(c).
CLASS A-X INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Class A-X Notional
Amount minus (i) any Compensating Interest Shortfall allocated to the Class A-X
Certificates on such Distribution Date pursuant to Section 6.05(b) and (ii) any
Realized Loss Interest Shortfall resulting from an Excess Loss allocated to the
Class A-X Certificates on such Distribution Date pursuant to Section 6.05(c).
5
CLASS A-X NOTIONAL AMOUNT: With respect to any Distribution Date, an
amount equal to the aggregate Scheduled Principal Balance of the Non-Discount
Mortgage Loans.
CLASS A PERCENTAGE: As of any Distribution Date, the percentage
obtained by dividing the Class A Principal Balance by the Mortgage Pool
Principal Balance, but not more than 100%.
CLASS A PRINCIPAL BALANCE: As of any Distribution Date, (a) the Class A
Principal Balance for the immediately preceding Distribution Date less (b)
amounts distributed to the Class A Certificateholders on such preceding
Distribution Date allocable to principal (including the principal portion of
Advances of the Servicer made pursuant to Section 6.03 and Realized Losses
allocated to the Class A Certificates pursuant to Section 6.04); provided that
the Class A Principal Balance on the first Distribution Date shall be the
Original Class A Principal Balance.
CLASS A-1 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class A-1 Interest Accrual Amount over the
amount actually distributed to the Class A-1 Certificateholders on such
Distribution Date pursuant to Section 6.01(b)(i)(A).
CLASS A-2 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class A-2 Interest Accrual Amount over the
amount actually distributed to the Class A-2 Certificateholders on such
Distribution Date pursuant to Section 6.01(b)(i)(B).
CLASS A-3 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class A-3 Interest Accrual Amount over the
amount actually distributed to the Class A-3 Certificateholders on such
Distribution Date pursuant to Section 6.01(b)(i)(C).
CLASS A-4 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class A-4 Interest Accrual Amount over the
amount actually distributed to the Class A-4 Certificateholders on such
Distribution Date pursuant to Section 6.01(b)(i)(D).
CLASS A-R SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class A-R Interest Accrual Amount over the
amount actually distributed to the Class A-R Certificateholders on such
Distribution Date pursuant to Section 6.01(b)(i)(E).
CLASS A-X SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class A-X Interest Accrual Amount over the
amount actually distributed to the Class A-X Certificates on such Distribution
Date pursuant to Section 6.01(b)(i)(F).
CLASS A-P SHORTFALL AMOUNT: With respect to any Distribution Date prior
to and including the Credit Support Depletion Date, to the extent of amounts
available to pay the Subordinated Optimal Principal Amount (without regard to
clause (b)(2) of the definition of such term), an amount equal to the sum of (i)
the applicable PO Percentage of the principal portion of any Realized Loss
(other than an Excess Loss) with respect to a Discount Mortgage Loan and (ii)
the sum of amounts, if any, by which the amounts specified in clause (i) with
respect to each prior Distribution Date exceeded the amount actually distributed
in respect thereof on such prior Distribution Date and not subsequently
distributed to the Class A-P Certificateholders.
CLASS B CERTIFICATES: The Class B-1, Class B-2, Class B-3, Class B-4
and Class B-5 Certificates, referred to collectively.
6
CLASS B-1 CERTIFICATE: Any one of the Class B-1 Certificates executed
by the Depositor and authenticated by the Trustee, subordinated in right of
payment to the Class A and Class M Certificates, substantially in the form of
the Class B Certificate set forth in Exhibit E hereto.
CLASS B-2 CERTIFICATE: Any one of the Class B-2 Certificates executed
by the Depositor and authenticated by the Trustee, subordinated in right of
payment to the Class A, Class M and Class B-1 Certificates, substantially in the
form of the Class B Certificate set forth in Exhibit E hereto.
CLASS B-3 CERTIFICATE: Any one of the Class B-3 Certificates executed
by the Depositor and authenticated by the Trustee, subordinated in right of
payment to the Class A, Class M, Class B-1 and Class B-2 Certificates,
substantially in the form of the Class B Certificate set forth in Exhibit E
hereto.
CLASS B-4 CERTIFICATE: Any one of the Class B-4 Certificates executed
by the Depositor and authenticated by the Trustee, subordinated in right of
payment to the Class A, Class M, Class B-1, Class B-2 and Class B-3
Certificates, substantially in the form of the Class B Certificate set forth in
Exhibit E hereto.
CLASS B-5 CERTIFICATE: Any one of the Class B-5 Certificates executed
by the Depositor and authenticated by the Trustee, subordinated in right of
payment to the Class A, Class M, Class B-1, Class B-2, Class B-3 and Class B-4
Certificates, substantially in the form of the Class B Certificate set forth in
Exhibit E hereto.
CLASS B-1 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class B-1 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class B-1 Certificates on such
Distribution Date pursuant to Section 6.05(b) and (ii) any Realized Loss
Interest Shortfall resulting from an Excess Loss allocated to the Class B-1
Certificates on such Distribution Date pursuant to Section 6.05(c).
CLASS B-2 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class B-2 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class B-2 Certificates on such
Distribution Date pursuant to Section 6.05(b) and (ii) any Realized Loss
Interest Shortfall resulting from an Excess Loss allocated to the Class B-2
Certificates on such Distribution Date pursuant to Section 6.05(c).
CLASS B-3 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class B-3 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class B-3 Certificates on such
Distribution Date pursuant to Section 6.05(b) and (ii) any Realized Loss
Interest Shortfall resulting from an Excess Loss allocated to the Class B-3
Certificates on such Distribution Date pursuant to Section 6.05(c).
CLASS B-4 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class B-4 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class B-4 Certificates on such
Distribution Date pursuant to Section 6.05(b) and (ii) any Realized Loss
Interest Shortfall resulting from an Excess Loss allocated to the Class B-4
Certificates on such Distribution Date pursuant to Section 6.05(c).
7
CLASS B-5 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class B-5 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class B-5 Certificates on such
Distribution Date pursuant to Section 6.05(b) and (ii) any Realized Loss
Interest Shortfall resulting from an Excess Loss allocated to the Class B-5
Certificates on such Distribution Date pursuant to Section 6.05(c).
CLASS B-1 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class B-1 Interest Accrual Amount over the
amount actually distributed to the Class B-1 Certificates on such Distribution
Date pursuant to Section 6.01(d)(1) (A) and (B).
CLASS B-2 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class B-2 Interest Accrual Amount over the
amount actually distributed to the Class B-2 Certificates on such Distribution
Date pursuant to Section 6.01(d)(2) (A) and (B).
CLASS B-3 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class B-3 Interest Accrual Amount over the
amount actually distributed to the Class B-3 Certificates on such Distribution
Date pursuant to Section 6.01(d)(3) (A) and (B).
CLASS B-4 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class B-4 Interest Accrual Amount over the
amount actually distributed to the Class B-4 Certificates on such Distribution
Date pursuant to Section 6.01(d)(4) (A) and (B).
CLASS B-5 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class B-5 Interest Accrual Amount over the
amount actually distributed to the Class B-5 Certificates on such Distribution
Date pursuant to Section 6.01(d)(5) (A) and (B).
CLASS B PERCENTAGE: As of any Distribution Date, the difference between
100% and the sum of (i) the Class A Percentage and (ii) the Class M Percentage
for such Distribution Date.
CLASS B PRINCIPAL BALANCE: As of any Distribution Date, the excess of
the Mortgage Pool Principal Balance (together with the principal portion of any
Monthly Payment due but not paid with respect to which an Advance has not been
made) over the sum of (i) the Class A Principal Balance and (ii) the Class M
Principal Balance.
CLASS M CERTIFICATE: Any one of the Class M Certificates executed by
the Depositor and authenticated by the Trustee, subordinated in right of payment
to the Class A Certificates, substantially in the form of the Class M
Certificate set forth in Exhibit D hereto.
CLASS M INTEREST ACCRUAL AMOUNT: With respect to any Distribution Date,
one month's interest at the Certificate Rate on the Outstanding Certificate
Principal Balance of the Class M Certificates minus (i) any Compensating
Interest Shortfall allocated to the Class M Certificates on such Distribution
Date pursuant to Section 6.05(b) and (ii) any Realized Loss Interest Shortfall
resulting from an Excess Loss allocated to the Class M Certificates on such
Distribution Date pursuant to Section 6.05(c).
CLASS M PERCENTAGE: As of any Distribution Date, the percentage
obtained by dividing the Class M Principal Balance by the Mortgage Pool
Principal Balance, but not more than 100%; provided, however, that on any
Distribution Date on which the Class B Percentage equals 0%, the Class M
Percentage shall equal 100% minus the Class A Percentage.
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CLASS M PRINCIPAL BALANCE: As of any Distribution Date, (a) the Class M
Principal Balance for the immediately preceding Distribution Date less (b)
amounts distributed to the Class M Certificateholders on such preceding
Distribution Date allocable to principal (including the principal portion of
Advances of the Servicer made pursuant to Section 6.03 and Realized Losses
allocated to the Class M Certificates pursuant to Section 6.04); provided that
the Class M Principal Balance on the first Distribution Date shall be the
Original Class M Principal Balance, and provided further that if the aggregate
Outstanding Certificate Principal Balance of the Class B Certificates has been
reduced to zero, as of any Distribution Date, the Class M Principal Balance will
equal the excess of the Mortgage Pool Principal Balance (together with the
portion of any Monthly Payment due but not paid with respect to which an Advance
has not been made) over the Class A Principal Balance.
CLASS M SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class M Interest Accrual Amount over the
amount actually distributed to the Class M Certificateholders on such
Distribution Date pursuant to Section 6.01(c)(A) and (B).
CLOSING DATE: [DATE].
CODE: The Internal Revenue Code of 1986, as amended from time to time,
and any successor statutes thereto, and applicable U.S. Department of Treasury
temporary or final regulations promulgated thereunder.
COLLECTION ACCOUNT: The account created and maintained pursuant to
Section 5.08.
COMPENSATING INTEREST: The meaning specified in Section 6.05(a).
COMPENSATING INTEREST SHORTFALL: The meaning specified in Section
6.05(b).
CO-OP LEASE: With respect to a Co-op Loan, the lease with respect to a
dwelling unit occupied by the Mortgagor and relating to the stock allocated to
the related dwelling unit.
CO-OP LOAN: A Mortgage Loan secured by the pledge of stock allocated to
a dwelling unit in a residential cooperative housing corporation and a
collateral assignment of the related Co-op Lease.
CREDIT SUPPORT: With respect to each Class of Subordinated Certificates
(other than the Class B-5 Certificates), the level of credit support supporting
such Class, expressed as a percentage of the aggregate Outstanding Certificate
Principal Balance of all Classes of Certificates (other than the Class A-P
Certificates). With respect to each Distribution Date, Credit Support for each
such Class will equal in each case the percentage, rounded to two decimal
places, obtained by dividing the aggregate Outstanding Certificate Principal
Balances immediately prior to such Distribution Date of all Classes of
Subordinated Certificates having higher numerical class designations than such
Class (for this purpose, the Class M Certificates shall be deemed to have a
lower numerical class designation than each Class of Class B Certificates) by
the aggregate Outstanding Certificate Principal Balance of all Classes of
Certificates (other than the Class A-P Certificates) immediately prior to such
Distribution Date.
CREDIT SUPPORT DEPLETION DATE: The first Distribution Date on which the
aggregate Outstanding Certificate Principal Balance of the Subordinated
Certificates has been or will be reduced to zero.
CUT-OFF DATE: [DATE].
9
DEBT SERVICE REDUCTION: With respect to any Mortgage Loan, a reduction
in the scheduled Monthly Payment for such Mortgage Loan by a court of competent
jurisdiction in a proceeding under the Bankruptcy Code, other than such a
reduction resulting from a Deficient Valuation.
DEFICIENT VALUATION: With respect to any Mortgage Loan, a valuation of
the related Mortgaged Property (or stock allocated to a dwelling unit, in the
case of a Co-op Loan) by a court of competent jurisdiction in an amount less
than the then outstanding principal balance of the Mortgage Loan, which
valuation results from a proceeding initiated under the Bankruptcy Code.
DEFINITIVE CERTIFICATES: The Certificates referred to in Section
4.01(c).
DEPOSITOR: Chase Mortgage Finance Corporation, a Delaware corporation,
or its successor in interest or any successor under this Agreement appointed as
herein provided.
DEPOSITORY: The Depository Trust Company, the nominee of which is Cede
& Co.
DEPOSITORY AGREEMENT: The agreement referred to in Section 4.01(b).
DEPOSITORY PARTICIPANT: A broker, dealer, bank or other financial
institution or other Person for whom from time to time the Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
DETERMINATION DATE: The sixteenth day of the month in which the related
Distribution Date occurs (or, if such sixteenth day is not a Business Day, the
preceding Business Day).
DISCOUNT MORTGAGE LOAN: Any Mortgage Loan having a Net Mortgage Rate
less than the Remittance Rate.
DISQUALIFIED ORGANIZATION: An organization referred to in section
860E(e)(5) of the Code.
DISTRIBUTION DATE: The 25th day of any month, or if such 25th day is
not a Business Day, the first Business Day immediately following, beginning with
[DATE].
DUE DATE: The first day of each month, being the day of the month on
which each Monthly Payment is due on a Mortgage Loan, exclusive of any days of
grace.
DUE PERIOD: With respect to any Distribution Date, the period from the
second day of the month preceding the month in which such Distribution Date
occurs through 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 national bank or banking corporation
which (a) has a rating of at least Baa3 or P-3 by Moody's and (b) is either
Chase or is the corporate trust department of a national bank or banking
corporation which has a rating of at least A- 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 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 Eligible 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, provided, however, that such uninsured
deposits do not result in the reduction of the ratings assigned to the
Certificates by the Rating Agencies as evidenced by a letter from each Rating
Agency or (v) otherwise acceptable to each Rating Agency without reduction or
withdrawal of the rating of any Class of Certificates, as evidenced by a letter
from each Rating Agency.
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ELIGIBLE INVESTMENTS: One or more of the following:
(i) obligations of, or guaranteed as to principal and interest by, the
United States or obligations of any agency or instrumentality thereof when such
obligations are backed by the full faith and credit of the United States;
provided that any such obligation held as a "cash flow investment" within the
meaning of section 860G(a)(6) of the Code shall not have a remaining maturity of
more than 45 days;
(ii) repurchase agreements on obligations specified in clause (i)
maturing not more than two months from the date of acquisition thereof, provided
that the long-term unsecured obligations of the party agreeing to repurchase
such obligations are at the time rated by each Rating Agency with its highest
rating and the short-term debt obligations of the party agreeing to repurchase
are rated with one of the two highest ratings by S&P or Moody's;
(iii) federal funds, certificates of deposit, time deposits and
bankers' acceptances (other than bankers' acceptances issued by Chase or any of
its Affiliates) (which shall each have an original maturity of not more than 60
days and, in the case of bankers' acceptances, shall in no event have an
original maturity of more than 365 days) of any United States depository
institution or trust company incorporated under the laws of the United States or
any state, provided that the long-term unsecured debt obligations of such
depository institution or trust company at the date of acquisition thereof have
been rated by each Rating Agency with its highest rating and the short-term
obligations of such depository institution or trust company are rated A-1+ by
S&P and P-1 by Moody's;
(iv) commercial paper (other than commercial paper issued by Chase or
any of its Affiliates) (having original maturities of not more than 365 days) of
any corporation incorporated under the laws of the United States or any state
thereof which on the date of acquisition has been rated by each Rating Agency in
its highest short-term unsecured commercial paper rating category; provided that
such commercial paper shall have a remaining maturity of not more than 45 days;
(v) units of taxable money market funds (including those for which the
Trustee or the Servicer or any Affiliate thereof receives compensation with
respect to such investment) which funds have been rated by each Rating Agency in
its highest rating category or which have been designated in writing by each
Rating Agency as Eligible Investments with respect to this definition;
(vi) other obligations or securities (other than investments or
obligations of Chase or any of its Affiliates) that are "permitted investments"
within the meaning of Section 860G(a)(5) of the Code and acceptable to each
Rating Agency rating the Certificates as an Eligible Investment hereunder and
will not result in a reduction or withdrawal in the then current rating of any
Class of Certificates, as evidenced by a letter to such effect from each Rating
Agency and short term unsecured debt or deposits of the obligor on such
investments are rated A-1 by S&P and P-1 by Moody's.
provided that no such instrument shall be an Eligible Investment if such
instrument evidences either (a) a right to receive only interest payments with
respect to the obligations underlying such instrument, or (b) both principal and
interest payments derived from obligations underlying such instrument where the
interest and principal 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; and provided further that no such instrument shall be
purchased above par.
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ERISA: The Employee Retirement Income Security Act of 1974, as amended
from time to time, and any successor statutes thereto, and applicable U.S.
Department of Labor temporary or final regulations promulgated thereunder.
ERISA RESTRICTED CERTIFICATE: Any Class B-3, Class B-4 or Class B-5
Certificate or any other Certificate which at the date of determination is not
rated in one of the four highest generic rating categories by any Rating Agency.
ESCROW ACCOUNT: The account or accounts created and maintained pursuant
to Section 5.10.
ESCROW PAYMENTS: The amounts constituting applicable ground rents,
taxes, assessments, water rates, Standard Hazard Policy premiums and other
payments required to be escrowed by the Mortgagor with the mortgagee pursuant to
a Mortgage Loan.
EVENT OF DEFAULT: Any of the events specified in Section 9.01.
EXCEPTION REPORT: The report of the Trustee referred to in Section
2.02.
EXCESS BANKRUPTCY LOSS: Any Bankruptcy Loss, or portion thereof, which
exceeds the then applicable Bankruptcy Amount.
EXCESS FRAUD LOSS: Any Fraud Loss, or portion thereof, which exceeds
the then applicable Fraud Loss Amount.
EXCESS LOSSES: Excess Bankruptcy Losses, Excess Fraud Losses and Excess
Special Hazard Losses, referred to collectively.
EXCESS PROCEEDS: All amounts (net of the related Servicing Advances)
received on any Mortgage Loan (whether as regular principal payments, Principal
Prepayments, Repurchase Proceeds, Liquidation Proceeds, Insurance Proceeds,
condemnation awards, or with respect to a disposition of a Mortgaged Property
(or stock allocated to a dwelling unit, in the case of a Co-op Loan) which has
been acquired by foreclosure or deed in lieu of foreclosure or otherwise) in
excess of the Principal Balance at the Cut-off Date of such Mortgage Loan and
accrued interest thereon at its Mortgage Rate to the Due Date immediately
succeeding the date of prepayment, repurchase or liquidation, as the case may
be.
EXCESS SPECIAL HAZARD LOSS: Any Special Hazard Loss, or portion
thereof, that exceeds the then applicable Special Hazard Amount.
FDIC: The Federal Deposit Insurance Corporation or any successor
organization.
FHLMC: The Federal Home Loan Mortgage Corporation or any successor
organization.
FIDELITY BOND: A fidelity bond and errors and omissions insurance to be
maintained by the Servicer pursuant to Section 5.19.
FITCH: Fitch, Inc. or its successor in interest.
FNMA: The Federal National Mortgage Association, or any successor
organization.
FNMA GUIDES: The FNMA Sellers' Guide and the FNMA Servicers' Guide, and
all amendments or additions thereto.
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FRAUD LOSS: Any Realized Loss or portion thereof sustained by reason of
a default arising from fraud, dishonesty or misrepresentation in connection with
the related Mortgage Loan, including by reason of the denial of coverage under
any related Primary Insurance Policy.
FRAUD LOSS AMOUNT: As of any date of determination after the Cut-off
Date, an amount equal to: (X) prior to the first anniversary of the Cut-off
Date, ____% (initially, $____________) of the aggregate outstanding principal
balance of all of the Mortgage Loans as of the Cut-off Date minus the aggregate
amount of Fraud Loss on the Mortgage Loans allocated to the Certificates in
accordance with Section 6.04 since the Cut-off Date up to such date of
determination and (Y) from the first to the fifth anniversary of the Cut-off
Date, (1) ____% of the aggregate outstanding principal balance of all of the
Mortgage Loans as of the most recent anniversary of the Cut-off Date minus (2)
the Fraud Losses allocated to the Certificates in accordance with Section 6.04
since the most recent anniversary of the Cut-off Date up to such date of
determination. On and after the fifth anniversary of the Cut-off Date, the Fraud
Loss Amount shall be zero.
INDIRECT PARTICIPANT: A broker, dealer, bank or other financial
institution or other Person that clears through or maintains a custodial
relationship with a Depository Participant, either directly or indirectly.
INSURANCE PROCEEDS: Proceeds paid by any insurer pursuant to any
insurance policy covering a Mortgage Loan, net of costs of collecting such
proceeds and net of amounts released to the Mortgagor or applied to the
restoration of the Mortgaged Property (or the underlying Mortgaged Property, in
the case of a Co-op Loan).
INSURED EXPENSES: Expenses covered by any insurance policy.
INTEREST ACCRUAL PERIOD: With respect to any Distribution Date and any
Class of Certificates (other than the Class A-P Certificates), the calendar
month immediately preceding the month in which the related Distribution Date
occurs.
LATE COLLECTIONS: With respect to any Mortgage Loan, all amounts
received during any Due Period, whether as late payments of Monthly Payments or
as Liquidation Proceeds, condemnation proceeds, Insurance Proceeds, or with
respect to a disposition of a Mortgaged Property (or stock allocated to a
dwelling unit, in the case of a Co-op Loan) which has been acquired by
foreclosure or deed in lieu of foreclosure or otherwise, which represent late
payments or collections of Monthly Payments due but delinquent for a previous
Due Period and not previously recovered.
[LIBOR: With respect to any Distribution Date and the Certificate Rates
on the Class ___ and Class ___ Certificates, LIBOR as determined in accordance
with Section 6.07.]
[LIBOR BUSINESS DAY: Any day other than (i) a Saturday or a Sunday or
(ii) a day on which banking institutions in the city of London, England are
required or authorized by law to be closed.]
LIQUIDATED MORTGAGE LOAN: Any Mortgage Loan (a) as to which the
Servicer has determined that all amounts which it expects to recover from or on
account of such Mortgage Loan or property acquired in respect thereof have been
recovered, (b) as to which a Cash Liquidation has taken place or (c) with
respect to which the Mortgaged Property (or stock allocated to a dwelling unit,
in the case of a Co-op Loan) has been acquired by foreclosure or deed in lieu of
foreclosure and a disposition (the term disposition shall include, for purposes
of a repurchase pursuant to Section 11.01, any repurchase of a Mortgaged
Property (or stock allocated to a dwelling unit, in the case of a Co-op Loan)
pursuant to such Section) of such Mortgaged Property (or stock allocated to a
dwelling unit, in the case of a Co-op Loan) has occurred.
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LIQUIDATION EXPENSES: Expenses which are incurred by the Servicer or
any Sub-Servicer in connection with the liquidation of any defaulted Mortgage
Loan or property acquired in respect thereof including, without limitation,
legal fees and expenses, any unreimbursed amount expended by the Servicer
pursuant to Sections 5.16 and 5.21 respecting the related Mortgage Loan and any
related and unreimbursed expenditures for real estate property taxes or for
property restoration or preservation.
LIQUIDATION PROCEEDS: Cash (including Insurance Proceeds) received by
the Servicer in connection with the liquidation of any Mortgage Loan or
Mortgaged Property (or stock allocated to a dwelling unit in the case of a Co-op
Loan) acquired in respect thereof, whether through the sale or assignment of
such Mortgage Loan (other than pursuant to Section 5.21), trustee's sale,
foreclosure sale or otherwise, or the sale of the Mortgaged Property (or stock
allocated to a dwelling unit, in the case of a Co-op Loan) if the Mortgaged
Property (or stock allocated to a dwelling unit, in the case of a Co-op Loan) is
acquired in satisfaction of the Mortgage Loan other than amounts required to be
paid to the Mortgagor pursuant to law or the terms of the applicable Mortgage
Note.
LOAN-TO-VALUE RATIO: The fraction, expressed as a percentage, the
numerator of which is the principal amount of the related Mortgage Loan at the
time of origination (or, (i) for purposes of Section 5.15, at the time of
determination and (ii) for purposes of a Mortgage Loan with respect to which a
conversion from adjustable rate to fixed rate has occurred, at the time of
initial origination) and the denominator of which is the Appraised Value of the
related Mortgaged Property (or applicable dwelling unit in the case of a Co-op
Loan) at the time of initial origination or, in the case of a Mortgage Loan
financing the acquisition of the Mortgaged Property (or applicable dwelling unit
in the case of a Co-op Loan), the sales price of the Mortgaged Property (or
applicable dwelling unit in the case of a Co-op Loan), if such sales price is
less than such Appraised Value.
LOCKOUT PERCENTAGE: With respect to any Distribution Date, the lesser
of (I) (A) the Outstanding Certificate Principal Balance of the Class A-4
Certificates divided by (B) the Non-PO Class A Principal Balance, in each case
immediately prior to the Distribution Date and (II) 100.00%.
LOCKOUT PRINCIPAL DISTRIBUTION AMOUNT: (A) With respect to any
Distribution Date through and including the Distribution Date in January 2007,
zero and (B) with respect to any Distribution Date in or after February 2007,
the lesser of (i) the sum of (x) the product of (I) the Lockout Percentage and
(II) the amount which is referred to in clause (i) of the definition of Non-PO
Class A Optimal Principal Amount and (y) the product of (I) the Lockout
Percentage, (II) the Step Down Percentage and (III) the amount which is referred
to in clause (ii) through (v) of the definition of Non-PO Class A Optimal
Principal Amount and (ii) the Non-PO Class A Optimal Principal Amount.
MERS: Mortgage Electronic Registration Systems, Inc., a Delaware
corporation, or any successor in interest thereto.
MERS MORTGAGE LOAN: Any Mortgage Loan as to which the related Mortgage,
or an Assignment of Mortgage, has been or will be recorded in the name of MERS
or otherwise assigned to MERS, as agent for the holder from time to time of the
Mortgage Note.
MODIFIED MORTGAGE LOAN: Any Mortgage Loan which the Servicer has
modified pursuant to Section 5.01.
MONTHLY PAYMENT: The minimum required monthly payment of principal and
interest due on a Mortgage Loan as specified in the Mortgage Note for any Due
Date (before any adjustment to such scheduled amount by reason of any bankruptcy
or similar proceeding or any moratorium or similar waiver or grace period).
Monthly Payments shall be deemed due on an Outstanding Mortgage Loan until such
time as it becomes a Liquidated Mortgage Loan.
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MOODY'S: Xxxxx'x Investors Service, Inc. or its successor in interest.
MORTGAGE: With respect to a Mortgage Loan that is not a Co-op Loan, the
mortgage, deed of trust or other instrument creating a first or second lien or a
first or second priority ownership interest in an estate in fee simple in real
property securing a Mortgage Note. With respect to a Co-op Loan, the security
agreement creating a security interest in the stock allocated to a dwelling unit
in a residential cooperative housing corporation and pledged to secure such
Co-op Loan and the related Co-op Lease.
MORTGAGE FILE: As to each Mortgage Loan, the items referred to in
Exhibit B annexed hereto.
MORTGAGE LOAN: An individual mortgage loan and all rights with respect
thereto, evidenced by a Mortgage and a Mortgage Note, sold and assigned by the
Depositor to the Trustee and which is subject to this Agreement and included in
the Trust Fund. The Mortgage Loans originally sold and subject to this Agreement
are identified on the Mortgage Loan Schedule.
MORTGAGE LOAN SCHEDULE: The schedule of Mortgage Loans attached hereto
as Exhibit A as it may be amended in accordance with Section 3.03, setting forth
the following information as to each Mortgage Loan: (i) the Mortgage Loan
identifying number; (ii) the street address of the Mortgaged Property (or
Underlying Mortgaged Property, in the case of a Co-op Loan), including the zip
code; (iii) an indication of whether the Mortgaged Property (or the related
residential dwelling unit in the Underlying Mortgaged Property, in the case of a
Co-op Loan), is owner-occupied; (iv) the property type of the Mortgaged Property
(or the related residential dwelling unit in the Underlying Mortgaged Property,
in the case of a Co-op Loan); (v) the original number of months to stated
maturity; (vi) the number of months remaining to stated maturity from the
Cut-off Date; (vii) the original Loan-to-Value Ratio; (viii) the original
principal balance of the Mortgage Loan; (ix) the unpaid principal balance of the
Mortgage Loan as of the close of business on the Cut-off Date; (x) the Mortgage
Rate; (xi) the amount of the current Monthly Payment; and (xii) the PO
Percentage with respect to such Mortgage Loan.
MORTGAGE NOTE: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
MORTGAGE POOL: The pool of Mortgage Loans held in the Trust Fund.
MORTGAGE POOL PRINCIPAL BALANCE: As of any date of determination, the
aggregate of the Principal Balances of each Outstanding Mortgage Loan on such
date of determination less the principal portion of any Monthly Payment due but
not paid with respect to which an Advance has not been made, initially
$______________.
MORTGAGED PROPERTY: The property securing a Mortgage Note.
MORTGAGE RATE: With respect to each Mortgage Loan, the per annum rate
of interest borne by the Mortgage Loan, as specified in the Mortgage Note. The
Mortgage Rate for any Mortgage Loan shall be zero with respect to the period
prior to the period during which interest accrues with respect to such Mortgage
Loan's first Monthly Payment.
MORTGAGOR: The obligor on a Mortgage Note.
NET LIQUIDATION PROCEEDS: As to any Liquidated Mortgage Loan,
Liquidation Proceeds net of Liquidation Expenses.
15
NET MORTGAGE RATE: With respect to each Mortgage Loan, a per annum rate
of interest for the applicable period equal to the Mortgage Rate less the
Servicing Fee.
NON-DISCOUNT MORTGAGE LOANS: The Mortgage Loans having Net Mortgage
Rates in excess of the Remittance Rate.
NON-MERS MORTGAGE LOAN: Any Mortgage Loan other than a MERS Mortgage
Loan
NON-PO ALLOCATED AMOUNT: At the time of any determination, the amount
derived by (i) multiplying the Principal Balance of each Outstanding Mortgage
Loan on such date of determination by the Non-PO Percentage with respect to such
Mortgage Loan and (ii) summing the results.
NON-PO CLASS A CERTIFICATES: The Class A-1, Class A-2, Class A-3, Class
A-4, Class A-R and Class A-X Certificates, referred to collectively.
NON-PO CLASS A OPTIMAL PRINCIPAL AMOUNT: With respect to any
Distribution Date, the lesser of (a) the Non-PO Class A Principal Balance and
(b) the sum of:
(i) the Non-PO Class A Percentage of the applicable Non-PO Percentage
of the principal portion of all Monthly Payments, whether or not received, which
were due during the related Due Period on Mortgage Loans which were outstanding
during such Due Period;
(ii) the Non-PO Class A Prepayment Percentage of the applicable Non-PO
Percentage of all Principal Prepayments made on any Mortgage Loan during the
related Principal Prepayment Period;
(iii) with respect to each Mortgage Loan not described in (iv) below,
the Non-PO Class A Percentage of the applicable Non-PO Percentage of the
principal portion of all Insurance Proceeds, condemnation awards and any other
cash proceeds from a source other than the applicable Mortgagor, to the extent
required to be deposited in the Collection Account pursuant to Section 5.08(d)
and (e), which were received during the related Principal Prepayment Period, net
of related unreimbursed Servicing Advances and net of any portion thereof which,
as to any such Mortgage Loan, constitutes Late Collections that have been the
subject of an Advance on any prior Distribution Date;
(iv) with respect to each Mortgage Loan which has become a Liquidated
Mortgage Loan during the related Principal Prepayment Period, the lesser of (A)
the Non-PO Class A Percentage of applicable Non-PO Percentage of an amount equal
to the Principal Balance of such Liquidated Mortgage Loan as of the Due Date
immediately preceding the date on which it became a Liquidated Mortgage Loan and
(B) the Non-PO Class A Prepayment Percentage of the applicable Non-PO Percentage
of the Net Liquidation Proceeds with respect to such liquidated Mortgage Loan
(net of any unreimbursed Advances);
(v) with respect to each Mortgage Loan repurchased during the related
Principal Prepayment Period pursuant to Section 2.02, 3.01, 5.01, 5.21 or 11.01,
an amount equal to the Non-PO Class A Prepayment Percentage of the applicable
Non-PO Percentage of the principal portion of the Purchase Price (net of amounts
with respect to which a distribution of principal has previously been made to
the Non-PO Class A Certificateholders); and
(vi) on or after the Credit Support Depletion Date, the excess of the
Non-PO Class A Principal Balance (calculated after giving effect to reductions
thereof on such Distribution Date with respect to the amounts described in (i) -
(v) above) over the Non-PO Allocated Amount, if any, as of the preceding
Distribution Date.
16
NON-PO CLASS A PERCENTAGE: As of any Distribution Date, the fraction,
expressed as a percentage (which shall never exceed 100%), the numerator of
which is the Non-PO Class A Principal Balance and the denominator of which is
the Non-PO Allocated Amount as of the immediately preceding Due Date.
NON-PO CLASS A PREPAYMENT PERCENTAGE: As of any Distribution Date up to
and including the Distribution Date in [MONTH/YEAR], 100%; as of any
Distribution Date during the first year thereafter, the Non-PO Class A
Percentage plus __% of the Subordinated Percentage for such Distribution Date;
as of any Distribution Date during the second year thereafter, the Non-PO Class
A Percentage plus __% of the Subordinated Percentage for such Distribution Date;
as of any Distribution Date during the third year thereafter, the Non-PO Class A
Percentage plus __% of the Subordinated Percentage for such Distribution Date;
as of any Distribution Date during the fourth year thereafter, the Non-PO Class
A Percentage plus __% of the Subordinated Percentage for such Distribution Date;
and as of any Distribution Date after the fourth year thereafter, the Non-PO
Class A Percentage; provided that if the Non-PO Class A Percentage as of any
such Distribution Date is greater than the Non-PO Class A Percentage on the
first Distribution Date, the Non-PO Class A Prepayment Percentage shall be 100%;
and provided further that whenever the Non-PO Class A Percentage equals 0%, the
Non-PO Class A Prepayment Percentage shall equal 0%; and provided further,
however, that no reduction of the Non-PO Class A Prepayment Percentage below the
level in effect for the most recent period shall occur with respect to any
Distribution Date unless, as of the last day of the month preceding such
Distribution Date, (A) the aggregate outstanding Principal Balance of the
Outstanding Mortgage Loans 60 days or more delinquent (including Mortgage Loans
in foreclosure and with respect to which the related Mortgaged Property (or
stock allocated to a dwelling unit, in the case of a Co-op Loan) has been
acquired by the Trust Fund) does not exceed __% of the aggregate Outstanding
Certificate Balance of the Subordinated Certificates as of such date and (B)
cumulative Realized Losses through the last day of the month preceding such
Distribution Date (including Nonrecoverable Advances) do not exceed (i) if such
Distribution Date occurs between [MONTH/YEAR] and [MONTH/YEAR] inclusive, __% of
the Original Subordinated Principal Balance, (ii) if such Distribution Date
occurs between [MONTH/YEAR] and [MONTH/YEAR] inclusive, __% of the Original
Subordinated Principal Balance, (iii) if such Distribution Date occurs between
[MONTH/YEAR] and [MONTH/YEAR] inclusive, __% of the Original Subordinated
Principal Balance, (iv) if such Distribution Date occurs between [MONTH/YEAR]
and [MONTH/YEAR] inclusive, __% of the Original Subordinated Principal Balance
and (v) if such Distribution Date occurs in [MONTH/YEAR] and thereafter, __% of
the Original Subordinated Principal Balance.
NON-PO CLASS A PRINCIPAL BALANCE: As of any Distribution Date, (a) the
Non-PO Class A Principal Balance for the immediately preceding Distribution Date
less (b) amounts distributed (or deemed distributed) to the Non-PO Class A
Certificateholders on such preceding Distribution Date allocable to principal
(including the principal portion of Advances of the Servicer made pursuant to
Section 6.03 and Realized Losses allocated to the Non-PO Class A Certificates
pursuant to Section 6.04); provided that the Non-PO Class A Principal Balance on
the first Distribution Date shall be the Original Non-PO Class A Principal
Balance.
NON-PO CLASS A PRINCIPAL PAYMENT RULES: [Describe payment methodology].
NON-PO PERCENTAGE: With respect to each Mortgage Loan, the fraction,
expressed as a percentage (but not greater than 100%), the numerator of which
equals the applicable Net Mortgage Rate and the denominator of which equals the
Remittance Rate.
NONRECOVERABLE ADVANCE: Any Advance previously made or proposed to be
made in respect of a Mortgage Loan by the Servicer pursuant to Section 6.03
which, in the good faith judgment of the Servicer, will not or, in the case of a
proposed Advance, would not, ultimately be recoverable by the Servicer from Late
Collections or otherwise. The determination by the Servicer that it has made, or
would be making, a Nonrecoverable Advance shall be evidenced by a certificate of
a Servicing Officer of the Servicer delivered to the Trustee, any co-trustee and
the Depositor and detailing the reasons for such determination.
17
OFFICERS' CERTIFICATE: A certificate signed by two of the Chairman of
the Board, the Vice Chairman of the Board, the President or a Vice President,
the Treasurer or the Secretary or one of the Assistant Treasurers or Assistant
Secretaries or any other duly authorized officer of the Depositor or the
Servicer, and delivered to the Trustee.
OPINION OF COUNSEL: A written opinion of counsel, who may be counsel
for the Depositor or the Servicer and who is reasonably acceptable to the
Trustee.
ORIGINAL CERTIFICATE PRINCIPAL BALANCE: With respect to any Class of
Certificates, the amount specified for such Class in Section 4.01(d).
ORIGINAL CLASS A PRINCIPAL BALANCE: $______________
ORIGINAL CLASS M PRINCIPAL BALANCE: $____________
ORIGINAL CLASS B PRINCIPAL BALANCE: $____________
ORIGINAL NON-PO CLASS A PRINCIPAL BALANCE: $______________
ORIGINAL CREDIT SUPPORT: With respect to any Class of Subordinated
Certificates (other than the Class B-5 Certificates), the level of Credit
Support indicated below:
Class M: ____%
Class B-1: ____%
Class B-2: ____%
Class B-3: ____%
Class B-4: ____%
ORIGINAL SUBORDINATED PRINCIPAL BALANCE: The aggregate Original
Certificate Principal Balance of the Subordinated Certificates.
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE: With respect to any Class
(other than the Class A-X Certificates) of Certificates and any Distribution
Date, the Original Certificate Principal Balance of such Class minus the sum of
(i) any distributions of principal made on such Class prior to such Distribution
Date and (ii) any Realized Losses allocated to such Class prior to such
Distribution Date; provided, however, that (I) with respect to the Class of
Class B Certificates then outstanding having the highest numerical class
designation, the Outstanding Certificate Principal Balance of such Class shall
equal the excess of the Mortgage Pool Principal Balance (together with the
principal portion of any Monthly Payment due but not paid with respect to which
an Advance has not been made) over the sum of the Outstanding Certificate
Principal Balances of all Classes of Certificates (other than the Class of Class
B Certificates then outstanding having the highest numerical class designation);
and (II) during such time as the Outstanding Certificate Principal Balance of
the Class B-1 Certificates equals zero, with respect to the Class M
Certificates, the Outstanding Certificate Principal Balance of such Class shall
equal the excess of the Mortgage Pool Principal Balance (together with the
principal portion of any Monthly Payment due but not paid with respect to which
an Advance has not been made) over the Class A Principal Balance.
18
OUTSTANDING MORTGAGE LOAN: As to any Distribution Date, a Mortgage Loan
which was not paid in full during the related or any previous Principal
Prepayment Period, which did not become a Liquidated Mortgage Loan during the
related or any previous Principal Prepayment Period and which was not
repurchased under Section 2.02, 3.01, 5.01, 5.21 or 11.01 during the related or
any previous Principal Prepayment Period.
PASS-THRU ENTITY: A "Pass-Thru Entity" as defined in Section 860E(e)(6)
of the Code.
PAYING AGENT: The Person appointed by the Trustee as Paying Agent
pursuant to Section 4.05.
PERCENTAGE INTEREST: As to any Certificate (other than the Class A-X
Certificates), the percentage interest evidenced thereby in distributions
required to be made hereunder, such percentage interest being equal, with
respect to any Class, to the percentage obtained by dividing the Outstanding
Certificate Principal Balance of such Certificate by the aggregate of the
Outstanding Certificate Principal Balances of all the Certificates of such Class
and with respect to all Certificates, the percentage obtained by dividing the
Outstanding Certificate Principal Balance of such Certificate by the aggregate
of the Outstanding Certificate Principal Balances of all the Certificates. With
respect to any Class A-X Certificate, the percentage interest specified on the
face of such Certificate.
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.
PERSON: Any individual, corporation, partnership, limited liability
company, limited liability partnership, joint venture, association, joint-stock
company, trust, unincorporated organization or government or any agency or
political subdivision thereof.
PO PERCENTAGE: The PO Percentage with respect to each Mortgage Loan as
identified on the Mortgage Loan Schedule, such percentage being equal to the
fraction, expressed as a percentage (but not less than 0%), the numerator of
which equals the excess of the Remittance Rate over the applicable Net Mortgage
Rate and the denominator of which equals the Remittance Rate.
PRIMARY INSURANCE POLICY: Each primary policy of mortgage guaranty
insurance or any replacement policy therefor referred to in Section 5.15 hereof.
PRINCIPAL BALANCE: At the time of any determination, the principal
balance of a Mortgage Loan remaining to be paid at the close of business on the
Cut-off Date (after deduction of all principal payments due on or before the
Cut-off Date whether or not paid) (or, in the case of a substitute Mortgage Loan
included in the Trust Fund pursuant to Section 3.04, the close of business as of
the date of substitution) reduced by all amounts previously distributed to
Certificateholders that are allocable to payments of principal on such Mortgage
Loan (including the principal portion of Advances of the Servicer made pursuant
to Section 6.03).
19
PRINCIPAL PREPAYMENT: Any payment or other recovery of principal on a
Mortgage Loan (other than Late Collections) which is received other than as part
of a Monthly Payment; provided, however, that the term Principal Prepayment does
not include Insurance Proceeds, Liquidation Proceeds, condemnation awards or
other cash proceeds from a source other than the applicable Mortgagor.
PRINCIPAL PREPAYMENT PERIOD: With respect to any Distribution Date, the
period beginning on the first day of the month preceding the month in which such
Distribution Date occurs and ending on the last day of such month.
PURCHASE PRICE: With respect to any Mortgage Loan required to be
purchased on any date pursuant to Section 2.02, 3.01, 5.01, 5.21 or 11.01, an
amount equal to the sum of (a) 100% of the Principal Balance thereof, (b) unpaid
accrued interest at the Mortgage Rate thereon from the Due Date on which
interest was last paid by the Mortgagor or Advanced by the Servicer to the Due
Date next following the date of repurchase and (c) the aggregate of any
unreimbursed Advances and any unreimbursed Servicing Advances.
QUALIFIED INSURER: An insurance company duly qualified as such under
the laws of the states in which the Mortgaged Properties are located, duly
authorized and licensed in such states to transact the applicable insurance
business and to write the insurance provided, approved as an insurer by FNMA and
FHLMC and whose claims-paying ability is rated in the two highest rating
categories by S&P and Xxxxx'x with respect to primary mortgage insurance and in
the two highest rating categories for general policyholder rating and financial
performance index rating by A.M. Best Company or its successor in interest with
respect to hazard and flood insurance.
[RATE ADJUSTMENT DATE: The LIBOR Business Day prior to the first day of
each Interest Accrual Period after the initial Interest Accrual Period.]
RATING AGENCY: Any nationally recognized statistical rating
organization, or its successor, that rated one or more Classes of Certificates
at the request of the Depositor at the time of the initial issuance of the
Certificates. If such organization or a successor is no longer in existence,
"Rating Agency" shall be such nationally recognized statistical rating
organization, or other comparable Person, designated by the Depositor, notice of
which designation shall be given to the Trustee and the Servicer. References
herein to the two highest long-term debt rating categories of a Rating Agency
shall mean AA or better in the case of Fitch and Aa or better in the case of
Xxxxx'x.
REALIZED LOSS: With respect to (i) a Liquidated Mortgage Loan, the
amount, if any, by which the unpaid Principal Balance and accrued interest
thereon at a rate equal to 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
Mortgage Loan or (ii) with respect to a Mortgage Loan which is not a Liquidated
Mortgage 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).
REALIZED LOSS INTEREST SHORTFALL: The meaning specified in Section
6.05(c).
RECORD DATE: The close of business of the last Business Day of the
month preceding the month of the related Distribution Date.
[REFERENCE BANK RATE: As of 11:00 A.M. London time, on the day that is
one LIBOR Business Day prior to the immediately preceding Distribution Date, the
rate at which deposits are offered by the reference banks (which shall be three
major banks engaged in transactions in the London interbank market, selected by
the Servicer) to prime banks in the London interbank market for a period of one
month in amounts approximately equal to the aggregate Outstanding Certificate
Principal Balance of the Class ___ and Class ___ Certificates in accordance with
the following procedures. The Servicer will request the principal London office
of each of the reference banks to provide a quotation of its rate. If at least
two such quotations are provided, the rate will be the arithmetic mean of the
quotations. If on such date fewer than two quotations are provided as requested,
the rate will be the arithmetic mean of the rates quoted by one or more major
banks in New York City, selected by the Servicer as of 11:00 A.M., New York City
time, on such date for loans in U.S. Dollars to leading European banks for a
period of one month in amounts approximately equal to the aggregate Outstanding
Certificate Principal Balance of the Class ___ and Class ___ Certificates. In
the event no such quotations can be obtained, the rate will be LIBOR for the
prior Distribution Date, or in the case of the first Rate Adjustment Date,
_________%].
20
REGULATION AB: Regulation AB promulgated under the Securities Act and
the Exchange Act, as the same may be amended from time to time; and all
references to any rule, item, section or subsection of, or definition or term
contained in, Regulation AB mean such rule, item, section, subsection,
definition or term, as the case may be, or any successor thereto, in each case
as the same may be amended from time to time.
RELEVANT MORTGAGE LOAN: The meaning specified in Section 5.01.
REMIC: A "real estate mortgage investment conduit," as such term is
defined in Section 860D of the Code. References herein to "the REMIC" shall mean
the REMIC created hereunder.
REMIC PROVISIONS: Provisions of the federal income tax law relating to
REMICs which appear at Sections 860A through 860G of Part IV of Subchapter M of
Chapter 1 of Subtitle A of the Code, and related provisions, and U.S. Department
of the Treasury temporary, proposed or final regulations and rulings promulgated
thereunder, as the foregoing are in effect (or with respect to proposed
regulations, are proposed to be in effect) from time to time.
REMITTANCE RATE: ____% per annum.
REPURCHASE PROCEEDS: All proceeds of any Mortgage Loan or property
acquired in respect thereof repurchased pursuant to Section 2.02, 3.01, 5.01,
5.21 or 11.01.
RESIDUAL INTEREST: The interest in the Trust Fund represented by (i)
amounts, if any, remaining in the Collection Account following termination of
the Trust Fund after payments to the Class A Certificateholders (other than the
Class A-R Certificateholder), the Class M Certificateholders and the Class B
Certificateholders and (ii) the right to receive payments of Excess Proceeds and
Substitute Excess Interest and payments under Section 6.01(a)(v) hereof.
RESPONSIBLE OFFICER: When used with respect to the Trustee, any Senior
Vice President, any Vice President, any Assistant Vice President, any Senior
Trust Officer, any Trust Officer or any other officer of the Trustee in its
Agency & Trust Office customarily performing functions similar to those
performed by any of the above designated officers and also, with respect to a
particular matter, any other officer in its Agency & Trust Office to whom such
matter is referred because of such officer's knowledge of and familiarity with
the particular subject.
SFAS 140: Statement of Financial Accounting Standard No. 140,
Accounting for Transfers and Servicing of Financial Assets and Extinguishment of
Liabilities dated September 2000, published by the Financial Accounting
Standards Board of the Financial Accounting Foundation.
S&P: Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc.
or its successor in interest.
SALE AGREEMENT: The Mortgage Loan Sale Agreement dated as of [DATE]
between the Depositor and CHF.
21
SCHEDULED PRINCIPAL BALANCE: With respect to any Mortgage Loan as of
any Distribution Date, the unpaid principal balance of such Mortgage Loan as
specified in the amortization schedule at the time relating thereto (before any
adjustment to such schedule by reason of bankruptcy or similar proceeding or any
moratorium or similar waiver or grace period) as of the Due Date in the month
preceding the month of such Distribution Date, or as the Cut-off Date, with
respect to the first Distribution Date, after giving effect to any previously
applied prepayments, the payment of principal due on such first day of the month
and any reduction of the principal balance of such Mortgage Loan by a bankruptcy
court, irrespective of any delinquency in payment by the related Mortgagor.
SECTION 302 REQUIREMENTS: Any rules or regulations promulgated pursuant
to the Xxxxxxxx-Xxxxx Act of 2002 (as such may be amended from time to time).
SELLER: [CHF].
SERVICER: CHF or any successor under this Agreement as herein
provided.
SERVICING ADVANCES: All customary, reasonable and necessary "out of
pocket" costs and expenses incurred in the performance by the Servicer of its
servicing obligations and which are "unanticipated expenses" of the REMIC, as
defined in the REMIC Provisions, including, but not limited to, the cost of (i)
the preservation, restoration and protection of the Mortgaged Property (or
Underlying Mortgaged Property, in the case of a Co-op Loan), (ii) any
enforcement or judicial proceedings, including foreclosures, (iii) the
management and liquidation of the Mortgaged Property (or stock allocated to a
dwelling unit, in the case of a Co-op Loan) if the Mortgaged Property (or stock
allocated to a dwelling unit, in the case of a Co-op Loan) is acquired in
satisfaction of the Mortgage, (iv) taxes and assessments on the Mortgaged
Properties subject to the Mortgage Loans and (v) compliance with the obligations
under Section 5.21.
SERVICING FEE: The amount of the monthly fee paid for the servicing of
the Mortgage Loans, equal to, as of any Distribution Date, the total of, with
respect to each Mortgage Loan, one-twelfth of ______% per annum of the Principal
Balance thereof as of the Determination Date in the preceding month, subject to
adjustment as provided in Section 6.05. The Servicing Fee shall be payable only
at the time of and with respect to those Mortgage Loans for which payment is in
fact made of the entire amount of the Monthly Payments that shall have come due
and only at the time such Monthly Payment shall be made. The right to receive
the Servicing Fee is limited to, and the Servicing Fee is payable solely from,
the interest portion of such Monthly Payments (or the interest portion of any
Principal Prepayment in full) collected by the Servicer, or as otherwise
provided under Section 5.09 or 5.23.
SERVICING OFFICER: Any officer of the Servicer or any Sub-Servicer
involved in, or responsible for, the administration and servicing of the
Mortgage Loans whose name appears on a written certificate listing servicing
officers furnished to the Trustee by the Servicer on or prior to the Closing
Date, and signed on behalf of the Servicer or any Sub-servicer by its President,
any Vice President or its Treasurer, as such certificate may from time to time
be amended.
SIMILAR LAW: The meaning specified in Section 4.02(d).
SINGLE CERTIFICATE: A Certificate of any Class that evidences the
smallest permissible original denomination for such Class of Certificates as
specified in Section 4.01(d).
SPECIAL HAZARD AMOUNT: Initially, $____________. As of the first
anniversary of the Cut-off Date, the Special Hazard Amount shall be reduced, but
not increased, to the lesser of (i) the initial Special Hazard Amount less the
sum of all amounts allocated to the Subordinated Certificates in respect of
Special Hazard Losses on the Mortgage Loans during such year and (ii) the
Adjustment Amount for such anniversary. As of each subsequent anniversary of the
Cut-off Date, the Special Hazard Amount shall be reduced, but not increased, to
the lesser of (i) the Special Hazard Amount on the immediately preceding
anniversary of the Cut-off Date less the sum of all amounts allocated to the
Subordinated Certificates in respect of Special Hazard Losses on the Mortgage
Loans during such year and (ii) the Adjustment Amount for such anniversary. The
"Adjustment Amount" with respect to each anniversary of the Cut-off Date will be
equal to the greatest of (i) ____% multiplied by the aggregate outstanding
Principal Balance of the Mortgage Loans, (ii) the aggregate outstanding
Principal Balance of the Mortgage Loans secured by Mortgaged Properties located
in the California postal zip code area in which the highest percentage of
Mortgage Loans by Principal Balance are located and (iii) twice the outstanding
Principal Balance of the Mortgage Loan having the largest outstanding Principal
Balance.
22
SPECIAL HAZARD LOSS: With respect to any Mortgage Loan, any Realized
Loss or portion thereof resulting from direct physical loss or damage to the
related Mortgaged Property (or Underlying Mortgaged Property, in the case of a
Co-op Loan), which is not insured against under the Standard Hazard Policy
required to be maintained hereunder.
STANDARD HAZARD POLICY: Each standard hazard insurance policy or
replacement therefor referred to in Section 5.16.
STARTUP DAY: The meaning specified in Section 2.04(a).
STEP-DOWN PERCENTAGE: With respect to any Distribution Date, the
percentage indicated below:
Distribution Date Occurring in Step Down Percentage
[MONTH/YEAR] through [MONTH/YEAR]................. 0%
[MONTH/YEAR] through [MONTH/YEAR]................. __%
[MONTH/YEAR] through [MONTH/YEAR]................. __%
[MONTH/YEAR] through [MONTH/YEAR]................. __%
[MONTH/YEAR] through [MONTH/YEAR]................. __%
[MONTH/YEAR] and thereafter....................... 100%
STRIPPED INTEREST RATE: For each Mortgage Loan, the excess, if any, of
the Net Mortgage Rate for such Mortgage Loan over the Remittance Rate.
SUBORDINATED CERTIFICATES: The Class M and Class B Certificates,
referred to collectively.
SUBORDINATED OPTIMAL PRINCIPAL AMOUNT: With respect to any Distribution
Date, the lesser of (a) the aggregate Outstanding Certificate Principal Balance
of the Subordinated Certificates (before giving effect to any distributions of
principal on such Distribution Date) and (b)(1) the sum of: (i) the Subordinated
Percentage of the applicable Non-PO Percentage of the principal portion of all
Monthly Payments, whether or not received, which were due during the related Due
Period on Mortgage Loans which were outstanding during such Due Period; (ii) the
Subordinated Prepayment Percentage of the applicable Non-PO Percentage of all
Principal Prepayments made on any Mortgage Loan during the related Principal
Prepayment Period; (iii) with respect to each Mortgage Loan not described in
(iv) below, the Subordinated Percentage of the applicable Non-PO Percentage of
the principal portion of all Insurance Proceeds, condemnation awards and any
other cash proceeds from a source other than the applicable Mortgagor, to the
extent required to be deposited in the Collection Account pursuant to Section
5.08(iv) and (v), which were received during the related Principal Prepayment
Period, net of related unreimbursed Servicing Advances and net of any portion
thereof which, as to any such Mortgage Loan, constitutes Late Collections that
have been the subject of an Advance on any prior Distribution Date; (iv) with
respect to each Mortgage Loan which has become a Liquidated Mortgage Loan during
the related Principal Prepayment Period, an amount equal to the portion (if any)
of the Net Liquidation Proceeds with respect to such liquidated Mortgage Loan
(net of any unreimbursed Advances) that was not included in the Class A-P Amount
or the Non-PO Class A Optimal Principal Amount with respect to such Distribution
Date; and (v) with respect to each Mortgage Loan repurchased during the related
Principal Prepayment Period pursuant to Section 2.02, 3.01, 5.01, 5.21 or 11.01,
an amount equal to the Subordinated Prepayment Percentage of the applicable
Non-PO Percentage of the principal portion of the Purchase Price (net of amounts
with respect to which a distribution of principal has previously been made to
the Subordinated Certificateholders) minus (2) the Class A-P Shortfall Amount
with respect to such Distribution Date.
23
SUBORDINATED PERCENTAGE: As of any Distribution Date, the difference
between 100% and the Non-PO Class A Percentage.
SUBORDINATED PREPAYMENT PERCENTAGE: As of any Distribution Date, the
difference between 100% and the Non-PO Class A Prepayment Percentage.
SUB-SERVICER: Any Person with whom the Servicer enters into a
Sub-Servicing Agreement.
SUB-SERVICING AGREEMENT: Any agreement between the Servicer and any
Sub-Servicer, relating to servicing or administration of certain Mortgage Loans
as provided in Section 5.02, in such form as has been approved by the Servicer
and the Depositor.
SUBSTITUTE EXCESS INTEREST: As defined in Section 3.03.
TRUST: The Trust created pursuant to this Agreement.
TRUST FUND: The corpus of the Trust consisting of (i) the Mortgage
Loans, (ii) such assets as shall from time to time be identified as deposited in
the Collection Account and the Certificate Account, (iii) property which secured
a Mortgage Loan and which has been acquired by foreclosure or deed in lieu of
foreclosure, (iv) Standard Hazard Policies and any other insurance policies, and
the proceeds thereof and (v) any proceeds of any of the foregoing.
TRUSTEE: [TRUSTEE], a _____________________ and its successors and any
corporation resulting from or surviving any consolidation or merger to which it
or its successors may be a party, and any successor trustee at the time serving
as successor trustee hereunder, appointed as herein provided.
UNDERLYING MORTGAGED PROPERTY: With respect to each Co-op Loan, the
underlying real property owned by the related residential cooperative housing
corporation.
U.S. PERSON: A "United States Person" as defined in Section 7701(a)(30)
of the Code.
[END OF ARTICLE I]
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; TRUST FUND
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
Mortgage Loans, including all interest and principal received on or with respect
to the Mortgage Loans on or after the Cut-off Date (other than Monthly 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.
24
(i) With respect to each Mortgage Loan which is not a Co-op Loan:
(A) Original Mortgage Note (or a lost note affidavit
(including a copy of the original Mortgage Note)) or (II) original
consolidation, extension and modification agreement (or a lost note
affidavit (including a copy of the original consolidation, extension
and modification agreement)), in either case endorsed "Pay to the order
of [TRUSTEE], as trustee, without recourse".
(B) The original Mortgage (including all riders thereto) with
evidence of recording thereon, or a copy thereof certified by the
public recording office in which such Mortgage has been recorded or, if
the original Mortgage has not been returned from the applicable public
recording office, a true certified copy, certified by the Seller, of
the original Mortgage together with a certificate of the Seller
certifying that the original Mortgage has been delivered for recording
in the appropriate public recording office of the jurisdiction in which
the Mortgaged Property is located.
(ii) With respect to each Non-MERS Mortgage Loan which is not a Co-op
Loan:
(A) The original Assignment of Mortgage to "[TRUSTEE], as
trustee," which assignment shall be in form and substance acceptable
for recording, or a copy certified by the Seller as a true and correct
copy of the original Assignment of Mortgage which has been sent for
recordation. Subject to the foregoing, such assignments may, if
permitted by law, be by blanket assignments for Mortgage Loans covering
Mortgaged Properties situated within the same county. If the Assignment
of Mortgage is in blanket form, a copy of the Assignment of Mortgage
shall be included in the related individual Mortgage File.
(B) The original policy of title insurance, including riders
and endorsements thereto, or if the policy has not yet been issued, a
written commitment or interim binder or preliminary report of title
issued by the title insurance or escrow company.
(C) Originals of all recorded intervening Assignments of
Mortgage, or copies thereof, certified by the public recording office
in which such Assignments or Mortgage have been recorded showing a
complete chain of title from the originator to the Depositor, with
evidence of recording, thereon, or a copy thereof certified by the
public recording office in which such Assignment of Mortgage has been
recorded or, if the original Assignment of Mortgage has not been
returned from the applicable public recording office, a true certified
copy, certified by the Seller of the original Assignment of Mortgage
together with a certificate of the Seller certifying that the original
Assignment of Mortgage has been delivered for recording in the
appropriate public recording office of the jurisdiction in which the
Mortgaged Property is located.
(D) Originals, or copies thereof certified by the public
recording office in which such documents have been recorded, of each
assumption, extension, modification, written assurance or substitution
agreements, if applicable, or if the original of such document has not
been returned from the applicable public recording office, a true
certified copy, certified by the Seller, of such original document
together with certificate of Seller certifying the original of such
document has been delivered for recording in the appropriate recording
office of the jurisdiction in which the Mortgaged Property is located.
25
(E) If the Mortgage Note or Mortgage or any other material
document or instrument relating to the Mortgage Loan has been signed by
a person on behalf of the Mortgagor, 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.
(iii) With respect to each Co-op Loan:
(A) (I) The original Mortgage Note (or a lost note affidavit
(including a copy of the original Mortgage Note)) or (II) original
consolidation, extension and modification agreement (or a lost note
affidavit (including a copy of the original consolidation, extension
and modification agreement)), in either case endorsed "Pay to the order
of [TRUSTEE], as trustee, without recourse."
(B) The original Mortgage entered into by the Mortgagor with
respect to such Co-Op Loan.
(C) The original Assignment of Mortgage to "[TRUSTEE] as
trustee".
(D) Original assignments of Mortgage showing a complete chain
of assignment from the originator of the related Co-Op Loan to the
Seller.
(E) Original Form UCC-1 and any continuation statements with
evidence of filing thereon entered into by the Mortgagor with respect
to such Co-Op Loan.
(F) Form UCC-3 (or copy thereof) by the applicable Mortgage
Loan Seller or its agent assigning the security interest covered by
such Form UCC-1 to "[TRUSTEE] as trustee", together with all Forms
UCC-3 (or copies thereof) showing a complete chain of assignment from
the originator of the related Co-op Loan to the Seller, with evidence
of recording thereon.
(G) Stock certificate representing the stock allocated to the
related dwelling unit in the related residential cooperative housing
corporation and pledged by the related Mortgagor to the originator of
such Co-op Loan with a stock power in blank attached.
(H) Original proprietary lease.
(I) Original assignment of proprietary lease, to the Trustee,
and all intervening assignments thereof.
(J) Original recognition agreement of the interests of the
mortgagee with respect to the Co-op Loan by the residential cooperative
housing corporation, the stock of which was pledged by the related
Mortgagor to the originator of such Co-op Loan.
26
(K) Originals of any assumption, consolidation or modification
agreements relating to any of the items specified in (A) through (F)
above with respect to such Co-op Loan.
If in connection with any Mortgage Loan which is not a Co-op Loan the
Depositor cannot deliver the Mortgage, Assignments of Mortgage, or assumption,
consolidation or modification agreement, 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
agreement, 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 agreement, 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 agreement, as the case
may be, with evidence of recording indicated thereon upon receipt thereof from
the public recording office.
With respect to any Non-MERS Mortgage Loans which are not Co-op Loans,
and as to which the related Mortgaged Property is located in 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 Non-MERS Mortgage Loans
which are not Co-op Loans as to which the related Mortgaged Property is located
outside of Florida, the Servicer shall not be obligated to cause to be recorded
the Assignment of Mortgage referred to in this Section 2.01. With respect to
Co-op Loans as to which the related dwelling unit is located in Florida, the
Servicer shall cause to be filed in the appropriate filing office the Form UCC-3
referred to in this Section 2.01 as soon as practicable. With respect to any
Co-op Loans as to which the related dwelling unit is located outside Florida,
the Servicer shall not be obligated to cause to be filed the Form UCC-3 referred
to in this Section 2.01. While each such Assignment of Mortgage or Form UCC-3 is
being recorded or filed, as applicable, the Servicer shall deliver to the
Trustee a photocopy of such document. If any such Assignment of Mortgage or Form
UCC-3 is returned unrecorded or unfiled to the Servicer because of any defect
therein, the Servicer shall cause such defect to be cured and such document to
be recorded or filed in accordance with this paragraph. The Depositor shall
deliver or cause to be delivered each such original recorded or filed Assignment
of Mortgage and intermediate assignment or Form UCC-3 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 or filing office for recording or filing, but has
not been returned solely because of a delay caused by such recording or filing
office. In any event, the Depositor shall use all reasonable efforts to cause
each such document with evidence of recording or filing thereon to be delivered
to the Trustee within 300 days of the Closing Date.
With respect to each MERS Mortgage Loan, the Trustee, at the expense of
the Depositor and at the direction and with the cooperation of the Servicer,
shall cause to be taken such actions as are necessary to cause the Trustee to be
clearly identified as the owner of each such Mortgage Loan on the records of
MERS for purposes of the system of recording transfers of beneficial ownership
of mortgages maintained by MERS.
27
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 or any
Sub-Servicer, for the benefit of the Trustee as the owner thereof, and the
Servicer's or such Sub-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 or such Sub-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 indicate to all
inquiring parties that the Mortgage Loans have been sold and to claim no
ownership interest in the Mortgage Loans. Each Mortgage File and the mortgage
documents relating to the Mortgage Loans contain proprietary business
information of the Servicer and its customers. The Trustee and the Depositor
agree that they will not use such information for business purposes without the
express written consent of the Servicer and that all such information shall be
kept strictly confidential.
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 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 the 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 the
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 all of its right, title and interest in that portion of the Trust Fund
described in items (ii), (iii), (iv) and (v) of the definition thereof and
further assigns to the Trustee for the benefit of the Certificateholders those
representations and warranties of the Seller contained in the Sale Agreement and
described in Section 3.01 hereof and the benefit of the repurchase obligations
of the Seller described in Sections 2.02 and 3.01 hereof and the obligations of
the Seller contained in the Sale Agreement 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.
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 Seller to repurchase
any Mortgage Loans 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.
28
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 A 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, the Seller and the Depositor.
In addition, the Trustee shall also notify the Servicer, the Seller and the
Depositor, 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, (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
Seller correct or cure such omission, defect or other irregularity, or
substitute a Mortgage Loan pursuant to the provisions of Section 3.03, within 60
days from the date the Seller was notified of such omission or defect and, if
the Seller does not correct or cure such omission or defect within such period,
that the Seller purchase such Mortgage Loan from the Trustee within 90 days from
the date the Trustee notified the 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
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 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 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 shall not solicit
any such Mortgagor for the purpose of refinancing the related Mortgage Loan.
Within 280 days of the Closing Date, the Trustee shall deliver to the
Depositor and the Servicer the Trustee's Certification, substantially in the
form of Exhibit G attached hereto, setting forth the status of the Mortgage
Files as of such date.
Section 2.03. Trust Fund; Authentication of Certificates.
The Trustee acknowledges and accepts the assignment to it of the Trust
Fund created pursuant to this Agreement in trust for the use and benefit of all
present and future Certificateholders. The Trustee acknowledges the assignment
to it for the benefit of the Trust Fund of the Mortgage Loans and 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 Trustee
or, if an Authenticating Agent has been appointed pursuant to Section 4.06, the
Authenticating Agent in authorized denominations evidencing ownership of the
entire Trust Fund.
29
Section 2.04. REMIC Election.
(a) The Depositor hereby instructs and authorizes the Trustee to make
an appropriate election to treat each of the Trust Fund as a REMIC. This
Agreement shall be construed so as to carry out the intention of the parties
that the Trust Fund be treated as a REMIC at all times prior to the date on
which the Trust Fund is terminated. The Closing Date is hereby designated as the
"startup day" of the REMIC within the meaning of Section 860G(a)(9) of the Code.
The "regular interests" (within the meaning of Section 860G(a)(1) of the Code)
in the REMIC shall consist of the Class A Certificates (other than the Class A-R
Certificate), the Class M Certificates and the Class B Certificates, and the
"residual interest" (within the meaning of Section 860G(a)(2) of the Code) in
the REMIC shall consist of the Class A-R Certificate, and all such interests
shall be designated as such on the Startup Day. Solely for the purposes of
Section 1.860G-1(a)(4)(iii) of the Treasury regulations, the "latest possible
maturity date" by which the Outstanding Certificate Principal Balance of each
Class of Certificates representing a regular interest in the REMIC would be
reduced to zero is the Distribution Date immediately following the latest
scheduled maturity of any Mortgage Loan.
(b) The "tax matters person" with respect to the Trust Fund for
purposes of the REMIC provisions shall be the beneficial owner of the Class A-R
Certificate; provided, however, that such beneficial owner of a Class A-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 the
Trust Fund for purposes of the REMIC provisions.
(c) It is intended that the Trust Fund shall constitute, and that the
affairs of the Trust Fund shall be conducted so as to qualify the Trust Fund 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 the Trust Fund and the Holder of the Class A-R
Certificate and that in such capacity it shall:
(i) 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) and prepare and file or cause to be prepared and
filed with the Internal Revenue Service and applicable state or local
tax authorities income tax or information returns for each taxable year
with respect to the Trust Fund using the calendar year as the taxable
year and the accrual method of accounting, 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 shall 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;
(ii) within thirty days of the Closing Date, shall furnish or
cause to be furnished to the Internal Revenue Service, on Form 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 (and the Servicer shall
act as the representative of the Trust Fund for this purpose), together
with such additional information as may be required by such Form, and
shall update such information at the time or times in the manner
required by the Code;
(iii) make or cause to be made an election, on behalf of the
Trust Fund, to be treated as a REMIC, and make the appropriate
designations, if applicable, in accordance with this Section 2.04 on
the federal tax return of the Trust Fund for its first taxable year
(and, if necessary, under applicable state law);
30
(iv) 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 or reports, or furnish or cause to be furnished by telephone,
mail, publication or other appropriate method such information, 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;
(v) provide information necessary for the computation of tax
imposed on the transfer of the Class A-R Certificate to a Disqualified
Organization, or an agent (including a broker, nominee or other
middleman) of a Disqualified Organization, or a pass-through entity in
which a Disqualified Organization 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);
(vi) ensure that federal, state or local income tax or
information returns shall be signed by the Trustee or such other person
as may be required to sign such returns by the Code or state or local
laws, regulations or rules; and
(vii) maintain such records relating to the Trust Fund, as may
be required by the Code and, as may be necessary to prepare the
foregoing returns, schedules, statements or information.
Section 2.05. Permitted Activities of Trust.
The Trust is created for the object and purpose of engaging in the
Permitted Activities.
Section 2.06. 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 2.05 of this Agreement shall be limited in accordance with paragraph
35 thereof.
[END OF ARTICLE II]
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR AND
THE SERVICER; REPURCHASE OF MORTGAGE LOANS
Section 3.01. Representations and Warranties of the Depositor with
respect to the Mortgage Loans.
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 Agreement with CHF as Seller, that the Seller has made the following
representations and warranties with respect to each Mortgage Loan in such 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 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 Sale Agreement.
31
[Insert Representations and Warranties]
Upon discovery by any of the Depositor, the Servicer or the Trustee of
a breach of any of the foregoing representations and warranties which materially
and adversely affects the value of a Mortgage Loan or the interest of the
Certificateholders (or which materially and adversely affects the interests of
the Certificateholders in the related Mortgage Loan in the case of a
representation and warranty relating to a particular Mortgage Loan), the party
discovering such breach shall give prompt written notice to the other parties
and to the Seller, which notice shall specify the date of discovery. Pursuant to
the Sale Agreement, the Seller shall within 90 days from the earlier of (i) the
date specified in the notice as the date of discovery of such breach or (ii) the
date the Seller otherwise discovers such breach, cure such breach, substitute a
Mortgage Loan pursuant to the provisions of Section 3.03 or, if the breach
relates to a particular Mortgage Loan, purchase such Mortgage Loan from the
Trustee at the Purchase Price. The Purchase Price for the purchased Mortgage
Loan shall be paid to the Servicer and shall be 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 Seller the related Mortgage File, and the Trustee
shall execute and deliver such instruments of transfer or assignment as may be
provided to it by the Servicer, without recourse, as shall be necessary to vest
in the 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 Seller to cure, substitute or purchase any Mortgage Loan as to which such a
breach has occurred shall constitute the sole remedy respecting such breach
available to Certificateholders or the Trustee on behalf of Certificateholders.
Section 3.02. Representations and Warranties of the Servicer.
The Servicer represents and warrants to, and covenants with, the
Trustee for the benefit of the Certificateholders that as of the Closing Date:
(a) The Servicer is a corporation duly chartered and validly existing
in good standing under the laws of the State of New Jersey, and the Servicer is
duly qualified or registered as a foreign corporation in good standing in each
jurisdiction in which the ownership or lease or its properties or the conduct of
its business requires such qualification;
(b) The execution and delivery of this Agreement by the Servicer and
its performance and compliance with the terms of this Agreement will not violate
the Servicer's corporate charter or by-laws or constitute a default (or an event
which, with notice or lapse of time, or both, would constitute a default) under,
or result in the breach of, any material contract, agreement or other instrument
to which the Servicer is a party or which may be applicable to the Servicer or
any of its assets;
(c) This Agreement, assuming due authorization, execution and delivery
by the Trustee and the Depositor, constitutes a valid, legal and binding
obligation of the Servicer, enforceable against it in accordance with the terms
hereof subject to applicable bankruptcy, insolvency, reorganization, moratorium
and other laws affecting the enforcement of creditors' rights generally and to
general principles of equity, regardless of whether such enforcement is
considered in a proceeding in equity or at law;
(d) The Servicer is not in default with respect to any order or decree
of any court or any order, regulation or demand of any federal, state, municipal
or governmental agency, which default might have consequences that would
materially and adversely affect the condition (financial or other) or operations
of the Servicer or its properties or might have consequences that would affect
its performance hereunder; and
32
(e) No litigation is pending or, to the best of the Servicer's
knowledge, threatened against the Servicer which would prohibit its entering
into this Agreement or performing its obligations under this Agreement.
It is understood and agreed that the representations and warranties set
forth in this Section 3.02 shall survive the issuance and delivery of the
Certificates and shall be continuing as long as any Certificate shall be
outstanding or this Agreement has been terminated.
Section 3.03. Option to Substitute.
If the Seller is required to repurchase any Mortgage Loan pursuant to
Section 2.02 or 3.01, the Seller may, at its option, within two years from the
Closing Date, remove such defective Mortgage Loan from the terms of this
Agreement and substitute another mortgage loan for such defective Mortgage Loan,
in lieu of repurchasing such defective Mortgage Loan. Any substitute Mortgage
Loan shall (a) have a Principal Balance at the time of substitution not in
excess of the Principal Balance of the removed Mortgage Loan (the amount of any
difference, plus one month's interest thereon at the Mortgage Rate borne by the
removed Mortgage Loan, being paid by the Seller and deemed to be a Principal
Prepayment to be deposited by the Servicer in the Collection Account), (b) have
a Mortgage Rate not less than, and not more than one percentage point greater
than, the Mortgage Rate of the removed Mortgage Loan (provided, however, that if
the Mortgage Rate on the substitute Mortgage Loan exceeds the Mortgage Rate on
the removed Mortgage Loan, the amount of that excess interest (the "Substitute
Excess Interest") shall be payable to the Residual Interest), (c) have a
remaining term to stated maturity not later than, and not more than one year
less than, the remaining term to stated maturity of the removed Mortgage Loan,
(d) be, in the reasonable determination of the Servicer, of the same type,
quality and character (including location of the Mortgaged Property (or
Underlying Mortgaged Property, in the case of a Co-op Loan)) as the removed
Mortgage Loan as if the breach had not occurred, (e) have a Loan-to-Value Ratio
at origination no greater than that of the removed Mortgage Loan and (f) be, in
the reasonable determination of the Servicer, in material compliance with the
representations and warranties contained in the Sale Agreement and described in
Section 3.01, as of the date of substitution.
The Servicer shall amend the Mortgage Loan Schedule to reflect the
withdrawal of the removed Mortgage Loan from this Agreement and the substitution
of such substitute Mortgage Loan therefor and shall send a copy of such amended
Mortgage Loan Schedule to the Trustee. The Sale Agreement provides that upon
such amendment the Seller shall be deemed to have made as to such substitute
Mortgage Loan the representations and warranties set forth in Section 3.01 as of
the date of such substitution, which shall be continuing as long as any
Certificate shall be outstanding or this Agreement has not been terminated, and
the remedies for breach of any such representation or warranty shall be as set
forth in Section 3.01. Upon such amendment, the Trustee shall review the
Mortgage File delivered to it relating to the substitute Mortgage Loan, within
the time and in the manner and with the remedies specified in Section 2.02,
except that for purposes of this Section 3.03 (other than the two-year period
specified in the first sentence of this Section), such time shall be measured
from the date of the applicable substitution. In the event of such a
substitution, accrued interest on the substitute Mortgage Loan for the month in
which the substitution occurs and any Principal Prepayments made thereon during
such month shall be the property of the Trust Fund, and accrued interest for
such month on the Mortgage Loan for which the substitution is made and any
Principal Prepayments made thereon during such month shall be the property of
the Seller. The principal payment on a substitute Mortgage Loan due on the Due
Date in the month of substitution shall be the property of the Seller, and the
principal payment on the Mortgage Loan for which the substitution is made due on
such date shall be the property of the Trust Fund.
33
[END OF ARTICLE III]
ARTICLE IV
THE CERTIFICATES
Section 4.01. The Certificates.
(a) The Class A, Class M and Class B Certificates shall be
substantially in the forms thereof included within Exhibits C, D, E and F and
shall, on original issue, be executed by the Depositor and authenticated by the
Trustee (or, if an Authenticating Agent has been appointed pursuant to Section
4.06, the Authenticating Agent) upon receipt by the Trustee of the documents
specified in Section 2.01, delivered to or upon the order of the Depositor.
(b) The Depository, the Depositor, the Paying Agent and the Trustee
have entered into a Depository Agreement dated as of [DATE] (the "Depository
Agreement"). Except as provided in paragraph (c) below, the Book-Entry
Certificates shall at all times remain registered in the name of the Depository
or its nominee and at all times: (i) registration of the Book-Entry Certificates
may not be transferred as provided in Section 4.02 except to a successor to the
Depository; (ii) ownership and transfers of registration of the Book-Entry
Certificates on the books of the Depository shall be governed by applicable
rules established by the Depository; (iii) the Depository may collect its usual
and customary fees, charges and expenses from its Depository Participants; (iv)
the Trustee shall deal with the Depository, Depository Participants and Indirect
Participants as representatives of the Certificate Owners of the Book-Entry
Certificates for purposes of exercising the rights of such Holders under this
Agreement, and requests and directions for and votes of such representatives
shall not be deemed to be inconsistent if they are made with respect to
different Certificate Owners; and (v) the Trustee may rely and shall be fully
protected in relying upon information furnished by the Depository with respect
to its Depository Participants and furnished by the Depository Participants with
respect to Indirect Participants and persons shown on the books of such Indirect
Participants as direct or indirect Certificate Owners. The Depository Agreement
provides that the Depository shall maintain book-entry records with respect to
the Certificate Owners and with respect to ownership and transfers of such
Certificates.
All transfers by Certificate Owners of Book-Entry Certificates shall be
made in accordance with the procedures established by the Depository Participant
or brokerage firm representing such Certificate Owners. Each Depository
Participant shall only transfer Book-Entry Certificates of Certificate Owners it
represents or of brokerage firms for which it acts as agent in accordance with
the Depository's normal procedures.
(c) If (i)(A) the Depository advises the Depositor, the Paying Agent or
the Trustee in writing that the Depository is no longer willing or able to
properly discharge its responsibilities as Depository and (B) the Trustee, the
Paying Agent or the Depositor are unable after exercise of their reasonable best
efforts to locate a qualified successor or (ii) the Depositor at its option
advises the Trustee in writing that it elects to terminate the book-entry system
through the Depository, the Trustee or, if a Paying Agent has been appointed
under Section 4.05, the Paying Agent, shall notify all Certificate Owners,
through the Depository, of the occurrence of any such event and of the
availability of definitive, fully registered Certificates (the "Definitive
Certificates") to Certificate Owners requesting the same. Upon surrender to the
Trustee or, if a Paying Agent has been appointed under Section 4.05, the Paying
Agent, of the Book-Entry Certificates by the Depository for registration and
receipt by the Trustee or, if a Paying Agent has been appointed under Section
4.05, the Paying Agent, of an adequate supply of certificates from the
Depositor, the Trustee or if the Paying Agent is appointed under Section 4.05,
the Paying Agent shall issue the Definitive Certificates based on information
received from the Depository. Neither the Depositor, the Servicer, the Paying
Agent nor the Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions.
34
(d) The Certificates (other than the Class A-R Certificate) shall be
issuable in the minimum original dollar denominations (and integral multiples of
$________ in excess of such amount) and aggregate original dollar denominations
per Class as set forth in the following table (except that one Certificate of
each of the Class A-P and Class B-5 Certificates may be issued in a different
denomination). A single Class A-R Certificate will be issued in definitive form
in a $___ denomination.
Aggregate Original Certificate
Minimum Principal Balance of all
Original Certificates of the CUSIP
Class Denomination Indicated Class Number
----- ------------ ------------------------------ -----------
A-1 $_________ $________________ 16162T __ _
A-2 $_________ $________________ 16162T __ _
A-3 $_________ $________________ 16162T __ _
A-4 $_________ $________________ 16162T __ _
A-P(2) $_________ $________________ 16162T __ _
A-R(3) $______ $________________ 16162T __ _
A-X (1) (1) 16162T __ _
M $_________ $________________ 16162T __ _
B-1 $_________ $________________ 16162T __ _
B-2 $_________ $________________ 16162T __ _
B-3 $__________ $________________ 16162T __ _
B-4 $__________ $________________ 16162T __ _
B-5 $__________ $________________ 16162T __ _
---------------
(1) The Class A-X Certificates have no Principal Balance, but accrue
interest on the Class A-X Notional Amount (initially, $______________).
(2) The Class A-P Certificates are principal only certificates and are not
entitled to payments of interest.
(3) The Class A-R Certificate represents the Residual Interest.
The Certificates shall be signed by manual or facsimile signature on
behalf of the Depositor by an officer of the Depositor. Certificates bearing the
manual or facsimile signatures of individuals who were at the time of signature
officers of the Depositor shall bind the Depositor, notwithstanding that such
individuals or any of them have ceased to be an officer prior to the
authentication and delivery of such Certificate or did not hold such offices at
the date of such Certificates. No Certificate shall be entitled to any benefit
under this Agreement, or be valid for any purpose, unless there appears on such
Certificate a manual authentication by an officer of the Trustee (or, if an
Authenticating Agent has been appointed pursuant to Section 4.06, the
Authenticating Agent) and such 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.
Section 4.02. Registration of Transfer and Exchange of Certificates.
(a) The Trustee or, if a Paying Agent has been appointed hereunder
pursuant to Section 4.05, the Paying Agent, shall cause to be kept a Certificate
Register in which, subject to such reasonable regulations as it may prescribe,
the Trustee shall provide for the registration of Certificates and of transfers
and exchanges of Certificates as herein provided.
35
(b) Upon surrender for registration of transfer of any Certificate at
any office or agency of the Trustee or, if a Paying Agent has been appointed
under Section 4.05, the Paying Agent, maintained for such purpose, the Depositor
shall execute and the Trustee (or, if an Authenticating Agent is appointed under
Section 4.06, the Authenticating Agent) shall authenticate and deliver, in the
name of the designated transferee or transferees, a Certificate of a like Class
and aggregate Percentage Interest and dated the date of authentication.
(c) No transfer of a Class A-X, Class B-3, Class B-4 or Class B-5
Certificate shall be made unless such transfer is made pursuant to an effective
registration statement or otherwise in accordance with the requirements under
the Securities Act of 1933, as amended. If such a transfer is to be made in
reliance upon an exemption from said Act, (i) the Depositor may require (except
with respect to the initial transfer of a Class B-3, Class B-4 or Class B-5
Certificate from [Placement Agent] and except if the transferee executes a
certificate substantially in the form of Exhibit I hereto) a written opinion of
independent counsel acceptable to and in form and substance satisfactory to the
Depositor that such transfer may be made pursuant to an exemption, describing
the applicable exemption and the basis therefor, from said Act and laws or is
being made pursuant to said Act and laws, which opinion of counsel shall not be
an expense of the Trust Fund, the Trustee, the Depositor or the Servicer, and
(ii) the Depositor shall require the transferee to execute a certification
substantially in the form of Exhibit H or Exhibit I.
(d) No transfer of an ERISA Restricted Certificate or the Class A-R
Certificate shall be made unless the Depositor or, if a Paying Agent has been
appointed under Section 4.05, the Paying Agent shall have received either (i) a
representation letter, substantially in the form of Exhibit M, from the
transferee of such Certificate acceptable to and in form and substance
satisfactory to the Depositor, to the effect that (A) such transferee is not an
employee benefit plan subject to Title I of ERISA or Section 4975 of the Code or
any materially similar provisions of applicable federal, state or local law
("Similar Law"), or a person acting on behalf of any such plan or using the
assets of such plan, or in the case of an insurance company, the assets of any
separate accounts, or alternatively, (B) in the case of an ERISA Restricted
Certificate only, such transferee is an insurance company and the source of
funds for the purchase of such Certificate 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 acquisition and
holding of such Certificate is exempt under PTCE 95-60, which representation
letter shall not be an expense of the Trustee, the Depositor or the Servicer, or
(ii) in the case of an ERISA Restricted Certificate presented for registration
in the name of an employee benefit 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 or
such other representation as required by and satisfactory to the Depositor 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.
"2510.3-101 or to be subject to the fiduciary responsibility provisions of ERISA
or the prohibited transaction provisions of ERISA or the Code or Similar Law,
will not constitute or result in a prohibited transaction within the meaning of
Section 406 or 407 of ERISA or Section 4975 of the Code or Similar Law, and will
not subject the Trustee, the Depositor or the Servicer to any obligation in
addition to those undertaken in this Agreement, which Opinion of Counsel or
other representation shall not be an expense of the Trustee, the Depositor or
the Servicer.
(e) At the option of a Certificateholder, a Certificate may be
exchanged for another Certificate or Certificates of authorized denominations of
a like Class, upon surrender of the Certificate to be exchanged at any office or
agency of the Trustee or, if a Paying Agent has been appointed under Section
4.05, the Paying Agent, maintained for such purpose. Whenever the Certificate is
so surrendered for exchange, the Depositor shall execute and the Authenticating
Agent shall authenticate and deliver, the Certificate which the
Certificateholder making the exchange is entitled to receive. Every Certificate
presented or surrendered for transfer or exchange shall (if so required by the
Authenticating Agent) be duly endorsed by, or be accompanied by a written
instrument of transfer in the form satisfactory to the Authenticating Agent duly
executed by, the Holder thereof or his attorney duly authorized in writing.
36
(f) No service charge shall be made to the Holder for any transfer or
exchange of a Certificate, but the Servicer may require payment by the
Certificateholders of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer or exchange of such
Certificate.
(g) All Certificates surrendered for transfer or exchange shall be
destroyed by the Trustee or, if a Paying Agent has been appointed under Section
4.05, the Paying Agent, in accordance with the Trustee's or, if a Paying Agent
has been appointed under Section 4.05, the Paying Agent's, standard procedures.
(h) [Reserved].
(i) A Disqualified Organization is prohibited from acquiring beneficial
ownership of a Class A-R Certificate. Notwithstanding anything to the contrary
contained herein, (i) unless and until the Servicer shall have received an
Opinion of Counsel, satisfactory to it in form and substance, to the effect that
the absence of the conditions contained in this Section 4.02(i) would not result
in the imposition of federal tax upon the Trust Fund or cause the Trust Fund to
fail to qualify as a REMIC, no transfer, sale or other disposition of the Class
A-R Certificate (including for purposes of this section any beneficial interest
therein) may be made without the express written consent of the Certificate
Registrar or, if no Certificate Registrar is appointed, the Trustee, which
consent is to be granted by the Certificate Registrar or, if no Certificate
Registrar is appointed, the Trustee only upon compliance with the requirements
of this Section and (ii) no transfer, sale or other disposition of the Class A-R
Certificate (or any beneficial interest therein) may be made to a Person who is
not a U.S. Person unless such Person furnishes the transferor and the
Certificate Registrar or, if no Certificate Registrar is appointed, 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 will not be disregarded for
federal income tax purposes. As a condition to granting its consent to a
transfer of a Class A-R Certificate, the Certificate Registrar or, if no
Certificate Registrar is appointed, the Trustee, shall require the proposed
transferee of such Certificate (including, in the case of the initial issuance
of the Class A-R Certificate, the initial Holder thereof) to execute a letter
and affidavit substantially in the form attached hereto as Exhibit K. In the
absence of a contrary instruction from the transferor of such Certificate,
declaration (11) in such affidavit may be left blank. If the transferor requests
by written notice to the Certificate Registrar or, if no Certificate Registrar
is appointed, the Trustee, prior to the date of the proposed transfer that one
of the two other forms of declaration (11) of such affidavit be used, then the
Certificate Registrar or, if no Certificate Registrar is appointed, the Trustee,
shall require that such form of declaration (11) be included in such affidavit.
37
As a condition to the granting of the consent referred to in this
Section 4.02(i), prior to the transfer, sale, pledge, hypothecation or other
disposition of the Class A-R Certificate or any interest therein, the
Certificate Registrar or, if no Certificate Registrar is appointed, the Trustee
shall require that (1) the proposed transferee deliver to the Trustee its
taxpayer identification number and state, under penalties of perjury that such
number is the social security or employer identification number, as the case may
be, of the transferee or provide an affidavit under penalties of perjury stating
that as of the date of such transfer such transferee is not and has no intention
of becoming a Disqualified Organization; (2) the proposed transferee deliver to
the Trustee an affidavit stating (i) that such transferee is not acquiring such
Class A-R Certificate as an agent, broker, nominee, or middleman for a
Disqualified Organization, (ii) if the Class A-R Certificate is a "non-economic
residual interest" within the meaning of Treas. Reg. "1.860E-1(c)(2), (X) that
no purpose of the acquisition of the Class A-R Certificate is to avoid or impede
the assessment or collection of tax, (Y) that such transferee has historically
paid its debts as they came due and will continue to pay its debts as they come
due, and (Z) that such transferee represents that it understands that, as the
holder of the non-economic residual interest, the transferee may incur tax
liabilities in excess of any cash flows generated by the interest and that the
transferee intends to pay taxes associated with holding the residual interest,
and (iii) unless the Certificate Registrar or, if no Certificate Registrar is
appointed, the Trustee consents to the transfer of the Class A-R Certificate to
a Person who is not a U.S. Person and who has furnished either a duly completed
and effective Form W-8ECI (or any successor thereto) or an Opinion of Counsel to
the effect that the transfer will not be disregarded for federal income tax
purposes, that it is a U.S. Person; (3) if so requested by the transferor in
written notice provided to the Certificate Registrar or, if no Certificate
Registrar is appointed, the Trustee, prior to the date of the proposed transfer,
the proposed transferee deliver to the Trustee an affidavit that includes a
declaration made in the form of declaration (11) in the affidavit set forth in
Exhibit K requested by the transferor; and (4) the transferor deliver to the
Certificate Registrar or, if no Certificate Registrar is appointed, the Trustee
a written certification that as of the date of such transfer it has no knowledge
and no reason to know that the affirmations described in clauses (1), (2) and
(3) were false. The Certificate Registrar or, if no Certificate Registrar is
appointed, the Trustee shall not grant the consent referred to in this Section
4.02(i) if it has actual knowledge that any statement made in the affidavit
issued pursuant to the preceding sentence is not true. Notwithstanding any
purported transfer, sale or other disposition of the Class A-R Certificate to a
Disqualified Organization, such transfer, sale or other disposition shall be
deemed to be of no legal force or effect whatsoever and such Disqualified
Organization shall not be deemed to be a Class A-R Certificateholder for any
purpose hereunder, including, but not limited to, the receipt of distributions
on such Class A-R Certificate. If any purported transfer shall be in violation
of the provisions of this Section 4.02(i) then the prior holder of the Class A-R
Certificate shall, upon discovery that the transfer of such Class A-R
Certificate was not in fact permitted by this Section 4.02(i), be restored to
all rights and obligations as a Holder thereof retroactive to the date of the
purported transfer of such Class A-R Certificate. The Trustee and the Servicer
shall be under no liability to any Person for any registration or transfer of a
Class A-R Certificate that is not permitted by this Section 4.02(i) or for
making payments due on such Class A-R Certificate to the purported Holder
thereof or taking any other action with respect to such purported Holder under
the provisions of this Agreement so long as the transfer was not registered
under the written certification of the Certificate Registrar or, if no
Certificate Registrar is appointed, the Trustee as described in this Section
4.02(i). The prior Holder shall be entitled to recover from any purported Holder
of a Class A-R Certificate that was in fact not a permitted purported transferee
under this Section 4.02(i) at the time it became a purported Holder all payments
made to such purported Holder on such Class A-R Certificate; provided that the
Servicer shall not be responsible for such recovery. Each Class A-R
Certificateholder, by the acceptance of the Class A-R Certificate, shall be
deemed for all purposes to have consented to the provisions of this Section
4.02(i) and to any amendment to this Agreement deemed necessary by counsel of
the Trustee or the Servicer to ensure that the Class A-R Certificate is not
transferred to a Disqualified Organization and that any transfer of such Class
A-R Certificate will not cause the imposition of a tax upon the Trust Fund or
cause the Trust Fund to fail to qualify as a REMIC. The restrictions on transfer
of the Class A-R Certificate will cease to apply and be void upon receipt by the
Certificate Registrar or, if no Certificate Registrar is appointed, the Trustee
of an Opinion of Counsel to the effect that such restrictions on transfer are no
longer necessary to avoid the risk of material federal taxation to the Trust
Fund or prevent the Trust Fund from qualifying as a REMIC.
(j) The Servicer shall make available upon written request to each
Holder and each proposed transferee of a Class A-X, Class B-3, Class B-4 or
Class B-5 Certificate such information as may be required to permit the proposed
transfer to be effected pursuant to Rule 144A under the Securities Act of 1933,
as amended.
Section 4.03. Mutilated, Destroyed, Lost or Stolen Certificates.
38
If (a) any mutilated Certificate is surrendered to the Trustee or, if a
Paying Agent has been appointed under Section 4.05, the Paying Agent, or the
Trustee or, if a Paying Agent has been appointed under Section 4.05, the Paying
Agent, receives evidence to its satisfaction of the destruction, loss or theft
of any Certificate, and (b) there is delivered to the Trustee or, if a Paying
Agent has been appointed under Section 4.05, the Paying Agent, such security or
indemnity as may be required by it to save it harmless, then, in the absence of
notice to the Trustee or, if a Paying Agent has been appointed under Section
4.05, the Paying Agent, that such Certificate has been acquired by a bona fide
purchaser, the Trustee or, if a Paying Agent has been appointed under Section
4.05, the Paying Agent, shall authenticate and deliver, in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like tenor and Class. Upon the issuance of any new Certificate
under this Section, the Trustee or, if a Paying Agent has been appointed under
Section 4.05, the Paying Agent, may require of the Certificateholder 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 connected therewith. Any
replacement Certificate of any Class issued pursuant to this Section shall
constitute complete and indefeasible evidence of ownership of the Percentage
Interest in the distributions to which the Certificateholders of such Class are
entitled, as if originally issued, whether or not the mutilated, destroyed, lost
or stolen Certificate shall be found at any time, and such mutilated, destroyed,
lost or stolen Certificate shall be of no force or effect under this Agreement,
to the extent permitted by law.
Section 4.04. Persons Deemed Owners.
Prior to due presentation of a Certificate of any Class for
registration of transfer, the Depositor, the Servicer, the Paying Agent and the
Trustee may treat the person in whose name any Certificate is registered on the
Record Date as the owner of such Certificate and the Percentage Interest in the
distributions to which the Certificateholders of such Class are entitled on the
relevant date as the Holder of such Certificate and the Percentage Interest
represented by such Certificate for the purpose of receiving remittances
pursuant to Section 6.01 and for all other purposes whatsoever, and neither the
Depositor, the Servicer nor the Trustee shall be affected by notice to the
contrary.
Section 4.05. Appointment of Paying Agent and Certificate Registrar;
Certificate Account.
The Trustee may appoint a Paying Agent and a Certificate Registrar
hereunder, but such Paying Agent and such Certificate Registrar shall not be the
Depositor, the Seller, or an Affiliate of the Depositor or the Seller unless
such Paying Agent or such Certificate Registrar is the Corporate Trust
Department of Chase. In the event of an appointment of such Paying Agent, no
later than two Business Days prior to each Distribution Date, the Servicer shall
deposit or cause to be deposited with the Paying Agent from funds on deposit in
the Collection Account a sum up to the Available Distribution Amount, such sum
to be held in trust for the benefit of Certificateholders in a segregated
account (the "Certificate Account") which shall be an Eligible Account in the
name of "[TRUSTEE], as Trustee, in trust for and for the benefit of the
Certificateholders of Multi-Class Mortgage Pass-Through Certificates, Chase
Mortgage Finance Corporation, Series [_______] Certificate Account". 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 Trustee designates the Corporate Trust Department of Chase as
the initial Paying Agent and initial Certificate Registrar. Only the Trustee may
remove the Paying Agent and the Certificate Registrar, and may do so at will.
39
If, on any Distribution Date, the Paying Agent fails to distribute to
Certificateholders the amounts then on deposit in the Certificate Account for
the purposes specified herein, the Trustee shall be obligated promptly upon its
knowledge thereof to distribute such amounts to Certificateholders in the manner
and in such amounts based upon information provided by the Servicer; provided
that in no event shall the Trustee be obligated for purposes of this paragraph
to distribute to Certificateholders any amounts other than those on deposit in
the Certificate Account or expend any funds not reimbursable pursuant to Section
10.05 hereof, except as otherwise provided herein. Notwithstanding anything in
this Agreement to the contrary, the Trustee shall be liable to the Servicer and
the Certificateholders only for its negligence in connection with the withdrawal
of funds from the Certificate Account by the Trustee and the distribution of
such funds by the Trustee to Certificateholders pursuant to this paragraph.
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.
Section 4.06. 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.]
(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 4.06, 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 4.06. No
Authenticating Agent shall have responsibility or liability for any action taken
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.
[END OF ARTICLE IV]
40
ARTICLE V
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 5.01. Servicer to Service Mortgage Loans.
The Servicer shall service and administer the Mortgage Loans and shall
have full power and authority, acting alone or through Sub-Servicers as provided
in Section 5.02, to do any and all things which it may deem necessary or
desirable in connection with such servicing and administration, all in
accordance with Accepted Servicing Practices. Without limiting the generality of
the foregoing, the Servicer in its own name or in the name of a Sub-Servicer
shall, pursuant to a power of attorney granted hereby by the Trustee for such
purposes, when the Servicer or the Sub-Servicer, as the case may be, believes it
appropriate in its best judgment, execute and deliver, on behalf of the
Certificateholders and the Trustee 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; provided, however, that subject to the
provisions of this paragraph, the Servicer may allow a modification with respect
to a Mortgage Loan if the Servicer would take such action in the ordinary course
of its business if it were the owner of the Mortgage Loan. The Servicer may
agree to a modification of any Mortgage Loan (the "Relevant Mortgage Loan") upon
the request of the related Mortgagor, provided that (i) the modification is in
lieu of a refinancing and the Mortgage Rate on the Relevant Mortgage Loan, as
modified, is approximately a prevailing market rate of newly-originated mortgage
loans having similar terms, (ii) the aggregate of the adjusted bases of all
Modified Mortgage Loans (including the Relevant Mortgage Loans) plus the
aggregate adjusted bases of any assets that are not qualified mortgages or
permitted investments under Section 860G(a) of the Code that are assets of the
Trust Fund established hereunder at all times on any day is less than one
percent of the aggregate of the adjusted bases of all assets of the Trust Fund
(including such Modified Mortgage Loans) on such day, and (iii) the Servicer
purchases the Relevant Mortgage Loan from the Trust Fund as described below.
Effective immediately after such modification, and, in any event, on the same
Business Day on which the modification occurs, all right, title and interest of
the Trustee in and to the Modified Mortgage Loan shall automatically be deemed
transferred and assigned to the Servicer and all benefits and burdens of
ownership thereof, including without limitation the right to accrued interest
thereon from and including the date of modification and the risk of default
thereon, shall pass to the Servicer. To confirm such transfer and assignment,
the Servicer, as servicer hereunder, as soon as practicable shall execute an
instrument of assignment of the Modified Mortgage Loan without recourse in
customary form to the Servicer in its individual capacity. The Servicer shall
deposit the Purchase Price for any Modified Mortgage Loan in the Collection
Account pursuant to Section 5.08. Upon receipt by the Trustee of written
notification of any such deposit signed by a Servicing Officer, the Trustee
shall release to the Servicer the related Mortgage File and shall execute and
deliver such instruments of transfer or assignment, in each case without
recourse, as shall be necessary more fully to vest in the Servicer any Modified
Mortgage Loan previously transferred and assigned pursuant thereto.
The Servicer shall furnish to the Trustee for execution and redelivery
to the Servicer or, at the request of the Servicer, a Sub-Servicer, such
documents necessary or appropriate to enable the Servicer to service and
administer the Mortgage Loans and the Trustee shall not be responsible for the
Servicer's application thereof. The Servicer agrees to remain eligible as either
a FNMA or FHLMC seller/servicer, or both, for so long as it is Servicer.
All Servicing Advances made by the Servicer in effecting the timely
payment of taxes, insurance and assessments on the properties subject to the
Mortgage Loans shall not, for the purpose of calculating monthly distributions
to Certificateholders, be added to the amount owing under the related Mortgage
Loans, notwithstanding that the terms of such Mortgage Loan so permit, and such
Servicing Advances shall be recoverable by the Servicer to the extent permitted
by Sections 5.09 and 5.23.
41
Section 5.02. Sub-Servicing Agreements Between Servicer and
Sub-Servicers; Enforcement of Sub-Servicer's Obligations.
(a) The Servicer may enter into Sub-Servicing Agreements with
Sub-Servicers for the servicing and administration of all or part of the
Mortgage Loans; provided, however, that any subservicer or other subcontractor
that performs any of the functions indentified in Item 1122(d) of Regulation AB
must agree in writing that, if the Servicer or the Depositor determines that
such subcontractor was "participating in the servicing function" within the
meaning of Item 1122, such subcontractor will comply with the provisions of
Sections 5.25 and 5.26 to the same extent as if it were the Servicer. References
in this Agreement to actions taken or to be taken by the Servicer in servicing
the Mortgage Loans include actions taken or to be taken by a Sub-Servicer on
behalf of the Servicer. Each Sub-Servicing Agreement will be upon such terms and
conditions as are not inconsistent with this Agreement and as the Servicer and
the Sub-Servicer have agreed. The Servicer shall notify the Trustee in writing
promptly upon the appointment of any Sub-Servicer. For purposes of this
Agreement, the receipt by the Sub-Servicer of any amount with respect to a
Mortgage Loan (other than amounts representing servicing compensation or
reimbursement for an advance) shall be treated as the receipt by the Servicer of
such amount. The Sub-Servicer shall deposit all such funds in an Eligible
Account.
(b) As part of its servicing activities hereunder, the Servicer, for
the benefit of the Trustee and the Certificateholders, shall enforce the
obligations of each Sub-Servicer under the related Sub-Servicing Agreement. Such
enforcement, including, without limitation, the legal prosecution of claims,
termination of Sub-Servicing Agreements as appropriate, and the pursuit of other
remedies, shall be in such form and carried out to such an extent and at such
time as the Servicer, in its good faith business judgment, would require were it
the owner of the related Mortgage Loans. The Servicer shall pay the costs of
such enforcement at its own expense but shall be reimbursed therefor only (i)
from a general recovery resulting from such enforcement only to the extent, if
any, that such recovery exceeds all amounts due in respect of the related
Mortgage Loans or (ii) from a specific recovery of costs, expenses or attorneys'
fees against the party against whom such enforcement is directed.
Section 5.03. Successor Sub-Servicers.
The Servicer shall be entitled to terminate any Sub-Servicing Agreement
that may exist in accordance with the terms and conditions of such Sub-Servicing
Agreement and without any limitation by virtue of this Agreement.
Section 5.04. Liability of the Servicer.
Notwithstanding any Sub-Servicing Agreement, any of the provisions of
this Agreement relating to agreements or arrangements between the Servicer and a
Sub-Servicer or reference to actions taken through a Sub-Servicer or otherwise,
the Servicer shall remain obligated and liable to the Trustee and
Certificateholders for the servicing and administering of the Mortgage Loans in
accordance with the provisions of this Agreement without diminution of such
obligation or liability by virtue of such Sub-Servicing Agreements or
arrangements or by virtue of indemnification from the Sub-Servicer and to the
same extent and under the same terms and conditions as if the Servicer alone
were servicing and administering the Mortgage Loans. The Servicer shall be
entitled to enter into any agreement with a Sub-Servicer for indemnification of
the Servicer and nothing contained in this Agreement shall be deemed to limit or
modify such indemnification.
Section 5.05. No Contractual Relationship Between Sub-Servicer and
Trustee or Certificateholders.
Any Sub-Servicing Agreement that may be entered into and any other
transactions or services relating to the Mortgage Loans involving a Sub-Servicer
in its capacity as such and not as an originator shall be deemed to be between
the Sub-Servicer and the Servicer alone, and the Trustee and Certificateholders
shall not be deemed parties thereto and shall have no claims, rights,
obligations, duties or liabilities with respect to the Sub-Servicer.
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Section 5.06. Termination of Sub-Servicing Agreement.
If the Servicer shall for any reason no longer be the Servicer
hereunder (including by reason of any Event of Default), the Servicer shall
thereupon terminate each Sub-Servicing Agreement that may have been entered
into, and the Trustee, its designee or the successor servicer and the Trustee
shall not be deemed to have assumed any of the Servicer's interest therein or to
have replaced the Servicer as a party to any such Sub-Servicing Agreement.
Section 5.07. Collection of Mortgage Loan Payments.
Continuously from the date hereof until the principal and interest on
all Mortgage Loans are paid in full, the Servicer will proceed diligently to
collect all payments due under each of the Mortgage Loans when the same shall
become due and payable; provided, however, that the Servicer may elect, to the
extent consistent with Accepted Servicing Practices, to waive any late payment
charge and shall, to the extent such procedures shall be consistent with this
Agreement, follow such collection procedures as it follows with respect to
conventional mortgage loans held in its own portfolio. Any such arrangements
shall not diminish or otherwise affect the Servicer's obligation to make
Advances pursuant to Section 6.03.
Section 5.08. Establishment of Collection Account; Deposit in
Collection Account.
With respect to all of the Mortgage Loans, the Servicer shall segregate
and hold all funds collected and received pursuant to a Mortgage Loan separate
and apart from any of its own funds and general assets and shall establish and
maintain one or more Collection Accounts for the benefit of the
Certificateholders (collectively, the "Collection Account") which are Eligible
Accounts, in the form of a trust account, in the name of "[TRUSTEE], as Trustee,
in trust for and for the benefit of the Certificateholders of Multi-Class
Mortgage Pass-Through Certificates, JPMorgan Chase Bank, N.A. as Servicer, Chase
Mortgage Finance Corporation, Series [_______] - Collection Account." Such
Collection Account shall be established with a commercial bank, a savings bank
or a savings and loan association. The Servicer may invest, or cause the
institution maintaining the Collection Account to invest, moneys in the
Collection Account in Eligible Investments, which shall mature not later than
the second Business Day next preceding the Distribution Date next following the
date of such investment and shall not be sold or disposed of prior to its
maturity. All income and gain realized from any such investment shall be for the
benefit of the Servicer as additional compensation and shall be subject to its
withdrawal or order from time to time. The amount of any losses incurred in
respect of any such investments (to the extent not offset by income from other
such investments) shall be deposited in the Collection Account by the Servicer
out of its own funds immediately as realized; provided, however, that if the
Trustee becomes Servicer, the Trustee shall not be required to deposit the
amount of any loss incurred prior to it becoming Servicer.
The Servicer shall deposit or cause to be deposited in the Collection
Account on a daily basis (and not later than the second Business Day following
receipt), and retain therein:
(a) All payments which were received after the Cut-off Date on account
of principal of the Mortgage Loans (other than the principal portion of Monthly
Payments due on or before the Cut-off Date), and all Principal Prepayments
collected on or after the Cut-off Date;
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(b) All payments which were received after the Cut-off Date on account
of interest on the Mortgage Loans (net of the Servicing Fee)(other than the
interest portion of Monthly Payments due on or before the Cut-off Date);
(c) Net Liquidation Proceeds;
(d) All Insurance Proceeds received by the Servicer under any title,
hazard or other insurance policy, including amounts required to be deposited
pursuant to Sections 5.16 and 5.20, other than proceeds to be held in the Escrow
Account or applied to the restoration or repair of the Mortgaged Property (or
Underlying Mortgaged Property, in the case of a Co-op Loan) or released to the
Mortgagor in accordance with the Servicer's normal servicing procedures or
otherwise applied or held as required by applicable law;
(e) All awards or settlements in respect of condemnation proceedings
affecting any Mortgaged Property (or Underlying Mortgaged Property, in the case
of a Co-op Loan), which are not released to the Mortgagor in accordance with the
Servicer's normal servicing procedures;
(f) All Repurchase Proceeds;
(g) All Advances made by the Servicer pursuant to Section 6.03;
(h) All amounts representing revenues under the insurance provided
pursuant to Section 5.19 to the extent of any losses borne by any
Certificateholder;
(i) All revenues from any Mortgaged Property (or Underlying Mortgaged
Property in the case of a Co-op Loan) acquired by the Servicer by foreclosure or
deed in lieu of foreclosure net of any Servicing Advances with respect to such
Mortgaged Property; and
(j) Any other amounts required to be deposited therein pursuant to this
Agreement.
The Servicer shall maintain accounting records on a Mortgage
Loan-by-Mortgage Loan basis with respect to the Collection Account. The Servicer
shall give notice to the Trustee, the Depositor and each Rating Agency of any
change in the location of the Collection Account, prior to the use thereof.
Notwithstanding anything to the contrary herein, no Monthly Payment or any
portion thereof shall be permitted to remain in the Collection Account for more
than 12 months. Any Monthly Payment or any portion thereof that has remained in
the Collection Account for 12 months shall be deemed a Principal Prepayment and
distributed to Certificateholders pursuant to the provisions of this Agreement
on the Distribution Date immediately following the end of such 12 month period.
Section 5.09. Permitted Withdrawals from the Collection Account.
The Servicer may, from time to time, withdraw funds from the Collection
Account for the following purposes:
(a) to reimburse itself for Advances made pursuant to Section 6.03
(including amounts to reimburse the related Sub-Servicer for advances made
pursuant to the applicable Sub-Servicing Agreement), the Servicer's and the
Sub-Servicer's right to receive reimbursement pursuant to this subclause (i)
being limited to amounts received on particular Mortgage Loans which represent
Late Collections (net of the Servicing Fees) with respect to those particular
Mortgage Loans;
(b) to pay itself the Servicing Fee;
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(c) to reimburse itself for unreimbursed Servicing Advances, or to pay
the related Sub-Servicer any unreimbursed Servicing Advances, the Servicer's
right to receive reimbursement or make payments to the Sub-Servicer pursuant to
this subclause (iii) with respect to any Mortgage Loan being limited to related
Liquidation Proceeds, Insurance Proceeds, and condemnation awards;
(d) to reimburse itself (or the related Sub-Servicer) or the Depositor
for expenses incurred by and recoverable by or reimbursable to it pursuant to
Section 5.01 or 5.16;
(e) to reimburse itself (or the related Sub-Servicer) for any
Nonrecoverable Advances;
(f) to pay to itself (or the related Sub-Servicer) income earned on the
investment of funds deposited in the Collection Account;
(g) to make deposits into the Certificate Account in the amounts and in
the manner provided for herein;
(h) to make payments to itself or others pursuant to any provision of
this Agreement, and to clear and terminate the Collection Account upon the
termination of this Agreement; and
(i) to withdraw amounts deposited in error.
Section 5.10. Establishment of Escrow Account; Deposits in Escrow
Account.
With respect to those Mortgage Loans on which the Servicer or any
Sub-Servicer collects Escrow Payments, if any, the Servicer shall, and shall
cause the Sub-Servicer to, segregate and hold all funds collected and received
pursuant to each such Mortgage Loan which constitute Escrow Payments separate
and apart from any of its own funds and general assets and shall establish and
maintain one or more Escrow Accounts, in the form of trust accounts. Such Escrow
Accounts shall be established with a commercial bank, a mutual savings bank or a
savings and loan association the deposits of which are insured by the FDIC in a
manner which shall provide maximum available insurance thereunder, and which may
be drawn on by the Servicer. The Servicer shall give notice to the Trustee of
the location of any Escrow Account, and of any change thereof, prior to the use
thereof. Nothing in this paragraph shall be deemed to require the Servicer to
collect Escrow Payments in the absence of a provision in the related Mortgage
requiring such collection.
The Servicer shall deposit, or cause to be deposited, in any Escrow
Account or Accounts on a daily basis, and retain therein, (i) all Escrow
Payments collected on account of any Mortgage Loans, for the purpose of
effecting timely payment of any such items as required under the terms of this
Agreement and (ii) all amounts representing proceeds of any hazard insurance
policy which are to be applied to the restoration or repair of any Mortgaged
Property (or Underlying Mortgaged Property, in the case of a Co-op Loan). The
Servicer shall make withdrawals therefrom only to effect such payments as are
required under this Agreement, and for such other purposes as are set forth in
Section 5.11. The Servicer shall be entitled to retain any interest paid on
funds deposited in the Escrow Account by the depository institution other than
interest on escrowed funds required by law to be paid to the related Mortgagor
and, to the extent required by law, the Servicer shall pay interest on escrowed
funds to the related Mortgagor notwithstanding that the Escrow Account is
non-interest-bearing or that interest paid thereon is insufficient for such
purposes.
Section 5.11. Permitted Withdrawals from Escrow Account.
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Withdrawals from any Escrow Account or Accounts may be made by the
Servicer only (i) to effect timely payments of ground rents, taxes, assessments,
water rates, Standard Hazard Policy premiums, or other items constituting Escrow
Payments for the related Mortgage, (ii) to reimburse the Servicer for any
Servicing Advance made by the Servicer, with respect to a related Mortgage Loan
but only from amounts received on the related Mortgage Loan which represent late
payments or collections of Escrow Payments thereunder, (iii) to refund to any
Mortgagor any funds found to be in excess of the amounts required under the
terms of the related Mortgage Loan or under applicable law, (iv) for application
to restoration or repair of the property subject to the related Mortgage, (v) to
pay to the Servicer, or to the Mortgagor to the extent required by law, any
interest paid on the funds deposited in the Escrow Account, (vi) to clear and
terminate the Escrow Account on the termination of this Agreement or (vii) to
withdraw amounts deposited in error.
Section 5.12. Payment of Taxes, Insurance and Other Charges.
With respect to each Mortgage Loan, the Servicer shall maintain, or
cause to be maintained, accurate records reflecting any delinquencies or
nonpayments with regard to taxes, assessments and Standard Hazard Policy
premiums. The Servicer assumes full responsibility for ensuring the payment of
all such bills and shall effect payments of all such bills irrespective of each
Mortgagor's faithful performance in the payment of same or the making of the
Escrow Payments and shall make advances from its own funds to effect such
payments.
Section 5.13. Transfer of Accounts.
The Servicer may transfer the Collection Account or Escrow Account to
an Eligible Account maintained with a different depository institution from time
to time.
Section 5.14. [Reserved].
Section 5.15. Maintenance of the Primary Insurance Policies.
The Servicer shall not take, or permit any Sub-Servicer to take, any
action which would result in non-coverage under any applicable Primary Insurance
Policy of any loss which, but for the actions of the Servicer or Sub-Servicer,
would have been covered thereunder. Except as otherwise required by applicable
law, to the extent coverage is available and until the Loan-to-Value Ratio of
the related Mortgage Loan is reduced to 80%, the Servicer shall keep or cause to
be kept in full force and effect each such Primary Insurance Policy in an amount
equal to the amount by which the unpaid principal balance of the related
Mortgage Loan exceeds 75% of the value (as described in the definition of
Loan-to-Value Ratio) of the related Mortgaged Property (or Underlying Mortgaged
Property, in the case of a Co-op Loan). The Servicer shall not cancel or refuse
to renew any such Primary Insurance Policy or consent to any Sub-Servicer
canceling or refusing to renew any such Primary Insurance Policy applicable to a
Mortgage Loan subserviced by it, that is in effect at the date of the initial
issuance of the Certificates and is required to be kept in force hereunder
unless the replacement Primary Insurance Policy for such canceled or non-renewed
policy is maintained with an insurer whose claims-paying ability is rated at
least as high as the original insurer or is acceptable to each Rating Agency as
confirmed in writing by each such Rating Agency, unless otherwise required by
law.
Section 5.16. Maintenance of Standard Hazard Policies.
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(a) The Servicer shall cause to be maintained for each Mortgage Loan
(other than a Co-op Loan) a Standard Hazard Policy with extended coverage as is
prudent in the area where the Mortgaged Property is located in an amount which
is equal to the greater of (i) the lesser of (A) 100% of the maximum insurable
value of the improvements securing such Mortgage Loan or (B) the principal
balance owing on such Mortgage Loan, or (ii) such amount required to prevent the
Mortgagor or mortgagee from becoming a co-insurer. If the Mortgaged Property is
in an area identified at the time of origination in the Federal Register by the
Federal Emergency Management Agency as having special flood hazards (and such
flood insurance has been made available) the Servicer will cause to be
maintained a flood insurance policy meeting the requirements of the current
guidelines of the Federal Insurance Administration with a generally acceptable
insurance carrier, in an amount representing coverage not less than the least of
(i) the outstanding Principal Balance of the Mortgage Loan, (ii) the full
insurable value or (iii) the maximum amount of insurance which is available
under the Flood Disaster Protection Act of 1973, as amended. The Servicer shall
also maintain on property acquired upon foreclosure, or by deed in lieu of
foreclosure, of any Mortgage Loan, fire and hazard insurance with extended
coverage in an amount which is not less than the lesser of (i) the outstanding
principal balance of the Mortgage Loan or (ii) the maximum insurable value of
the improvements which are a part of such property, liability insurance, and, to
the extent available, flood insurance in an amount as provided above. Any
amounts collected by the Servicer under any such policies (other than amounts to
be applied to the restoration or repair of the property subject to the related
Mortgage or property acquired in liquidation of the Mortgage Loan, or released
to the Mortgagor in accordance with the Servicer's normal servicing procedures)
shall be deposited, subject to applicable law, in the Collection Account. It is
understood and agreed that no earthquake or other additional insurance need be
required by the Servicer of any Mortgagor or maintained on property acquired in
respect of a Mortgage Loan, other than pursuant to such applicable laws and
regulations as shall at any time be in force and as shall require such
additional insurance. All such Standard Hazard Policies and other policies shall
be endorsed with standard mortgagee clauses with loss payable to the Servicer or
its designee. Any such Standard Hazard Policies or other policies may be in the
form of blanket policies; provided, however, that in the event of any claim
arising in connection with a hazard loss the Servicer shall be obligated, in the
case of blanket insurance policies, to deposit in the Collection Account any
amount not payable under such blanket policy because of a deductible clause in
such policy and not otherwise payable under an individual policy. The Servicer
shall not interfere with the Mortgagor's freedom of choice in selecting either
his insurance carrier or agent; provided, however, that the Servicer shall not
accept any such insurance policies from insurance companies unless such
companies are acceptable insurers in the discretion of the Servicer.
(b) Any cost incurred by the Servicer in maintaining any of the
foregoing insurance shall not, for the purpose of calculating monthly
distributions to Certificateholders, be added to the amount owing under the
Mortgage Loan, notwithstanding that the terms of the Mortgage Loan so permit.
Such costs (other than the costs of maintaining a blanket hazard insurance
policy not attributable to a specific Mortgaged Property) shall be recoverable
by the Servicer from the Mortgagor or out of Insurance Proceeds or Liquidation
Proceeds or to the extent permitted by Section 5.09.
Section 5.17. [Reserved].
Section 5.18. [Reserved].
Section 5.19. Fidelity Bond and Errors and Omissions Insurance.
The Servicer shall maintain, at its own expense, a blanket fidelity
bond and an errors and omissions insurance policy, with broad coverage with
responsible companies on all officers, employees or other persons acting on
behalf of the Servicer in any capacity with regard to the Mortgage Loans to
handle funds, money, documents and papers relating to the Mortgage Loans. Any
such fidelity bond and errors and omissions insurance shall protect and insure
the Servicer against losses, including forgery, theft, embezzlement, fraud,
errors and omissions and negligent acts of such persons and shall be maintained
at a level acceptable to FNMA. No provision of this Section 5.19 requiring such
fidelity bond and errors and omissions insurance shall diminish or relieve the
Servicer from its duties and obligations as set forth in this Agreement. Upon
request of the Trustee, the Servicer shall cause to be delivered to the Trustee
a certification evidencing coverage under such fidelity bond and insurance
policy. Promptly upon receipt of any notice from the surety or the insurer that
such fidelity bond or insurance policy has been terminated or modified in a
materially adverse manner, the Servicer shall notify the Trustee and each Rating
Agency of any such termination or modification.
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Section 5.20. Collections under Insurance Policies; Enforcement of
Due-On-Sale Clauses; Assumption Agreements.
(a) In connection with its activities as administrator and servicer of
the Mortgage Loans, the Servicer agrees to present, on behalf of itself, the
Trustee and the Certificateholders, claims to the insurer under any Standard
Hazard Policies and, in this regard, to take such reasonable action as shall be
necessary to permit recovery under any insurance policies. Pursuant to Section
5.08, the Servicer shall deposit Insurance Proceeds in the Collection Account.
(b) When any Mortgaged Property (or stock allocated to a dwelling unit,
in the case of a Co-op Loan) is conveyed by the Mortgagor, the Servicer shall
enforce any due-on-sale clause contained in any Mortgage Note or Mortgage, to
the extent permitted by such Mortgage Note or Mortgage, applicable law and
governmental regulations. Subject to the foregoing, the Servicer is authorized
to take or enter into an assumption or substitution agreement from or with the
Person to whom such property has been or is about to be conveyed. In connection
with such assumption or substitution, the Servicer shall apply such underwriting
standards and follow such practices and procedures as shall be normal and usual
and as it applies to mortgage loans owned solely by it.
Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Servicer shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any conveyance by the
Mortgagor of the Mortgaged Property (or stock allocated to a dwelling unit, in
the case of a Co-op Loan) or any assumption of a Mortgage Loan by operation of
law which the Servicer in good faith determines it may be restricted by law from
preventing, for any reason whatsoever.
(c) Subject to the Servicer's duty to enforce any due-on-sale clause to
the effect set forth in Section 5.20(b), in any case in which a Mortgaged
Property (or stock allocated to a dwelling unit, in the case of a Co-op Loan) is
to be 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, the Servicer shall so notify the Trustee by forwarding to the
Trustee the original copy of such assumption or substitution agreement, which
copy shall be added by the Trustee to the related Mortgage File and shall, for
all purposes, be considered a part of such Mortgage File to the same extent as
all other documents and instruments constituting a part thereof. In connection
with any such assumption, modification agreement or substitution agreement, the
interest rate of the related Mortgage Note shall not be changed, the principal
amount of the Mortgage Note shall not be increased or decreased and the maturity
of the Mortgage Note shall not be extended, nor shall it be shortened by more
than one year. Any fee collected by the Servicer for entering into an assumption
or substitution of liability agreement with respect to such Mortgage Loan shall
be retained by the Servicer as additional servicing compensation.
Section 5.21. Income and Realization from Defaulted Mortgage Loans.
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The Servicer, on behalf of the Trustee, shall foreclose upon or
otherwise comparably convert the ownership of Mortgaged Properties (or stock
allocated to a dwelling unit, in the case of a Co-op Loan) 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
pursuant to Section 5.07, shall manage, conserve, protect and operate such
Mortgaged Properties (or stock allocated to a dwelling unit, in the case of a
Co-op Loan) for the purposes of their prompt disposition and sale, and shall
dispose of such Mortgaged Properties (or stock allocated to a dwelling unit, in
the case of a Co-op Loan) on such terms and conditions as it deems in the best
interests of the Certificateholders. The Servicer shall sell such property prior
to the close of the third calendar year beginning after the year in which such
foreclosure or conversion occurs or such longer period as would not prevent such
Mortgaged Property (or stock allocated to a dwelling unit, in the case of a
Co-op Loan) from constituting "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code. In connection with such activities, the Servicer
shall follow such practices and procedures as it shall deem necessary or
advisable, as shall be normal and usual in its general mortgage servicing
activities, including its management of foreclosed properties for a temporary
period as contemplated herein. The foregoing is subject to the provisions of
Section 5.28 of this Agreement and to the proviso that the Servicer shall not be
required to expend its own funds in connection with any management, foreclosure
or towards the restoration of any property unless it shall determine that such
management, restoration or foreclosure will increase the Liquidation Proceeds of
the Mortgage Loan to Certificateholders after reimbursement to itself for such
expenses (respecting which it shall have priority for purposes of withdrawals
from the Collection Account pursuant to Section 5.09). The Servicer shall be
permitted to earn income with respect to any Mortgaged Properties (or stock
allocated to a dwelling unit, in the case of a Co-op Loan), provided such income
does not constitute "net income from foreclosure property" within the meaning of
Section 860G(c) of the Code. The income earned from the management of such
Mortgaged Properties (or stock allocated to a dwelling unit, in the case of a
Co-op Loan), net of reimbursement to the Servicer for expenses (including any
taxes) incurred in connection with such management, shall be applied to the
payment of principal of and interest on the related defaulted Mortgage Loans
(with interest accruing and principal amortizing 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 is in excess of the amount attributable to
amortizing principal and accrued interest at the Net Mortgage Rate on the
related Mortgage Loan, such excess shall be deposited in the Collection Account.
The Servicer shall take into account the existence of any hazardous
substances, hazardous wastes or solid wastes, as such terms are defined in the
Comprehensive Environmental Response Compensation and Liability Act, as amended,
the Resources Conservation and Recovery Act of 1976, as amended, or other
federal, state or local environmental legislation, on a Mortgaged Property (or
Underlying Mortgaged Property, in the case of a Co-op Loan), in determining
whether to foreclose upon or otherwise comparably convert the ownership of such
property. To the extent that the Servicer has actual knowledge of any such
substance or waste, it shall consult with the Trustee regarding the appropriate
course of action. The Servicer shall not institute foreclosure actions with
respect to a property containing substance or waste as described above if it
reasonably believes that such action would not be consistent with its servicing
standards, and in no event shall the Servicer manage, operate or take any other
action with respect thereto which the Servicer in good faith believes will
result in "clean-up" or other liability under applicable law. The net income
from the rental or sale of a REO Property shall be deposited in the Collection
Account within two (2) Business Days after receipt thereof by the Servicer.
The Servicer may enter into a special servicing agreement with an
unaffiliated holder of 100% Percentage Interest of the Class of Class B
Certificates then outstanding having the highest numerical class designation or
a holder of a class of securities representing interests in such Class B
Certificate and/or other subordinate mortgage pass-through certificates, such
agreement to be (i) substantially in the form of Exhibit J hereto or (ii)
subject to each Rating Agency's acknowledgment that the ratings of the
Certificates in effect immediately prior to the entering into of such agreement
would not be qualified, downgraded or withdrawn and the Certificates would not
be placed on credit review status (except for possible upgrading) as a result of
such agreement. Any such agreement may contain provisions whereby such holder
may instruct the Servicer to commence or delay foreclosure proceedings with
respect to delinquent Mortgage Loans and will contain provisions for the deposit
of cash by the holder that would be available for distribution to
Certificateholders if Liquidation Proceeds are less than they otherwise may have
been had the Servicer acted in accordance with its normal procedures.
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Section 5.22. Trustee to Cooperate; Release of Mortgage Files.
(a) Upon becoming aware of the payment in full of any Mortgage Loan, or
upon the receipt by the Servicer of a notification that payment in full will be
made in a manner customary for such purposes, the Servicer shall immediately
notify the Trustee (if the Trustee holds the related Mortgage File) by a
certification (which certification shall include a statement to the effect that
all amounts received or to be received in connection with such payment which are
required to be deposited in the Collection Account pursuant to Section 5.08 have
been or will be so deposited) of a Servicing Officer and shall request delivery
to it of the Mortgage File. Upon receipt of such certification and request,
within five Business Days the Trustee shall release the related Mortgage File to
the Servicer and execute and deliver to the Servicer the request for
reconveyance, deed of reconveyance or release or satisfaction of mortgage or
such other instruments releasing the lien of the Mortgage as have been provided
by the Servicer to the Trustee, together with the Mortgage Note with written
evidence of cancellation thereon, and the Trustee shall have no further
responsibility with respect to said Mortgage File. Upon any such payment in
full, or the receipt of such notification, the Servicer is authorized to procure
from the Trustee under the deed of trust which secured the Mortgage Note, if
any, a deed of full reconveyance covering the property encumbered by such deed
of trust, which assignment of deed of trust, except as otherwise provided by any
applicable law, shall be recorded by the Servicer in the appropriate land
records in the jurisdiction in which the assignment of deed of trust is
recorded, or, as the case may be, to procure from the Trustee an instrument of
satisfaction or, if the Mortgagor so requests, an assignment without recourse,
which deed of reconveyance, instrument of satisfaction or assignment shall be
delivered by the Servicer to the Person or Persons entitled thereto. No expenses
incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the Collection Account or to the Trustee.
(b) From time to time as is appropriate for the servicing or
foreclosure of any Mortgage Loan, the Servicer shall deliver to the Trustee a
certificate of a Servicing Officer requesting that possession of the Mortgage
File be released to the Servicer and certifying as to the reason for such
release and that such release will not invalidate any insurance coverage
provided in respect of the Mortgage Loan under any of the insurance policies
required by this Agreement. With such certificate, the Servicer shall require
that the Trustee release the Mortgage File, and, within five Business Days, the
Trustee shall deliver the Mortgage File or any document therein to the Servicer.
The Servicer shall cause each Mortgage File so released to be returned to the
Trustee when the need therefor by the Servicer no longer exists, unless (i) the
Mortgage Loan has been liquidated and the Net Liquidation Proceeds relating to
the Mortgage Loan have been deposited in the Collection Account or (ii) the
Mortgage File has 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 (or
stock allocated to a dwelling unit, in the case of a Co-op Loan) either
judicially or non-judicially, and the Servicer has delivered to the Trustee a
certificate of a Servicing Officer in the form of Exhibit L hereto certifying as
to the name and address of the Person to which such Mortgage File was delivered
and the purpose or purposes of such delivery.
(c) Upon written request of the Servicer, the Trustee shall execute and
deliver to the Servicer any court pleadings, requests for trustee's sale or
other documents prepared by and delivered by the Servicer to the Trustee
necessary to the foreclosure or trustee's sale in respect of a Mortgaged
Property (or stock allocated to a dwelling unit, in the case of a Co-op Loan) or
to any legal action brought to obtain judgment against any Mortgagor on the
Mortgage Note or Mortgage or to obtain a deficiency judgment, or to enforce any
other remedies or rights provided by the Mortgage Note or Mortgage or otherwise
available at law or in equity. Together with such documents or pleadings, the
Servicer shall deliver to the Trustee a certificate of a Servicing Officer
requesting that such pleadings or documents be executed by the Trustee and
certifying as to the reason such documents or pleadings are required and that
the execution and delivery thereof by the Trustee will not invalidate any
insurance coverage under the insurance policies required under this Agreement or
invalidate or otherwise affect the lien of the Mortgage, except for the
termination of such a lien upon completion of the foreclosure or trustee's sale.
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Section 5.23. Servicing and Other Compensation.
The Servicer, as compensation for its activities hereunder, shall be
entitled to receive, on or prior to each Distribution Date, the amounts provided
for as the Servicing Fee and as reimbursement for Nonrecoverable Advances,
Servicing Advances and reimbursement for Advances, all as specified by Section
5.09. The amount of compensation or reimbursement provided for shall be
accounted for on a Mortgage Loan-by-Mortgage Loan basis.
Additional servicing compensation in the form of assumption fees,
prepayment fees and late payment charges shall be retained by the Servicer, to
the extent permitted by applicable law. The Servicer shall be required to pay
all expenses incurred by it in connection with its servicing activities
hereunder (including the fees and expenses of the Trustee and any Sub-Servicer)
and shall not be entitled to reimbursement therefor except as specifically
provided in Sections 5.09 and 5.21.
Section 5.24. Reports.
(a) The Servicer shall, on behalf of the Trust, make all filings
("Periodic Reports") required to be made by the Depositor or the Trust (other
than the filings relating to the closing of this transaction) with respect to
the Class A Certificates, the Class M Certificates, the Class B-1 Certificates
and the Class B-2 Certificates pursuant to the Securities Exchange Act of 1934,
as amended (the "Exchange Act") and the rules and regulations of the Securities
and Exchange Commission (the "Commission") thereunder. The Form 10-K filing
required to be made by the Trust shall also include a certification complying
with the Section 302 Requirements, which shall be signed by the senior officer
of the Depositor in charge of securitization.
(b) Within 30 days after the beginning of the first fiscal year during
which the Trust's obligation to file Periodic Reports pursuant to the Exchange
Act shall have been suspended, the Depositor may prepare, or cause to be
prepared, a notice on Commission Form 15 ("Form 15") and is hereby authorized to
and shall execute such Form 15 on the Trust's behalf; provided, however, that
the Depositor shall be under no obligation to prepare such notice if the number
of Certificateholders exceeds 300. The Depositor shall file any notice on Form
15 with the Commission in accordance with the provisions of Rule 15d-6 under the
Exchange Act.
(c) The Depositor shall prepare or cause to be prepared the initial
current report on Form 8-K. Thereafter, within 10 days (or, if applicable,
within such shorter period of time as is required under the rules of the
Securities and Exchange Commission (the "Commission") as in effect from time to
time (the "Rules")) following each Distribution Date, the Servicer shall, in
accordance with industry standards and the Rules, prepare and file with the
Commission via the Electronic Data Gathering and Retrieval System ("XXXXX"), and
the [Servicer] shall sign, a Form 10-D that includes (i) a copy of the statement
to the Certificateholders for such Distribution Date and (ii) such other
information as is required by Form 10-D, including, but not limited to, the
information required by Item 1121 (ss. 229.1121) of Regulation AB, so long as
such information is made available to the Servicer in a format compatible with
XXXXX filing requirements.
(d) Prior to March 30, 20[__] and, unless and until a Form 15
Suspension Notification shall have been filed, on or prior to March 30 of each
year thereafter, the Servicer shall file (but will not execute) a Form 10-K, and
the Depositor shall sign, in substance conforming to industry standards and
complying with the Rules, with respect to the Trust Fund. Each Form 10-K shall
include (w) the certification required pursuant to Rule 13a-14 under the
Exchange Act, as amended (the "Form 10-K Certification") signed by an
appropriate party or parties (x) the annual certifications delivered by the
Servicer, [the Trustee] and the Paying Agent, (y) the related public accounting
firm attestation reports and (z) such other information as is required by the
Rules and Regulation AB. If any party's report on assessment of compliance with
servicing criteria required by clause (x) in the immediately preceding sentence,
or the related public accounting firm attestation report required by clause (y)
in the immediately preceding sentence, identifies any material instance of
noncompliance with the servicing criteria specified in paragraph (d) of Item
1122 of Regulation AB (ss. 229.1122(d)), the Servicer shall identify the
material instance of noncompliance in such report in the Form 10-K; and in the
event that the Servicer is unable to include any report required by either
clause (x) or (y) in the immediately preceding sentence in the Form 10-K, the
Servicer shall disclose such fact in the Form 10-K together with an explanation
as to why such report is not included as an exhibit to the Form 10-K.
Section 5.25. Annual Statement as to Compliance; Notification of
Certain Events
(a) The Servicer will deliver to the Depositor and the Trustee on or
before March 31 of each year beginning in 20__ or such other date in order to
remain in compliance with Section 302 Requirements, an Officers' Certificate
(substantially in the form of Exhibit N hereto) stating, as to each signer
thereof, that (i) a review of the activities of the Servicer during the
preceding calendar year and of performance under this Agreement has been made
under such officer's supervision, (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 Sub-Servicer has fulfilled its obligations under its
Sub-Servicing Agreement throughout such year, or if there has been a default in
the fulfillment of any such obligation, specifying each such default known to
such officer and the nature and status thereof. Copies of such statement shall
be provided to each Rating Agency by the Servicer. Copies of such statement
shall also be provided by the Servicer to any Certificateholder upon request. If
the Servicer shall fail to provide such copies and a Responsible Officer of the
Trustee is aware that the Servicer has not so provided copies, the Trustee shall
provide such copies at the Servicer's expense if the Trustee has received such
statement.
The Paying Agent will deliver to the Servicer and the Depositor on or
before March 31 or each year beginning in 20__ or such other date in order to
remain in compliance with Section 302 Requirements, an Officer's Certificate
substantially in the form of Exhibit O hereto.
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(b) On or before March 1 of each calendar year, the Servicer shall
deliver to the Depositor a report regarding its assessment of compliance with
the servicing criteria specified in paragraph (d) of Item 1122 of Regulation AB
(ss. 229.1122(d)), as of and for the period ending the end of each fiscal year,
with respect to asset-backed security transactions taken as a whole involving
the Servicer, and that are backed by the same asset type as the Mortgage Loans.
Each such report shall include all of the statements required under paragraph
(a) of Item 1122 of Regulation AB (ss. 229.1122(a)).
(c) On or before March 1 of each calendar year, the Paying Agent [and
the Trustee] shall each deliver to the Servicer and the Depositor a report
regarding its assessment of compliance with the servicing criteria specified in
paragraph (d) of Item 1122 of Regulation AB (ss. 229.1122(d)), as of and for the
period ending the end of each fiscal year, with respect to asset-backed security
transactions taken as a whole involving the Paying Agent and the Trustee, as
applicable, and that are backed by the same asset type as the Mortgage Loans.
Each such report shall include all of the statements required under paragraph
(a) of Item 1122 of Regulation AB (ss. 229.1122(a)).
(d) The Servicer shall promptly notify the Depositor (i) of any legal
proceedings pending against the Servicer of the type described in Item 1117 (ss.
229.1117) of Regulation AB and (ii) if the Servicer shall become (but only to
the extent not previously disclosed to the Depositor) at any time an affiliate
of any of the Sponsor, the Trustee, the Paying Agent, any originator
contemplated by Item 1110 (ss. 229.1110) of Regulation AB, any significant
obligor contemplated by Item 1112 (ss. 229.1112) of Regulation AB, any
enhancement or support provider contemplated by Items 1114 or 1115 (xx.xx.
229.1114-1115) of Regulation AB or any other material party to the Trust Fund
contemplated by Item 1100(d)(1) (ss. 229.1100(d)(1)) of Regulation AB.
(e) The Paying Agent and the Trustee shall each notify the Servicer and
the Depositor (i) of any legal proceedings pending against the Paying Agent or
the Trustee, as applicable, of the type described in Item 1117 (ss. 229.1117) of
Regulation AB and (ii) if the Paying Agent or the Trustee, as applicable, shall
become (but only to the extent not previously disclosed) at any time an
affiliate of any of the Sponsor, the Trustee, the Servicer, any originator
contemplated by Item 1110 (ss. 229.1110) of Regulation AB, any significant
obligor contemplated by Item 1112 (ss. 229.1112) of Regulation AB, any
enhancement or support provider contemplated by Items 1114 or 1115 (xx.xx.
229.1114-1115) of Regulation AB or any other material party to the Trust Fund
contemplated by Item 1100(d)(1) (ss. 229.1100(d)(1)) of Regulation AB, as
applicable.
Section 5.26. Annual Independent Public Accountants' Servicing Report.
(a) On or before March 31 of each year beginning in 20__ or such other
date in order to remain in compliance with the Section 302 Requirements, 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) which is a member of the American Institute of Certified
Public Accountants to furnish a statement to the Depositor and the Trustee in
compliance with the Uniform Single Attestation Program for Mortgage Bankers.
Copies of such statement shall be provided to each Rating Agency, and, upon
request, to the Certificateholders, by the Servicer, or by the Trustee at the
Servicer's expense if the Trustee has received such statement and the Servicer
shall fail to provide such copies and the Trustee is aware that the Servicer has
not so provided copies.
(b) On or before March 1 of each calendar year, the Paying Agent [and
the Trustee] shall each deliver to the Servicer and the Depositor a report by a
registered public accounting firm that attests to, and reports on, the
assessment made by such asserting party pursuant to Section 5.25. Each such
report shall be made in accordance with standards for attestation engagements
issued or adopted by the Public Company Accounting Oversight Board.
(c) On or before March 1 of each calendar year, the Servicer shall
deliver to the Depositor a report by a registered public accounting firm that
attests to, and reports on, the assessment made by such asserting party pursuant
to Section 5.25(b). Each such report shall be made in accordance with standards
for attestation engagements issued or adopted by the Public Company Accounting
Oversight Board.
Section 5.27. Access to Certain Documentation; Rights of the Depositor
in Respect of the Servicer.
The Servicer shall provide access to the Trustee and Certificateholders
which are savings and loan associations, banks or insurance companies or
examiners of any federal or state banking or insurance regulatory authority to
the documentation regarding the Mortgage Loans if so required by applicable
regulations of any regulatory authority, such access to be afforded subject to
reimbursement for expenses without charge but only upon reasonable request and
during normal business hours at the offices of the Servicer designated by it.
The Depositor may, but is not obligated to, enforce the obligations of the
Servicer under this Agreement and may, but is not obligated to, appoint and
cause a designee to perform, any defaulted obligations of the Servicer hereunder
or exercise the rights of the Servicer hereunder; provided that the Servicer
shall not be relieved of any of its obligations hereunder by virtue of the
appointment of a designee by the Depositor or its designee. The Depositor shall
not assume any responsibility or liability for any action or failure to take
action by the Servicer and is not obligated to supervise the performance of the
Servicer under this Agreement or otherwise.
Section 5.28. REMIC-Related Covenants.
For as long as the Trust Fund shall exist, the Servicer and the Trustee
shall act in accordance herewith to assure continuing treatment of the Trust
Fund as a REMIC. In particular:
52
(a) The Servicer shall not create, or permit the creation of, any
"interests" in the Trust Fund within the meaning of Section 860G(a) of the Code
other than the "regular interests" in the Trust Fund designated as such in
Section 2.04(a) and the "residual interest" in the Trust Fund designated as such
in Section 2.04(a);
(b) As of all times as may be required by the Code, the Servicer will
ensure that substantially all of the assets of the Trust Fund will consist of
"qualified mortgages" as defined in section 860G(a)(3) of the Code and
"permitted investments" as defined in section 860G(a)(5) of the Code. The
Servicer and the Trustee, upon the direction of the Servicer, also will maintain
records that are sufficient to indicate the Trust Fund's compliance with
applicable requirements of the Code (and applicable Proposed, Temporary or final
Treasury regulations) relating to the assets held by the Trust Fund. Further,
the Servicer shall not permit and the Trustee shall not accept the transfer or
substitution of any Mortgage Loan other than pursuant to Section 3.03, 5.01 or
5.21 of this Agreement, and the Servicer shall, in any case, not permit
substitution later than two years from the Closing Date unless the Servicer and
the Trustee have received an Opinion of Counsel, which will not be an expense of
the Trust Fund, that such transfer or substitution would not adversely affect
the REMIC status of the Trust Fund or would not otherwise be prohibited by this
Agreement;
(c) The Servicer shall ensure that the Trust Fund does not receive a
fee or other compensation for services and that the Trust Fund does not receive
any income from assets other than "qualified mortgages" within the meaning of
section 860G(a)(3) of the Code or "permitted investments" within the meaning of
section 860G(a)(5) of the Code, and shall take whatever action it deems
necessary to avoid any material tax imposed by the Code on the Trust Fund;
(d) The Trustee shall not sell or permit the sale of all or any portion
of the Mortgage Loans or of any Eligible Investment unless such sale is as a
result of a repurchase of the Mortgage Loans pursuant to this Agreement or the
Trustee has received an Opinion of Counsel, which will not be an expense of the
Trust Fund or the Trustee, to the effect that such sale (i) is pursuant to a
"qualified liquidation" as defined in section 860F(a)(4) of the Code and as
described in Section 11.01 hereof, or (ii) would not be treated as a "prohibited
transaction" within the meaning of section 860F(a)(2) of the Code that results
in the realization of a material amount of gain or loss for federal income tax
purposes;
(e) The Trustee shall not accept any contribution to the Trust Fund
after the Startup Day without an Opinion of Counsel (which shall not be an
expense of the Trustee) that such contribution is included within the exceptions
provided in Section 860G(d)(2) of the Code and, therefore, will not be subject
to the tax imposed by Section 860G(d)(1) of the Code; and
(f) Notwithstanding anything to the contrary in this Agreement, the
Servicer and the Trustee, at the direction of the Servicer, shall take any other
action or refuse to take any action otherwise required (including adjusting the
Purchase Price for any Mortgage Loan) where the Servicer deems such action or
inaction reasonably necessary to ensure the REMIC status of the Trust Fund under
the Code and applicable regulations or to avoid the imposition of any material
tax liability on the Trust Fund that will affect amounts distributable to the
Certificateholders.
(g) In the event that any applicable federal, state or local tax,
including interest, penalties or assessments, additional amounts or additions to
tax, is imposed on the Trust Fund, such tax shall be treated in the same manner
as a Realized Loss and shall be charged against amounts otherwise distributable
to the Holders of the Certificates, except as provided in the last sentence of
this Section 5.28 (g). The Trustee or, if a Paying Agent has been appointed
under Section 4.05, the Paying Agent shall withdraw from the Collection Account
sufficient funds to pay or provide for the payment of, and to actually pay, such
tax as is estimated to be legally owed by (but such authorization shall not
prevent the Trustee or, if a Paying Agent has been appointed under Section 4.05,
the Paying Agent from contesting, at the expense of the Trust Fund (other than
as a consequence of a breach of its obligations under this Agreement), any such
tax in appropriate proceedings, and withholding payment of such tax, if
permitted by law, pending the outcome of such proceedings). The Trustee or, if a
Paying Agent has been appointed under Section 4.05, the Paying Agent is hereby
authorized to and shall segregate, into a separate non-interest bearing account,
the net income from any "prohibited transaction" under Code Section 860F(a), the
amount of any taxable contribution to the Trust Fund after the Startup Day that
is subject to tax under Code Section 860G(d), and 35% of any estimated "net
income from foreclosure property" under Section 860G(c) and use such income or
amount, to the extent necessary, to pay such tax. To the extent that any such
tax is paid to the Internal Revenue Service or applicable state or local tax
authorities, the Trustee or a Paying Agent has been appointed under Section
4.05, the Paying Agent shall retain an equal amount from future amounts
otherwise distributable to the Holder of the Class A-R Certificate and shall
distribute such retained amounts to the Holders of the other Classes of
Certificates, to the extent they remain outstanding, until they are fully
reimbursed for any amount of such taxes previously charged to the then Holder of
the Class A-R Certificate. Neither the Trustee nor the Servicer shall be
responsible for any taxes imposed on the Trust Fund except to the extent such
taxes arise as a consequence of a breach of their respective obligations under
this Agreement.
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[END OF ARTICLE V]
ARTICLE VI
PAYMENTS TO THE CERTIFICATEHOLDERS
Section 6.01. Distributions.
(a) On each Distribution Date, the Paying Agent shall apply an amount
equal to the Available Distribution Amount in the following order of priority:
(i) to the Non-PO Class A Certificateholders, all
distributable amounts up to the sum of (A) the Aggregate Class A
Interest Accrual Amount and (B) the Aggregate Class A Interest
Shortfall;
(ii) the balance, if any, of the Available Distribution Amount
shall be allocated, first, pro rata (in accordance with the maximum
amounts distributable in accordance with this paragraph (ii)) and
concurrently between (A) the Non-PO Class A Certificateholders, the
amounts distributable pursuant to paragraph (b)(ii)(A) below, up to the
Non-PO Class A Optimal Principal Amount and (B) the Class A-P
Certificateholders, the Class A-P Amount, in accordance with paragraph
(b)(ii)(B) below and second, to the Class A-P Certificateholders, the
Class A-P Shortfall Amount, in accordance with paragraph (b)(iii)
below;
(iii) to the Class M Certificateholders, the balance, if any,
of the Available Distribution Amount after making the distributions
provided for in paragraphs (i) and (ii) above, in accordance with, and
up to the amount calculated pursuant to, Section 6.01(c) below;
(iv) to the Class B Certificateholders, the balance, if any,
of the Available Distribution Amount after making the distributions
provided for in paragraphs (i) through (iii) above, in accordance with,
and up to the amounts calculated pursuant to, Section 6.01(d) below;
and
(v) to the Class A-R Certificateholders the balance, if any,
of the Available Distribution Amount remaining after the distributions
provided for in paragraphs (i) through (iv) above.
(b) Amounts payable to the Class A Certificateholders on any
Distribution Date shall be distributed as follows:
(i) to the extent the amount available for distribution
pursuant to paragraph (a)(i)(A) above is sufficient:
(A) to the Class A-1 Certificateholders, (1) the
Class A-1 Interest Accrual Amount plus (2) the Class A-1
Shortfall from the preceding Distribution Date;
(B) to the Class A-2 Certificateholders, (1) the
Class A-2 Interest Accrual Amount plus (2) the Class A-2
Shortfall from the preceding Distribution Date;
(C) to the Class A-3 Certificateholders, (1) the
Class A-3 Interest Accrual Amount plus (2) the Class A-3
Shortfall from the preceding Distribution Date;
54
(D) to the Class A-4 Certificateholders, (1) the
Class A-4 Interest Accrual Amount plus (2) the Class A-4
Shortfall from the preceding Distribution Date;
(E) to the Class A-R Certificateholder, (1) the Class
A-R Interest Accrual Amount plus (2) the Class A-R Shortfall
from the preceding Distribution Date;
(F) to the Class A-X Certificateholders, (1) the
Class A-X Interest Accrual Amount plus (2) the Class A-X
Shortfall from the preceding Distribution Date; and
(ii) concurrently, (A) to the Non-PO Class A
Certificateholders, up to the Non-PO Class A Optimal Principal Amount,
allocated among the Non-PO Class A Certificates in accordance with the
Non-PO Class A Principal Payment Rules and (B) to the Class A-P
Certificateholders, the Class A-P Amount;
(iii) to the Class A-P Certificateholders, the Class A-P
Shortfall Amount; provided, however, that any amounts distributed
pursuant to this Section 6.01(b)(iii) shall not cause a further
reduction in the Outstanding Certificate Principal Balance of the Class
A-P Certificates; and
(iv) If the Available Distribution Amount is insufficient to
make the distributions set forth in paragraph (b)(i) above, the Paying
Agent shall distribute the Available Distribution Amount to the Non-PO
Class A Certificateholders pro rata in accordance with the amounts
otherwise distributable to them pursuant to paragraph (b)(i)(A)-(F)
above.
(c) Amounts payable on any Distribution Date to the Class M
Certificateholders shall be distributed up to an amount equal to (A) the Class M
Interest Accrual Amount plus (B) the Class M Shortfall from the preceding
Distribution Date plus (C) the portion of the Subordinated Optimal Principal
Amount allocable (pursuant to Section 6.01(e)) to the Class M Certificates plus
(D) any Carry-over Subordinated Principal Amounts with respect to the Class M
Certificates.
(d) Amounts payable on any Distribution Date to the Class B
Certificateholders pursuant to Section 6.01(a)(iv) shall be distributed in the
following priority:
(1) first, to the Class B-1 Certificateholders, up to an
amount equal to (A) the Class B-1 Interest Accrual Amount plus (B) the
Class B-1 Shortfall from the preceding Distribution Date plus (C) the
pro rata portion, if any, of the Subordinated Optimal Principal Amount
allocable to the Class B-1 Certificates in accordance with Section
6.01(e) plus (D) any Carry-over Subordinated Principal Amounts with
respect to the Class B-1 Certificates plus (E) any portion of the
Subordinated Optimal Principal Amount allocated to the Class M
Certificates in excess of the Outstanding Certificate Principal Balance
of such Class;
(2) second, to the Class B-2 Certificateholders, up to an
amount equal to (A) the Class B-2 Interest Accrual Amount plus (B) the
Class B-2 Shortfall from the preceding Distribution Date plus (C) the
pro rata portion, if any, of the Subordinated Optimal Principal Amount
allocable to the Class B-2 Certificates in accordance with Section
6.01(e) plus (D) any Carry-over Subordinated Principal Amounts with
respect to the Class B-2 Certificates plus (E) any portion of the
Subordinated Optimal Principal Amount allocated to the Class B-1
Certificates in excess of the Outstanding Certificate Principal Balance
of such Class;
(3) third, to the Class B-3 Certificateholders, up to an
amount equal to (A) the Class B-3 Interest Accrual Amount plus (B) the
Class B-3 Shortfall from the preceding Distribution Date plus (C) the
pro rata portion, if any, of the Subordinated Optimal Principal Amount
allocable to the Class B-3 Certificates in accordance with Section
6.01(e) plus (D) any Carry-over Subordinated Principal Amounts with
respect to the Class B-3 Certificates plus (E) any portion of the
Subordinated Optimal Principal Amount allocated to the Class B-2
Certificates in excess of the Outstanding Certificate Principal Balance
of such Class;
55
(4) fourth, to the Class B-4 Certificateholders, up to an
amount equal to (A) the Class B-4 Interest Accrual Amount plus (B) the
Class B-4 Shortfall from the preceding Distribution Date plus (C) the
pro rata portion, if any, of the Subordinated Optimal Principal Amount
allocable to the Class B-4 Certificates in accordance with Section
6.01(e) plus (D) any Carry-over Subordinated Principal Amounts with
respect to the Class B-4 Certificates plus (E) any portion of the
Subordinated Optimal Principal Amount allocated to the Class B-3
Certificates in excess of the Outstanding Certificate Principal Balance
of such Class; and
(5) fifth, to the Class B-5 Certificateholders, up to an
amount equal to (A) the Class B-5 Interest Accrual Amount plus (B) the
Class B-5 Shortfall from the preceding Distribution Date plus (C) the
pro rata portion, if any, of the Subordinated Optimal Principal Amount
allocable to the Class B-5 Certificates in accordance with Section
6.01(e) plus (D) any Carry-over Subordinated Principal Amounts with
respect to the Class B-5 Certificates plus (E) any portion of the
Subordinated Optimal Principal Amount allocated to the Class B-4
Certificates in excess of the Outstanding Certificate Principal Balance
of such Class.
(e) On each Distribution Date, the Subordinated Optimal Principal
Amount shall be allocated among the Classes of Subordinated Certificates
entitled, pursuant to the next succeeding sentence, to an allocation of
principal on such Distribution Date, pro rata based upon the Outstanding
Certificate Principal Balances of all such Classes so entitled. With respect to
the Subordinated Certificates, on each Distribution Date, principal shall be
distributable to (1) any Class of Subordinated Certificates which has current
Credit Support (before giving effect to any distribution of principal and any
Realized Losses allocable on such Distribution Date) greater than or equal to
the Original Credit Support for such Class; (2) the Class having the lowest
numerical class designation of any outstanding Class of Subordinated
Certificates which does not meet the criteria in (1) above; and (3) the Class
B-5 Certificates if all other outstanding Classes of Subordinated Certificates
meet the criteria in (1) above or if no other Class of Subordinated Certificates
is outstanding; provided, however, that no Class of Subordinated Certificates
shall receive any distributions of principal if any Class of Subordinated
Certificates having a lower numerical class designation than such Class fails to
meet the criteria in (1) above. For purposes of this paragraph, the Class M
Certificates shall be deemed to have a lower numerical class designation than
each Class of Class B Certificates.
(f) The Servicer shall make all calculations necessary to make the
distributions described in this Section 6.01. All distributions made to
Certificateholders of any Class on each Distribution Date will be made to the
Certificateholders of the respective Class of record on the next preceding
Record Date, except that the final distribution with respect to each Class shall
be made as provided in the forms of Certificates. All distributions made to
Certificateholders shall be based on the Percentage Interest of the Class
represented by their respective Certificates, and shall be made either by
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 Trustee or, if a Paying Agent has
been appointed under Section 4.05, the Paying Agent, in writing at least 10
Business Days prior to the first Distribution Date for which distribution by
wire transfer is to be made and such Holder's Certificates of such Class in the
aggregate evidence an original denomination of not less than $5,000,000 or such
Holder holds a 100% Percentage Interest of such Class or, if not, by check
mailed to the address of the Person entitled thereto as it appears on the
Certificate Register, except that the final distribution in retirement of the
Certificates will be made only upon presentation and surrender of the
Certificates at the office specified in the final Distribution Notice. If on any
Determination Date, the Servicer determines that there are no Mortgage Loans
outstanding and no other funds or assets in the Trust Fund other than the funds
in the Certificate Account, the Trustee or if a Paying Agent has been appointed
under Section 4.05, the Paying Agent shall promptly send the final distribution
notice to each Certificateholder specifying the manner in which the final
distribution will be made.
56
Section 6.02. Statements to the Certificateholders.
(a) Not later than the second Business Day prior to each Distribution
Date, the Servicer shall send to the Paying Agent and the Trustee the relevant
information for purposes of this Section 6.02. Not later than each Distribution
Date, the Paying Agent shall send to each Certificateholder, the Depositor, the
Trustee (if other than the Paying Agent), the Servicer, any co-trustee and each
Rating Agency a statement setting forth the following information, after giving
effect to the distributions to be made by the Paying Agent pursuant to Section
6.01 on or as of such Distribution Date:
(i) with respect to each Class of Certificates the amount of
such distribution to Holders of such Class allocable to principal;
(ii) with respect to each Class of Certificates the amount of
such distribution to Holders of such Class allocable to interest;
(iii) the aggregate amount of any Principal Prepayments and
Repurchase Proceeds included in the distributions to
Certificateholders;
(iv) the aggregate amount of any Advances by the Servicer
pursuant to Section 6.03;
(v) the number of Outstanding Mortgage Loans and the Mortgage
Pool Principal Balance as of the close of business as of the end of the
related Principal Prepayment Period;
(vi) the related amount of the Servicing Fees (as adjusted
pursuant to Section 6.05) retained or withdrawn from the Collection
Account by the Servicer;
(vii) the number and aggregate principal amounts of Mortgage
Loans (A) delinquent (1) one Monthly Payment, (2) two Monthly Payments
and (3) three or more Monthly Payments and (B) in foreclosure, in each
case, as of the end of the related Principal Prepayment Period;
(viii) the number and the principal balance of Mortgage Loans
with respect to any real estate acquired through foreclosure or grant
of a deed in lieu of foreclosure;
(ix) the aggregate amount of all Advances recovered during the
related Due Period;
(x) with respect to the following Distribution Date, the Class
A Percentage, the Class M Percentage, the Class B Percentage, the Class
A Principal Balance, the Class M Principal Balance, the Class B
Principal Balance, the Non-PO Class A Percentage, the Non-PO Class A
Prepayment Percentage, and the level of Credit Support, if any, with
respect to each Class of Subordinated Certificates;
(xi) the aggregate amount of Realized Losses during the
related Due Period and the aggregate amount of Realized Losses since
the Cut-off Date;
(xii) the allocation to each Class of Certificates of any
Realized Losses during the related Due Period;
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(xiii) the Outstanding Certificate Principal Balance of each
Class of Certificates after giving effect to the distributions to each
Class on such Distribution Date; and
(xiv) with respect to each Class of Certificates, the amount
of any Compensating Interest Shortfalls on such Distribution Date.
The Paying Agent's responsibility for sending the above information to
the Certificateholders is limited to the availability, timeliness and accuracy
of the information derived from the Servicer.
Upon reasonable advance notice in writing if required by federal
regulation, the Servicer will provide to each Certificateholder which is a
savings and loan association, bank or insurance company certain reports and
access during business hours to information and documentation regarding the
Mortgage Loans sufficient to permit such Certificateholder to comply with
applicable regulations of regulatory authorities with respect to investment in
the Certificates; provided, that the Servicer shall be entitled to be reimbursed
by each such Certificateholder for the Servicer's actual expenses incurred in
providing such reports and access.
(b) The Servicer shall cause to be prepared, and the Servicer or the
Trustee, as required by applicable law, shall file, any and all tax returns,
information statements or other filings required to be delivered to
Certificateholders and any governmental taxing authority pursuant to any
applicable law with respect to the Trust Fund and the transactions contemplated
hereby (the Servicer or the Trustee may, at its option but with the consent of
the other, which consent shall not be unreasonably withheld, appoint an
organization which regularly engages in the preparation and filing of such
documents on a continuous basis for profit and which represents itself to be
expert in such matters) and the Servicer shall maintain a record of the
information necessary for the application of Section 860E(e) of the Code and
shall make such information available as required by Section 860D(a)(6) of the
Code; provided, however, that the Servicer shall notify the Trustee of the
Trustee's obligation to make any such filings and that any fees of the
organization appointed as provided above shall be paid by the Servicer; and
provided further that if an organization is employed, as described above, to
prepare and file any such filings, neither the Trustee nor the Servicer shall be
liable for any errors by such organization.
Section 6.03. Advances by the Servicer.
If, on any Determination Date, the Servicer determines that any Monthly
Payments due on the immediately preceding Due Date have not been received, the
Servicer shall, unless it determines in its sole discretion that such amounts
will not be recoverable from Late Collections, Liquidation Proceeds or
otherwise, make an Advance on or before the related Distribution Date in an
amount equal to the amount of such delinquent Monthly Payments, after adjustment
of any delinquent interest payment for the Servicing Fee. For purposes of this
Section 6.03, the delinquent Monthly Payments referred to in the preceding
sentence shall be deemed to include an amount equal to the Monthly Payments that
would have been due on Mortgage Loans which have been foreclosed or otherwise
terminated and in connection with which the Servicer acquired and continues to
own the Mortgaged Properties on behalf of the Certificateholders. If the
Servicer makes an Advance, it shall on or prior to such Distribution Date either
(i) deposit in the Collection Account an amount equal to such Advance, (ii)
cause to be made an appropriate entry in the records of the Collection Account
that funds in such account being held for future distribution or withdrawal have
been, as permitted by this Section 6.03, used by the Servicer to make such
Advance or (iii) make Advances in the form of any combination of clauses (i) and
(ii) aggregating the amount of such Advance. Any funds being held in the
Collection Account for future distribution to Certificateholders and so used
pursuant to clause (ii) or (iii) above shall be replaced by the Servicer from
its own funds by deposit into the Collection Account on or before any subsequent
Distribution Date to the extent that funds in the Collection Account on such
Distribution Date shall be less than the amount of payments required to be made
to Certificateholders on such Distribution Date. Any such Advance shall be
included with the distribution to the Certificateholders on the related
Distribution Date. If the Servicer determines not to make a Nonrecoverable
Advance, it shall on the related Determination Date furnish to the Trustee, any
co-trustee, and each Rating Agency notice of such determination. The Servicer
shall be entitled to be reimbursed from the Collection Account for all Advances
and Nonrecoverable Advances as provided in Section 5.09.
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Section 6.04. Allocation of Realized Losses.
(a) Prior to each Determination Date, the Servicer shall determine (i)
the total amount of Realized Losses, if any, incurred during the related
Principal Prepayment Period; (ii) whether and to what extent such Realized
Losses constitute Excess Losses; and (iii) the respective portions of such
Realized Losses allocable to interest and to principal.
(b) The principal portion of any Realized Losses other than Excess
Losses shall be allocated as follows: first, to the Class B-5 Certificates until
the Outstanding Certificate Principal Balance of the Class B-5 Certificates has
been reduced to zero; second, to the Class B-4 Certificates until the
Outstanding Certificate Principal Balance of the Class B-4 Certificates has been
reduced to zero; third, to Class B-3 Certificates until the Outstanding
Certificate Principal Balance of the Class B-3 Certificates has been reduced to
zero; fourth, to the Class B-2 Certificates until the Outstanding Certificate
Principal Balance of the Class B-2 Certificates has been reduced to zero; fifth,
to the Class B-1 Certificates until the Outstanding Certificate Principal
Balance of the Class B-1 Certificates has been reduced to zero; sixth, to the
Class M Certificates until the Outstanding Certificate Principal Balance of the
Class M Certificates has been reduced to zero; and seventh, to the Non-PO Class
A Certificates on a pro rata basis until the Outstanding Certificate Principal
Balance of the Non-PO Class A Certificates has been reduced to zero; provided,
however, that if a Realized Loss occurs with respect to a Discount Mortgage Loan
(A) the amount of such Realized Loss equal to the product of (i) the amount of
such Realized Loss and (ii) the PO Percentage with respect to such Discount
Mortgage Loan will be allocated to Class A-P Certificates and (B) the remainder
of such Realized Loss will be allocated as described above. The principal
portion of any Excess Losses shall be allocated among all Classes of
Certificates on a pro rata basis; provided, however, that the applicable PO
Percentage of any Excess Losses on the Discount Mortgage Loans shall be
allocated to Class A-P Certificates.
(c) As used herein, an allocation of a Realized Loss on a "pro rata
basis" among two or more specified Classes means an allocation on a pro rata
basis, among the various Classes so specified, to each such Class on the basis
of their Outstanding Certificate Principal Balances prior to giving effect to
distributions to be made on such Distribution Date. All Realized Losses and all
other losses allocated to a Class of Certificates hereunder will be allocated
among the Certificates of such Class in proportion to the Percentage Interests
evidenced thereby.
(d) In the event that a recovery is made with respect to any Realized
Loss, the amount of such recovery shall be distributed on the next Distribution
Date first to the Class A Certificateholders, up to the amount to which such
Realized Loss was allocated to the Class A Certificateholders; second to the
Class M Certificateholders, up to the amount to which such Realized Loss was
allocated to the Class M Certificateholders; third to the Class B-1
Certificateholders, up to the amount to which such Realized Loss was allocated
to the Class B-1 Certificateholders; fourth to the Class B-2 Certificateholders,
up to the amount to which such Realized Loss was allocated to the Class B-2
Certificateholders; fifth to the Class B-3 Certificateholders, up to the amount
to which such Realized Loss was allocated to the Class B-3 Certificateholders;
sixth to the Class B-4 Certificateholders, up to the amount to which such
Realized Loss was allocated to the Class B-4 Certificateholders; and seventh to
the Class B-5 Certificateholders, up to the amount to which such Realized Loss
was allocated to the Class B-5 Certificateholders.
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Section 6.05. Compensating Interest; Allocation of Certain Interest
Shortfalls.
(a) Upon a Principal Prepayment of a Mortgage Loan, the Servicer shall
deposit into the Collection Account from its own funds, as a reduction of its
servicing compensation hereunder, an amount, if any, by which the amount of the
interest that would otherwise accrue with respect to such Mortgage Loan from the
date of prepayment to the Due Date in the related Due Period at the Net Mortgage
Rate exceeds the amount of the interest (adjusted to the Net Mortgage Rate)
collected from the Mortgagor with respect to such period (such amount,
"Compensating Interest"); 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 0.125% and (ii)
the aggregate Scheduled Principal Balance of the Mortgage Loans with respect to
such Distribution Date.
(b) On any Distribution Date, the excess, if any, of (X) Compensating
Interest with respect to such Distribution Date over (Y) the amount deposited in
the Collection Account pursuant to (a) above for such Distribution Date shall
equal the "Compensating Interest Shortfall" with respect to such Distribution
Date. On any Distribution Date, the Compensating Interest Shortfall shall be
allocated pro rata among the outstanding Classes of Class A, Class M and Class B
Certificates based on the amount of interest to which each such Class would
otherwise be paid on such Distribution Date had there been no such Compensating
Interest Shortfall.
(c) On any Distribution Date, the interest portion of any Realized
Losses ("Realized Loss Interest Shortfall") other than the interest portion of
Excess Losses shall be allocated to the Class of Subordinated Certificates then
outstanding having the highest numerical class designation (for this purpose,
the Class M Certificates shall be deemed to have a lower numerical class
designation than each Class of Class B Certificates) or, if no Class of
Subordinated Certificates is then outstanding, to the Non-PO Class A
Certificates pro rata among the outstanding Classes of Non-PO Class A
Certificates based on the amount of interest to which each such Class would
otherwise be paid on such Distribution Date had there been no such Realized Loss
Interest Shortfall. On any Distribution Date, the interest portion of any Excess
Losses shall be allocated pro rata among the outstanding Classes of Certificates
based upon the amount of interest to which each such Class would otherwise be
paid on such Distribution Date had there been no such Excess Losses allocable to
interest.
Section 6.06. Subordination.
The rights of the Class B Certificateholders to receive distributions
in respect of the Class B Certificates on any Distribution Date shall be
subordinated to the rights of the Class A and Class M Certificateholders to
receive distributions in respect of the Class A and Class M Certificates. The
rights of the Class M Certificateholders to receive distributions in respect of
the Class M Certificates on any Distribution Date shall be subordinated to the
rights of the Class A Certificateholders to receive distributions in respect of
the Class A Certificates. The rights of the Class B-1 Certificateholders to
receive distributions in respect of the Class B-1 Certificates on any
Distribution Date shall be subordinate to the rights of the Class A and Class M
Certificateholders to receive distributions in respect of such Class A and Class
M Certificates. Each Class of Class B Certificates (other than the Class B-1
Certificates) is subordinated to the Class A Certificates, the Class M
Certificates and each Class of Class B Certificates having a lower numerical
class designation than such Class of Class B Certificates. The rights of the
Servicer, as servicer, to receive funds from the Collection Account, pursuant to
Section 5.09, on account of the Servicing Fee (except as provided in Section
6.05) in respect of each Mortgage Loan, assumption fees, late payment charges
and other Mortgagor charges, reimbursement of Advances and expenses or
otherwise, shall not be subordinated to the rights of the Class A, Class M or
Class B Certificateholders. Amounts held by the Servicer or the Trustee for
future distribution to the Class M or Class B Certificateholders, including,
without limitation, in the Collection Account, shall not be distributed in
respect of the Class M or Class B Certificates except in accordance with the
terms of this Agreement. The Class B Certificateholders are deemed to have
granted a security interest in such amounts to the Class A and Class M
Certificateholders to secure the rights of the Class A and Class M
Certificateholders to receive distributions in priority over the Class B
Certificateholders. The Class M Certificateholders are deemed to have granted a
security interest in such amounts to the Class A Certificateholders to secure
the rights of the Class A Certificateholders to receive distributions in
priority over the Class A Certificateholders.
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Section 6.07. [Determination of LIBOR.
LIBOR applicable to the calculation of the Certificate Rates on the
Class ___ and Class ___ Certificates for any Interest Accrual Period (other than
the initial Interest Accrual Period) will be determined by the Servicer on each
Rate Adjustment Date as follows:
For any Interest Accrual Period other than the first Interest Accrual
Period, the rate for United States dollar deposits for one month which appears
on the Telerate Screen Page 3750 as of 11:00 A.M., London, England time, on the
LIBOR Business Day prior to the first day of such Interest Accrual Period. For
the first Interest Accrual Period, LIBOR shall equal _________% with respect to
the Class ___ and Class ___ Certificates. If such rate does not appear on such
page (or such other page as may replace that page on that service, or if such
service is no longer offered, such other service for displaying LIBOR or
comparable rates as may be reasonably selected by the Servicer), the rate will
be the Reference Bank Rate. If no such quotations can be obtained and no
Reference Bank Rate is available, LIBOR will be LIBOR applicable to the
preceding Distribution Date.
The establishment of LIBOR by the Servicer on any Rate Adjustment Date
on the Servicer's subsequent calculation of the Certificate Rates applicable to
the Class ___ and Class ___ Certificates for the relevant Interest Accrual
Period, in the absence of manifest error, will be final and binding.]
[END OF ARTICLE VI]
ARTICLE VII
REPORTS TO BE PREPARED BY THE SERVICER
Section 7.01. Servicer Shall Provide Information as Reasonably
Required.
The Servicer shall furnish to the Trustee, during the term of this
Agreement, such periodic, special, or other reports or information, whether or
not provided for herein, as shall be necessary, reasonable, or appropriate in
respect to the Trustee, or otherwise in respect to the purposes of this
Agreement, all such reports or information to be as provided by and in
accordance with such applicable instructions and directions as the Trustee may
reasonably require.
Section 7.02. Federal Information Returns and Reports to
Certificateholders.
(a) For federal income tax purposes, the taxable year of the Trust Fund
shall be a calendar year and the Servicer shall maintain or cause the
maintenance of the books of the Trust Fund on the accrual method of accounting.
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(b) The Servicer shall prepare and file or cause to be filed with the
Internal Revenue Service federal tax or information returns with respect to the
Trust Fund and the Certificates containing such information and at the times and
in the manner as may be required by the Code or applicable Treasury regulations,
and shall furnish to each Certificateholder at any time during the calendar year
for which such returns or reports are made such statements or information at the
times and in the manner as may be required thereby. Without limitation on any
other requirement of this Section 7.02, the Servicer shall make available the
information necessary for the application of Section 860E(e) of the Code within
60 days of such request. With respect to the Class A-R Certificate, the Servicer
shall provide such information or cause such information to be provided to (i)
the Internal Revenue Service, (ii) the transferor of a Class A-R Certificate to
a Disqualified Organization and (iii) a Pass-Thru Entity that holds a Class A-R
Certificate with one or more record holders that are Disqualified Organizations.
The Servicer also shall provide or cause to be provided promptly the above
described computation and information relating to the tax on transfers to
Disqualified Organizations within 60 days after becoming aware of the transfer
to a Disqualified Organization. In addition, except as may be provided in
Treasury regulations, any person holding an interest in a Pass-Thru Entity as a
nominee for another will, with respect to such interest, be treated as a
Pass-Thru Entity. In connection with the foregoing, the Servicer shall provide
the name, address and telephone number of the person who can be contacted to
obtain information required to be reported to the holders of regular interests
in the Trust Fund (the "REMIC Reporting Agent") as required by IRS Form 8811.
The Servicer shall provide the name, address and telephone number of the REMIC
Reporting Agent to the Trustee on the Closing Date, and the Trustee shall
designate such person to act as the REMIC Reporting Agent as required by IRS
Form 8811. The Servicer shall indicate the election to treat the Trust Fund as a
REMIC (which election shall apply to the taxable period ending [DATE] and each
calendar year thereafter) in such manner as the Code or applicable Treasury
regulations may prescribe. The Trustee shall sign all tax and information
returns filed pursuant to this Section 7.02 and any other returns as may be
required by the Code, and in doing so shall rely entirely upon, and shall have
no liability for information provided by, or calculations provided by, the
Servicer. The Servicer is hereby designated as the agent of the Holder of the
Class A-R Certificate who shall be the "tax matters person" (within the meaning
of Treas. Reg. "1.860F-4(d)) for the Trust Fund. Any Holder of a Class A-R
Certificate will by acceptance thereof so appoint the Servicer as agent and
attorney-in-fact for the purpose of acting as tax matters person. In the event
that the Code or applicable Treasury regulations prohibit the Trustee from
signing tax or information returns or other statements, or the Servicer from
acting as tax matters person (as an agent or otherwise), the Trustee or the
Servicer, as the case may be, shall take whatever action that in its sole good
faith judgment is necessary for the proper filing of such information returns or
for the provision of a tax matters person, including designation of the Holder
of a Class A-R Certificate to sign such returns or act as tax matters person.
Each Holder of a Class A-R Certificate shall be bound by this Section 7.02 by
virtue of its acceptance of a Class A-R Certificate.
[END OF ARTICLE VII]
ARTICLE VIII
THE DEPOSITOR AND THE SERVICER
Section 8.01. Indemnification; Third Party Claims.
The Servicer agrees to indemnify the Depositor and the Trustee and hold
the Depositor and the Trustee, their officers, directors, employees and agents
harmless against any and all claims, losses, penalties, fines, forfeitures,
legal fees and related costs, judgments, and any other costs, fees and expenses
that the Depositor or the Trustee may sustain in any way related to failure of
the Servicer to perform its duties and service the Mortgage Loans in compliance
with the terms of this Agreement; provided that no such indemnification shall be
required with respect to acts of a prior Servicer. The Servicer shall
immediately notify the Depositor and the Trustee if a claim is made by a third
party with respect to this Agreement or the Mortgage Loans, assume (with the
consent of the Depositor and the Trustee) the defense of any such claim and pay
all expenses in connection therewith, including counsel fees, and promptly pay,
discharge and satisfy any judgment or decree which may be entered against it,
the Depositor or the Trustee in respect of such claim. This right to
indemnification shall survive the termination of this Agreement.
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Section 8.02. 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, and will obtain and preserve
its qualification to do business as a foreign corporation in each jurisdiction
in which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the Certificates or any of the Mortgage Loans
and to perform its duties under this Agreement. The Servicer will not sell all
or substantially all of its assets without the prior written consent of the
Depositor and the Trustee.
Any Person into which the Depositor or the Servicer may be merged or
consolidated, or to whom the Depositor or the Servicer has sold substantially
all of its assets, or any corporation resulting from any merger, conversion or
consolidation to which the Depositor or the Servicer shall be a party, or any
Person succeeding to the business of the Depositor or the Servicer, shall be the
successor of the Depositor or the Servicer hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding; provided, however, that the
successor or surviving Person to the Servicer shall satisfy the requirements of
Section 8.05 with respect to the qualifications of a successor to the Servicer.
Notwithstanding anything else in this Section 8.02 and Section 8.04 to
the contrary, the Servicer may assign its rights and delegate its duties and
obligations under this Agreement; provided that the Person accepting such
assignment or delegation shall be a Person which is qualified to service
mortgage loans on behalf of FNMA or FHLMC, is approved in advance in writing by
the Trustee and the Depositor, is willing to service the Mortgage Loans and
executes and delivers to the Depositor and the Trustee an agreement, in form and
substance reasonably satisfactory to the Depositor and the Trustee, which
contains an assumption by such Person of the due and punctual performance and
observance of each covenant and condition to be performed or observed by the
Servicer under this Agreement; provided further that each Rating Agency's rating
of any of the Classes of Certificates that have been rated in effect immediately
prior to such assignment and delegation will not be qualified or reduced or
withdrawn as a result of such assignment and delegation. In the case of any such
assignment and delegation, the Servicer shall be released from its obligations
as Servicer under this Agreement, except that the Servicer shall remain liable
for all liabilities and obligations incurred by it as Servicer hereunder prior
to the satisfaction of the conditions to such assignment and delegation set
forth in the next preceding sentence.
Section 8.03. Limitation on Liability of the Depositor, the Servicer,
the Trustee and Others.
Neither 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 Trustee or the Certificateholders for any action taken, or for
refraining from the taking of any action, in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Depositor or the Servicer against any breach of warranties
or representations made herein, or failure to perform its obligations in strict
compliance with this Agreement, or any liability which would otherwise be
imposed by reason of any breach of the terms and conditions of this Agreement.
The Depositor, the Servicer, the Trustee, and any director, officer, employee or
agent of the Depositor, the Servicer or the Trustee 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. Neither the Depositor, the
Trustee nor the Servicer shall be under any obligation to appear in, prosecute
or defend any legal action which is not incidental to its respective duties to
service the Mortgage Loans in accordance with this Agreement and which in its
opinion may cause it to incur any expenses or liability; provided, however, that
the Depositor, the Trustee or the Servicer may in its discretion (and, in the
case of the Depositor or the Servicer, with the consent of the Trustee, which
consent shall not be unreasonably withheld) undertake any such action which it
may deem necessary or desirable with respect to this Agreement and the rights
and duties of the parties hereto. In such event, the legal expenses and costs of
such action and any liability resulting therefrom shall be expenses, costs and
liabilities payable from the Collection Account and the Depositor, the Servicer
or the Trustee shall be entitled to be reimbursed therefor out of the Collection
Account as provided by Section 4.06; provided that no such right of
reimbursement shall exist with respect to the Servicer when such claim relates
to the failure of the Servicer to service the Mortgage Loans in strict
compliance with the terms of this Agreement or to a breach of a representation
or warranty made by the Servicer hereunder.
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Section 8.04. Depositor and Servicer Not to Resign.
Except as described in Section 8.02, neither the Depositor nor the
Servicer shall assign this Agreement or resign from the obligations and duties
hereby imposed on it except by mutual consent of the Depositor, the Servicer and
all of the Certificateholders unless the determination is made that its duties
hereunder are no longer permissible under applicable law and such incapacity
cannot be cured by the Depositor or the Servicer. Any such determination
permitting the resignation of the Depositor or the Servicer shall be evidenced
by an opinion of independent counsel to such effect delivered to the Trustee
which opinion of counsel shall be in form and substance acceptable to the
Trustee. Upon any such assignment or resignation, the Depositor or the Servicer,
as appropriate, shall send notice to all Certificateholders of the effect of
such assignment or resignation upon the then current rating of the Class of
Certificates by each Rating Agency whose rating on such Class is then in effect.
No such resignation shall become effective until a successor shall have assumed
the Depositor's or the Servicer's responsibilities and obligations hereunder in
the manner provided in Section 8.05. Any purported assignment or resignation
which does not comply with the requirements of this Section shall be of no
effect.
Section 8.05. Successor to the Servicer.
In connection with the termination of the Servicer's responsibilities
and duties under this Agreement pursuant to Section 8.04 or 9.01, the Trustee
shall succeed to and assume all of the Servicer's responsibilities, rights,
duties and obligations as Servicer (but not in any other capacity) under this
Agreement (except that the Trustee shall not be obligated to make Advances if
prohibited by applicable law nor to effectuate repurchases or substitutions of
Mortgage Loans pursuant to Section 2.02 and except that the Trustee makes no
representations and warranties pursuant to Sections 3.01 and 3.02). Prior to the
termination of the Servicer's responsibilities, duties and liabilities under
this Agreement, the Trustee may appoint a successor having a net worth of not
less than $15,000,000 and which is a FNMA or FHLMC approved seller/servicer in
good standing and which shall succeed to all rights and assume all of the
responsibilities, duties and liabilities of the Servicer under this Agreement,
except as aforesaid, if the Trustee receives a letter from each Rating Agency
that such appointment would not result in a reduction or withdrawal of the
current rating of any Class of Certificates that is rated by a Rating Agency.
Any co-trustee appointed pursuant to Section 10.10 for purposes of this Section
8.05 shall have an obligation to make Advances pursuant to Section 6.03 during
such time as the Trustee is the Servicer, which obligation shall be joint and
several with that of the Trustee as Servicer. If the Trustee has become the
successor to the Servicer in accordance with this Section or Section 9.03, then
notwithstanding the above, the Trustee may, if it shall be unwilling to so act,
or shall, if it is unable to so act, appoint, or petition a court of competent
jurisdiction to appoint, any established housing and home finance institution
having a net worth of not less than $15,000,000 and which is a FNMA or FHLMC
approved seller/servicer in good standing as the successor to the Servicer
hereunder in the assumption of all of the responsibilities, duties or
liabilities of the Servicer hereunder. In connection with any 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 or such court shall determine; provided, however, that no such
compensation shall be in excess of that permitted under this Agreement without
the consent of all of the Certificateholders. If the Servicer's duties,
responsibilities and liabilities under this Agreement should be terminated
pursuant to Section 8.02, 8.04 or 9.01, the Servicer shall discharge such duties
and responsibilities during the period from the date it acquires knowledge of
such termination until the effective date thereof with the same degree of
diligence and prudence which it is obligated to exercise under this Agreement,
and shall take no action whatsoever that might impair or prejudice the rights or
financial condition of its successor or the Trust Fund. The resignation or
removal of the Servicer pursuant to Section 8.02, 8.04 or 9.01 shall not become
effective until a successor shall be appointed pursuant to this Section and
shall in no event relieve the Servicer of liability for breach of the
representations and warranties made pursuant to Section 3.03.
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Any successor appointed as provided herein shall execute, acknowledge
and deliver to the Servicer and to the Trustee an instrument accepting such
appointment, whereupon such successor shall become fully vested with all the
rights, powers, duties, responsibilities, obligations and liabilities of the
Servicer, with like effect as if originally named as a party to this Agreement
and the Certificates. Any termination or resignation of the Servicer or this
Agreement pursuant to Section 8.02, 8.04, 9.01 or 11.01 shall not affect any
claims that the Trustee may have against the Servicer for events or actions
taken or not taken by the Servicer arising prior to any such termination or
resignation.
The Servicer shall timely deliver to the successor the funds that were,
or were required to be, in the Collection Account and the Escrow Account, if
any, and all Mortgage Files and related documents, statements and recordkeeping
held by it hereunder and the Servicer shall account for all funds and shall
execute and deliver such instruments and do such other things as may reasonably
be required to more fully and definitely vest and confirm in the successor all
such rights, powers, duties, responsibilities, obligations and liabilities of
the Servicer.
Upon a successor's acceptance of appointment as such, the Servicer
shall notify, in writing, the Trustee, the Certificateholders and each Rating
Agency of such appointment.
Section 8.06. Maintenance of Ratings.
The Servicer shall cooperate with the Depositor and take any action
that may be reasonably necessary to maintain the current rating or ratings on
the Certificates.
[END OF ARTICLE VIII]
ARTICLE IX
DEFAULT
Section 9.01. Events of Default.
If one or more of the following Events of Default shall occur and be
continuing, that is to say:
(a) any failure by the Servicer to remit any payment required to be
made or distributed under the terms of this Agreement which continues unremedied
for a period of three Business Days after the date upon which written notice of
such failure, requiring the same to be remedied, shall have been given to the
Servicer by the Trustee or the Depositor or to the Servicer, the Trustee and the
Depositor by the Holders of Certificates of any Class evidencing, as to such
Class, Percentage Interests aggregating not less than 25%; or
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(b) a breach by the Servicer in a material respect of any
representation or warranty set forth in Section 3.02, or failure on the part of
the Servicer duly to observe or perform in any material respect any other of the
covenants or agreements on the part of the Servicer set forth in this Agreement,
which continues unremedied for a period of 60 days after the date on which
written notice of such breach or failure, requiring the same to be remedied,
shall have been given to the Servicer by the Trustee or the Depositor or to the
Servicer, the Trustee and the Depositor by the Holders of Certificates of any
Class evidencing, as to such Class, Percentage Interests aggregating not less
than 25%; or
(c) the Servicer shall notify the Trustee in writing that it is unable
to make an Advance required to be made in accordance with Section 6.03; or;
(d) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings, or for the winding-up or liquidation of its
affairs, shall have been entered against the Servicer and such decree or order
shall have remained in force undischarged or unstayed for a period of 60 days;
or
(e) the Servicer shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings of or relating to the Servicer or
of or relating to all or substantially all of the Servicer's property; or
(f) the Servicer shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations.
Then, and in each and every such case, so long as an Event of Default
shall not have been remedied, the Trustee shall notify the Certificateholders,
and each Rating Agency of such Event of Default. The Trustee may, and at the
written direction of the Holders of Certificates evidencing Percentage Interests
aggregating more than 50%, shall, by notice in writing to the Servicer,
terminate all the rights and obligations of the Servicer under this Agreement
and in and to the Mortgage Loans and the proceeds thereof. On or after the
receipt by the Servicer of such written notice, all authority and power of the
Servicer under this Agreement, whether with respect to the Mortgage Loans or
otherwise, shall pass to and be vested in the successor appointed pursuant to
Section 8.05. Upon written request from the Trustee, the Servicer shall prepare,
execute and deliver, any and all documents and other instruments, place in such
successor's possession all Mortgage Files, and 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, at the Servicer's sole
expense. The Servicer agrees to cooperate with the Trustee and any co-trustee in
effecting the termination of the Servicer's responsibilities and rights
hereunder, including, without limitation, the transfer to such successor for
administration by it of all cash amounts which shall at the time be credited or
should have been credited by the Servicer to the Collection Account or Escrow
Account or thereafter received with respect to the Mortgage Loans. The Trustee
will have no obligation to take any action or institute, conduct or defend any
litigation under this Agreement at the request, order or direction of any of the
Holders of Certificates unless such Certificateholders have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities which the Trustee may incur.
Section 9.02. Waiver of Defaults.
The Trustee may waive any default by the Servicer in the performance of
its obligations hereunder and its consequences, except that a default in the
making of any required distribution on any of the Certificates may only be
waived by the holders of a majority of the Percentage Interests of the affected
Certificateholders. Upon any such waiver of a past default, such default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been remedied for every purpose of this Agreement. No such waiver shall
extend to any subsequent or other default or impair any right consequent thereon
except to the extent expressly so waived.
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Section 9.03. Trustee to Act; Appointment of Successor.
On and after the time the Servicer receives a notice of termination
pursuant to Section 9.01, the Trustee or its appointed agent shall be the
successor in all respects to the Servicer to the extent provided in Section
8.05.
Section 9.04. Notification to Certificateholders and the Rating
Agencies.
(a) Upon any such termination pursuant to Section 9.01, the Trustee
shall give prompt written notice thereof to Certificateholders at their
respective addresses appearing in the Certificate Register and to each Rating
Agency.
(b) Within 60 days of a Responsible Officer of the Trustee having
received written notice of the occurrence of any Event of Default, the Trustee
shall transmit by mail to all Holders of Certificates notice of each such Event
of Default hereunder known to the Trustee, unless such Event of Default shall
have been cured or waived.
[END OF ARTICLE IX]
ARTICLE X
CONCERNING THE TRUSTEE
Section 10.01. Duties of Trustee.
The Trustee, prior to the occurrence of an Event of Default and after
the curing of all Events of Default which may have occurred, undertakes to, and
is empowered to, perform such duties and only such duties as are specifically
set forth in this Agreement. Any permissive right of the Trustee as enumerated
in this Agreement shall not be construed as a duty; provided that in case an
Event of Default has occurred (which has not been cured), 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 man would
exercise or use under the circumstances in the conduct of such man's own
affairs.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct, and, if the Trustee is acting as the
successor Servicer pursuant to Section 8.05 or 9.03, its own willful misconduct
with respect to its servicing obligations; provided, however, that:
(i) Prior to the occurrence of an Event of Default, and after
the curing of all such Events of Default which may have occurred, the
duties and obligations of the Trustee shall be determined solely by the
express provisions of this Agreement, the Trustee shall not be liable
except for the performance of such duties and obligations as are
specifically set forth in this Agreement, no implied covenants or
obligations shall be read into this Agreement against the Trustee and,
in the absence of bad faith on the part of the Trustee, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Agreement;
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(ii) The Trustee shall not be liable for an error of judgment
made in good faith by a Responsible Officer or Responsible Officers of
the Trustee, unless it shall be proved that the Trustee was negligent
in ascertaining the pertinent facts; and
(iii) The Trustee shall not be liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of Certificateholders of any Class
holding Certificates which evidence, as to such Class, Percentage
Interests aggregating not less than 25% as 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 10.02. Certain Matters Affecting the Trustee.
Except as otherwise provided in Section 10.01:
(a) The Trustee may rely upon and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate, certificate
of auditors or any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties;
(b) The Trustee may consult with counsel, and any advice or Opinion of
Counsel shall be full and complete authorization and protection in respect of
any action taken or suffered or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;
(c) The Trustee shall be under no obligation to exercise any of the
trusts or powers vested in it by this Agreement or to institute, conduct or
defend any litigation hereunder or in relation hereto at the request, order or
direction of any of the Certificateholders, pursuant to the provisions of this
Agreement, unless such Certificateholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which may be incurred therein or thereby; nothing contained herein shall,
however, relieve the Trustee of the obligation, upon the occurrence of an Event
of Default (which has not been cured), to exercise such of the rights and powers
vested in it by this Agreement, and to use the same degree of care and skill in
their exercise as a prudent man would exercise or use under the circumstances in
the conduct of such man's own affairs;
(d) Neither the Trustee nor any of its directors, officers, employees
or agents shall be personally liable for any action taken, suffered or omitted
by it in good faith and believed by it or any of them to be authorized or within
the discretion or rights or powers conferred upon the Trustee by this Agreement;
(e) Prior to the occurrence of an Event of Default hereunder and after
the curing of all Events of Default which may have occurred, the Trustee shall
not be bound to 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 to do so by Holders of Certificates of any Class
evidencing, as to such Class, Percentage Interests aggregating not less than 25%
(in the case of conflicting requests by two or more 25% or greater Percentage
Interests, the Trustee shall act in accordance with the first such request);
provided, however, that if the payment within a reasonable time to the Trustee
of the costs, expenses or liabilities likely to be incurred by it in the making
of such investigation is, in the opinion of the Trustee, not reasonably assured
to the Trustee by the security afforded to it by the terms of this Agreement,
the Trustee may require reasonable indemnity against such expense or liability
as a condition to such proceeding. The reasonable expense of every such
examination shall be paid by the Servicer, if an Event of Default shall have
occurred and is continuing, and otherwise by the Certificateholder requesting
the investigation;
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(f) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents,
subcontractors or attorneys; and
(g) Nothing in this Agreement shall be construed to require the Trustee
(acting in its capacity as Trustee) to expend its own funds.
Section 10.03. Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates (other than the
authentication of the Certificates by an authorized signatory of the Trustee)
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 or warranties as to the validity or sufficiency
of this Agreement or of the Certificates (except that (except as set forth
herein) the Certificates shall be duly and validly executed and authenticated by
it) or of any Mortgage Loan or related document. The Trustee shall not be
accountable for the use or application by the Depositor or the Servicer of any
of the Certificates or of the proceeds of such Certificates, or for the use or
application 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 by the
Depositor or the Servicer. The Trustee, in its capacity as trustee hereunder,
shall have no responsibility for the timeliness or the amount of payments made
by the Paying Agent to the Certificateholders.
Section 10.04. 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 it would have if it were
not Trustee.
Section 10.05. Fees and Expenses.
The Servicer covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to, reasonable compensation (which shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust) for all services rendered by it in the execution of
the trust hereby created and in the exercise and performance of any of the
powers and duties hereunder of the Trustee, and the Servicer will pay or
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any of the provisions of this Agreement (including the reasonable compensation
and the expenses and disbursements of its counsel and of all persons not
regularly in its employ, and the expenses incurred by the Trustee in connection
with the appointment of an office or agency pursuant to Section 10.11) except
any such expense, disbursement or advance as may arise from its negligence or
bad faith. Notwithstanding anything to the contrary in this Agreement, this
Section shall survive the termination of this Agreement.
Section 10.06. Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be an entity having its
principal office in a state and city acceptable to the Depositor and organized
and doing business under the laws of such state or the United States of America,
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus of at least $50,000,000 and subject to supervision or
examination by federal or state authority. The Trustee shall not be an Affiliate
of either Seller or the Depositor. If such entity 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, the
combined capital and surplus of such corporation 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, the Trustee shall resign
immediately in the manner and with the effect specified in Section 10.07.
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Section 10.07. Resignation and Removal of the Trustee.
The Trustee, and any co-trustee may at any time resign and be
discharged from the trusts hereby created by giving written notice thereof to
the Depositor, the Servicer and each Rating Agency. Upon receiving such notice
of resignation, the Depositor shall promptly appoint a successor trustee or
co-trustee by written instrument, in duplicate, one copy of which instrument
shall be delivered to the resigning Trustee and one copy to the successor
trustee; provided that such appointment does not result in a reduction or
withdrawal of the rating of any of the Classes of Certificates that have been
rated. If no successor trustee shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee.
If at any time, the Trustee shall cease to be eligible in accordance
with the provisions of Section 10.06 and shall fail to resign after written
request therefor by the Depositor, or if at any time the Trustee shall become
incapable of acting, or shall be adjudged bankrupt or insolvent, or a receiver
of the Trustee or of its property shall be appointed, or any public officer
shall take charge or control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation, then the Depositor
may remove the Trustee and appoint a successor trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee.
The Holders of Certificates evidencing in the aggregate more than 50%
of Percentage Interest 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 to the Depositor, one complete set to the
Trustee so removed and one complete set to the successor so appointed.
Any resignation or removal of the Trustee or any resignation of any
co-trustee and appointment of a successor trustee or co-trustee pursuant to any
of the provisions of this Section shall become effective upon acceptance of
appointment by the successor trustee as provided in Section 10.08, or upon
acceptance of appointment by a co-trustee, as applicable, unless with respect to
a co-trustee, the Trustee receives written notice from each Rating Agency that
the failure to appoint a successor co-trustee would not result in a withdrawal
or reduction of the rating of any of the Classes of Certificates that have been
rated, in which case the resignation of any co-trustee shall be effective upon
receipt of such written notice. Any co-trustee may not be removed unless the
Depositor and the Trustee each receive written notice from each Rating Agency
that such removal would not result in a withdrawal or reduction of the rating of
any of the Classes of Certificates that have been rated, in which case the
removal of any co-trustee shall be effective upon receipt of such written
notice.
Section 10.08. Successor Trustee.
Any successor trustee appointed as provided in Section 10.07 shall
execute, acknowledge and deliver to the Depositor and to its predecessor trustee
an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor trustee shall become effective, and
such successor trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become fully vested with all
the rights, powers, duties and obligations of its predecessor hereunder, with
the like effect as if originally named as trustee herein. The predecessor
trustee shall deliver to the successor trustee all Mortgage Files and related
documents and statements held by it hereunder, and the Depositor, the Servicer
and the predecessor trustee shall execute and deliver such instruments and do
such other things as may reasonably be required for more fully and certainly
vesting and confirming in the successor trustee all such rights, powers, duties
and obligations.
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No successor trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor trustee shall be
eligible under the provisions of Section 10.06. Prior to the appointment of any
successor trustee becoming effective, the Depositor shall have received from
each Rating Agency written confirmation that such appointment would not result
in a reduction of the rating of the Class A or Class M Certificates.
Upon acceptance of appointment by a successor trustee as provided in
this Section, the Depositor shall mail notice of the succession of such trustee
hereunder to all Holders of Certificates at their addresses as shown in the
Certificate Register, to the Servicer, any Sub-Servicer and to each Rating
Agency. If the Depositor fails to mail such notice within 10 days after
acceptance of appointment by the successor trustee, the successor trustee shall
cause such notice to be mailed at the expense of the Depositor.
Section 10.09. Merger or Consolidation of Trustee.
Any entity into which the Trustee may be merged or converted or with
which it may be consolidated or any entity resulting from any merger, conversion
or consolidation to which the Trustee shall be a party, or any entity succeeding
to the business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be eligible under the provisions of Section
10.06, without the execution or filing of any paper or any further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 10.10. Appointment of Co-Trustee or Separate Trustee.
At any time, for the purpose of meeting any legal requirements of any
jurisdiction in which any part of the Trust Fund or property securing the same
may at the time be located, the Depositor 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, of any part of the Trust Fund, and to vest in such
Person or Persons, in such capacity, such title to the Trust Fund, or any part
thereof, and, subject to the other provisions of this Section 10.10, such
powers, duties, obligations, rights and trusts as the Depositor and the Trustee
may consider necessary or desirable. If the Depositor shall not have joined in
such appointment within 15 days after the receipt by it of a request so to do,
or in case an Event of Default shall have occurred and be continuing, the
Trustee alone shall have the power to make such appointment. No co-trustee or
separate trustee hereunder shall be required to meet the terms of eligibility as
a successor trustee under Section 10.06, hereunder, and no notice to Holders of
Certificates of the appointment of co-trustee(s) or separate trustee(s) shall be
required under Section 10.08 hereof.
In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 10.10, all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly and severally, 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 by such separate trustee or co-trustee at the direction of the
Trustee.
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Every instrument appointing any separate trustee or co-trustee shall
refer to this Agreement and the conditions of this Article X. Each separate
trustee and co-trustee, upon its acceptance of the trusts conferred, shall be
vested with the estates or property specified in its instrument of appointment,
either jointly with the Trustee or separately, as may be provided therein,
subject to all the provisions of this Agreement, specifically including every
provision of this Agreement relating to the conduct of, affecting the liability
of, or affording protection to, the Trustee. Every such instrument shall be
filed with the Trustee.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name.
Section 10.11. Appointment of Office or Agency.
The Trustee may appoint an office or agency in The City of New York
where Certificates may be surrendered for registration of transfer or exchange.
The Trustee will maintain an office at the address stated in Section 12.07
hereof where notices and demands to or upon the Trustee in respect of the
Certificates may be served.
[END OF ARTICLE X]
ARTICLE XI
TERMINATION
Section 11.01. Termination.
The respective obligations and responsibilities of the Depositor, the
Servicer (except the duty to pay the Trustee's fees and expenses and
indemnification hereunder) and the Trustee shall 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
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and the
remittance of all funds due hereunder; or (ii) at the option of the Servicer, on
any Distribution Date which occurs in the month next following a Due Date on
which the aggregate unpaid Principal Balance of all Outstanding Mortgage Loans
is less than 10% of the aggregate unpaid Principal Balance of the Mortgage Loans
on the Cut-off Date, so long as the Servicer deposits or causes to be deposited
in the Collection Account during the Principal Prepayment Period related to such
Distribution Date (and provides notice to the Trustee of its intention to so
deposit on or before the 20th day of such Principal Prepayment Period) an amount
equal to the greater of (A) the Purchase Price for each Outstanding Mortgage
Loan, less any unreimbursed Advances made with respect to any Mortgage Loan
(which amount shall offset completely any unreimbursed Advances for which the
Servicer is otherwise entitled to reimbursement), and, with respect to all
property acquired in respect of any Mortgage Loan remaining in the Trust Fund,
an amount equal to the fair market value of such property, as determined by an
appraisal to be conducted by an appraiser selected by the Trustee, less
unreimbursed Advances made with respect to any Mortgage Loan with respect to
which property has been acquired and (B) the aggregate Outstanding Certificate
Principal Balance of the Class A, Class M, Class B-1 and Class B-2 Certificates,
plus any accrued and unpaid interest thereon at the Remittance Rate; provided,
however, that in no event shall the trust created hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants of
Xxxxxx X. Xxxxxxx, the late ambassador of the United States to the Court of St.
James's, living on the date hereof. Notwithstanding the foregoing, a termination
may be effected by the making of such optional repurchases only if the
termination of the Trust Fund satisfies the requirement for a "qualified
liquidation" of the Trust Fund within the meaning of Section 860F(a)(4) of the
Code and that the purchases of the Outstanding Mortgage Loans pursuant to
Section 11.01 will not constitute "prohibited transactions" within the meaning
of Section 860F(a)(2) of the Code.
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Notice of any termination, specifying the Distribution Date upon which
all Certificateholders may surrender their Certificates to the Trustee or, if a
Paying Agent has been appointed pursuant to Section 4.05, the Paying Agent for
payment and cancellation, shall be given promptly by the Trustee or, if a Paying
Agent has been appointed under Section 4.05, the Paying Agent, (upon direction
by the Depositor 10 days prior to the date such notice is to be mailed) by
signed letter to Certificateholders and each Rating Agency mailed no later than
the 25th day of the month preceding the month of such final distribution
specifying (i) the Distribution Date upon which final payment on the
Certificates will be made upon presentation and surrender of Certificates at the
office or agency of the Trustee or, if a Paying Agent has been appointed under
Section 4.05, the Paying Agent, therein designated and (ii) that the Record Date
otherwise applicable to such Distribution Date is not applicable, payments being
made only upon presentation and surrender of the Certificates at the office or
agency of the Trustee or, if a Paying Agent has been appointed under Section
4.05, the Paying Agent, therein specified. The Servicer shall indicate the date
of adoption of the plan of qualified liquidation in a statement attached to the
final federal income tax return of the Trust Fund. After giving such notice, the
Trustee, or if a Paying Agent has been appointed under Section 4.05, the Paying
Agent shall not register the transfer or exchange of any Certificates. If such
notice is given in connection with the Servicer's election to purchase the
Outstanding Mortgage Loans, the Servicer shall deposit in the Collection Account
after adoption of the plan during the applicable Principal Prepayment Period an
amount equal to the purchase price as determined as provided in clause (ii) of
the preceding paragraph and on the Distribution Date on which such termination
is to occur, Certificateholders will be entitled to the amount of such purchase
price but not amounts in excess thereof, all as provided herein. Upon
presentation and surrender of the Certificates, the Trustee or, if a Paying
Agent has been appointed under Section 4.05, the Paying Agent, shall notify the
Servicer and the Servicer shall cause to be distributed to Certificateholders an
amount equal to (a) the amount otherwise distributable on such Distribution
Date, if not in connection with a purchase; or (b) if the Servicer elected to so
purchase, the purchase price determined as provided in clause (ii) of the
preceding paragraph. Following such final deposit the Trustee shall promptly
release to the Servicer the Mortgage Files for the remaining Mortgage Loans, and
the Trustee shall execute all assignments, endorsements and other instruments
necessary to effectuate such transfer and shall have no further responsibility
with regard to said Mortgage Files.
If all of the Certificateholders shall not surrender their Certificates
for cancellation within three months after the time specified in the
above-mentioned written notice, at the close of the 90 day period beginning
after the written notice is given, each remaining Certificateholder will be
credited with an amount that would have been otherwise distributed to such
Certificateholder, and the Trustee or, if a Paying Agent has been appointed
under Section 4.05, the Paying Agent, shall give a second written notice to the
remaining Certificateholders to surrender their Certificates for cancellation
and receive the final distribution with respect thereto. If within three months
after the second notice all the Certificates shall not have been surrendered for
cancellation, the Trustee or, if a Paying Agent has been appointed under Section
4.05, the Paying Agent, shall appoint an agent to take appropriate and
reasonable steps to contact the remaining Certificateholders concerning
surrender of their Certificates, and the cost thereof shall be paid out of the
funds and other assets which remain in the Trust Fund hereunder.
[END OF ARTICLE XI]
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ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01. 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.
Section 12.02. Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding-up of the Trust Fund, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
No Certificateholder shall have any right to vote (except as expressly
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 person 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 of any provision of
this Agreement to institute any suit, action or proceeding in equity or at law
upon or under or with respect to this Agreement, unless such Holder previously
shall have given to the Trustee a written notice of default and of the
continuance thereof, as hereinbefore provided, and the Holders of Certificates
of any Class evidencing in the aggregate not less than 25% of the Percentage
Interests of such Class shall have made written request upon the Trustee to
institute such action, suit or proceeding in its own name as Trustee hereunder
(in the case of conflicting requests by two or more 25% or greater Percentage
Interests, the Trustee shall act in accordance with the first such request) 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 of any Class shall have any right in
any manner whatever by virtue of any provision of this Agreement to affect,
disturb or prejudice the rights of the Holders of any other of such Certificates
of such Class or any other Class, or to obtain or seek to obtain priority over
or preference to any other such Holder, or to enforce any right under this
Agreement, except in the manner herein provided and for the common benefit of
Certificateholders of such Class or all Classes, as the case may be. For the
protection and enforcement of the provisions of this Section, each and every
Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
Section 12.03. 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,
to cure any ambiguity, to correct or supplement any provisions herein which may
be inconsistent with any other provisions herein, to ensure continuing treatment
of the Trust Fund as a REMIC, to avoid or minimize the risk of imposition of any
tax on the Trust Fund pursuant to the Code, or to make any other provisions with
respect to matters or questions arising under this Agreement which shall not be
materially inconsistent with the provisions of this Agreement, provided that
such actions shall not, as evidenced by an Opinion of Counsel, adversely affect
in any material respect the interests of any Certificateholder of a Class having
an Outstanding Certificate Principal Balance of greater than zero or cause the
Trust Fund to fail to qualify as a REMIC.
74
This 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 Interest of
each Class of Certificates having an Outstanding Certificate Principal Balance
greater than zero and affected thereby for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions of this
Agreement or of modifying in any manner the rights of the Holders of
Certificates of such Class; provided, however, that no such amendment shall (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) reduce the aforesaid
percentage of Certificates of any class the Holders of which are required to
consent to any such amendment or (iii) change the percentage specified in clause
(ii) of the first paragraph of Section 11.01, without the consent of the Holders
of all Certificates of such Class 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 interests held by parties other than the Depositor, its
Affiliates or its agents, for the purposes of significantly changing the
Permitted Activities of the Trust.
Promptly after the execution of any such amendment the Trustee shall
furnish written notification of the substance of such amendment to each
Certificateholder and each Rating Agency.
It shall not be necessary for the consent of Certificateholders under
this Section 12.03 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.
Section 12.04. 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 12.05. Duration of Agreement.
This Agreement shall continue in existence and effect until terminated
as herein provided.
Section 12.06. Governing Law.
This Agreement shall be construed in accordance with the laws of the
State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws.
Section 12.07. Notices.
75
All demands, notices and communications hereunder shall be in writing
and shall be deemed to have been duly given if personally delivered at or mailed
by first class or registered mail, postage prepaid, to (i) in the case of the
Depositor, Chase Mortgage Finance Corporation, 000 Xxxx Xxxxxxxxx, Xxxxxxxxx
Xxxx, Xxx Xxxxxx 00000, (ii) in the case of the Servicer, JPMorgan Chase Bank,
N.A., 0000 Xxxxxxx Xxxxxxx, Xxxxxxxx Xxxx 00000, (iii) in the case of the
Trustee, [TRUSTEE], [ADDRESS], (iv) in the case of [RATING AGENCY], [ADDRESS],
(v) in the case of [RATING AGENCY], [ADDRESS] and (vi) 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.
Section 12.08. Further Assurances.
The Seller and the Servicer agree to do and perform, from time to time,
any and all acts and to execute any and all further instruments required or
reasonably requested by the Trustee more fully to effect the purposes of this
Agreement, including, without limitation, the execution of any financing
statements and the preparation for execution by the Trustee of any continuation
statements relating to the Co-op Loans for filing under the provisions of the
Uniform Commercial Code as in effect in the jurisdiction in which the Underlying
Mortgaged Property related to the affected Co-op Loan is located. The Trustee
agrees that it shall promptly execute and redeliver to the Seller or the
Servicer for filing any such continuation statement so prepared by the Seller
relating to the Co-op Loans.
[END OF ARTICLE XII]
76
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 MORTGAGE FINANCE CORPORATION
By: __________________________________
Name:
Title:
JPMORGAN CHASE BANK, N.A.
By: __________________________________
Name:
Title:
[TRUSTEE],
as Trustee
By: __________________________________
Name:
Title:
EXHIBIT A
MORTGAGE LOAN SCHEDULE
A-1
EXHIBIT B
CONTENTS OF MORTGAGE FILE
(i) With respect to each Mortgage Loan which is not a Co-op Loan:
(ii) (I) Original Mortgage Note (or a lost note affidavit (including a
copy of the original Mortgage Note)) or (II) original consolidation, extension
and modification agreement (or a lost note affidavit (including a copy of the
original consolidation, extension and modification agreement)), in either case
endorsed "Pay to the order of [TRUSTEE], as trustee, without recourse".
(A) The original Mortgage (including all riders thereto) with
evidence of recording thereon, or a copy thereof certified by the
public recording office in which such Mortgage has been recorded or, if
the original Mortgage has not been returned from the applicable public
recording office, a true certified copy, certified by the Seller, of
the original Mortgage together with a certificate of the Seller
certifying that the original Mortgage has been delivered for recording
in the appropriate public recording office of the jurisdiction in which
the Mortgaged Property is located.
(B) With respect to each Non-MERS Mortgage Loan which is not a
Co-op Loan, the original Assignment of Mortgage to "[TRUSTEE], as
trustee," which assignment shall be in form and substance acceptable
for recording, or a copy certified by the Seller as a true and correct
copy of the original Assignment of Mortgage which has been sent for
recordation. Subject to the foregoing, such assignments may, if
permitted by law, be by blanket assignments for Mortgage Loans covering
Mortgaged Properties situated within the same county. If the Assignment
of Mortgage is in blanket form, a copy of the Assignment of Mortgage
shall be included in the related individual Mortgage File.
(C) The original policy of title insurance, including riders
and endorsements thereto, or if the policy has not yet been issued, a
written commitment or interim binder or preliminary report of title
issued by the title insurance or escrow company.
(D) Originals of all recorded intervening Assignments of
Mortgage, or copies thereof, certified by the public recording office
in which such Assignments or Mortgage have been recorded showing a
complete chain of title from the originator to the Depositor, with
evidence of recording, thereon, or a copy thereof certified by the
public recording office in which such Assignment of Mortgage has been
recorded or, if the original Assignment of Mortgage has not been
returned from the applicable public recording office, a true certified
copy, certified by the Seller of the original Assignment of Mortgage
together with a certificate of the Seller certifying that the original
Assignment of Mortgage has been delivered for recording in the
appropriate public recording office of the jurisdiction in which the
Mortgaged Property is located.
(E) Originals, or copies thereof certified by the public
recording office in which such documents have been recorded, of each
assumption, extension, modification, written assurance or substitution
agreements, if applicable, or if the original of such document has not
been returned from the applicable public recording office, a true
certified copy, certified by the Seller, of such original document
together with certificate of Seller certifying the original of such
document has been delivered for recording in the appropriate recording
office of the jurisdiction in which the Mortgaged Property is located.
B-1
(F) If the Mortgage Note or Mortgage or any other material
document or instrument relating to the Mortgage Loan has been signed by
a person on behalf of the Mortgagor, 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.
(iii) With respect to each Co-op Loan:
(A) (I) The original Mortgage Note (or a lost note affidavit
(including a copy of the original Mortgage Note)) or (II) original
consolidation, extension and modification agreement (or a lost note
affidavit (including a copy of the original consolidation, extension
and modification agreement)), in either case endorsed "Pay to the order
of [TRUSTEE], as trustee, without recourse."
(B) The original Mortgage entered into by the Mortgagor with
respect to such Co-op Loan.
(C) The original Assignment of Mortgage to "[TRUSTEE] as
trustee."
(D) Original assignments of Mortgage showing a complete chain
of assignment from the originator of the related Co-op Loan to the
Seller.
(E) Original Form UCC-1 and any continuation statements with
evidence of filing thereon entered into by the Mortgagor with respect
to such Co-op Loan.
(F) Form UCC-3 (or copy thereof) by the applicable Mortgage
Loan Seller or its agent assigning the security interest covered by
such Form UCC-1 to "[TRUSTEE] as trustee," together with all Forms
UCC-3 (or copies thereof) showing a complete chain of assignment from
the originator of the related Co-op Loan to the Seller, with evidence
of recording thereon.
(G) Stock certificate representing the stock allocated to the
related dwelling unit in the related residential cooperative housing
corporation and pledged by the related Mortgagor to the originator of
such Co-op Loan with a stock power in blank attached.
(H) Original proprietary lease.
(I) Original assignment of proprietary lease, to the Trustee,
and all intervening assignments thereof.
(J) Original recognition agreement of the interests of the
mortgagee with respect to the Co-op Loan by the residential cooperative
housing corporation, the stock of which was pledged by the related
Mortgagor to the originator of such Co-op Loan.
B-2
(K) Originals of any assumption, consolidation or modification
agreements relating to any of the items specified in (A) through (F)
above with respect to such Co-op Loan.
B-3
EXHIBIT C
FORM OF CLASS A CERTIFICATES
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS 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 (the "COde").
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN CHASE
MORTGAGE FINANCE CORPORATION ("CMFC"), JPMORGAN CHASE BANK, N.A. (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 CMFC, THE SERVICER, 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 WILL BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN BELOW.
ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL BALANCE BY
INQUIRY OF THE TRUSTEE.
CLASS A-1 CERTIFICATE
Number __-__-A-1-1 Original Denomination $_____________
Cut-off Date: [DATE] Final Scheduled
Distribution Date: [DATE]
First Distribution Date: Aggregate Original Principal
[DATE] Balance of all Class A-1
Certificates: $_____________
Certificate Rate: _______% CUSIP: 16162T __ _
C-1
MULTI-CLASS MORTGAGE PASS-THROUGH CERTIFICATE
Series [_______]
evidencing an ownership interest in distributions allocable to the Class A-1
Certificates with respect to a pool of conventional one- to four-family mortgage
loans formed and sold by
CHASE MORTGAGE FINANCE CORPORATION
Unless this Certificate is presented by an authorized representative of
the Depository Trust Company, a New York corporation ("DTC"), to the Trustee 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 Original
Denomination of all Class A-1 Certificates) in certain distributions with
respect to a pool of conventional one- to four-family first lien mortgage loans
(the "Mortgage Loans") formed and sold by Chase Mortgage Finance Corporation
(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 JPMorgan Chase Bank, N.A. (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 [DATE] among the Depositor, the Servicer and [TRUSTEE], 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 Multi-Class Mortgage Pass-Through Certificates, Series [_______],
Class A-1 (the "Class A-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 Multi-Class Mortgage Pass-Through Certificates,
Series [_______], Class M Certificates and Class B Certificates. The Class A
Certificates, the Class M Certificates and the Class B Certificates are
collectively referred to herein as the "Certificates."
Pursuant to the terms of the Agreement, the Trustee, or, if a Paying
Agent has been appointed under Section 4.05 of the Agreement thereof, the Paying
Agent, will distribute from funds in the Certificate Account the amount as
described on the reverse hereof 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 [DATE]. 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 10 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 denomination of
not less than $5,000,000 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 Trustee, or, if a Paying Agent has been
appointed under Section 4.05 of the Agreement, the Paying Agent, of the pendency
of such distribution and only upon presentation and surrender of this
Certificate at the office of the Trustee, or, if a Paying Agent has been
appointed under Section 4.05 of the Agreement, the Paying Agent, or agency
appointed by the Trustee, or, if a Paying Agent has been appointed under Section
4.05 of the Agreement the Paying Agent, for the purpose and specified in such
notice of final distribution.
C-2
The Trustee will cause to be kept at its Agency & Trust Office in New
York, New York, or at the office of its designated agent, a Certificate Register
in which, subject to such reasonable regulations as it may prescribe, the
Trustee 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 Trustee, or, if a Paying Agent has
been appointed under Section 4.05 of the Agreement, the Paying Agent, maintained
for such purpose, the Trustee, or, if a Paying Agent has been appointed under
Section 4.05 of the Agreement, the Paying 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 Trustee, or, if a Paying Agent has been appointed under Section
4.05 of the Agreement, the Paying Agent, of the pendency of such distribution
and only upon presentation and surrender of this Certificate at the office or
agency appointed by the Trustee, or, if a Paying Agent has been appointed under
Section 4.05 of the Agreement, the Paying Agent, 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-3
IN WITNESS WHEREOF, the Depositor has caused this Certificate to be
duly executed.
Dated: [DATE] CHASE MORTGAGE FINANCE
CORPORATION
By: __________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-1
Certificates referred to
in the within-mentioned
Agreement.
JPMORGAN CHASE BANK
as Authenticating Agent
By: _______________________________
Authorized Signatory
C-4
REVERSE OF CERTIFICATE
MULTI-CLASS MORTGAGE PASS-THROUGH CERTIFICATE
SERIES [_______]
This Certificate is one of a duly authorized issue of Certificates,
designated as Multi-Class Mortgage Pass-Through Certificates, Series [_______],
issued in one or more Classes of Class A, Class M and Class B Certificates. The
Class A Certificates evidence in the aggregate the Class A Percentage of
distributions relating to repayments of principal and interest on the Mortgage
Loans. The Class M Certificates evidence in the aggregate the Class M Percentage
of distributions relating to repayments of principal and interest on the
Mortgage Loans. The Class B Certificates evidence in the aggregate the Class B
Percentage of distributions relating to repayments of principal and interest on
the Mortgage Loans.
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 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.
The Trustee will cause to be kept at its Agency & Trust Office in New
York, New York, or at the office of any Paying Agent appointed under the
Agreement, a Certificate Register in which, subject to such reasonable
regulations as it may prescribe, the Trustee (or any Paying Agent, as the case
may be) 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 Trustee, or, if a Paying Agent has
been appointed under Section 4.05 of the Agreement, the Paying Agent, maintained
for such purpose, the Trustee, or, if a Paying Agent has been appointed under
Section 4.05 of the Agreement, the Paying 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.
No service charge will be made to the Holder for any transfer or
exchange of the Certificate, but the Trustee, or, if a Paying Agent has been
appointed under Section 4.05 of the Agreement, the Paying 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, the Paying Agent 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 the Trust Fund as a REMIC (as hereinafter defined), 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 or cause the Trust Fund to fail to qualify as a REMIC.
C-5
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) reduce the aforesaid
percentage of Certificates of any Class the Holders of which are required to
consent to any such amendment or (iii) change the percentage specified in clause
(ii) of the first paragraph of Section 11.01 of the Agreement, without the
consent of the Holders of all Certificates of such Class then outstanding.
The Depositor intends to cause an election to be made to treat the
assets of the Trust Fund as a real estate mortgage investment conduit (a
"REMIC") for federal income tax purposes. The Class A Certificates (other than
the Class A-R Certificate), the Class M Certificates and the Class B
Certificates will constitute "regular interests" in the REMIC. The Class A-R
Certificate will represent the sole class of "residual interest" in the REMIC.
The respective obligations and responsibilities of the Depositor, the
Servicer (except the duty to pay the Trustee's fees and expenses and
indemnification hereunder) and the Trustee shall 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
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and the
remittance of all funds due hereunder; or (ii) at the option of the Servicer, on
any Distribution Date which occurs in the month next following a Due Date on
which the aggregate unpaid Principal Balance of all Outstanding Mortgage Loans
is less than 10% of the aggregate unpaid Principal Balance of the Mortgage Loans
on the Cut-off Date, so long as the Servicer deposits or causes to be deposited
in the Collection Account during the Principal Prepayment Period related to such
Distribution Date (and provides notice to the Trustee of its intention to so
deposit on or before the 20th day of such Principal Prepayment Period) an amount
equal to the greater of (A) the Purchase Price for each Outstanding Mortgage
Loan, less any unreimbursed Advances made with respect to any Mortgage Loan
(which amount shall offset completely any unreimbursed Advances for which the
Servicer is otherwise entitled to reimbursement), and, with respect to all
property acquired in respect of any Mortgage Loan remaining in the Trust Fund,
an amount equal to the fair market value of such property, as determined by an
appraisal to be conducted by an appraiser selected by the Trustee, less
unreimbursed Advances made with respect to any Mortgage Loan with respect to
which property has been acquired and (B) the aggregate Outstanding Certificate
Principal Balance of the Class A, Class M, Class B-1 and Class B-2 Certificates,
plus any accrued and unpaid interest thereon at the Remittance Rate; provided,
however, that in no event shall the trust created hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants of
Xxxxxx X. Xxxxxxx, the late ambassador of the United States to the Court of St.
James's, living on the date hereof.
C-6
[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-7
EXHIBIT D
FORM OF CLASS M CERTIFICATE
THIS CLASS M CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS 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 (the "code").
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN CHASE
MORTGAGE FINANCE CORPORATION ("CMFC"), JPMORGAN CHASE BANK, N.A. (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 CMFC, THE SERVICER, THE
TRUSTEE OR BY ANY OF THEIR AFFILIATES OR BY ANY GOVERNMENTAL AGENCY OR
INSTRUMENTALITY.
[THIS LEGEND WILL APPEAR ON THE CERTIFICATE IF SUCH CERTIFICATE IS AN ERISA
RESTRICTED CERTIFICATE (AS DEFINED IN THE POOLING AND SERVICING AGREEMENT).] NO
TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE DEPOSITOR OR, IF A PAYING
AGENT HA BEEN APPOINTED UNDER SECTION 4.05 OF THE POOLING AND SERVICING
AGREEMENT, THE PAYING AGENT, SHALL HAVE RECEIVED EITHER (i) A REPRESENTATION
LETTER FROM THE TRANSFEREE OF THIS CERTIFICATE TO THE EFFECT THAT (A) SUCH
TRANSFEREE EITHER IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA") OR SECTION
4975 OF THE CODE OR MATERIALLY SIMILAR PROVISIONS OF APPLICABLE FEDERAL, STATE
OR LOCAL LAW ("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) SUCH TRANSFEREE 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, 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. "2510.3-101 AND TO
BE SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF ERISA OR THE PROHIBITED
TRANSACTION PROVISIONS OF ERISA OR THE CODE OR SIMILAR LAW, WILL NOT CONSTITUTE
OR RESULT IN A PROHIBITED TRANSACTION WITHIN THE MEANING OF SECTION 406 OR 407
OF ERISA OR SECTION 4975 OF THE CODE OR SIMILAR LAW, AND WILL NOT SUBJECT THE
TRUSTEE, THE SERVICER, CMFC 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.
D-1
FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE PRINCIPAL BALANCE OF
THIS CERTIFICATE WILL BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN BELOW.
ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL BALANCE BY
INQUIRY OF THE TRUSTEE.
CLASS M CERTIFICATE
Number __-__-M-1 Original Denomination
$------------
Cut-off Date: [DATE] Final Scheduled
Distribution Date: [DATE]
First Distribution Date: Aggregate Original Principal
[DATE] Balance of all Class M
Certificates: $____________
Certificate Rate: _____% CUSIP: 16162T __ _
D-2
MULTI-CLASS MORTGAGE PASS-THROUGH CERTIFICATE
Series [_______]
evidencing an ownership interest in distributions allocable to the Class M
Certificates with respect to a pool of conventional one- to four-family mortgage
loans formed and sold by
CHASE MORTGAGE FINANCE CORPORATION
Unless this Certificate is presented by an authorized representative of
the Depository Trust Company, a New York corporation ("DTC"), to the Trustee 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 Original
Denomination of all Class M Certificates) in certain distributions with respect
to a pool of conventional one- to four-family first lien mortgage loans (the
"Mortgage Loans") formed and sold by Chase Mortgage Finance Corporation
(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 JPMorgan Chase Bank, N.A. (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 [DATE] among the Depositor, the Servicer and [TRUSTEE], 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 Multi-Class Mortgage Pass-Through Certificates, Series [_______],
Class M (the "Class M 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 Multi-Class Mortgage Pass-Through Certificates, Series [_______],
Class A Certificates and Class B Certificates. The Class A Certificates are
senior to, and the Class B Certificates are subordinate to, the Class M
Certificates in right of payment to the extent described herein and in the
Agreement. The Class A Certificates, the Class M Certificates and the Class B
Certificates are collectively referred to herein as the "Certificates." Amounts
properly distributed to the Class M Certificateholders pursuant to the Agreement
will be deemed released from the Trust Fund, and the Class M Certificateholders
will not in any event be required to refund any such distributed amounts.
Pursuant to the terms of the Agreement, the Trustee, or, if a Paying
Agent has been appointed under Section 4.05 of the Agreement thereof, the Paying
Agent, will distribute from funds in the Certificate Account the amount as
described on the reverse hereof 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 [DATE]. 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.
D-3
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 10 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 denomination of
not less than $5,000,000 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 Trustee, or, if a Paying Agent has been
appointed under Section 4.05 of the Agreement, the Paying Agent, of the pendency
of such distribution and only upon presentation and surrender of this
Certificate at the office of the Trustee, or, if a Paying Agent has been
appointed under Section 4.05 of the Agreement, the Paying Agent, or agency
appointed by the Trustee, or, if a Paying Agent has been appointed under Section
4.05 of the Agreement, the Paying Agent, for the purpose and specified in such
notice of final distribution.
The Trustee will cause to be kept at its Agency & Trust Office in New
York, New York, or at the office of its designated agent, a Certificate Register
in which, subject to such reasonable regulations as it may prescribe, the
Trustee 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 Trustee, or, if a Paying Agent has
been appointed under Section 4.05 of the Agreement, the Paying Agent, maintained
for such purpose, the Trustee, or, if a Paying Agent has been appointed under
Section 4.05 of the Agreement, the Paying 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 Trustee, or, if a Paying Agent has been appointed under Section
4.05 of the Agreement, the Paying Agent, of the pendency of such distribution
and only upon presentation and surrender of this Certificate at the office or
agency appointed by the Trustee, or, if a Paying Agent has been appointed under
Section 4.05 of the Agreement, the Paying Agent, 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: [DATE] CHASE MORTGAGE FINANCE
CORPORATION
By: _____________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class M Certificates referred to in the within-mentioned
Agreement.
JPMORGAN CHASE BANK
as Authenticating Agent
By: _________________________________
Authorized Signatory
D-5
REVERSE OF CERTIFICATE
MULTI-CLASS MORTGAGE PASS-THROUGH CERTIFICATE
SERIES [_______]
This Certificate is one of a duly authorized issue of Certificates,
designated as Multi-Class Mortgage Pass-Through Certificates, Series [_______],
issued in one or more Classes of Class A, Class M and Class B Certificates. The
Class A Certificates evidence in the aggregate the Class A Percentage of
distributions relating to repayments of principal and interest on the Mortgage
Loans. The Class M Certificates evidence in the aggregate the Class M Percentage
of distributions relating to repayments of principal and interest on the
Mortgage Loans. The Class B Certificates evidence in the aggregate the Class B
Percentage of distributions relating to repayments of principal and interest on
the Mortgage Loans.
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 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.
The Trustee will cause to be kept at its Agency & Trust Office in New
York, New York, or at the office of any Paying Agent appointed under the
Agreement, a Certificate Register in which, subject to such reasonable
regulations as it may prescribe, the Trustee (or any Paying Agent, as the case
may be) 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 Trustee, or, if a Paying Agent has
been appointed under Section 4.05 of the Agreement, the Paying Agent, maintained
for such purpose, the Trustee, or, if a Paying Agent has been appointed under
Section 4.05 of the Agreement, the Paying 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.
No service charge will be made to the Holder for any transfer or
exchange of the Certificate, but the Trustee, or, if a Paying Agent has been
appointed under Section 4.05 of the Agreement, the Paying 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, the Paying Agent nor the Trustee will be affected by
notice to the contrary.
D-6
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 the Trust Fund as a REMIC (as hereinafter defined), 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 or cause the Trust Fund to fail to qualify as a REMIC.
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) reduce the aforesaid
percentage of Certificates of any Class the Holders of which are required to
consent to any such amendment or (iii) change the percentage specified in clause
(ii) of the first paragraph of Section 11.01 of the Agreement, without the
consent of the Holders of all Certificates of such Class then outstanding.
The Depositor intends to cause an election to be made to treat the
assets of the Trust Fund as a real estate mortgage investment conduit (a
"REMIC") for federal income tax purposes. The Class A Certificates (other than
the Class A-R Certificate), the Class M Certificates and the Class B
Certificates will constitute "regular interests" in the REMIC. The Class A-R
Certificate will represent the sole class of "residual interest" in the REMIC.
The respective obligations and responsibilities of the Depositor, the
Servicer (except the duty to pay the Trustee's fees and expenses and
indemnification hereunder) and the Trustee shall 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
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and the
remittance of all funds due hereunder; or (ii) at the option of the Servicer, on
any Distribution Date which occurs in the month next following a Due Date on
which the aggregate unpaid Principal Balance of all Outstanding Mortgage Loans
is less than 10% of the aggregate unpaid Principal Balance of the Mortgage Loans
on the Cut-off Date, so long as the Servicer deposits or causes to be deposited
in the Collection Account during the Principal Prepayment Period related to such
Distribution Date (and provides notice to the Trustee of its intention to so
deposit on or before the 20th day of such Principal Prepayment Period) an amount
equal to the greater of (A) the Purchase Price for each Outstanding Mortgage
Loan, less any unreimbursed Advances made with respect to any Mortgage Loan
(which amount shall offset completely any unreimbursed Advances for which the
Servicer is otherwise entitled to reimbursement), and, with respect to all
property acquired in respect of any Mortgage Loan remaining in the Trust Fund,
an amount equal to the fair market value of such property, as determined by an
appraisal to be conducted by an appraiser selected by the Trustee, less
unreimbursed Advances made with respect to any Mortgage Loan with respect to
which property has been acquired and (B) the aggregate Outstanding Certificate
Principal Balance of the Class A, Class M, Class B-1 and Class B-2 Certificates,
plus any accrued and unpaid interest thereon at the Remittance Rate; provided,
however, that in no event shall the trust created hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants of
Xxxxxx X. Xxxxxxx, the late ambassador of the United States to the Court of St.
James's, living on the date hereof.
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
FORM OF CLASS B CERTIFICATES
THIS CLASS B-1 CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES AND THE CLASS M CERTIFICATES AS DESCRIBED IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS 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 (the "Code").
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN CHASE
MORTGAGE FINANCE CORPORATION ("CMFC"), JPMORGAN CHASE BANK, N.A. (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 CMFC, THE SERVICER, THE
TRUSTEE OR BY ANY OF THEIR AFFILIATES OR BY ANY GOVERNMENTAL AGENCY OR
INSTRUMENTALITY.
[THIS LEGEND WILL APPEAR ON THE CERTIFICATE IF SUCH CERTIFICATE IS AN ERISA
RESTRICTED CERTIFICATE (AS DEFINED IN THE POOLING AND SERVICING AGREEMENT).] NO
TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE DEPOSITOR OR, IF A PAYING
AGENT HA BEEN APPOINTED UNDER SECTION 4.05 OF THE POOLING AND SERVICING
AGREEMENT, THE PAYING AGENT, SHALL HAVE RECEIVED EITHER (i) A REPRESENTATION
LETTER FROM THE TRANSFEREE OF THIS CERTIFICATE TO THE EFFECT THAT (A) SUCH
TRANSFEREE EITHER IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA") OR SECTION
4975 OF THE CODE OR MATERIALLY SIMILAR PROVISIONS OF APPLICABLE FEDERAL, STATE
OR LOCAL LAW ("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) SUCH TRANSFEREE 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, 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. "2510.3-101 AND TO
BE SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF ERISA OR THE PROHIBITED
TRANSACTION PROVISIONS OF ERISA OR THE CODE OR SIMILAR LAW, WILL NOT CONSTITUTE
OR RESULT IN A PROHIBITED TRANSACTION WITHIN THE MEANING OF SECTION 406 OR 407
OF ERISA OR SECTION 4975 OF THE CODE OR SIMILAR LAW, AND WILL NOT SUBJECT THE
TRUSTEE, THE SERVICER, CMFC 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.
E-1
FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE PRINCIPAL BALANCE OF
THIS CERTIFICATE WILL BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN BELOW.
ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL BALANCE BY
INQUIRY OF THE TRUSTEE.
CLASS B-1 CERTIFICATE
Number __-__-B-1-1 Original Denomination
$------------
Cut-off Date: [DATE] Final Scheduled
Distribution Date: [DATE]
First Distribution Date: Aggregate Original Principal
[DATE] Balance of all Class B-1
Certificates: $____________
Certificate Rate: ______% CUSIP: 16162T __ _
E-2
MULTI-CLASS MORTGAGE PASS-THROUGH CERTIFICATE
Series [_______]
evidencing an ownership interest in distributions allocable to the Class B-1
Certificates with respect to a pool of conventional one- to four-family mortgage
loans formed and sold by
CHASE MORTGAGE FINANCE CORPORATION
This certifies that __________ 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 Original
Denomination of all Class B-1 Certificates) in certain distributions with
respect to a pool of conventional one- to four-family first lien mortgage loans
(the "Mortgage Loans") formed and sold by Chase Mortgage Finance Corporation
(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 JPMorgan Chase Bank, N.A. (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 [DATE] among the Depositor, the Servicer and [TRUSTEE], 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 Multi-Class Mortgage Pass-Through Certificates, Series [_______],
Class B-1 (the "Class B-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 Multi-Class Mortgage Pass-Through Certificates,
Series [_______], Class A Certificates and Class M Certificates. The rights of
the Class B-1 Certificateholders to receive distributions in respect of the
Class B Certificates on any Distribution Date are subordinated to the rights of
the Class A and Class M Certificateholders to receive distributions in respect
of the Class A and Class M Certificates to the extent, and only to the extent,
set forth in the Agreement. The Class A Certificates, the Class M Certificates
and the Class B Certificates are collectively referred to herein as the
"Certificates." Amounts properly distributed to the Class B Certificateholders
pursuant to the Agreement will be deemed released from the Trust Fund, and the
Class B Certificateholders will not in any event be required to refund any such
distributed amounts.
Pursuant to the terms of the Agreement, the Trustee, or, if a Paying
Agent has been appointed under Section 4.05 of the Agreement thereof, the Paying
Agent, will distribute from funds in the Certificate Account the amount as
described on the reverse hereof 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 [DATE]. 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 10 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 denomination of
not less than $5,000,000 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 Trustee, or, if a Paying Agent has been
appointed under Section 4.05 of the Agreement, the Paying Agent, of the pendency
of such distribution and only upon presentation and surrender of this
Certificate at the office of the Trustee, or, if a Paying Agent has been
appointed under Section 4.05 of the Agreement, the Paying Agent, or agency
appointed by the Trustee, or, if a Paying Agent has been appointed under Section
4.05 of the Agreement, the Paying Agent, for the purpose and specified in such
notice of final distribution.
E-3
The Trustee will cause to be kept at its Agency & Trust Office in New
York, New York, or at the office of its designated agent, a Certificate Register
in which, subject to such reasonable regulations as it may prescribe, the
Trustee 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 Trustee, or, if a Paying Agent has
been appointed under Section 4.05 of the Agreement, the Paying Agent, maintained
for such purpose, the Trustee, or, if a Paying Agent has been appointed under
Section 4.05 of the Agreement, the Paying 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 Trustee, or, if a Paying Agent has been appointed under Section
4.05 of the Agreement, the Paying Agent, of the pendency of such distribution
and only upon presentation and surrender of this Certificate at the office or
agency appointed by the Trustee, or, if a Paying Agent has been appointed under
Section 4.05 of the Agreement, the Paying Agent, 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: [DATE] CHASE MORTGAGE FINANCE
CORPORATION
By: ________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class B-1
Certificates referred to
in the within-mentioned
Agreement.
JPMORGAN CHASE BANK
as Authenticating Agent
By: _______________________________
Authorized Signatory
E-5
REVERSE OF CERTIFICATE
MULTI-PASS MORTGAGE PASS-THROUGH CERTIFICATE
SERIES [_______]
This Certificate is one of a duly authorized issue of Certificates,
designated as Multi-Class Mortgage Pass-Through Certificates, Series [_______],
issued in one or more Classes of Class A, Class M and Class B Certificates. The
Class A Certificates evidence in the aggregate the Class A Percentage of
distributions relating to repayments of principal and interest on the Mortgage
Loans. The Class M Certificates evidence in the aggregate the Class M Percentage
of distributions relating to repayments of principal and interest on the
Mortgage Loans. The Class B Certificates evidence in the aggregate the Class B
Percentage of distributions relating to repayments of principal and interest on
the Mortgage Loans.7
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 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.
The Trustee will cause to be kept at its Agency & Trust Office in New
York, New York, or at the office of any Paying Agent appointed under the
Agreement, a Certificate Register in which, subject to such reasonable
regulations as it may prescribe, the Trustee (or any Paying Agent, as the case
may be) 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 Trustee, or, if a Paying Agent has
been appointed under Section 4.05 of the Agreement, the Paying Agent, maintained
for such purpose, the Trustee, or, if a Paying Agent has been appointed under
Section 4.05 of the Agreement, the Paying 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.
No service charge will be made to the Holder for any transfer or
exchange of the Certificate, but the Trustee, or, if a Paying Agent has been
appointed under Section 4.05 of the Agreement, the Paying 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, the Paying Agent 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 the Trust Fund as a REMIC (as hereinafter defined), 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 or cause the Trust Fund to fail to qualify as a REMIC.
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) reduce the aforesaid
percentage of Certificates of any Class the Holders of which are required to
consent to any such amendment or (iii) change the percentage specified in clause
(ii) of the first paragraph of Section 11.01 of the Agreement, without the
consent of the Holders of all Certificates of such Class then outstanding.
The Depositor intends to cause an election to be made to treat the
assets of the Trust Fund as a real estate mortgage investment conduit (a
"REMIC") for federal income tax purposes. The Class A Certificates (other than
the Class A-R Certificate), the Class M Certificates and the Class B
Certificates will constitute "regular interests" in the REMIC. The Class A-R
Certificate will represent the sole class of "residual interest" in the REMIC.
The respective obligations and responsibilities of the Depositor, the
Servicer (except the duty to pay the Trustee's fees and expenses and
indemnification hereunder) and the Trustee shall 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
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and the
remittance of all funds due hereunder; or (ii) at the option of the Servicer, on
any Distribution Date which occurs in the month next following a Due Date on
which the aggregate unpaid Principal Balance of all Outstanding Mortgage Loans
is less than 10% of the aggregate unpaid Principal Balance of the Mortgage Loans
on the Cut-off Date, so long as the Servicer deposits or causes to be deposited
in the Collection Account during the Principal Prepayment Period related to such
Distribution Date (and provides notice to the Trustee of its intention to so
deposit on or before the 20th day of such Principal Prepayment Period) an amount
equal to the greater of (A) the Purchase Price for each Outstanding Mortgage
Loan, less any unreimbursed Advances made with respect to any Mortgage Loan
(which amount shall offset completely any unreimbursed Advances for which the
Servicer is otherwise entitled to reimbursement), and, with respect to all
property acquired in respect of any Mortgage Loan remaining in the Trust Fund,
an amount equal to the fair market value of such property, as determined by an
appraisal to be conducted by an appraiser selected by the Trustee, less
unreimbursed Advances made with respect to any Mortgage Loan with respect to
which property has been acquired and (B) the aggregate Outstanding Certificate
Principal Balance of the Class A, Class M, Class B-1 and Class B-2 Certificates,
plus any accrued and unpaid interest thereon at the Remittance Rate; provided,
however, that in no event shall the trust created hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants of
Xxxxxx X. Xxxxxxx, the late ambassador of the United States to the Court of St.
James's, living on the date hereof.
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
FORM OF CLASS A-R CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
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 (THE "CODE").
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN CHASE
MORTGAGE FINANCE CORPORATION ("CMFC"), JPMORGAN CHASE BANK, N.A. (THE
"SERVICER") OR THE TRUSTEE REFERRED TO BELOW OR ANY OF THEIR AFFILIATES. NEITHER
THIS CERTIFICATE, THE REMIC REsidual INTEREST REPRESENTED HEREBY NOR THE
UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR INSURED BY CMFC, THE SERVICER, THE
TRUSTEE OR BY ANY OF THEIR AFFILIATES OR BY ANY GOVERNMENTAL AGENCY OR
INSTRUMENTALITY.
NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE depositor SHALL HAVE
RECEIVED A REPRESENTATION LETTER FROM THE TRANSFEREE OF THIS CERTIFICATE TO THE
EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO title i
OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA") OR
SECTION 4975 OF THE CODE OR MATERIALLY SIMILAR PROVISIONS OF APPLICABLE FEDERAL,
STATE OR LOCAL LAW ("SIMILAR LAW")(A "PLAN"), AND IS NOT DIRECTLY OR INDIRECTLY
PURCHASING this 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 general or SEPARATE ACCOUNT TO EFFECT SUCH
ACQUISITION.
TRANSFERABILITY OF THIS CERTIFICATE IS RESTRICTED UNDER THE PROVISIONS OF
SECTION 4.02 OF THE AGREEMENT.
FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE PRINCIPAL BALANCE OF
THIS CERTIFICATE WILL BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN BELOW.
ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL BALANCE BY
INQUIRY OF THE TRUSTEE.
CLASS A-R CERTIFICATE
Number __-__-A-R-1 Original Denomination
$------
Cut-off Date: [DATE] Final Scheduled
Distribution Date: [DATE]
First Distribution Date: Aggregate Original Principal
[DATE] Balance of Class A-R
Certificate: $______
Certificate Rate: ______% CUSIP: 16162T __ _
F-1
MULTI-CLASS MORTGAGE PASS-THROUGH CERTIFICATE
Series [_______]
evidencing an ownership interest in distributions allocable to the Class A-R
Certificate with respect to a pool of conventional one- to four-family mortgage
loans formed and sold by
CHASE MORTGAGE FINANCE CORPORATION
This certifies that [Placement Agent] 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 one- to four-family
first lien mortgage loans (the "Mortgage Loans") formed and sold by Chase
Mortgage Finance Corporation (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 JPMorgan
Chase Bank, N.A. (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 [DATE] among the Depositor,
the Servicer and [TRUSTEE], 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 Multi-Class Mortgage Pass-Through Certificates, Series [_______],
Class A-R (the "Class A-R Certificate") 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 Multi-Class Mortgage Pass-Through Certificates,
Series [_______], Class M Certificates and Class B Certificates. The Class A
Certificates, the Class M Certificates and the Class B Certificates are
collectively referred to herein as the "Certificates."
Pursuant to the terms of the Agreement, the Trustee, or, if a Paying
Agent has been appointed under Section 4.05 of the Agreement thereof, the Paying
Agent, will distribute from funds in the Certificate Account the amount as
described on the reverse hereof 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 [DATE]. 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 10 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 denomination of
not less than $5,000,000 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 Trustee, or, if a Paying Agent has been
appointed under Section 4.05 of the Agreement, the Paying Agent, of the pendency
of such distribution and only upon presentation and surrender of this
Certificate at the office of the Trustee, or, if a Paying Agent has been
appointed under Section 4.05 of the Agreement, the Paying Agent, or agency
appointed by the Trustee, or, if a Paying Agent has been appointed under Section
4.05 of the Agreement, the Paying Agent, for the purpose and specified in such
notice of final distribution.
F-2
The Trustee will cause to be kept at its Agency & Trust Office in New
York, New York, or at the office of its designated agent, a Certificate Register
in which, subject to such reasonable regulations as it may prescribe, the
Trustee 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 Trustee, or, if a Paying Agent has
been appointed under Section 4.05 of the Agreement, the Paying Agent, maintained
for such purpose, the Trustee, or, if a Paying Agent has been appointed under
Section 4.05 of the Agreement, the Paying 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 Trustee, or, if a Paying Agent has been appointed under Section
4.05 of the Agreement, the Paying Agent, of the pendency of such distribution
and only upon presentation and surrender of this Certificate at the office or
agency appointed by the Trustee, or, if a Paying Agent has been appointed under
Section 4.05 of the Agreement, the Paying Agent, 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.
F-3
IN WITNESS WHEREOF, the Depositor has caused this Certificate to be
duly executed.
Dated: [DATE] CHASE MORTGAGE FINANCE
CORPORATION
By: _________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is the Class A-R
Certificate referred to
in the within-mentioned
Agreement.
JPMORGAN CHASE BANK
as Authenticating Agent
By: ________________________________
Authorized Signatory
F-4
REVERSE OF CERTIFICATE
MULTI-CLASS MORTGAGE PASS-THROUGH CERTIFICATE
SERIES [_______]
This Certificate is one of a duly authorized issue of Certificates,
designated as Multi-Class Mortgage Pass-Through Certificates, Series [_______],
issued in one or more Classes of Class A, Class M and Class B Certificates. The
Class A Certificates evidence in the aggregate the Class A Percentage of
distributions relating to repayments of principal and interest on the Mortgage
Loans. The Class M Certificates evidence in the aggregate the Class M Percentage
of distributions relating to repayments of principal and interest on the
Mortgage Loans. The Class B Certificates evidence in the aggregate the Class B
Percentage of distributions relating to repayments of principal and interest on
the Mortgage Loans.
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 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.
The Trustee will cause to be kept at its Agency & Trust Office in New
York, New York, or at the office of any Paying Agent appointed under the
Agreement, a Certificate Register in which, subject to such reasonable
regulations as it may prescribe, the Trustee (or any Paying Agent, as the case
may be) 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 Trustee, or, if a Paying Agent has
been appointed under Section 4.05 of the Agreement, the Paying Agent, maintained
for such purpose, the Trustee, or, if a Paying Agent has been appointed under
Section 4.05 of the Agreement, the Paying 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.
No service charge will be made to the Holder for any transfer or
exchange of the Certificate, but the Trustee, or, if a Paying Agent has been
appointed under Section 4.05 of the Agreement, the Paying 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, the Paying Agent nor the Trustee will be affected by
notice to the contrary.
F-5
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 the Trust Fund as a REMIC (as hereinafter defined), 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 or cause the Trust Fund to fail to qualify as a REMIC.
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) reduce the aforesaid
percentage of Certificates of any Class the Holders of which are required to
consent to any such amendment or (iii) change the percentage specified in clause
(ii) of the first paragraph of Section 11.01 of the Agreement, without the
consent of the Holders of all Certificates of such Class then outstanding.
The Depositor intends to cause an election to be made to treat the
assets of the Trust Fund as a real estate mortgage investment conduit (a
"REMIC") for federal income tax purposes. The Class A Certificates (other than
the Class A-R Certificate), the Class M Certificates and the Class B
Certificates will constitute "regular interests" in the REMIC. The Class A-R
Certificate will represent the sole class of "residual interest" in the REMIC.
The respective obligations and responsibilities of the Depositor, the
Servicer (except the duty to pay the Trustee's fees and expenses and
indemnification hereunder) and the Trustee shall 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
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and the
remittance of all funds due hereunder; or (ii) at the option of the Servicer, on
any Distribution Date which occurs in the month next following a Due Date on
which the aggregate unpaid Principal Balance of all Outstanding Mortgage Loans
is less than 10% of the aggregate unpaid Principal Balance of the Mortgage Loans
on the Cut-off Date, so long as the Servicer deposits or causes to be deposited
in the Collection Account during the Principal Prepayment Period related to such
Distribution Date (and provides notice to the Trustee of its intention to so
deposit on or before the 20th day of such Principal Prepayment Period) an amount
equal to the greater of (A) the Purchase Price for each Outstanding Mortgage
Loan, less any unreimbursed Advances made with respect to any Mortgage Loan
(which amount shall offset completely any unreimbursed Advances for which the
Servicer is otherwise entitled to reimbursement), and, with respect to all
property acquired in respect of any Mortgage Loan remaining in the Trust Fund,
an amount equal to the fair market value of such property, as determined by an
appraisal to be conducted by an appraiser selected by the Trustee, less
unreimbursed Advances made with respect to any Mortgage Loan with respect to
which property has been acquired and (B) the aggregate Outstanding Certificate
Principal Balance of the Class A, Class M, Class B-1 and Class B-2 Certificates,
plus any accrued and unpaid interest thereon at the Remittance Rate; provided,
however, that in no event shall the trust created hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants of
Xxxxxx X. Xxxxxxx, the late ambassador of the United States to the Court of St.
James's, living on the date hereof.
F-6
[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.)
F-7
EXHIBIT G
FORM OF TRUSTEE CERTIFICATION
[DATE]
Chase Mortgage Finance Corporation
000 Xxxx Xxxxxxxxx
Xxxxxxxxx Xxxx, XX 00000
Re: Pooling and Servicing Agreement dated as of [DATE]
among Chase Mortgage Finance Corporation, Chase
Manhattan Mortgage Corporation as servicer and
[TRUSTEE], as trustee, Multi-Class Mortgage
Pass-Through Certificates, Series [-------]
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:
1. 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;
2. 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
3. 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 (G), 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.
G-1
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
[TRUSTEE],
as Trustee
By: ______________________________________
Name: ____________________________________
Title: ___________________________________
G-2
EXHIBIT H
FORM OF INVESTMENT LETTER
(Accredited Investor)
[DATE]
JPMorgan Chase Bank, N.A.
0000 Xxxxxxx Xxxxxxx
Xxxxxxxx, Xxxx 00000
JPMorgan Chase Bank, N.A.
Global Trust Services
Four Xxx Xxxx Xxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
[TRUSTEE], as trustee
[ADDRESS]
[ADDRESS]
[ADDRESS]
Re: Chase Mortgage Finance Corporation Multi-Class Mortgage
Pass-Through Certificates, Series [_______], [Class B- ]
Ladies and Gentlemen:
______________ (the "Purchaser") intends to purchase from
________________ _________ (the "Transferor") $_______ by original principal
balance (the "Transferred Certificates") of Multi-Class Mortgage Pass-Through
Certificates, Series [_______], [Class B- ] (the "Certificates"), issued
pursuant to a pooling and servicing agreement, dated as of [DATE] (the "Pooling
and Servicing Agreement"), among Chase Mortgage Finance Corporation (the
"Depositor"), JPMorgan Chase Bank, N.A., as Servicer (the "Servicer"), and
[TRUSTEE], 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.
H-1
2. The Certificates will bear a legend to the following effect:
THIS CLASS B CERTIFICATE HAS NOT 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 4.02 OF THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
[THIS LEGEND WILL APPEAR ON THE CERTIFICATE IF SUCH
CERTIFICATE IS AN ERISA RESTRICTED CERTIFICATE (AS DEFINED IN
THE POOLING AND SERVICING AGREEMENT).] NO TRANSFER OF THIS
CERTIFICATE SHALL BE MADE UNLESS THE DEPOSITOR OR, IF A PAYING
AGENT HA BEEN APPOINTED UNDER SECTION 4.05 OF THE POOLING AND
SERVICING AGREEMENT, THE PAYING AGENT, SHALL HAVE RECEIVED
EITHER (i) A REPRESENTATION LETTER FROM THE TRANSFEREE OF THIS
CERTIFICATE TO THE EFFECT THAT (A) SUCH TRANSFEREE EITHER IS
NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA") OR SECTION 4975 OF THE CODE OR MATERIALLY SIMILAR
PROVISIONS OF APPLICABLE FEDERAL, STATE OR LOCAL LAW ("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) SUCH
TRANSFEREE 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, 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. "2510.3-101 AND TO BE
SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF ERISA OR
THE PROHIBITED TRANSACTION PROVISIONS OF ERISA OR THE CODE OR
SIMILAR LAW, WILL NOT CONSTITUTE OR RESULT IN A PROHIBITED
TRANSACTION WITHIN THE MEANING OF SECTION 406 OR 407 OF ERISA
OR SECTION 4975 OF THE CODE OR SIMILAR LAW, AND WILL NOT
SUBJECT THE TRUSTEE, THE SERVICER, CMFC 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.
H-2
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.
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 4.02(d) of the Pooling and
Servicing Agreement or if the Purchaser is purchasing an ERISA Restricted
Certificate.] 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 any retirement plan
or other employee benefit plan subject to any federal, state or local law
materially similar to the foregoing provisions of ERISA or 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 I 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.
--------
*/ Not required of a broker/dealer purchaser.
-
H-3
Very truly yours,
[PURCHASER]
By: ______________________________
Name: ____________________________
Title: ___________________________
H-4
EXHIBIT I
FORM OF RULE 144A INVESTMENT LETTER
(Qualified Institutional Buyer)
[DATE]
JPMorgan Chase Bank, N.A.
0000 Xxxxxxx Xxxxxxx
Xxxxxxxx, Xxxx 00000
JPMorgan Chase Bank, N.A.
Global Trust Services
Four Xxx Xxxx Xxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
[TRUSTEE], as trustee
[ADDRESS]
[ADDRESS]
[ADDRESS]
Re: Chase Mortgage Finance Corporation, Multi-Class Mortgage
Pass-Through Certificates, Series [_______], [Class B- ]
Ladies and Gentlemen:
______________ (the "Purchaser") intends to purchase from
_________________________ (the "Transferor") $_______ by original principal
balance (the "Transferred Certificates") of Multi-Class Mortgage Pass-Through
Certificates, Series [_______], [Class B-] (the "Certificates"), issued pursuant
to a pooling and servicing agreement, dated as of [DATE] (the "Pooling and
Servicing Agreement"), among Chase Mortgage Finance Corporation (the
"Depositor"), JPMorgan Chase Bank, N.A., as Servicer (the "Servicer"), and
[TRUSTEE], 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:
I-1
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 Title I 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 any retirement plan or other employee benefit plan
subject to any federal, state or local law materially similar to the foregoing
provisions of ERISA or 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, if we are an insurance
company, 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, (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: ___________________________________
X-0
XXXXX 0
XXXXXXXXX XXXXXXXXXXXXX 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.
____ 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.
--------
* 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.
I-3
____ Insurance Company. The Buyer is an insurance company
whose primary and predominant business activity is
the writing of insurance or the reinsuring of risks
underwritten by insurance companies and which is
subject to supervision by the insurance commissioner
or a similar official or agency of 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.
____ Employee Benefit 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, or a plan within the meaning of Section 4975
of the Internal Revenue Code or 1986, 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.
I-4
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
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: __________________________________
X-0
XXXXX 0
XXXXXXXXX XXXXXXXXXXXXX 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.
I-6
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: ___________________________________
I-7
EXHIBIT J
FORM OF SPECIAL SERVICING AND COLLATERAL FUND AGREEMENT
This SPECIAL SERVICING AND COLLATERAL FUND AGREEMENT (the "Agreement")
is made and entered into as of [DATE], between JPMorgan Chase Bank, N.A., (the
"Company") and _____________________ (the "Purchaser").
PRELIMINARY STATEMENT
__________________ (the "Owner") is the holder of the entire interest
in Chase Mortgage Finance Corporation Multi-Class Mortgage Pass-Through
Certificates, Series [_______], Class B-5 (the "Class B-5 Certificates"). The
Class B-5 Certificates were issued pursuant to a Pooling and Servicing Agreement
dated as of [DATE] (the "Pooling and Servicing Agreement") among Chase Mortgage
Finance Corporation, (the "Company"), JPMorgan Chase Bank, N.A. as servicer
thereunder (the "Servicer") and [TRUSTEE], as trustee (the "Trustee").
The Owner intends to resell all of the Class B-5 Certificates directly
to the Purchaser on or promptly after the date hereof.
In connection with such sale, the parties hereto have agreed that the
Company, as Servicer, will engage in certain special servicing procedures
relating to foreclosures for benefit of the Purchaser, and that the Purchaser
will deposit funds in a collateral fund to cover any losses attributable to such
procedures as well as all advances and costs in connection therewith, as set
forth herein.
In consideration of the mutual agreements herein contained, the receipt
and sufficiency of which are hereby acknowledged, the Company and the Purchaser
agree to the following:
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms.
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a
day on which banking institutions in the State of New York are required or
authorized by law or executive order to be closed.
Collateral Fund: The fund established and maintained pursuant to
Section 3.01 hereof.
Collateral Fund Permitted Investments: Either: (i) obligations of, or
obligations fully guaranteed as to principal and interest by, the United States,
or any agency or instrumentality thereof, provided such obligations are backed
by the full faith and credit of the United States, (ii) a money market fund
rated in the highest rating category by a nationally recognized rating agency
selected by the Company, (iii) cash, (iv) mortgage pass-through certificates
issued or guaranteed by GNMA, FNMA or FHLMC, (v) commercial paper (including
both non-interest bearing discount obligations and interest bearing obligations
payable on demand or on a specified date), the issuer of which may be an
affiliate of the Company, having at the time of such investment a rating of at
least Prime-1 by Xxxxx'x Investors Service, Inc. ("Moody's") or at least D-1 by
Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc. ("S&P") and
(vi) demand and time deposits in, certificates of deposit of, any depository
institution or trust company (which may be an affiliate of the Company)
incorporated under the laws of the United States of America or any state thereof
and subject to supervision and examination by federal and/or state banking
authorities, so long as at the time of such investment either (x) the long-term
debt obligations of such depository institution or trust company have a rating
of at least Aa by Moody's or at least AA by S&P or (y) the certificate of
deposit or other unsecured short-term debt obligations of such depository
institution or trust company have a rating of at least A-1 by S&P or Prime-1 by
Moody's and, for each of the preceding clauses (i), (iv), (v) and (vi), the
maturity thereof shall be not later than the earlier to occur of (A) 30 days
from the date of the related investment and (B) the next succeeding Distribution
Date.
J-1
Commencement of Foreclosure: The first official action required under
local law in order to commence foreclosure proceedings or to schedule a
trustee's sale under a deed of trust, including (i) in the case of a mortgage,
any filing or service of process necessary to commence an action to foreclose,
or (ii) in the case of a deed of trust, the posting, publishing, filing or
delivery of a notice of sale, but not including in either case (x) any notice of
default, notice of intent to foreclose or sell or any other action prerequisite
to the actions specified in (i) or (ii) above and upon the consent of the
Purchaser which will be deemed given unless expressly withheld within two
Business Days of notification, (y) the acceptance of a deed-in-lieu of
foreclosure (whether in connection with a sale of the related property or
otherwise) or (z) initiation and completion of a short pay-off.
Current Appraisal: With respect to any Mortgage Loan as to which the
Purchaser has made an Election to Delay Foreclosure, an appraisal of the related
Mortgaged Property (or Underlying Mortgaged Property, in the case of a Co-op
Loan), obtained by the Purchaser at its expense from an appraiser (which shall
not be an affiliate of the Purchaser) acceptable to the Company as nearly
contemporaneously as practicable to the time of the Purchaser's election,
prepared based on the Company's customary requirements for such appraisals.
Election to Delay Foreclosure: Any election by the Purchaser to delay
the Commencement of Foreclosure, made in accordance with Section 2.02(b).
Election to Foreclose: Any election by the Purchaser to proceed with
the Commencement of Foreclosure, made in accordance with Section 2.03(a).
Required Collateral Fund Balance: As of any date of determination, an
amount equal to the aggregate of all amounts previously required to be deposited
in the Collateral Fund pursuant to Section 2.02(d) (after adjustment for all
withdrawals and deposits pursuant to Section 2.02(e)) and Section 2.03(b) (after
adjustment for all withdrawals and deposits pursuant to Section 2.03(c)) and
Section 3.02 to be reduced by all withdrawals therefrom pursuant to Section
2.02(g) and Section 2.03(d).
Section 1.02 Definitions Incorporated by Reference.
All capitalized terms not otherwise defined in this Agreement shall
have the meanings assigned in the Pooling and Servicing Agreement.
J-2
ARTICLE II
SPECIAL SERVICING PROCEDURES
Section 2.01 Reports and Notices.
1. In connection with the performance of its duties under the Pooling
and Servicing Agreement relating to the realization upon defaulted Mortgage
Loans, the Company, as Servicer, shall provide to the Purchaser the following
notices and reports:
(a) Within five Business Days after each Distribution Date (or
included in or with the monthly statement to Certificateholders
pursuant to the Pooling and Servicing Agreement), the Company shall
provide to the Purchaser a report indicating for the Trust the number
of Mortgage Loans that are (A) thirty days, (B) sixty days, (C) ninety
days or more delinquent or (D) in foreclosure, and indicating for each
such Mortgage Loan the outstanding principal balance.
(b) Prior to the Commencement of Foreclosure in connection
with any Mortgage Loan, the Company shall provide the Purchaser with a
notice (sent by telecopier) of such proposed and imminent foreclosure,
stating the loan number and the aggregate amount owing under the
Mortgage Loan.
2. If requested by the Purchaser, the Company shall make its servicing
personnel available (during their normal business hours) to respond to
reasonable inquiries by the Purchaser in connection with any Mortgage Loan
identified in a report under subsection (a)(i)(B), (a)(i)(C), (a)(i)(D) or
(a)(ii) which has been given to the Purchaser; provided, that (1) the Company
shall only be required to provide information that is readily accessible to its
servicing personnel and is non-confidential and (2) the Company shall not be
required to provide any written information under this subsection.
3. In addition to the foregoing, the Company shall provide to the
Purchaser such information as the Purchaser may reasonably request concerning
each Mortgage Loan that is at least sixty days delinquent and each Mortgage Loan
which has become real estate owned, through the final liquidation thereof;
provided that the Company shall only be required to provide information that is
readily accessible to its servicing personnel and is non-confidential.
(a) With respect to all Mortgage Loans which are serviced at
any time by the Company through a Subservicer, the Company shall be
entitled to rely for all purposes hereunder, including for purposes of
fulfilling its reporting obligations under this Section 2.01 on the
accuracy and completeness of any information provided to it by the
applicable Subservicer.
Section 2.02 Purchaser's Election to Delay Foreclosure Proceedings.
1. The Purchaser directs the Company that in the event that the Company
does not receive written notice of the Purchaser's election pursuant to
subsection (b) below within 24 hours (exclusive of any intervening non-Business
Days) of transmission of the notice provided by the Company under Section
2.01(a)(ii), subject to extension as set forth in Section 2.02(b), the Company
shall proceed with the Commencement of Foreclosure in respect of such Mortgage
Loan in accordance with its normal foreclosure policies without further notice
to the Purchaser. Any foreclosure that has been initiated may be discontinued
(i) without notice to the Purchaser, if the Mortgage Loan has been brought
current or if a refinancing or prepayment occurs with respect to the Mortgage
Loan (including by means of a short payoff approved by the Company) (ii) with
notice to the Purchaser if the Company has reached the terms of a forbearance
agreement with the borrower. In such latter case the Company may complete such
forbearance agreement unless instructed otherwise by the Purchaser within one
Business Day of notification.
J-3
2. In connection with any Mortgage Loan with respect to which a notice
under Section 2.01(a)(ii) has been given to the Purchaser, the Purchaser may
elect, for reasonable cause as determined by the Purchaser, to instruct the
Company to delay the Commencement of Foreclosure until such term as the
Purchaser determines that the Company may proceed with the Commencement of
Foreclosure. Such election must be evidenced by written notice received within
24 hours (exclusive of any intervening non-Business Days) of transmission of the
notice provided by the Company under Section 2.01(a)(ii). Such 24 hour period
shall be extended for no longer than an additional four Business Days after the
receipt of the information if the Purchaser requests additional information
related to such foreclosure; provided, however that the Purchaser will have at
least one Business Day to respond to any requested additional information. Any
such additional information shall (i) not be confidential in nature and (ii) be
obtainable by the Company from existing reports, certificates or statements or
otherwise be readily accessible to its servicing personnel. The Purchaser agrees
that it has no right to deal with the Mortgagor. If the Company's normal
foreclosure policy includes acceptance of a deed-in-lieu of foreclosure or short
payoff, the Purchaser will be notified and given one Business Day to respond.
3. With respect to any Mortgage Loan as to which the Purchaser has made
an Election to Delay Foreclosure, the Purchaser shall obtain a Current Appraisal
as soon as practicable, and shall provide the Company with a copy of such
Current Appraisal.
4. Within two Business Days of making any Election to Delay
Foreclosure, the Purchaser shall remit by wire transfer to the Company, for
deposit in the Collateral Fund, an amount, as calculated by the Company, equal
to the sum of (i) 125% of the greater of the outstanding Principal Balance of
the Mortgage Loan and the value shown in the Current Appraisal referred to in
subsection (c) above (or, if such Current Appraisal has not yet been obtained,
the Company's estimate thereof, in which case the required deposit under this
subsection shall be adjusted upon obtaining of such Current Appraisal), and (ii)
three months' interest on the Mortgage Loan at the applicable Mortgage Rate. If
any Election to Delay Foreclosure extends for a period in excess of three months
(such excess period being referred to herein as the "Excess Period"), the
Purchaser shall remit by wire transfer in advance to the Company for deposit in
the Collateral Fund the amount, as calculated by the Company, equal to interest
on the Mortgage Loan at the applicable Mortgage Rate for the Excess Period. The
terms of this Agreement shall no longer apply to the servicing of any Mortgage
Loan upon the failure of the Purchaser to deposit the above amounts relating to
the Mortgage Loan within two Business Days of the Election to Delay Foreclosure.
5. With respect to any Mortgage Loan as to which the Purchaser has made
an Election to Delay Foreclosure, the Company may withdraw from the Collateral
Fund from time to time amounts necessary to reimburse the Company for all
Advances and Liquidation Expenses thereafter made by the Company as Servicer in
accordance with the Pooling and Servicing Agreement. To the extent that the
amount of any such Liquidation Expense is determined by the Company based on
estimated costs, and the actual costs are subsequently determined to be higher,
the Company may withdraw the additional amount from the Collateral Fund. In the
event that the Mortgage Loan is brought current by the Mortgagor and the
foreclosure action is discontinued, the amounts so withdrawn from the Collateral
Fund shall be redeposited therein as and to the extent that reimbursement
therefor from amounts paid by the Mortgagor is not prohibited pursuant to the
Pooling and Servicing Agreement. Except as provided in the preceding sentence,
amounts withdrawn from the Collateral Fund to cover Advances and Liquidation
Expenses shall not be redeposited therein or otherwise reimbursed to the
Purchaser. If and when any such Mortgage Loan is brought current by the
Mortgagor, all amounts remaining in the Collateral Fund in respect of such
Mortgage Loan (after adjustment for all withdrawals and deposits pursuant to
this subsection) shall be released to the Purchaser.
J-4
6. With respect to any Mortgage Loan as to which the Purchaser has made
an Election to Delay Foreclosure, the Company shall continue to service the
Mortgage Loan in accordance with its customary procedures (other than the delay
in Commencement of Foreclosure as provided herein). If and when the Purchaser
shall notify the Company that it believes that it is appropriate to do so, the
Company shall proceed with the Commencement of Foreclosure. In any event, if the
Mortgage Loan is not brought current by the Mortgagor by the time the loan
becomes 6 months delinquent, the Purchaser's election shall no longer be
effective and at the Purchaser's option, either (i) the Purchaser shall purchase
the Mortgage Loan from the Trust Fund at a purchase price equal to the fair
market value as shown on the Current Appraisal, to be paid by (x) applying any
balance in the Collateral Fund to such purchase price, and (y) to the extent of
any deficiency, by wire transfer of immediately available funds to the Company
or Trustee; or (ii) the Company shall proceed with the Commencement of
Foreclosure.
7. Upon the occurrence of a liquidation with respect to any Mortgage
Loan as to which the Purchaser made an Election to Delay Foreclosure and as to
which the Company proceeded with the Commencement of Foreclosure in accordance
with subsection (f) above, the Company shall calculate the amount, if any, by
which the value shown on the Current Appraisal obtained under subsection (c)
exceeds the actual sales price obtained for the related Mortgaged Property (or
stock allocated to a dwelling unit in the case of a Co-op Loan) (net of
Liquidation Expenses and accrued interest related to the extended foreclosure
period), and the Company shall withdraw the amount of such excess from the
Collateral Fund, shall remit the same to the Trust Fund and in its capacity as
Servicer shall apply such amount as additional Liquidation Proceeds pursuant to
the Pooling and Servicing Agreement. After making such withdrawal, all amounts
remaining in the Collateral Fund in respect of such Mortgage Loan (after
adjustment for all withdrawals and deposits pursuant to subsection (e)) shall be
released to the Purchaser.
Section 2.03 Purchaser's Election to Commence Foreclosure Proceedings.
1. In connection with any Mortgage Loan identified in a report under
Section 2.01(a)(i)(B), the Purchaser may elect, for reasonable cause as
determined by the Purchaser, to instruct the Company to proceed with the
Commencement of Foreclosure as soon as practicable. Such election must be
evidenced by written notice received by the Company by 5:00 p.m., New York City
time, on the third Business Day following the delivery of such report under
Section 2.01(a)(i).
2. Within two Business Days of making any Election to Foreclose, the
Purchaser shall remit to the Company, for deposit in the Collateral Fund, an
amount, as calculated by the Company, equal to 125% of the current Principal
Balance of the Mortgage Loan and three months' interest on the Mortgage Loan at
the applicable Mortgage Rate. If and when any such Mortgage Loan is brought
current by the Mortgagor, all amounts in the Collateral Fund in respect of such
Mortgage Loan shall be released to the Purchaser. The terms of this Agreement
shall no longer apply to the servicing of any Mortgage Loan upon the failure of
the Purchaser to deposit the above amounts relating to the Mortgage Loans within
two Business Days at the Election to Foreclose.
3. With respect to any Mortgage Loan as to which the Purchaser has made
an Election to Foreclose, the Company shall continue to service the Mortgage
Loan in accordance with its customary procedures (other than to proceed with the
Commencement of Foreclosure as provided herein). In connection therewith, the
Company shall have the same rights to make withdrawals for Advances and
Liquidation Expenses from the Collateral Fund as are provided under Section
2.02(e), and the Company shall make reimbursements thereto to the limited extent
provided under such subsection. The Company shall not be required to proceed
with the Commencement of Foreclosure if (i) the same is stayed as a result of
the Mortgagor's bankruptcy or is otherwise barred by applicable law, or to the
extent that all legal conditions precedent thereto have not yet been complied
with or (ii) the Company believes there is a breach of representation or
warranties by the Company, which may result in a repurchase or substitution of
such Mortgage Loan, or (iii) the Company reasonably believes the Mortgaged
Property (or Underlying Mortgaged Property, in the case of a Co-op Loan) may be
contaminated with or affected by hazardous wastes or hazardous substances (and
the Company supplies the Purchaser with information supporting such belief). The
Company will repurchase or substitute a Mortgage Loan pursuant to the preceding
clause (ii) within the time period specified in the Pooling and Servicing
Agreement. Any foreclosure that has been initiated may be discontinued (i)
without notice to the Purchaser if the Mortgage Loan has been brought current or
if a refinancing or prepayment occurs with respect to the Mortgage Loan
(including by means of a short payoff approved by the Company), or (ii) with
notice to the Purchaser if the Company has reached the terms of a forbearance
agreement unless instructed otherwise by the Purchaser within two Business Days
of notification.
J-5
4. Upon the occurrence of a liquidation with respect to any Mortgage
Loan as to which the Purchaser made an Election to Foreclose and as to which the
Company proceeded with the Commencement of Foreclosure in accordance with
subsection (c) above, the Company shall calculate the amount, if any, by which
the Principal Balance of the Mortgage Loan at the time of liquidation (plus all
unreimbursed Advances and Liquidation Expenses in connection therewith other
than those paid from the Collateral Fund) exceeds the actual sales price
obtained for the related Mortgaged Property (or stock allocated to a dwelling
unit in the case of a Co-op Loan), and the Company shall withdraw the amount of
such excess from the Collateral Fund, shall remit the same to the Trust Fund and
in its capacity as Servicer shall apply such amount as additional Liquidation
Proceeds pursuant to the Pooling and Servicing Agreement. After making such
withdrawal, all amounts remaining in the Collateral Fund (after adjustment for
all withdrawals and deposits pursuant to subsection (c)) in respect of such
Mortgage Loan shall be released to the Purchaser.
Section 2.04 Termination.
1. With respect to all Mortgage Loans included in the Trust Fund, the
Purchaser's rights to make any Election to Delay Foreclosure or any Election to
Foreclose and the Company's obligations under Section 2.01 shall terminate (i)
at such time as the Certificate Principal Balance of the Class B-5 Certificates
has been reduced to zero, (ii) if the greater of (x) ___% (or such lower or
higher percentages that represents the Company's actual historical loss
experience with respect to the Mortgage Loans in the related pool) of the
aggregate principal balance of all Mortgage Loans that are in foreclosure or are
more than 90 days delinquent on a contractual basis and REO properties or if the
aggregate amount that the Company estimates will be required to be withdrawn
from the Collateral Fund with respect to Mortgage Loans as to which the
Purchaser has made an Election to Delay Foreclosure or an Election to Foreclose
exceeds (z) the Outstanding Certificate Principal Balance of the Class B-5
Certificates, or (iii) upon any transfer by the Purchaser of any interest (other
than the minority interest therein, but only if the transferee provides written
acknowledgment to the Company of the Purchaser's right hereunder and that such
transferee will have no rights hereunder) in the Class B-5 Certificates (whether
or not such transfer is registered under the Pooling and Servicing Agreement),
including any such transfer in connection with a termination of the Trust Fund.
Except as set forth above, this Agreement and the respective rights, obligations
and responsibilities of the Purchaser and the Company hereunder shall terminate
upon the later to occur of (i) the final liquidation of the last Mortgage Loan
as to which the Purchaser made any Election to Delay Foreclosure or any Election
to Foreclose and the withdrawal of all remaining amounts in the Collateral Fund
as provided herein and (ii) ten (10) Business Day's notice.
2. Purchaser's rights pursuant to Section 2.02 or 2.03 of this
Agreement shall terminate with respect to a Mortgage loan as to which the
Purchaser has exercised its rights under Section 2.02 or 2.03 hereof, upon
Purchaser's failure to deposit any amounts required pursuant to Section 2.02(d)
or 2.03(b).
3. Neither the Servicer nor any of its directors, officers, employees
or agents shall be under any liability for any action taken or for refraining
from the taking of any action in good faith pursuant to this Agreement, or for
errors in judgment; provided, however, that this provision shall not protect the
Servicer or any such Person against any liability which would otherwise be
imposed by reason of willful misfeasance, bad faith or gross negligence in the
performance of duties or by reason of reckless disregard of obligations and
duties hereunder. The Servicer and any director, officer, employee or agent
thereof may rely in good faith on any document of any kind prima facie properly
executed and submitted by an Person respecting any matters arising hereunder.
J-6
ARTICLE III
COLLATERAL FUND; SECURITY INTEREST
Section 3.01 Collateral Fund.
1. Upon receipt from the Purchaser of the initial amount required to be
deposited in the Collateral Fund pursuant to Article 11, the Company shall
establish and maintain with itself as a segregated account on its books and
records an account (the "Collateral Fund"), entitled "Chase Manhattan Mortgage
Corporation, as Servicer, for the benefit of registered holders of Chase
Mortgage Finance Corporation Multi-Class Mortgage Pass-Through Certificates,
Series [_______], Class B-5." Amounts in the Collateral Fund shall continue to
be the property of the Purchaser, subject to the first priority security
interest granted hereunder for the benefit of the Certificate holders, until
withdrawn from the Collateral Fund pursuant to Section 2.02 or 2.03 hereof.
2. Upon the termination of this Agreement and the liquidation of all
Mortgage Loans as to which the Purchaser has made any Election to Delay
Foreclosure or any Election to Foreclose pursuant to Section 2.04 hereof, the
Company shall distribute to the Purchaser all amounts remaining in the
Collateral Fund together with any investment earnings thereon.
3. The Collateral Fund shall be an "outside reserve fund" within the
meaning of the REMIC Provisions, beneficially owned by the Purchaser, who shall
report all income, gain or loss with respect thereto. Any amounts transferred
from the Trust Fund to the Collateral Fund shall be deemed to be transferred to
the Purchaser, as beneficial owner of the Collateral Fund. In no event shall the
Purchaser (i) take or cause the Trustee or the Company to take any action that
could cause any REMIC established under the Trust Agreement to fail to qualify
as a REMIC or cause the imposition on any such REMIC of any "prohibited
transaction" or "prohibited contribution" taxes or (ii) cause the Trustee or the
Company to fail to take any action necessary to maintain the status of any such
REMIC as a REMIC.
Section 3.02 Collateral Fund Permitted Investments.
1. The Company shall, at the written direction of the Purchaser invest
the funds in the Collateral Fund in Collateral Fund Permitted Investments. Such
direction shall not be changed more frequently than quarterly. In the absence of
any direction, the Company shall select such investments in accordance with the
definition of Collateral Fund Permitted Investments in its discretion.
2. All income and gain realized from any investment as well as any
interest earned on deposits in the Collateral Fund (net of any losses on such
investments) and any payments of principal made in respect of any Collateral
Fund Permitted Investment shall be deposited in the Collateral Fund upon
receipt. All costs and realized losses associated with the purchase and sale of
Collateral Fund Permitted Investments shall be borne by the Purchaser and the
amount of net realized losses shall be deposited by the Purchaser in the
Collateral Fund. The Company shall periodically (but not more frequently than
monthly) distribute to the Purchaser upon request an amount of cash, to the
extent cash is available therefor in the Collateral Fund, equal to the amount by
which the balance of the Collateral Fund, after giving effect to all other
distributions to be made from the Collateral Fund on such date, exceeds the
Required Collateral Fund Balance. Any amounts so distributed shall be released
from the lien and security interest of this Agreement.
J-7
Section 3.03 Grant of Security Interest.
1. The Purchaser grants to the Company and the Trustee for the benefit
of the Certificateholders a security interest in and lien on all of the
Purchaser's right, title and interest, whether now owned or hereafter acquired,
in and to: (1) the Collateral Fund, (2) all amounts deposited in the Collateral
Fund and Collateral Fund Permitted Investments in which such amounts are
invested (and the distributions and proceeds of such investments) and (3) all
cash and non-cash proceeds of any of the foregoing, including proceeds of the
voluntary or involuntary conversion thereof (all of the foregoing collectively,
the "Collateral").
2. The Purchaser acknowledges the lien on and security interest in the
Collateral for the benefit of the Certificateholders. The Purchaser shall take
all actions requested by the Company or the Trustee as may be reasonably
necessary to perfect the security interest created under this Agreement in the
Collateral and cause it to be prior to all other security interests and liens,
including the execution and delivery to the Company for filing of appropriate
financing statements in accordance with applicable law. The Company shall file
appropriate continuation statements, or appoint an agent on its behalf to file
such statements, in accordance with applicable law.
Section 3.04 Collateral Shortfalls.
In the event that amounts on deposit in the Collateral Fund at any time
are insufficient to cover any withdrawals therefrom that the Company or the
Trustee is then entitled to make hereunder, the Purchaser shall be obligated to
pay such amounts to the Company or the Trustee immediately upon demand. Such
obligation shall constitute a general corporate obligation of the Purchaser.
ARTICLE IV
MISCELLANEOUS PROVISIONS
Section 4.01 Amendment.
This Agreement may be amended from time to time by the Company and the
Purchaser by written agreement signed by the Company and the Purchaser.
Section 4.02 Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts, each of which counterparts shall be deemed to be an original, and
such counterparts shall constitute but one and the same instrument.
Section 4.03 Governing Law.
This Agreement shall be construed in accordance with the laws of the
State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws.
J-8
Section 4.04 Notices.
All demands, notices and direction hereunder shall be in writing or by
telecopy and shall be deemed effective upon receipt to:
in the case of the Company,
JPMorgan Chase Bank, N.A.
0000 Xxxxxxx Xxxxxxx
Xxxxxxxx, Xxxx 00000
such other address as may hereafter be furnished in writing by the Company, or
4. in the case of the Purchaser, with respect to notices pursuant to
Section 2.01,
[PURCHASER]
____________________________________________
[ADDRESS]
Attn: ______________________________________
Phone: _____________________________________
Fax: _______________________________________
5. with respect to all other notices pursuant to this Agreement,
____________________________________________
[ADDRESS]
Attn: ______________________________________
Phone: _____________________________________
Fax: _______________________________________
or such other address as may hereafter be furnished in writing by the Purchaser.
Section 4.05 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever, including regulatory, held
invalid, then such covenants, agreements, provisions or terms shall be deemed
severable from the remaining covenants, agreements, provisions or terms of this
Agreement and shall in no way affect the validity or enforceability of the other
provisions of this Agreement.
Section 4.06 Successors and Assigns.
The provisions of this Agreement shall be binding upon and inure to the
benefit of the respective successors and assigns of the parties hereto, and all
such provisions shall inure to the benefit of the Certificateholders; provided,
however, that the rights under this Agreement cannot be assigned by the
Purchaser without the consent of the Company.
J-9
Section 4.07 Article and Section Headings.
The article and section headings herein are for convenience of
reference only, and shall not limit or otherwise affect the meaning hereof.
Section 4.08 Confidentiality.
The Purchaser agrees that all information supplied by or on behalf of
the Company pursuant to Sections 2.01 or 2.02, including individual account
information, is the property of the Company and the Purchaser agrees to hold
such information confidential and not to disclose such information.
J-10
IN WITNESS WHEREOF, the Company and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly
authorized, all as of the day and year first above written.
JPMORGAN CHASE BANK, N.A.
By: ______________________________________
Name: ____________________________________
Title: ___________________________________
__________________________________________
By: ______________________________________
Name: ____________________________________
Title: ___________________________________
J-11
EXHIBIT K
FORM OF TRANSFEREE'S LETTER
CHASE MORTGAGE FINANCE CORPORATION SERIES [_______]
[DATE]
Chase Mortgage Finance Corporation
000 Xxxx Xxxxxxxxx
Xxxxxxxxx Xxxx, XX 00000
Ladies and Gentlemen:
We propose to purchase Chase Mortgage Finance Corporation's Multi-Class
Mortgage Pass-Through Certificates, Series [_______], Class A-R, described in
the Prospectus Supplement, dated [DATE] and Prospectus, dated [DATE].
We certify that (a) we are not a disqualified organization and (b) we
are not purchasing such Class A-R Certificate 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.
We certify that we are not an employee benefit plan subject to Title I
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA") or
Section 4975 of the Code or materially similar provisions or applicable federal,
state or local law, nor a person acting directly or indirectly on behalf of, as
investment manager of, or named fiduciary of, or trustee of any such plan or
using the assets of such plan, or, alternatively, in the case of an insurance
company, the assets of any general or separate account to effect such
acquisition.
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 A-R Certificate, we may incur tax liabilities in excess of
any cash flows generated by the Class A-R Certificate, (d) we intend to pay any
taxes associated with holding the Class A-R Certificate as they become due and
(e) we will not cause income from the Class A-R Certificate to be atttributable
to a foreign permanent establishment or fixed base (within the meaning of an
applicable income tax treaty) of ours or another U.S. taxpayer.
We acknowledge that we will be the beneficial owner of the Class A-R
Certificate and:*/
______ The Class A-R Certificate will be registered in our
name.
--------
*/ Check appropriate box and if necessary fill in the name of the Transferee's
nominee.
K-1
______ The Class A-R Certificate will be held in the name of
our nominee, ____________________, which is not a
disqualified organization.
Unless Chase Mortgage Finance Corporation ("CMFC") 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 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). We agree that any breach by us of this certification shall
render the transfer of any interest in the Class A-R Certificate to us
absolutely null and void and shall cause no rights in the Class A-R Certificate
to vest in us.
We agree that in the event that at some future time we wish to transfer
any interest in the Class A-R Certificate, we will transfer such interest in the
Class A-R Certificate only (a) to a transferee that (i) is not a disqualified
organization and is not purchasing such interest in the Class A-R Certificate on
behalf of a disqualified organization, (ii) is a U.S. person and (iii) has
delivered to CMFC a letter in the form of this letter (including the affidavit
appended hereto) and, if requested by CMFC, an opinion of counsel (in a form
acceptable to CMFC) that the proposed transfer will not cause the interest in
the Class A-R Certificate to be held by a disqualified organization or a person
who is not a U.S. person or (b) with the written consent of CMFC.
We hereby designate JPMorgan Chase Bank, N.A. as our fiduciary to act
as the tax matters person for the Series [_______] REMIC.
Very truly yours,
[PURCHASER]
By: ____________________________________
Name: __________________________________
Title: _________________________________
Accepted as of _____________________ , 200_
CHASE MORTGAGE FINANCE CORPORATION
By: ______________________________
Name: ____________________________
Title: ___________________________
K-2
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 Mortgage Finance Corporation,
Multi-Class Mortgage Pass-Through Certificates, Series
[_______], Class A-R on behalf of a disqualified organization
or any other entity,
4. unless Chase Mortgage Finance Corporation ("CMFC") 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 A-R Certificate, it may incur tax liabilities in excess
of any cash flows generated by the Class A-R Certificate,
9. the Transferee intends to pay any taxes associated with
holding the Class A-R Certificate as they become due,
10. the Transferee consents to any amendment of the Pooling and
Servicing Agreement that shall be deemed necessary by CMFC
(upon advice of counsel) to constitute a reasonable
arrangement to ensure that the Class A-R Certificate will not
be owned directly or indirectly by a disqualified
organization, and
11. IF BRACKETED, THE FOLLOWING CERTIFICATIONS ARE INAPPLICABLE
[the transfer is not a direct or indirect transfer of the
Class A-R Certificate to a foreign permanent establishment or
fixed base (within the meaning of an applicable income tax
treaty) of the Transferee, and as to each of the residual
interests represented by the Class A-R Certificate, the
present value of the anticipated tax liabilities associated
with holding such residual interest does not exceed the sum
of:
A. the present value of any consideration given to the
Transferee to acquire such residual interest;
K-3
B. the present value of the expected future
distributions on such residual interest; and
C. the present value of the anticipated tax savings
associated with holding such residual interest as the
related REMIC 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, but the tax rate
specified in Section 55(b)(1)(B) of the Code may be used in
lieu of the highest rate specified in Section 11(b)(1) of the
Code if the Transferee has been subject to the alternative
minimum tax under Section 55 of the Code in the preceding two
years and will compute its taxable income in the current
taxable year using the alternative minimum tax rate, and (ii)
present values are computed using a discount rate equal to the
Federal short-term rate prescribed by Section 1274(d) of the
Code for the month of the transfer and the compounding period
used by the Transferee,]
11. [(A) at the time of the transfer, and at the close of each of
the Transferee's two fiscal years preceding the Transferee's
fiscal 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
Treasury regulation section 1.860E-1(c)(6)(i) and has agreed
in writing that any subsequent transfer of the Class A-R
Certificate will be to another eligible corporation in a
transaction that satisfies Treasury regulation sections
1.860E-1(c)(4)(i), 1.860E-1(c)(4)(ii), 1.860E-1(c)(4)(iii) and
1.860E-1(c)(5) and such transfer will not be a direct or
indirect transfer to a foreign permanent establishment (within
the meaning of an applicable income tax treaty) of a domestic
corporation.
For purposes of this declaration, the gross assets and net
assets of the Transferee do not include any obligation of any
related person (as defined in Treasury regulation section
1.860E-1(c)(6)(ii)) or any other asset if a principal purpose
for holding or acquiring the other asset is to permit the
Transferee to make this declaration or to satisfy the
requirements of Treasury regulation section
1.860E-1(c)(5)(i),]
11. [Intentionally left blank;]
12. the Transferee represents that it will not cause income from
the Class A-R Certificate to be attributable to a foreign
permanent establishment or fixed base (within the meaning of
an applicable income tax treaty) of the Transferee or another
U.S. taxpayer.
K-4
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).
K-5
__________________________
By: ______________________
__________________________
Address of Investor for receipt of distribution:
Address of Investor for receipt of tax information:
(Corporate Seal)
Attest:
____________________________________
____________________________________, Secretary
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: __________________
K-6
APPENDIX B
CONSENT
___________________________________ (Transferee)
___________________________________
___________________________________
___________________________________
Ladies and Gentlemen:
Chase Mortgage Finance Corporation ("CMFC") 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 Multi-Class
Mortgage Pass-Through Certificates, Series [_______], Class A-R described in the
Transferee's Letter to which this Consent is appended, notwithstanding CMFC's
knowledge that the Transferee is not a U.S. Person (as defined in such
Transferee's Letter).
CHASE MORTGAGE FINANCE CORPORATION
By: ____________________________________
Dated: ______________
K-7
EXHIBIT L
REQUEST FOR RELEASE OF DOCUMENTS
To: [TRUSTEE]
[ADDRESS]
[ADDRESS]
[ADDRESS]
Re: Pooling and Servicing Agreement, dated as of [DATE], by and
among Chase Mortgage Finance Corporation, JPMorgan Chase Bank,
N.A. and [TRUSTEE] relating to the issuance of the Series
[_______] Multi-Class Mortgage Pass-Through Certificates
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 Paid in Full
_______ 2. Foreclosure
_______ 3. Substitution
_______ 4. Other Liquidation
_______ 5. Nonliquidation Reason:
___________________________
By: _______________________
(authorized signer)
Issuer: ___________________
Address: __________________
___________________________
Date: _____________________
Trustee
[TRUSTEE]
Please acknowledge the execution of the above request by your signature and date
below:
___________________________
Signature Date
Documents returned to Trustee:
___________________________
Trustee Date
L-1
EXHIBIT M
TRANSFEREE ERISA REPRESENTATION LETTER
[DATE]
Chase Mortgage Finance Corporation
000 Xxxx Xxxxxxxxx
Xxxxx Xxxxx
Xxxxxxxxx Xxxx, XX 00000
Re: Chase Mortgage Finance Corporation, Multi-Class Mortgage
Pass-Through Certificates, Series [_______], [Class M] [Class
B- ]
Ladies and Gentlemen:
______________ (the "Purchaser") intends to purchase from
_________________________ (the "Transferor") $_______ by original principal
balance (the "Transferred Certificate") of Multi-Class Mortgage Pass-Through
Certificates, Series [_______], [Class M] [Class B-__] (the "Certificates"),
issued pursuant to a pooling and servicing agreement, dated as of [DATE] (the
"Pooling and Servicing Agreement"), among Chase Mortgage Finance Corporation
(the "Depositor"), JPMorgan Chase Bank, N.A., as Servicer (the "Servicer"), and
[TRUSTEE], 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, we hereby certify, represent and warrant to, and
covenant with, the Depositor that:
(a) we are not an employee benefit plan subject to Title I of
the Employee Retirement Income Security Act of 1974, as amended
("ERISA") or Section 4975 of the Internal Revenue Code of 1986, as
amended (the "Code") or any materially similar provisions of applicable
federal, state or local law, nor a person acting on behalf of any such
plan or using the assets of such plan, or, alternatively, in the case
of an insurance company, the assets of any separate accounts to effect
such acquisition, or alternatively, (b) the source of funds for the
purchase of such Transferred Certificate 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 acquisition and holding of such Transferred Certificate is exempt
under PTCE 95-60.
M-1
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: _____________________________________
M-2
EXHIBIT N
FORM OF OFFICER'S CERTIFICATE (SERVICER)
[DATE]
Chase Mortgage Finance Corporation
000 Xxxx Xxxxxxxxx, Xxxxx Xxxxx
Xxxxxxxxx Xxxx, Xxx Xxxxxx 00000
Re: Chase Mortgage Finance Trust, Multi-Class Mortgage Pass-Through
Certificates, Series [ ]
-----------------------------------------------
Ladies and Gentlemen:
JPMorgan Chase Bank, N.A. ("Chase"), as servicer hereby certifies to the
Depositor that:
1. Based on our knowledge, the information prepared by Chase and
relating to the mortgage loans serviced by Chase and provided by Chase
to the Depositor or the Trustee in its reports to the Depositor or the
Trustee is accurate and complete in all material respects as of the
last day of the period covered by such report;
2. Based on our knowledge, the servicing information required to be
provided to the Depositor or the Trustee by Chase pursuant to the
Agreement has been provided to the Depositor or the Trustee;
3. Based upon the review required under the Agreement, and except as
disclosed in its reports, Chase as of the last day of the period
covered by such reports has fulfilled its obligations under the
Agreement; and
4. Chase has disclosed to its independent auditor, who issues the
independent auditor's report on the Uniform Single Attestation Program
for Mortgage Bankers for Chase, any significant deficiencies relating
to Chase's compliance with minimum servicing standards.
Very truly yours,
JPMORGAN CHASE BANK, N.A.
By:_________________________________
Name:_______________________________
Title:______________________________
N-1
EXHIBIT O
FORM OF OFFICER'S CERTIFICATE (PAYING AGENT)
[DATE]
Chase Mortgage Finance Corporation
000 Xxxx Xxxxxxxxx, Xxxxx Xxxxx
Xxxxxxxxx Xxxx, Xxx Xxxxxx 00000
Reference is made to each pooling and servicing agreement listed on
Exhibit A hereto (each, an "Agreement") in which JPMorgan Chase Bank, N.A. has
been appointed the paying agent (the "Paying Agent"). JPMorgan Chase Bank, N.A.,
hereby certifies to you that:
1. I have reviewed all reports on Form 8-K containing distribution
reports filed in respect of periods included in the year covered by the
annual report, of each of the trusts created pursuant to each
Agreement;
2. Based on my knowledge, the information in these reports, taken as a
whole, does not contain any untrue statement of a material fact or omit
to state a material fact required by the respective pooling and
servicing agreement to be included therein and necessary to make the
statements made, in light of the circumstances under which such
statements were made, not misleading as of the last day of the period
covered by the annual reports; and
3. Based on my knowledge, the distribution or servicing information
required to be provided to the Paying Agent by the Servicer under each
Agreement for inclusion in the reports is included in the reports.
4. In compiling the distribution information, the Paying Agent has
relied upon information furnished to it by the Servicer under each
pooling and servicing agreement. The Paying Agent shall have no
responsibility or liability for any inaccuracy in such reports
resulting from information so provided by the Servicer.
[JPMORGAN CHASE BANK, N.A.]
By: ______________________________
Name: ______________________________
Title: ______________________________
O-1
