Execution Copy
Exhibit 4.2
POOLED SECURITIES
PURCHASE AGREEMENT
Dated as of July 1, 1999
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
Seller
and
ABN AMRO MORTGAGE CORPORATION
Purchaser
Execution Copy
Table of Contents
Section Page
------- ----
Statement of the Transaction 1
ARTICLE I
DEFINITIONS
SECTION 1.01. 2
ARTICLE II
CONVEYANCE OF THE UNDERLYING CERTIFICATES
SECTION 2.01. Delivery of Underlying Certificates 4
SECTION 2.02. Closing 4
SECTION 2.03. Survival of Representations and Warranties 4
ARTICLE III
REPRESENTATIONS AND WARRANTIES; REPURCHASE OBLIGATIONS
SECTION 3.01. Representations and Warranties of the Seller 5
SECTION 3.02. Substitution of Underlying Certificates 6
SECTION 3.03. Indemnification By the Seller 7
ARTICLE IV
ACKNOWLEDGEMENTS
SECTION 4.01. Acknowledgement of the Purchaser 8
SECTION 4.02. Acknowledgement of the Seller 8
ARTICLE V
MISCELLANEOUS
SECTION 5.01. Notices 9
SECTION 5.02. Separability Clause 9
SECTION 5.03. Counterparts 9
SECTION 5.04. Place of Delivery and Governing Law 9
SECTION 5.05. Remedies Cumulative; No Waiver 9
SECTION 5.06. Miscellaneous 10
SECTION 5.07. Agreement of the Seller 10
SECTION 5.08. Successors and Assigns 10
SECTION 5.09. Underwriting Agreement 11
Schedule A Underlying Certificates Schedule 13
Schedule B Form of Mortgage Loan Data Tape 15
(3)
Statement of the Transaction
Subject to the terms and conditions hereof, Xxxxxxxxx, Lufkin
& Xxxxxxxx Securities Corporation (the "Seller") hereby agrees to irrevocably
sell and transfer to ABN AMRO Mortgage Corporation (the "Purchaser"), and the
Purchaser hereby agrees to purchase and accept from the Seller, the Underlying
Certificates identified in the Underlying Certificates Schedule attached hereto
as Schedule A, having an aggregate Principal Balance on the Closing Date of
$47,753,042.
Simultaneously with the sale of the Underlying Certificates to
the Purchaser on the Closing Date, the Underlying Certificates will be sold to a
trust in exchange for the ABN AMRO Mortgage Corporation, Resecuritization
Pass-Through Certificates, Series 1999-RS1 (the "Certificates").
The following sets forth the terms and conditions of the
contemplated transaction, to which the parties have agreed, as evidenced by the
execution of this Agreement.
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ARTICLE I
DEFINITIONS
SECTION 1.1. Whenever used in the Agreement, the following
words and phrases, unless the context otherwise requires, shall have the
following meanings (capitalized terms not otherwise defined herein are used
herein with the meanings assigned thereto in the Pooling Agreement):
Agreement: This Pooled Securities Purchase Agreement including
all schedules, amendments and supplements hereto.
Certificate Rate: As to any Underlying Certificate, the per
annum rate of interest at which interest accrues on the principal balance of
such Underlying Certificate.
Certificates: As defined in the Statement of Transaction
hereto.
Closing Date: July 30, 1999.
Cut-off Date: June 25, 1999.
Defective Underlying Certificate: Any Underlying Certificate
subject to repurchase or substitution by the Seller pursuant to Section 3.01 or
Section 3.02.
Eligible Underlying Certificate. An Underlying Certificate
substituted by the Seller for a Defective Underlying Certificate which must, on
the date of such substitution, (i) have an outstanding principal balance, not in
excess of and not more than 5% less than the principal balance of the Defective
Underlying Certificate, (ii) have a Certificate Rate not less than the
Certificate Rate of the Defective Underlying Certificate, (iii) have a last
scheduled distribution date not more than six months earlier and not later than
the last scheduled distribution date of the Defective Underlying Certificate,
(iv) comply with each representation and warranty set forth in Section 3.01
(deemed to be made as of the Substitution Date), and (v) have the same or
comparable rating of at least one nationally recognized statistical rating
organization. More than one Eligible Underlying Certificate may be substituted
for a Defective Underlying Certificate if each such Eligible Underlying
Certificate meets the attributes set forth in (ii), (iii), (iv) and (v) above,
and the attribute set forth in (i) above in the aggregate.
Pooling Agreement: The Pooling Agreement, dated as of July 1,
1999, among the Purchaser, as depositor and the Trustee, as trustee.
Person: Any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
Purchase Price: As to any Underlying Certificate and as of any
date of repurchase, the principal balance thereon plus accrued and unpaid
interest thereon up to but not including such date.
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Substitution Adjustment: As to any date on which a
substitution occurs pursuant to Section 3.02, the excess of (i) the principal
balance of the Defective Underlying Certificate (after application of principal
payments received on or before the date of substitution of any Eligible
Underlying Certificate), together with all accrued and unpaid interest over (ii)
the principal balance of such Eligible Underlying Certificate as of the date of
substitution.
Trust: As defined in Section 5.08.
Trustee: The First National Bank of Chicago, as trustee for
the holders of ABN AMRO Mortgage Corporation, Resecuritization Pass-Through
Certificates, Series 1999-RS1.
Underlying Certificates Purchase Price: $43,651,055.69.
Underlying Certificates: The securities identified in the
Underlying Certificates Schedule attached hereto as Schedule A.
Underwriting Agreement: The Underwriting Agreement, dated July
27, 1999, among the Purchaser, Seller, ABN AMRO North America, Inc. and ABN AMRO
Incorporated.
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ARTICLE II
CONVEYANCE OF THE UNDERLYING CERTIFICATES
SECTION 2.1. Delivery of Underlying Certificates.
Conveyance of Underlying Certificates. The Seller concurrently
with the execution and delivery of this Agreement, does hereby sell, transfer,
assign, set over and otherwise convey to the Purchaser without recourse all the
right, title and interest of the Seller in and to the Underlying Certificates,
including all interest and principal received on or with respect to the
Underlying Certificates after the Pooled Security Distribution Date (as defined
in the Pooling Agreement) for July 1999 and all proceeds of the foregoing.
In connection with such transfer and assignment, the Purchaser
hereby directs the Seller to cause the Underlying Certificates to be registered
in the name of the Trustee and to be delivered to the Trustee. The transfer of
the Underlying Certificates accomplished hereby is absolute and is intended as a
sale. If such transfer is deemed to constitute a pledge of security for a loan,
it is the intent of this Agreement that the Seller shall be deemed to have
granted to the Purchaser a first priority perfected security interest in all of
the Seller's right, title and interest to and under the Underlying Certificates
and all proceeds thereof, and that this Agreement shall constitute a security
agreement under applicable law.
SECTION 2.2. Closing.
On the Closing Date the Purchaser shall pay to the Seller the
Underlying Certificates Purchase Price by wire transfer of immediately available
funds or such other method of payment as the parties hereto may agree.
SECTION 2.3. Survival of Representations and Warranties.
It is understood and agreed that the representations and
warranties set forth in Article III are continuing representations and
warranties and shall survive the sale of the Underlying Certificates to the
Purchaser and by the Purchaser to the Trustee and shall inure to the benefit of
the Purchaser and the Trustee.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES; REPURCHASE OBLIGATIONS
SECTION 3.1. Representations and Warranties of the Seller.
(a) The Seller hereby represents and warrants to the Purchaser
as of the Closing Date:
(i) The information referred to in Schedule A was true and correct in
all material respects as of the Cut-off Date;
(ii) immediately prior to the sale of the Underlying Certificates to
the Purchaser, the Seller was the sole owner and holder of the
Underlying Certificates, free and clear of any and all liens, pledges,
participations, charges, mortgages, encumbrances or security interests
of any nature whatsoever, and had full right and authority, subject to
no interest or participation of, or agreement with, any other party, to
sell and assign the same; and
(iii) the Seller has the requisite power and authority to sell the
Underlying Certificates and all corporate and other action required to
be taken for the sale of the Underlying Certificates hereunder has been
taken.
Upon discovery by the Seller, the Purchaser or the Trustee of
a breach of any of the representations and warranties set forth in this Section
3.01(a) that materially and adversely affects the value of the Underlying
Certificates or the interests of the Purchaser in the related Underlying
Certificate, the party discovering such breach shall give prompt written notice
to the other party. Pursuant to such notice, the Seller shall be directed to
cure such breach. Within 60 days of its discovery or its receipt of notice of
breach, if the Seller has not cured such breach in all material respects, the
Seller shall either substitute an Eligible Underlying Certificate for the
defective Underlying Certificate as provided in Section 3.02 or shall purchase
the defective Underlying Certificate from the Purchaser on the first day of the
month in the month following the month in which such 60-day period expired at
the Purchase Price of such Underlying Certificate. The Purchase Price for the
purchased Underlying Certificate shall be deposited by the Seller in an account
at the direction of the Purchaser on or prior to such date. Upon receipt of
either the Eligible Underlying Certificate or the Purchase Price by the
Purchaser, the Purchaser shall release the defective Underlying Certificate to
the Seller, and the Purchaser shall execute and deliver such instruments of
transfer or assignment, in each case without recourse, as shall be necessary to
vest in the Seller or its designee any Underlying Certificate released pursuant
hereto. Except as provided in Section 3.03, it is understood and agreed that the
obligation of the Seller to cure, substitute or purchase any Underlying
Certificate as to which such a breach has occurred and is continuing shall
constitute the sole remedy against the Seller respecting such breach available
to the Purchaser.
(b) The Seller hereby represents and warrants to Purchaser, as
of the Closing Date:
(i) The Seller is duly organized as a Delaware corporation
and is validly
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existing and in good standing under the laws of the State of Delaware.
The Seller has all requisite power and authority to enter into this
Agreement and to carry out the transactions contemplated hereby;
(ii) The execution and delivery by the Seller of this
Agreement and the consummation of the transactions contemplated hereby
have each been duly and validly authorized by all necessary action, and
this Agreement and such other agreements constitute valid and legally
binding agreements of the Seller, enforceable against the Seller in
accordance with their respective terms, except that (i) the
enforceability thereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to creditors'
rights generally and (ii) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought;
(iii) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not violate,
conflict with, result in a breach of, constitute a default under or be
prohibited by, or require any additional approval, waiver or consent
under the Seller's charter or by-laws or any instrument or agreement to
which it is a party or by which it is bound or any federal or state
law, rule or regulation or any judicial or administrative decree,
order, ruling or regulation applicable to it; and
(iv) There is no litigation or action at law or in equity
pending, or, to its knowledge, threatened against the Seller and no
proceeding or investigation of any kind is pending or, to its
knowledge, threatened, by any federal, state or local governmental or
administrative body, which could reasonably be expected to materially
and adversely affect the Seller's ability to consummate the
transactions contemplated hereby.
SECTION 3.2. Substitution of Underlying Certificates.
(a) On any date within two years following the Closing Date
and which is on or before the date on which the Seller would otherwise be
required to repurchase an Underlying Certificate pursuant to Section 3.01, the
Seller may deliver to the Trustee one or more Eligible Underlying Certificates
in substitution for a Defective Underlying Certificate which the Seller would
otherwise be required to repurchase pursuant to Section 3.01. In connection with
any such substitution, the Seller shall calculate the Substitution Adjustment,
if any, and shall deposit such amount in an account at the direction of the
Purchaser on the date of such substitution (the "Substitution Date").
(b) The Seller shall notify the Purchaser and the Trustee in
writing not less than five business days on or before the date on which the
Seller would otherwise be required to repurchase any Defective Underlying
Certificate pursuant to Section 3.01 of its intention to effect a substitution
under this Section. On the Substitution Date, the Seller shall cause the
Eligible Underlying Certificates to be registered in the name of the Trustee and
to be delivered to the Trustee and shall confirm that the representations and
warranties contained in Section 3.01 are true and correct in all material
respects with respect to the Eligible Underlying Certificates as of
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such Substitution Date, provided that remedies for any breach of such
representations and warranties are limited as set forth in Section 3.01 and this
Section.
(c) Concurrently with the satisfaction of the conditions set
forth in Sections 3.02(a) and (b) above and the transfer of such Eligible
Underlying Certificates to the Trustee pursuant to this Section, Schedule A to
this Agreement shall be deemed to be amended to exclude the Defective Underlying
Certificate and to include the information with respect to such Eligible
Underlying Certificates, and all references in this Agreement to the Underlying
Certificates shall include such Eligible Underlying Certificates and be deemed
to be made on or after the related Substitution Date, as the case may be, as to
such Eligible Underlying Certificates.
(d) In connection with the transfer of any Eligible Underlying
Certificates to the Trustee pursuant to this Section 3.02, the Seller shall
deliver to the Purchaser and the Trustee an opinion of counsel to the effect
that such substitution will not cause (x) any federal tax to be imposed on the
Trust, including, without limitation, any Federal tax imposed on the "prohibited
transactions" under Section 860G(d)(1) of the Code or (y) the Trust to fail to
qualify as a REMIC at any time that any Certificate is outstanding. In the event
that such opinion indicates that a substitution will result in the imposition of
a prohibited transaction tax, give rise to net taxable income or be deemed a
contribution to the REMIC, the Seller shall not substitute for any such
Underlying Certificates until the opinion of counsel to the effect referred to
in the preceding sentence may be rendered.
SECTION 3.3. Indemnification By the Seller.
The Seller shall indemnify and hold harmless the Purchaser
from and against any actual loss, liability or expense incurred by the Purchaser
arising from the breach by the Seller of a representation and warranty made by
the Seller pursuant to either Section 3.01(a)(ii) or (iii) of this Agreement,
provided that the Seller shall have no obligation to indemnify the Purchaser for
any such loss, liability or expense incurred by the Purchaser as a result of the
Purchaser's bad faith or negligence. The Seller will have no obligation to
indemnify the Purchaser for a breach of the representation and warranty being
made by the Seller pursuant to Section 3.01(a)(i) of the Agreement, the remedies
for any such breach being limited to Section 3.01 hereto.
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ARTICLE IV
ACKNOWLEDGEMENTS
SECTION 4.1. Acknowledgement of the Purchaser.
The Purchaser hereby acknowledges its purchase of the
Underlying Certificates in consideration for the payment of the Underlying
Certificates Purchase Price.
SECTION 4.2. Acknowledgement of the Seller.
The Seller hereby acknowledges (a) the receipt of the
Underlying Certificates Purchase Price in consideration for the sale to the
Purchaser of the Underlying Certificates and (b) that it has caused the
Underlying Certificates to be registered in the name of the Trustee and that it
has delivered the Underlying Certificates to the Trustee. The Seller shall
provide the Purchaser on the Closing Date with evidence satisfactory to it
showing that the Underlying Certificates have been registered in the name of the
Trustee as of such date.
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ARTICLE V
MISCELLANEOUS
SECTION 5.1. Notices.
All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed by registered or
certified mail, return receipt requested, or, if by other means, when received
by the other party or at the address, in the case of the Seller: Xxxxxxxxx,
Lufkin & Xxxxxxxx Securities Corporation, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Xxxxxxx Xxxxx; and in the case of the Purchaser: ABN AMRO
Mortgage Corporation, 000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000,
Attention: Xxxxx X. Xxxxxxx - Director - ABN AMRO Mortgage Operations, or such
other address as may hereafter be furnished to the other party by like notice.
Any such demand, notice or communication hereunder shall be deemed to have been
given on the date delivered to the premises of the addressee (as evidenced, in
the case of registered or certified mail, by the date noted on the return
receipt).
SECTION 5.2. Separability Clause.
Any provision, representation or warranty of this Agreement
that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. To the extent
permitted by applicable law, the parties hereto waive any provision of law that
prohibits or renders unenforceable any provision hereof.
SECTION 5.3. Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts, each of which counterparts shall be deemed to be an original, and
such counterparts shall constitute but one and the same instrument.
SECTION 5.4. Place of Delivery and Governing Law.
The Agreement shall be construed in accordance with the laws
of the State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws.
SECTION 5.5. Remedies Cumulative; No Waiver.
All rights and remedies of the Purchaser or any assignee of
the Purchaser under the Agreement shall, to the extent permitted by law, be
deemed cumulative and not exclusive of any thereof or of any other rights and
remedies available to the Purchaser or such assignee; and no failure to exercise
any right or power accruing upon the occurrence and continuation as
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aforesaid of any default shall impair any such right or power, or shall be
construed to be a waiver of any such default or an acquiescence therein; and
every right and remedy arising under this Agreement or by law to the Purchaser
or such assignee may be exercised from time to time, and as often as shall be
deemed expedient, by the Purchaser or such assignee.
SECTION 5.6. Miscellaneous.
This Agreement may be amended or supplemented from time to
time only with the written consent of the Seller and the Purchaser or any
assignee of the Purchaser. This Agreement contains the entire understanding and
agreement of the parties and supersedes and incorporates all prior negotiations,
understandings and agreements, which are fully merged herein.
SECTION 5.7. Agreement of the Seller.
(a) The Seller agrees to execute and deliver such instruments
and take such actions, including, without limitation all necessary UCC-1
financing statements and any continuation statements with respect thereto, as
the Purchaser or any assignee of the Purchaser may, from time to time,
reasonably request in order to effectuate the purpose and to carry out the terms
of this Agreement.
(b) On the Closing Date the Seller shall provide the Purchaser
with an opinion of counsel to the effect that this Agreement has been duly
authorized, executed and delivered by the Seller and is an enforceable
obligation of the Seller subject to bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally and to
general principals of equity.
(c) On the Closing Date the Seller shall provide the Purchaser
with a data tape containing the information with respect to the underlying
mortgage loans substantially in the form of Schedule B attached hereto.
(d) On the Closing Date the Seller shall provide the Purchaser
with copies of the: (i) prospectus and prospectus supplement pursuant to which
each of the Underlying Certificates were publicly offered; and (ii) most recent
monthly trustee report for each of the Underlying Certificates which are
required to be delivered to the holders of the Underlying Certificates pursuant
to the terms of the underlying agreements.
SECTION 5.8. Successors and Assigns.
This Agreement shall bind and inure to the benefit of and be
enforceable by the Seller, the Purchaser, and the respective successors and
assigns of the Seller, the Purchaser and any designee of the Purchaser. The
parties hereto acknowledge that the Purchaser is acquiring the Underlying
Certificates for the purpose of contributing them to a trust (the "Trust") that
will issue Certificates representing undivided interests in the Underlying
Certificates. As an inducement to the Purchaser to purchase the Underlying
Certificates, the Seller acknowledges
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and consents to the assignment to the Trustee by the Purchaser of all of the
Purchaser's rights against the Seller hereunder in respect of the Underlying
Certificates and that the enforcement or exercise of any right or remedy against
the Seller hereunder by the Trustee shall have the same force and effect as if
enforced or exercised by the Purchaser directly.
SECTION 5.9. Underwriting Agreement.
The parties hereto agree that the Seller shall have no
obligation to sell the Underlying Certificates to the Purchaser, and the
Purchaser shall have no obligation to purchase the Underlying Certificates from
the Seller, if the sale of the Certificates pursuant to the Underwriting
Agreement is not consummated on the Closing Date.
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IN WITNESS WHEREOF, the Seller and the Purchaser have caused
their names to be signed hereto by their respective officers thereunto duly
authorized and their respective seals, duly attested, to be hereunto affixed.
Dated as of July 1, 1999
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION.
as Seller
By: /s/ Xxxxxxx Xxxxx
-------------------------------
Name: Xxxxxxx Xxxxx
Title: Senior Vice President
ABN AMRO MORTGAGE CORPORATION
as Purchaser
By: /s/ Xxxxx Xxxxxxx
-------------------------------
Name: Xxxxx Xxxxxxx
Title: First Vice President
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SCHEDULE A
UNDERLYING CERTIFICATES SCHEDULE
ISSUER NAME SERIES CLASS TRUSTEE ORIGINAL CUT-OFF PASS-THROUGH CURRENT
----------- ------ ----- ------- PRINCIPAL DATE RATE RATING
BALANCE PRINCIPAL ---- ------
------- BALANCE
--------
BSMSI 1996-5 B-3 BNY $2,370,244 $2,280,345 8.125 BBB
BSMSI 1998-1 B-3 CHASE $3,572,600 $2,001,182 6.750 XXX
XXX 0000-0 X-0 CHASE $4,033,964 $3,750,508 6.500 XXX
XXX 0000-0 C-B-3 BNY $2,295,948 $2,264,554 6.835 BBB
FNW 1998-W7 B-2 FNMA $2,248,574 $2,232,606 7.085 BBB
HMSI 1998-3 B-3 BNY $1,366,900 $1,359,756 6.650 BBB
PNC 1998-14 D-B-3 STATE $4,260,274 $4,238,803 6.764 BBB
PNC 1998-2 C-B-3 USBNK $2,098,478 $2,071,867 7.000 BBB
PNC 1998-7 II-B-3 STATE $3,364,662 $3,341,287 7.000 BBB
PNC 1999-1 I-B-3 STATE $3,756,138 $3,740,291 6.250 BBB
PNC 1998-6 C-B-3 USBNK $2,743,972 $2,716,902 6.671 BBB
RALI 1997-QS4 M-3 FCHIC $3,316,900 $2,282,901 7.750 BBB
RAST 1997-A1 B-3 BNY $1,731,000 $1,691,226 7.735 BBB
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ISSUER NAME SERIES CLASS TRUSTEE ORIGINAL CUT-OFF PASS-THROUGH CURRENT
----------- ------ ----- ------- PRINCIPAL DATE RATE RATING
BALANCE PRINCIPAL ---- ------
------- BALANCE
--------
RAST 1998-A6 B-3 BNY $3,375,684 $3,344,555 6.750 BBB
RAST 1998-A15 B-3 BNY $2,073,300 $2,062,588 6.850 BBB
RAST 1999-A1 B-3 BNY $1,995,888 $1,989,198 6.716 BBB
SAMI 1998-10 B-3 BKTRU $2,285,600 $2,272,695 6.900 BBB
SAMI 1998-12 B-3 NORWB $1,114,000 $1,108,252 6.750 BBB
SAMI 1998-11 B-3 FCHIC $1,485,500 $1,476,993 6.750 BBB
SAMI 1998-8 4-B-3 FCHIC $1,540,000 $1,526,535 6.750 BBB
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SCHEDULE B
FORM OF MORTGAGE LOAN DATA TAPE
LOAN ORIGINAL CURRENT LOAN REMAINING ORIGINAL BALLOON TOTAL LTV STATE ZIP DELINQUENCY MONTHLY
GROUP PRINCIPAL FACTOR AGE TERM TO TERM TO FLAG SERVICING --- ----- CODE STATUS PYMT
----- BALANCE ------ --- MATURITY MATURITY ---- FEES ---- ------ AMT
------- -------- -------- ---- ---
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