Exhibit 4.1
Form of Pooling and Servicing Agreement
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ABN AMRO MORTGAGE CORPORATION
Seller
and
LASALLE HOME MORTGAGE CORPORATION,
Master Servicer
and
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Trustee
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FORM OF
POOLING AND SERVICING AGREEMENT
Dated as of _________, 199_
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$________________
Mortgage Pass-Through Certificates
SERIES 199_-_
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TABLE OF CONTENTS
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Section Page
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ARTICLE I
DEFINITIONS
ARTICLE II
CONVEYANCE OF TRUST FUND;
ORIGINAL ISSUANCE OF CERTIFICATES
2.1. Conveyance of Trust Fund........................................... 24
2.2. Acceptance by Trustee.............................................. 28
2.3. Representations and Warranties of the Depositor.................... 30
2.4. Authentication and Delivery of Certificates; Designation of
Certificates as REMIC Regular and Residual Interests............... 35
2.5. Designation of Startup Day......................................... 35
2.6. No Contributions................................................... 35
2.7. Representations and Warranties of the Master Servicer.............. 35
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
3.1. [Master Servicer to Act as Servicer and Tax Matters Person;
Administration of the Mortgage Loans............................... 36
3.2. Collection of Certain Mortgage Loan Payments; Certificate Account.. 41
3.3. Permitted Withdrawals from the Certificate Account................. 43
3.4. Taxes, Assessments and Similar Items............................... 45
3.5. Maintenance of Insurance........................................... 45
3.6. Enforcement of Due-on-Sale Clauses; Assumption and Substitution
Agreements......................................................... 48
3.7. Realization upon Defaulted Mortgage Loans.......................... 49
3.8. Trustee to Cooperate; Release of Mortgage Files.................... 51
3.9. Servicing Compensation............................................. 52
3.10. Reports to the Trustee; Certificate Account Statements............. 52
3.11. Annual Statement as to Compliance.................................. 53
3.12. Annual Independent Public Accountants' Servicing Report............ 53
3.13. Access to Certain Documentation and Information Regarding the
Mortgage Loans..................................................... 54
3.14. Back-up Servicer................................................... 54
3.15. Sale of Defaulted Mortgage Loans and REO Properties................ 55
3.16. Delegation of Duties............................................... 57
3.17. Maintenance of Special Hazard Insurance Policy..................... 57
3.18. Letter of Credit................................................... 58
3.19. Appointment of a Special Servicer.................................. 59
TABLE OF CONTENTS
(continued)
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Section Page
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ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS; ADVANCES;
STATEMENTS AND REPORTS
4.1. Distributions...................................................... 60
4.2. Subordination; Priority of Distributions........................... 60
4.3. Advances........................................................... 61
4.4. Statements to Certificateholders................................... 62
4.5. Foreclosure Reports................................................ 65
4.6. Adjustment of Administration Fees with Respect to Prepaid
Mortgage Loans..................................................... 65
4.7. Prohibited Transactions Taxes and Other Taxes...................... 66
4.8. Tax Administration................................................. 67
4.9. Equal Status of Administration Fee................................. 68
4.10. Appointment of Paying Agent and Certificate Administrator.......... 68
ARTICLE V
THE CERTIFICATES
5.1. The Certificates................................................... 69
5.2. Registration of Transfer and Exchange of Certificates.............. 70
5.3. Mutilated, Destroyed, Lost or Stolen Certificates.................. 73
5.4. Persons Deemed Owners.............................................. 73
5.5. Maintenance of Office or Agency.................................... 74
ARTICLE VI
THE DEPOSITOR AND THE MASTER SERVICER
6.1. Liability of the Depositor and the Master Servicer................. 74
6.2. Merger or Consolidation of the Depositor or the Master Servicer.... 74
6.3. Limitation on Liability of the Master Servicer and Others.......... 75
6.4. Master Servicer Not to Resign...................................... 75
ARTICLE VII
DEFAULT
7.1. Events of Default.................................................. 76
7.2. Other Remedies of Trustee.......................................... 79
7.3. Directions by Certificateholders and Duties of Trustee During
Event of Default................................................... 79
7.4. Action upon Certain Failures of Master Servicer and upon Event of
Default............................................................ 80
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TABLE OF CONTENTS
(continued)
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Section Page
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7.5. Appointment of [Back-up Servicer].................................. 80
7.6. Notification to Certificateholders................................. 82
ARTICLE VIII
CONCERNING THE TRUSTEE
8.1. Duties of Trustee.................................................. 82
8.2. Certain Matters Affecting Trustee.................................. 84
8.3. Trustee Not Required to Make Investigation......................... 85
8.4. Trustee Not Liable for Certificates or Mortgage Loans.............. 85
8.5. Trustee May Own Certificates....................................... 86
8.6. Master Servicer to Pay Trustee's Fees and Expenses................. 86
8.7. Eligibility Requirements for Trustee............................... 86
8.8. Resignation and Removal of Trustee................................. 87
8.9. Successor Trustee.................................................. 88
8.10. Merger or Consolidation of Trustee................................. 88
8.11. Appointment of Co-Trustee or Separate Trustee...................... 88
8.12. Appointment of Custodians.......................................... 90
8.13. Authenticating Agent............................................... 90
ARTICLE IX
TERMINATION
9.1. Termination upon Purchase by the Class R Certificateholder or
Liquidation of All Mortgage Loans.................................. 91
9.2. Trusts Irrevocable................................................. 93
9.3. Additional Termination Requirements................................ 93
ARTICLE X
MISCELLANEOUS PROVISIONS
10.1. Amendment.......................................................... 94
10.2. Recordation of Agreement........................................... 95
10.3. Limitation on Rights of Certificateholders......................... 96
10.4. Governing Law; Jurisdiction........................................ 97
10.5. Notices............................................................ 97
10.6. Severability of Provisions......................................... 97
10.7. Sale of Class A Certificates....................................... 98
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EXHIBITS
Exhibit A Form of Class A Certificate................................... A-1
Exhibit B Form of Class B Certificate................................... B-1
Exhibit C Form of Class R Certificate................................... C-1
Exhibit D Mortgage Loan Schedule........................................ D-1
Exhibit E Form of Mortgage Note......................................... E- ]
Exhibit F Form of Special Hazard Policy................................. G- ]
Exhibit G Form of Letter of Credit...................................... H- ]
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This Pooling and Servicing Agreement, effective as of ____________, 199_,
is executed between ABN AMRO MORTGAGE CORPORATION, in its capacity as depositor
(the "Depositor"), LASALLE HOME MORTGAGE CORPORATION, in its capacity as master
servicer ("Master Servicer") and _______________, as trustee (the "Trustee").
W I T N E S E T H
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In consideration of the mutual agreements herein contained, the Depositor,
Master Servicer and the Trustee agree as follows:
ARTICLE I
DEFINITIONS
Whenever used herein, the following words and phrases, unless the context
otherwise requires, shall have the meanings specified in this Article:
Adjustment Date: With respect to each Mortgage Loan, the date specified on
the related Mortgage Note as the first date on which the interest rate is
subject to adjustment, and the same date in each month thereafter.
Administration Fee: With respect to any Mortgage Loan and any month, the
fee payable to the Master Servicer pursuant to Section 3.9 for the
administration of such Mortgage Loan, such fee being an amount paid out of
interest on such Mortgage Loan and equal to ____% per annum of the Principal
Balance for the related Mortgage Loan which percentage shall include ____% per
annum for servicing such Mortgage Loan and the Trustee's fees for such Mortgage
Loan, but subject to adjustment as provided in Section 4.6 hereof.
Advance: An Advance made by the Master Servicer pursuant to Section 4.3.
Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the terms "controlling" and
"controlled" have meanings correlative to the foregoing. The Trustee may obtain
and rely on an Officer's Certificate of the Master Servicer or the Depositor to
determine whether any Person is an Affiliate of such party.
Agreement: This Pooling and Servicing Agreement and all amendments and
supplements hereto.
Anniversary: Each anniversary of the Cut-off Date.
Authenticating Agent: As defined in Section 8.13.
ALTA: The American Land Title Association, or any successor.
[Back-up Servicer: The Back-up Servicer, initially [ABN AMRO Bank N.V.],
defined in Section 3.14 hereof.]
Balloon Payment: With respect to any Mortgage Loan, a final or intermediate
scheduled monthly payment of principal and interest which, pursuant to the
related Mortgage Note or any other document in the Mortgage File, is at least
twice as large as other scheduled payments due thereon.
Bankruptcy Loss: Any Realized Loss incurred on a Mortgage Loan as a result
of a Deficient Valuation or Debt Service Reduction.
Bankruptcy Loss Limit: An aggregate amount which will not be less than the
following percentages of the aggregate outstanding Principal Balances of all
Mortgage Loans as of the Cut-Off Date: ___% in the first Series Year and ___% in
each of the second, third, fourth and fifth Series Years or (ii) such lesser
amount if the Master Servicer confirms with the Rating Agencies that such lesser
amount will not impair the ratings on the Certificates.
BIF: The Bank Insurance Fund administered by the FDIC, or any successor
thereto.
Business Day: Any day other than (i) a Saturday or a Sunday, or (ii) a
legal holiday in the State of Illinois, or (iii) a day in which banking
institutions in the State of Illinois are authorized or obligated by law or
executive order to be closed.
Certificate: Any one of the Class A, Class B or Class R Certificates.
Certificate Account: The separate account established and maintained by the
Master Servicer pursuant to Section 3.2 which shall be entitled
"_______________________________, as trustee for the benefit of the Holders of
ABN AMRO Mortgage Corporation, Mortgage Pass-Through Certificates, Series 199_-
_." The Certificate Account must be an Eligible Account. Funds deposited in the
Certificate Account shall be held in trust for the
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Certificateholders for the uses and purposes set forth in Sections 3.2, 3.3,
3.9, 4.1, 4.2, 4.3 and 9.1.
Certificate Administrator: As defined in Section 4.10.
Certificate Balance: The aggregate Principal Balance of Mortgage Loans
evidenced by each Certificate's Fractional Undivided Interest in the Mortgage
Loans.
Certificate Register and Certificate Registrar: The register maintained
pursuant to and the registrar provided for in Section 5.2.
Certificateholder or Holder: The Person in whose name a Certificate is
registered in the Certificate Register, except that, solely for the purposes of
the taking of any action under Article VII or giving any consent pursuant to
this Agreement, any Certificate registered in the name of the Master Servicer or
any affiliate thereof shall be deemed not to be outstanding and the Fractional
Undivided Interest evidenced thereby shall not be taken into account in
determining whether the requisite percentage of Certificates necessary to take
any such action or effect any such consent has been obtained.
Class: All Certificates whose form is identical except for variations in
Fractional Undivided Interest or Percentage Interest.
Class A Certificate: Any one of the Certificates executed by the Depositor
and authenticated by the Trustee in substantially the form set forth in Exhibit
A hereto.
Class A Certificateholder: The registered holder of a Class A Certificate.
Class A Distribution: On any Distribution Date, the amount required to be
distributed on such Distribution Date to the Class A Certificateholders, such
amount being equal to the lesser of (x) the Pool Distribution for the related
Distribution Date or (y) the sum of (i) one month's interest, less the Class A
Percentage of Deferred Interest, at the Pass-Through Rate on the Class A
Principal Balance (net of the Class A Percentage of the amount by which the
aggregate amount of interest otherwise payable on the prepaid Mortgage Loans by
adjustment of the Administration Fee exceeds the related aggregate
Administration Fee available for payment thereof as provided in Section 4.6
hereof), (ii) the outstanding balance in the Class A Interest Shortfall Account,
(iii) the Class A Percentage of each scheduled payment of principal payable on
the Mortgage Loans on the preceding Installment Due Date, (iv) the Class A
Prepayment Entitlement and (v) the Redirected Distribution Amount. In the
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event that clause (y) is greater than the amount computed pursuant to clause
(x), distributions shall be allocated first to the interest component of the
Class A Distribution calculated pursuant to clause (y)(i) of this definition;
second to any balance in the Class A Interest Shortfall Account in accordance
with clause (y)(ii) of this definition; and third to the principal component of
the Class A Distribution calculated pursuant to clauses (y)(iii)-(v) of this
definition. Payments of interest due with respect to the Certificates shall be
calculated based upon twelve 30-day months and a 360-day year.
Class A Interest Shortfall: On any Distribution Date, the excess, if any,
of the amount computed pursuant to clause (y)(i) of the definition of Class A
Distribution over the amount distributed to the Class A Certificateholders on
such Distribution Date.
Class A Interest Shortfall Account: A ledger account established on the
books of the Master Servicer to reflect any unpaid Class A Interest Shortfall
owed to the Class A Certificateholders [and accrued interest thereon at the
Pass-Through Rate]. The balance in such account will be decreased on each
Distribution Date by disbursements to the Class A Certificateholders of any
previously due Class A Interest Shortfalls and accrued interest thereon at the
Pass-Through Rate from the Distribution Date that said Class A Interest
Shortfall first accrued through such Distribution Date and increased on each
Distribution Date by any new Class A Interest Shortfall allocable to the Class A
Certificates and by accrued and unpaid interest on previously due and unpaid
Class A Interest Shortfalls at the Pass-Through Rate.
Class A Percentage: On any Distribution Date before giving effect to any
distribution on such Distribution Date, the fraction expressed as a percentage
(expressed as a decimal and carried to eight places rounded up) the numerator of
which is the Class A Principal Balance and the denominator of which is the Pool
Principal Balance.
Class A Prepayment Entitlement: On any Distribution Date, the difference
between the Principal Prepayments for such Distribution Date and the Class B
Prepayment Entitlement.
Class A Principal Balance: On any Distribution Date, the Original Class A
Principal Balance plus the Class A Percentage of Deferred Interest accrued since
the Cut-off Date less the sum of (A) all amounts previously distributed to
holders of Class A Certificates on previous Distribution Dates on account of
amounts described in clauses (y)(iii) - (y)(v) of the definition of Class A
Distribution, (B) if such Distribution Date is subsequent to the date on which
the Class B Principal Balance equals zero,
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the principal amount of the Bankruptcy Losses, Special Hazard Losses and Excess
Credit Losses since such date and (C) to the extent not covered by the Class B
Certificateholders pursuant to Section 4.2, Fraud Losses.
Class B Certificate: Any one of the Certificates executed by the Depositor
and authenticated by the Trustee in substantially the form set forth in Exhibit
B hereto.
Class B Certificateholder: The registered holder of a Class B Certificate.
Class B Distribution: On any Distribution Date, an amount equal to the
lesser of (x) the Pool Distribution for the related Distribution Date reduced by
any amounts required to be paid to the Class A Certificateholders on such
Distribution Date or (y) the sum of (i) one month's interest, less the Class B
Percentage of Deferred Interest, at the Pass-Through Rate on the Class B
Principal Balance (net of the Class B Percentage of the amount by which the
aggregate amount of interest otherwise payable on the prepaid Mortgage Loans by
adjustment of the Administration Fee exceeds the related aggregate
Administration Fee available for payment thereof as provided in Section 4.6
hereof), (ii) the outstanding balance in the Class B Interest Shortfall Account,
(iii) the Class B Percentage of each scheduled payment of principal payable on
the Mortgage Loans on the preceding Installment Due Date and (iv) the Class B
Prepayment Entitlement, provided that the Class B Distribution shall be limited
to an amount, which, after payment to the Class B Certificateholders, would not
reduce the Class B Principal Balance below the Minimum Required Class B
Principal Balance. In the event that clause (y) is greater than clause (x),
distributions shall be allocated first to the interest component of the Class B
Distribution calculated pursuant to clause (y)(i) of this definition; second to
any balance in the Class B Interest Shortfall Account in accordance with clause
(y)(ii) of this definition; and third to the principal component of the Class B
Distribution calculated pursuant to clause (y)(iii) and (y)(iv) of this
definition. The amount distributable pursuant to clause (x) of this definition
shall never be less than zero.
Class B Interest Shortfall: On any Distribution Date, the excess, if any,
of the amount computed pursuant to clause (y)(i) of the definition of Class B
Distribution over the amount distributed to the Class B Certificateholders with
respect to such clause on such Distribution Date.
Class B Interest Shortfall Account: A ledger account established on the
books of the Master Servicer to reflect any unpaid Class B Interest Shortfall
owed to the Class B Certificateholders. The balance in such account will be
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decreased on each Distribution Date by disbursements with respect to clause
(y)(ii) of the definition of Class B Distribution to the Class B
Certificateholders of any previously due Class B Interest Shortfalls and
interest otherwise distributable with respect to clause (y)(ii) of the
definition of Class B Distribution to the Class B Certificateholders but used
instead to cover Excess Credit Losses, Bankruptcy Losses, Special Hazard Losses
or Fraud Losses and increased on each Distribution Date by any new Class B
Interest Shortfall allocable to the Class B Certificates with respect to clause
(y)(ii) of the definition of Class B Distribution.
Class B Percentage: On any Distribution Date the difference between 100%
and the Class A Percentage.
Class B Prepayment Entitlement: Until the Class A Percentage is reduced to
____%, zero. On the Distribution Date on which the Class A Percentage decreases
to ____% after giving effect to the distribution to be made to the Class A
Certificateholders on such Distribution Date, any Principal Prepayments
available for distribution on such Distribution Date in excess of such amounts
necessary to decrease the Class A Percentage to less than ____% shall be
distributed to the Class B Certificateholders. After such Distribution Date and
on each Distribution Date thereafter, the Class B Prepayment Entitlement shall
be equal to the Class B Percentage multiplied by the Principal Prepayments on
such Distribution Date; provided, however, that on and prior to _______________,
199_, the Class B Prepayment Entitlement shall not exceed ____% of the Class B
Percentage of Principal Prepayments. However, notwithstanding the foregoing, if
(A) the mean aggregate principal amount of delinquent Mortgage Loans 60 days or
more delinquent (including loans in foreclosure and property held by the Trust
Fund) for each of the immediately preceding six calendar months exceeds ____% of
the then outstanding principal balance of the Mortgage Loans or [(B) the
weighted average Loan-to-Value Ratio of the Mortgage Loans exceeds ____% or] (C)
the sum of aggregate Realized Losses exceed ____% of the sum of the Class B
Principal Balance as of the Cut-off Date, then the Class B Prepayment
Entitlement for such Distribution Date will be zero.
Class B Principal Balance: On any Distribution Date the difference between
the Pool Principal Balance and Class A Principal Balance.
Class R Certificate: The Certificate executed by the Depositor and
authenticated by the Trustee in substantially the form set forth in Exhibit C
hereto.
Class R Certificateholder: The registered holder of the Class R
Certificate.
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Class R Distribution: On any Distribution Date, to the extent of amounts
remaining in the Certificate Account (exclusive of amounts received in advance
of the related Installment Due Date and being held for future distribution), an
amount equal to any gain realized on a Liquidated Mortgage Loan. Any amounts
remaining in the Certificate Account on the termination of the Trust and not
otherwise distributed shall be distributed to the Class R Certificateholder.
Closing Date: _____________, 199_.
Code: The Internal Revenue Code of 1986, as amended.
Co-op Loan: A Mortgage Loan secured principally by stock in a cooperative
corporation.
Corporate 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 the execution of this agreement is located at
________________________________.
Custodial Agreement: An agreement, if any, that may be entered into from
time to time among the Master Servicer, the Trustee and a Custodian providing
for the safekeeping of the Mortgage Files for the benefit of Certificateholders,
which agreement may be in such form and content as the Master Servicer, Trustee
and any such Custodian shall agree.
Custodian: An institution as may from time to time be appointed by the
Trustee as custodial agent or agents of the Trustee hereunder pursuant to a
Custodial Agreement or their respective successors in interest. The Custodian
may (but need not) be the Master Servicer, the Trustee or any Person directly or
indirectly controlling or controlled by or under common control with either of
them.
Cut-off Date: ____________, 1998.
Debt Service Reduction: The amount of the reduction of the Monthly Payment
on a Mortgage Loan established by a bankruptcy court in connection with the
personal bankruptcy of the related Mortgagor.
Defaulted Mortgage Loan: As of any Determination Date, any Mortgage Loan
for which any payment of principal of or interest on or in respect of such
Mortgage Loan is more than [89] days past due, or that is delinquent in respect
of its Balloon Payment, if any, determined without giving effect to any grace
period permitted by the related Mortgage or Mortgage Note or any other document
in the Mortgage File.
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[Deferred Interest: As to any Mortgage Loan, the excess, if any, of
interest accrued at its Mortgage Interest Rate for any month over the Monthly
Payment for such month.]
Deficient Valuation: The excess of the Principal Balance of the Mortgage
Loan over the value of the Mortgaged Property as established by a bankruptcy
court in connection with the personal bankruptcy of the mortgagor.
Denomination: The amount specified on a Certificate as representing the
aggregate Principal Balance of the Mortgage Loans as of the Cut-off Date
evidenced by such Certificate.
Depositor: ABN AMRO Mortgage Corporation, a Delaware corporation, or its
successors.
Determination Date: The 20th day (or if such 20th day is not a Business
Day, the Business Day immediately preceding such 20th day) of the month of the
related Distribution Date.
[Disqualified Organization: As identified in Section 5.2(g).]
Distribution Account: The trust account or accounts created and maintained
by the Master Servicer pursuant to Section 4.1, which shall be entitled
"______________, as Trustee, in trust for the benefit of the Holders of
_________________________", and which must be an Eligible Account.
Distribution Date: The 25th day of any month, or, if such 25th day is not
a Business Day, the Business Day immediately following such 25th day, commencing
_____________, 199__.
Due Date: means the date set forth on each Mortgage Note on which each
Monthly Payment with respect thereto is due.
Duff: means Duff & Xxxxxx Credit Rating Co.
Eligible Account: Any account or accounts held and established by the
Master Servicer or the Trustee in trust for the benefit of the
Certificateholders that is either (i) in the corporate trust department of a
bank or trust company incorporated under the laws of the United States or any
state thereof having appropriate trust powers or (ii) an account that is
maintained with a depository institution which has a rating assigned to its
long-term debt obligations of at least as high as the rating assigned to the
Class A Certificates on the Delivery Date or which has a rating assigned to its
short-term debt obligations of the highest rating of the Rating Agency for such
obligations or (iii) a bank or trust company incorporated under the laws of the
United States or any state thereof acceptable to
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the Rating Agency rating the Class A Certificates, and the amounts deposited
therein shall be held in the form of Permitted Investments or uninvested,
provided, however, that the Certificate Account may be maintained in a
depository institution with a long-term debt rating of at least the second
highest rating available by the Rating Agency.
Eligible Institution: A corporation or association: (i) organized and
doing business under the laws of any State or the United States of America,
authorized under such laws to exercise the powers required by it to perform its
obligations under this Agreement and (ii) the appointment of which under this
Agreement, the Master Servicer confirms with the Rating Agencies will not impair
the ratings on the Certificates.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
[Escrow Payment: Any payment received by the Master Servicer for the
account of any Mortgagor for application toward the payment of taxes, insurance
premiums, assessments and similar items in respect of the related Mortgaged
Property.]
Excess Credit Losses: Any losses on a related Mortgage Loan due to a
Mortgagor default in excess of the Mortgage Loan Policy Limit, other than a
Fraud Loss, Bankruptcy Loss or Special Hazard Loss.
FDIC: The Federal Deposit Insurance Corporation, or any successor thereto.
FHLMC: The Federal Home Loan Mortgage Corporation, or any successor
thereto.
Fitch: Fitch Investors Service, Inc., or any successor thereto.
First Installment Adjustment Date: The date of the first adjustment of a
Monthly Payment with respect to a Mortgage Loan as set forth on the related
Mortgage Note.
FNMA: The Federal National Mortgage Association, or any successor thereto.
Fractional Undivided Interest: For any Certificate, the Denomination shown
on such Certificate divided by the aggregate Principal Balance of the Mortgage
Loans included in the Trust Fund on the Cut-off Date.
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Fraud Loss: Any Realized Loss incurred by reason of default arising from
fraud, dishonesty or misrepresentation in connection with the origination of the
related Mortgage Loan.
Fraud Loss Limit: An aggregate amount which will not be less than the
following percentages of the aggregate outstanding Principal Balances of all
Mortgage Loans as of the Cut-Off Date: 2% in the first Series Year and 1% in
each of the second, third, fourth and fifth Series Years or (ii) such lesser
amount if the Master Servicer confirms with the Rating Agencies that such lesser
amount will not impair the ratings on the Certificates.
Gross Margin: As to each Mortgage Loan, the fixed percentage set forth in
the related Mortgage Note and in the Mortgage Loan Schedule as the "Gross
Margin," which percentage is added to the Index on each rate adjustment date set
forth in the related Mortgage Note to determine (subject to rounding and any
periodic rate increase or decrease limitations and any Lifetime Mortgage Rate
Cap) the Mortgage Interest Rate on such Mortgage Loan until the next such rate
adjustment date.
Imputed Principal Balance Decline: With respect to any Mortgage Loan which
is the subject of a Debt Service Reduction, the excess of the outstanding unpaid
principal balance of such Mortgage Loan as of the date of such Debt Service
Reduction before giving effect to such Debt Service Reduction over the
discounted present value of the scheduled payments on such Mortgage Loan as
adjusted to reflect such Debt Service Reduction using a discount rate equal to
the Mortgage Rate in effect on such Mortgage Loan immediately before the
effective date of such Debt Service Reduction.
Independent: When used with respect to any specified Person, any such
Person who (i) is in fact independent of the Depositor and the Master Servicer,
(ii) does not have any direct financial interest or any material indirect
financial interest in the Depositor or the Master Servicer or in an affiliate of
either and (iii) is not connected with the Depositor or the Master Servicer as
an officer, employee, promoter, underwriter, trustee, partner, director or
person performing similar functions.
Index: As to any Mortgage Loan, the applicable index to be used in
computing the Mortgage Interest Rate payable on the related Mortgage Note, which
shall be [define Index].
Installment Due Date: The first day of the month in which the related
Distribution Date occurs.
Insurance Proceeds: Proceeds of any fire and hazard insurance policy,
title policy or other insurance policy relating to a Mortgage Loan, to the
extent such proceeds are not to be
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applied to the restoration of the related Mortgaged Property or released to the
Mortgagor in accordance with the express requirements of the Mortgage or
Mortgage Note or other documents included in the Mortgage File or in accordance
with prudent and customary servicing practices.
Interested Person: The Depositor, the Master Servicer, [the Back-Up
Servicer,] any Holder of a Certificate, or any Affiliate of any such Person.
[Letter of Credit: A standby Letter of Credit issued by [Name of letter of
credit bank] (the "L/C Bank") and maintained by the Master Servicer to cover
certain payments to the Certificate Account for Mortgage Loans with respect to
which foreclosure proceedings have been commenced or with respect to which the
Master Servicer has agreed to accept a deed to the property in lieu of
foreclosure, substantially in the form of Exhibit G hereto.]
[Limited Mortgage Documentation: means ___________________.]
Liquidated Mortgage Loan: Any defaulted Mortgage Loan as to which the
Master Servicer has determined that all amounts which it expects to recover from
or on account of such Mortgage Loan have been recovered.
Liquidation Expenses: Expenses incurred by the Master 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 Master Servicer pursuant to
Section 3.7 respecting the related Mortgage Loan and any unreimbursed
expenditures for real property taxes or for property restoration or preservation
relating to the Mortgaged Property that secured such Mortgage Loan.
Liquidation Proceeds: Amounts received by the Master Servicer in
connection with the liquidation of defaulted Mortgage Loans or property acquired
in respect thereof, whether through trustee's sale, foreclosure sale or
otherwise, 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: As of the origination date (or in the case of Section
3.5, as of each Determination Date [and for the purpose of the definition of
Class B Prepayment Entitlement]), the fraction, expressed as a percentage, the
numerator of which is the then unpaid principal balance of a particular Mortgage
Loan and the denominator of which is, for refinanced Mortgage Loans, the
appraised value of the property at the time of such refinancing, and as to all
other Mortgage Loans, the lower of the
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appraised value of the Mortgaged Property as determined at the origination of
the Mortgage Loan or its sale price.
[Master Servicer: ___________________ [and ________________, individually
and collectively], or any successor master servicer appointed as provided
herein.]
Maximum Adjustment: As to each Mortgage Loan, the percentage set forth in
the related Mortgage Note as the maximum amount by which Mortgage Interest Rate
applicable to such Mortgage Note may adjust for any single applicable period
borne by such Mortgage Loan.
Maximum Rate: As to each Mortgage Loan, the percentage set forth in the
related Mortgage Note as the maximum interest rate at which such Mortgage Note
may bear interest.
MERS: Mortgage Electronic Registry System developed and supervised by
Mortgage Registration Systems, Inc.
Minimum Rate: As to each Mortgage Loan, the percentage set forth in the
related Mortgage Note as the minimum rate at which such Mortgage Note may bear
interest.
Minimum Required Class B Principal Balance: As of any Distribution Date
following all distributions required to be made on such date, the lesser of (a)
the greatest of (i) 1% of the Pool Principal Balance as of such Distribution
Date, (ii) two times the then largest outstanding principal balance of any
Mortgage Loan and (iii) the aggregate amount of the outstanding principal
balances of the Mortgage Loans secured by Mortgaged Properties located in the
zip code area which, of all zip code areas, has the highest aggregate amount of
outstanding principal balances of Mortgage Loans and (b) the Class B Principal
Balance as of the immediately preceding Distribution Date, less Special Hazard
Losses and Fraud Losses (to the extent covered pursuant to Section 4.2) during
the related Prepayment Period.
Monthly Payment: The scheduled monthly principal and interest payment on a
Mortgage Loan for any month (which interest may be less than the interest
accruing thereon for such month). Monthly Payments shall be deemed to include
payments or Advances made in respect of any Mortgage Loan as to which the
Mortgaged Property securing such Mortgage Loan has been acquired by the Master
Servicer on behalf of the Trust Fund and that portion of the proceeds of
prepayments in full, repurchases and other liquidations equal to delinquent
Monthly Payments at the time of such prepayment, repurchase or other
liquidation.
Moody's: Xxxxx'x Investors Service, Inc., or any successor thereto.
12
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note.
[Mortgage Asset Seller:]
Mortgage File: The mortgage documents listed in Section 2.1 pertaining to
a particular Mortgage Loan and any additional documents required to be added to
the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: The per annum rate of interest for the applicable
period borne by a Mortgage Loan determined at any time in accordance with the
terms of each related Mortgage Note.
Mortgage Loan Policy Limit: With respect to any Mortgage Loan, ____% of
the principal balance of such Mortgage Loan as of the Cut-off Date plus Deferred
Interest.
Mortgage Loan Schedule: The schedule of Mortgage Loans attached hereto as
Exhibit D, such schedule setting forth the following information as to each
Mortgage Loan: (i) the Mortgage Loan identifying number; (ii) the Mortgagor's
name; (iii) the street address of the Mortgaged Property including the zip code;
(iv) the type of property constituting the Mortgaged Property; (v) the original
number of months to maturity; (vi) the current Mortgage Interest Rate; (vii) the
applicable Index; (viii) the initial Mortgage Interest Rate; (ix) the scheduled
Monthly Payment due date currently in effect; (x) the amount of the current
Monthly Payment; (xi) the original principal amount of the Mortgage Loan; (xii)
the Principal Balance of the Mortgage Loan as of the close of business on the
Cut-off Date, after deduction of payments of principal due on or before the Cut-
off Date whether or not collected; (xiii) the date of its first scheduled
Monthly Payment; (xiv) its Maximum Rate; (xv) its Maximum Adjustment; (xvi) its
Gross Margin; (xvii) its next Installment Adjustment Date; (xviii) its Loan-to-
Value Ratio; and (xix) whether the Mortgage Loan can be converted by the
borrower into a fixed rate loan.
Mortgage Loans: Such of the mortgage loans (which may include Co-op
Loans], excluding the Retained Yield, transferred and assigned to the Trustee
pursuant to Section 2.1 or 2.2 as from time to time are included in the Trust
Fund, the Mortgage Loans originally so included being identified in Exhibit D
hereto.
Mortgage Note: The note, including any modification thereto, or other
evidence of indebtedness evidencing the indebtedness of a Mortgagor under a
Mortgage Loan.
13
Mortgage Pass-Through Rate: For each Mortgage Loan on each Distribution
Date, an amount equal to the Mortgage Interest Rate for the related Mortgage
Loan less the sum of (i) the Administration Fee and (ii) the Retained Yield.
Mortgaged Property: The property securing a Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
Net Margin: An amount equal to ____%.
Nonrecoverable Advance: Any Advance as to which the Master Servicer has
not been fully reimbursed following final liquidation of the related Mortgage
Loan or Mortgaged Property.
Officer's Certificate: With respect to any Person, a certificate signed
both by the Chairman of the Board, the President or a Vice President, and by the
Treasurer, the Secretary or one of the Assistant Treasurers or Assistant
Secretaries of such Person (or, in the case of a Person which is not a
corporation, signed by the person or persons having like responsibilities), and
delivered to the Trustee.
Opinion of Counsel: A written opinion of counsel, who may be outside or
salaried counsel for the Depositor or the Master Servicer, or any affiliate of
the Depositor or the Master Servicer, acceptable to the Trustee; [provided that
with respect to REMIC matters, matters relating to the determination of Eligible
Accounts or matters relating to transfers of Certificates, such counsel shall be
Independent.]
Original Class A Principal Balance: $__________.
Original Class B Principal Balance: $__________.
OTS: The Office of Thrift Supervision, or any successor thereto.
Pass-Through Rate: Initially ____%. Thereafter, an adjustable amount
which is equal to the weighted average of the Mortgage Pass-Through Rates on the
Mortgage Loans. Any regular calculation of interest at such rate shall be based
upon annual interest at such rate divided by twelve on the Pool Principal
Balance.
[Paying Agent: As defined in Section 4.10.]
Payment Cap: The size of the increase or decrease in monthly payments for
any year as specified on the related Mortgage Loan.
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Percentage Interest: The percentage or fractional interest representing
the Denomination of any Certificate divided by the aggregate Denominations of
the related Certificates or any Class of Certificates.
Permitted Investments: Any one or more of the following obligations or
securities payable on demand or having a scheduled maturity on or before the
Business Day preceding the following Service Remittance Date, regardless of
whether issued by the Depositor, the Master Service, the Trustee or any of their
respective Affiliates and having at the time of purchase, or at such other time
as may be specified, the required ratings, if any, provided for in this
definition:
(a) direct obligations of, or guaranteed as to full and timely payment of
principal and interest by, the United States or any agency or instrumentality
thereof provided that such obligations are backed by the full faith and credit
of the United States of America;
(b) direct obligations of, or guaranteed as to timely payment of principal
and interest by, FHLMC, FNMA or the Federal Farm Credit System, provided that
any such obligation, at the time or purchase or contractual commitment providing
for the purchase thereof, is qualified by each Rating Agency as an investment of
funds backing securities rated "Aaa" in the case of Moody's and "AAA" in the
case of S&P and [Fitch] [Duff] (the initial rating of the Class A Certificates);
(c) demand and time deposits in or certificates of deposit of, or bankers'
acceptances issued by, any bank or trust company, savings and loan association
or savings bank, provided that the short-term deposit ratings and/or long-term
unsecured debt obligations of such depository institution or trust company (or
in the case of the principal depository institutions in a holding company
system, the commercial paper or long-term unsecured debt obligations of such
holding company) have, in the case of commercial paper, the highest rating
available for such securities by each Rating Agency and, in the case of long-
term unsecured debt obligations, one of the two highest ratings available for
such securities by each Rating Agency, or in each case such lower rating as will
not result in the downgrading or withdrawal of the rating or ratings then
assigned to any Class of Certificates by any Rating Agency but in no event less
than the initial rating of the Class [] Certificates;
(d) general obligations of or obligations guaranteed by any state of the
United States or the District of Columbia receiving one of the two highest long-
term debt ratings available for such securities by each Rating Agency, or such
lower rating as will not result in the downgrading or withdrawal of the rating
or
15
ratings then assigned to any Class of Certificates by any Rating Agency;
(e) commercial or finance company paper (including both non-interest-
bearing discount obligations and interest-bearing obligations payable on demand
or on a specified date not more than one year after the date of issuance
thereof) that is rated by each Rating Agency in its highest short-term unsecured
rating category at the time of such investment or contractual commitment
providing for such investment, and is issued by a corporation the outstanding
senior long-term debt obligations of which are then rated by each Rating Agency
in one of its two highest long-term unsecured rating categories, or such lower
rating as will not result in the downgrading or withdrawal of the rating or
ratings then assigned to any Class of Certificates by any Rating Agency but in
no event less than the initial rating of the Class [] Certificates;
(f) guaranteed reinvestment agreements issued by any bank, insurance
company or other corporation rated in one of the two highest rating levels
available to such issuers by each Rating Agency at the time of such investment,
provided that any such agreement must by its term provide that it is terminable
by the purchaser without penalty in the event any such rating is at any time
lower than such level;
(g) repurchase obligations with respect to any security described in clause
(a) or (b) above entered into with a depository institution or trust company
(acting as principal) meeting the rating standards described in (c) above;
(h) securities bearing interest or sold at a discount that are issued by
any corporation incorporated under the laws of the United States of America or
any State thereof and rated by each Rating Agency in one of its two highest
long-term unsecured rating categories at the time of such investment or
contractual commitment providing for such investment; provided, however, that
securities issued by any such corporation will not be Permitted Investments to
the extent that investment therein would cause the outstanding principal amount
of securities issued by such corporation that are then held as part of the
Certificate Account or the Distribution Account to exceed 20% of the aggregate
principal amount of all Permitted Investments then held in the Certificate
Account and the Distribution Account;
(i) units of taxable money market funds 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 Permitted Investments with respect to this
definition;
16
(j) if previously confirmed in writing to the Trustee, any other demand,
money market or time deposit, or any other obligation, security or investment,
as may be acceptable to each Rating Agency as a permitted investment of funds
backing securities having ratings equivalent to the initial rating of the Class
A Certificates; and
(k) such other obligations as are acceptable as Permitted Investment to
each Rating Agency;
provided, however, that such instrument continues to qualify as a "cash flow
investment" pursuant to Code Section 860G(a)(6) and that no instrument or
security shall be a Permitted Investment if (i) such instrument or security
evidences a right to receive only interest payments or (ii) the right to receive
principal and interest payments derived from the underlying investment provides
a yield to maturity in excess of 120% of the yield to maturity at par of such
underlying investment.
Person: Any individual, corporation, partnership, association, joint
venture, bank, joint-stock company, trust, unincorporated organization or a
government or any agency or political subdivision thereof.
Plan Entity: As defined in Section 5.2(d).
Pool Distribution: On any Distribution Date, an amount equal to all
previously undistributed Pool Receipts received by the Master Servicer and due
after the Cut-off Date, or received prior to the Cut-off Date but due
thereafter, and before the related Determination Date except:
(a) amounts received on particular Mortgage Loans as late payments or other
recoveries of principal or interest (including Liquidation Proceeds and
insurance proceeds) and respecting which the Master Servicer previously made an
unreimbursed Advance of such amounts;
(b) amounts representing reimbursement for Nonrecoverable Advances and
amounts representing reimbursement for certain losses and expenses incurred by
the Master Servicer and described herein;
(c) that portion of each Mortgagor payment of interest on a particular
Mortgage Loan in excess of interest at the Mortgage Pass-Through Rate on the
Principal Balance of such Mortgage Loan outstanding during the period for which
such payment was received, as adjusted as provided in Section 4.6 herein
respecting Principal Prepayments;
17
(d) all amounts representing scheduled payments of principal and interest
due after the immediately preceding Installment Due Date;
(e) all Principal Prepayments (including Liquidation Proceeds and
Repurchase Proceeds) with respect to Mortgage Loans received after the related
Prepayment Period and all related payments of interest representing interest for
any period of time after the last day of the related Prepayment Period for such
Mortgage Loans;
(f) where permitted by this Agreement, that portion of Liquidation Proceeds
which represents unpaid Administration Fees to which the Master Servicer is
entitled; and
(g) any other amounts not included in the Pool Distribution in accordance
with this Agreement.
Pool Principal Balance: As to any Distribution Date, the aggregate of the
Principal Balances of the Mortgage Loans outstanding on such Distribution Date
before giving effect to any distributions made on such date. A foreclosed
Mortgage Loan is deemed to be outstanding for purposes of this definition until
it becomes a Liquidated Mortgage Loan and a Mortgage Loan which is prepaid in
full is deemed to be outstanding until the amount of the prepayment is
distributed to Certificateholders.
Pool Receipts: As of any Determination Date, all payments or other
receipts on account of principal and interest on the Mortgage Loans or property
acquired in respect thereof due after the Cut-off Date, including, but not
limited to, Advances and Principal Prepayments, if any, but excluding amounts in
respect of the Retained Yield.
Prepayment Period: With respect to any Distribution Date, the month
preceding the month in which such Distribution Date occurs.
Prepayment Premium: With respect to any Mortgage Loan, any premium, fee,
charge or penalty paid by the related Borrower in connection with any Principal
Prepayment.
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), reduced by all amounts distributed to
Certificateholders and allocable to principal of such Mortgage Loan, including
Advances made with respect to such Mortgage Loan and Realized Losses incurred
with respect thereto, and increased by any Deferred Interest added thereto.
18
Principal Prepayment: Any Mortgagor payment or other recovery of principal
on a Mortgage Loan which is received in advance of its scheduled due date and
not accompanied by an amount representing scheduled interest for the full month
during which such prepayment is received (unless paid on the last day of the
month) or any month thereafter, including, without limitation, principal
prepayments in part, principal prepayments in full, scheduled principal balances
of Mortgage Loans liquidated due to default, casualty, condemnation and the
like, Repurchase Proceeds, insurance proceeds and other unscheduled recoveries
of principal on Mortgage Loans during the related Prepayment Period, but
excluding that portion of any prepayment received from the Mortgagor which
constitutes the principal component of any Monthly Payment currently due at the
time of the receipt of such prepayment.
Rate Adjustment Date: As to any Mortgage Loan, the date specified in the
related Mortgage Note as the date on which the Mortgage Interest Rate is subject
to adjustment based on a change in the related Index.
Rating Agency: [Xxxxx'x] [S&P] [Fitch] [Duff] and any other nationally
recognized statistical rating organization that has rated the Class A
Certificates at the request of the Depositor, or each of such organizations if
more than one.
Realized Loss: With respect to any Mortgage Loan other than a Repurchased
Mortgage Loan or a Mortgage Loan subject to a Bankruptcy Loss, the Principal
Balance of such Mortgage Loan and accrued interest thereon remaining unpaid at
the time such Mortgage Loan becomes a Liquidated Mortgage Loan after the
application of any Liquidation Proceeds net of Liquidation Expenses against such
Principal Balance and accrued interest; with respect to a Mortgage Loan subject
to a Bankruptcy Loss, if the Mortgage Loan becomes subject to a Debt Service
Reduction, an amount equal to the Imputed Principal Balance Decline related to
such Debt Service Reduction or the Deficient Valuation, otherwise, and, in each
case, the accrued interest thereon remaining unpaid at the time such Mortgage
Loan becomes subject to a Bankruptcy Loss. The Principal Balance of each
Mortgage Loan shall be reduced, but not more than once for the same amount of
Realized Loss, by the amount of any Realized Loss on such Mortgage Loan. For
purposes of this definition, acquisition of a Mortgaged Property by the Trust
Fund shall not constitute final liquidation of the related Mortgage Loan. The
Master Servicer shall advise the Trustee in an Officer's Certificate of the
amount of any Realized Loss and the particulars of the related final liquidation
or adjustment on account of a Bankruptcy Loss on a Mortgage Loan by Mortgage
Loan basis. Realized Losses incurred during any Prepayment Period shall be
applied to reduce
19
the Pool Principal Balance applicable to the related Distribution Date.
Record Date: The last Business Day of the month preceding the month of the
related Distribution Date.
Redirected Distribution Amount: As to any Distribution Date, prior to
giving effect to any amounts distributable to Class B Certificateholders on such
Distribution Date, with respect to which the Class B Principal Balance is less
than or equal to the Minimum Required Class B Principal Balance, the Redirected
Distribution Amount shall be equal to the amount otherwise distributable to
holders of the Class B Certificates as Class B Distribution on such Distribution
Date in excess of the sum of clauses (y)(i) and (y)(ii) under the definition of
Class B Distribution for such Distribution Date. As to any Distribution Date
with respect to which the Class B Principal Balance is greater than the Minimum
Required Class B Principal Balance, the Redirected Distribution Amount shall be
an amount equal to the excess, if any, of (A) the amount, if any, otherwise
distributable to holders of the Class B Certificates on such Distribution Date
in excess of the sum of clauses (y)(i) and (y)(ii) under the definition of the
Class B Distribution for such Distribution Date, over (B) the amount of the
difference between the Class B Principal Balance on such Distribution Date and
the Minimum Required Class B Principal Balance.
Regular Interest: As defined in Section 2.4.
[REMIC: A real estate mortgage investment conduit, as such term is defined
in the Code.]
[REMIC Provisions: Section 860A through 860G of the Code, related Code
provisions and regulations promulgated thereunder, as the foregoing may be in
effect from time to time and analogous provisions in any applicable
jurisdiction.]
REO Property: A Mortgaged Property, title to which has been acquired by
the Master Servicer on behalf of the Trust Fund through foreclosure, deed in
lieu of foreclosure or otherwise.
Repurchase Price: With respect to any Mortgage Loan to be purchased or
repurchased pursuant to Section 2.2 or Section 2.3, or any Defaulted Mortgage
Loan or any Mortgage Loan related to an REO Property to be sold or repurchased
pursuant to Section 3.15, an amount, calculated by the Master Servicer, equal
to:
(a) the unpaid principal balance of such Mortgage Loan as of the Due Date
as to which a payment was last made by the Mortgagor; plus
20
(b) unpaid accrued interest from the Due Date as to which interest was last
paid by the Mortgagor up to the Due Date in the month following the month in
which the purchase or repurchase occurred at a rate equal to the Mortgage
Interest Rate applicable from time to time on the unpaid principal balance of
such Mortgage Loan; plus
[(c) any unpaid Administration Fees allocable to such Mortgage Loan; plus]
(d) expenses reasonably incurred or to be incurred by the Master Servicer
or the Trustee in respect of the breach or defect giving rise to the repurchase
obligations, including any expenses arising out of the enforcement of the
repurchase obligation.
Repurchase Proceeds: All proceeds of any Repurchased Mortgage Loans.
Repurchased Mortgage Loan: Any Mortgage Loan or property acquired in
respect thereof repurchased by the Depositor pursuant to Section 2.2 [, Section
3.6] or Section 2.3 or purchased by the Class R Certificateholder pursuant to
Section 9.1.
[Reserve Fund: A separate account which shall be an Eligible Account
established by the Depositor with an initial deposit of cash in the amount of
$____________ which may be used by the Master Servicer to make Advances and to
make any other distributions required hereby.]
Residual Certificate: The Class R Certificate designated as the single
class of "residual interest" pursuant to Section 2.4 and evidencing such rights
and obligations as are set forth herein.
Responsible Officer: When used with respect to the Trustee, the Chairman
or Vice-Chairman of the Board of Directors or Trustees, the Chairman or Vice-
Chairman of the Executive or Standing Committee of the Board of Directors or
Trustees, the President, the Chairman of the Committee on Trust Matters, any
Vice-President, any Assistant Vice President, the Secretary, any Assistant
Secretary, the Treasurer, any Assistant Treasurer, the Cashier, any Assistant
Cashier, any Trust Officer or Assistant Trust Officer, the Controller and any
Assistant Controller or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above-designated officers and
also, with respect to a particular matter, any other officer to whom such matter
is referred because of such officer's knowledge of and familiarity with the
particular subject. When used with respect to the Master Servicer, the Chairman
or Vice-Chairman of the Board of Directors or Trustees, the Chairman or Vice-
Chairman of the Executive or Standing Committee of the Board
21
of Directors or Trustees, the President, any Vice-President, the Secretary, any
Assistant Secretary, the Treasurer, any Assistant Treasurer, the Controller and
any Assistant Controller or any other officer of the Master Servicer customarily
performing functions similar to those performed by any of the above-designated
officers and also, with respect to a particular matter, any other officer to
whom such matter is referred because of such officer's knowledge of and
familiarity with the particular subject. When used with respect to the
Depositor, the Chairman or Vice-Chairman of the Board of Directors, the Chairman
or Vice-Chairman of any executive committee of the Board of Directors, the
President, any Vice-President, the Secretary, any Assistant Secretary, the
Treasurer, any Assistant Treasurer, or any other officer of the Depositor
customarily performing functions similar to those performed by any of the above-
designated officers and also, with respect to a particular matter, any other
officer to whom such matter is referred because of such officer's knowledge of
and familiarity with the particular subject.
[Retained Yield: As to each Mortgage Loan, the fixed amount of interest
retained by the Depositor as identified on the Mortgage Loan Schedule, such
amount being equal to the difference between the (i) Gross Margin for such
Mortgage Loan and (ii) the sum of the Net Margin and the Administration Fee. The
Retained Yield is not a part of the Trust Fund. Nothing in this Agreement shall
prevent the Depositor from transferring the Retained Yield.]
S&P: Standard & Poor's Ratings Group, or any successor thereto.
SAIF: Savings Association Insurance Fund administered by the FDIC, or any
successor thereto.
Securities Act: The Securities Act of 1933, as amended.
Series Year: Commencing with the Cut-Off Date, each year (seriatim in
ascending chronological order) beginning on such date and ending on the date one
calendar year following such date.
Servicing Officer: Any individual involved in, or responsible for, the
administration and servicing of the Mortgage Loans whose name and specimen
signature appear on a list of servicing officers furnished to the Trustee on the
Closing Date by the Master Servicer in the form of an Officer's Certificate, as
such list may from time to time be amended.
Single Certificate: A Certificate that evidences the smallest permissible
Denomination, such smallest Denomination
22
being $__________ and integral multiples of $__________ with respect to the
Class A Certificates and $__________ and integral multiples of $__________ in
excess of $__________ with respect to the Class B Certificates. With respect to
each class of Certificates, there may be one odd denomination Certificate.
[Special Hazard Insurance Policy: An insurance policy issued by [name of
Insurer] and maintained by the Master Servicer covering losses on Mortgaged
Property that result from certain physical risks that are not otherwise insured
against (including earthquakes and mudflows), substantially in the form of
Exhibit F hereto.]
Special Hazard Losses: Any Realized Loss incurred as a result of direct
physical loss to a Mortgaged Property (including earthquakes, floods, tidal
waves and related water damage, war, civil insurrection, certain governmental
action, errors in design, faulty workmanship or materials, nuclear reaction and
chemical reaction), exclusive of (i) any such loss covered by an insurance
policy and (ii) any loss caused by or resulting from reasonable wear and tear.
Special Hazard Loss Limit: As of each Anniversary, an aggregate amount
equal to the greater of (i) [1%] of the aggregate outstanding Principal Balances
of all Mortgage Loans on such Anniversary and (ii) the largest percentage
obtained by dividing the aggregate outstanding Principal Balances on such
Anniversary of the Mortgage Loans secured by Mortgaged Properties located in a
single, five-digit zip code area in the State of [California] by the outstanding
Principal Balance of all the Mortgage Loans on such Anniversary, multiplied by
the aggregate outstanding Principal Balances of all Mortgage Loans on such
Anniversary.
Special Servicer: ___________, or any sucessor special servicer appointed
pursuant to the Special Servicing Agreement.
Special Servicing Agreement: The agreement dated as of __________ entered
into between ____________ and ___________.
Substitute Mortgage Loan: A Mortgage Loan which is substituted for a
Repurchased Mortgage Loan pursuant to Section 2.2 or 2.3.
Tax Matters Person: The Person designated as the "tax matters person" of
the Trust Fund pursuant to Section 4.8 of this Agreement, [in the manner
provided under Treasury regulation section 1.860F-4(d) and temporary Treasury
regulation section 301.6231(a)(7)-1T, which Person shall hold a 0.001%
Percentage Interest (the "Tax Matters Person Residual Interest") in the Class R
Certificates].
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Trust Fund: The corpus of the trust created by this Agreement, consisting
of the Mortgage Loans (exclusive of the Retained Yield, if any, for each such
Mortgage Loan), such amounts as shall from time to time be held in the
Certificate Account, the Distribution Account, the Pre-Funding Account, the
insurance policies, if any, relating to each Mortgage Loan and property which
secured a Mortgage Loan and which has been acquired by foreclosure or deed in
lieu of foreclosure.
Trustee: _______________, a [national banking association], or any
successor trustee appointed as herein provided.
All references to the origination date or original date in the Mortgage
Loan Schedule with respect to a Mortgage Loan shall refer to the date upon which
the related Mortgage Note was originated or modified, whichever is later.
ARTICLE II
CONVEYANCE OF TRUST FUND;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.1. Conveyance of Trust Fund. The Depositor, concurrently with
the execution and delivery hereof, does hereby irrevocably sell, convey and
assign to the Trustee for the benefit of the Certificateholders without recourse
all the right, title and interest of the Depositor in and to the Trust Fund,
including all interest and principal received by the Depositor with respect to
the Mortgage Loans after the Cut-off Date (and including without limitation
scheduled payments of principal and interest due after the Cut-off Date but
received by the Depositor on or before the Cut-off Date, but not including
payments of principal and interest due on the Mortgage Loans on or before the
Cut-off Date). The Depositor, at its own expense, shall file or cause to be
filed protective Form UCC-1 financing statements with respect to the Mortgage
Loans in the State of ______________ or other applicable jurisdiction, listing
itself as "Debtor" under such financing statement and listing the Trustee, for
the benefit of the Certificateholders, as "Secured Party" under such financing
statement.
In connection with such assignment, the Depositor does hereby deliver to,
and deposit with, the Trustee for the benefit of the Certificateholders the
following documents or instruments with respect to each Mortgage Loan so
assigned [unless otherwise in compliance with MERS]:
(i) the original Mortgage Note, endorsed (which endorsement may be by
facsimile or signature stamp) without recourse to the order of the Trustee
for the benefit of the
24
Certificateholders in the following form: "Pay to the order of
_______________________________ as Trustee (for the Benefit of the
Certificateholders) under the Pooling and Servicing Agreement dated as of
____________, 199_ for ABN AMRO Mortgage Corporation Mortgage Pass-Through
Certificates, Series 199_-_, without recourse";
(ii) a recorded assignment to the Trustee for the benefit of the
Certificateholders of the Mortgage, except that no such assignment shall be
required to be recorded with respect to any Mortgage Loan secured by
Mortgaged Property located in any state in which, as evidenced by an
Opinion of Counsel, who is Independent and admitted to practice law in the
state in which such Mortgaged Property is located, which opinion shall be
acceptable to the Trustee, to the effect that such recording is not
required to protect the Trustee's interest in the Mortgage Loan against any
other transferee or creditor of the Depositor. If permitted by law,
assignments, whether or not recorded, may be in the form of one or more
blanket assignments covering Mortgages secured by Mortgaged Properties in
the same county, in which case one original assignment will be delivered
for each county for which there is a blanket assignment and copies of such
assignments will be in each applicable Mortgage File and delivered at the
time of delivery of such Mortgages;
(iii) the original Mortgage with evidence of recording indicated
thereon, unless it is the custom of the relevant recording office to retain
the original Mortgage on record, in which case a copy of such Mortgage
certified by the recording office as a true copy shall be delivered;
(iv) originals of all assumption, modification and substitution
agreements in those instances where the terms or provisions of the Mortgage
or Mortgage Note have been modified or the Mortgage or Mortgage Note have
been assumed as noted in the Mortgage Loan Schedule;
(v) either the original title insurance policy or an Officer's
Certificate to the effect that a lender's title insurance policy [with a
negative amortization rider] was issued on the date of the origination of
each Mortgage Loan identified in the Mortgage Loan Schedule and each such
policy is in full force and effect; and
(vi) the paid commitment and the first lien letter.
If the Depositor cannot deliver the original Mortgage with evidence of recording
thereon concurrently with the execution and delivery of this Agreement because
of a delay caused by the
25
public recording office where such original Mortgage has been delivered for
recordation, the Depositor shall deliver to the Trustee an Officer's
Certificate, with a photocopy of such Mortgage attached thereto, stating that
such original Mortgage has been delivered to the appropriate public recording
official for recordation. The Depositor shall promptly deliver to the Trustee
such original Mortgage with evidence of recording indicated thereon upon receipt
thereof from the public recording official.
The Depositor shall, at its own expense, promptly record or cause to be
recorded in the appropriate public real property or other records each
assignment referred to in Section 2.1(ii), unless the Depositor delivers to the
Trustee an Independent opinion of counsel admitted to practice law in the state
in which such Mortgaged Property is located to the effect that such recordation
is not necessary to secure the interest in the related Mortgaged Properties
against any other transferee or creditor of the Depositor, in which case such
assignments shall be delivered to the Trustee for the benefit of the
Certificateholders in recordable form. If the Depositor cannot deliver the
original assignment concurrently with the execution and delivery of this
Agreement solely because it is in the process of being prepared and recorded or
because of a delay caused by the public recording office where such original
assignment has been delivered for recordation, the Depositor shall deliver a
blanket Officer's Certificate covering all such assignments stating that such
original assignment is in the process of being prepared and recorded or it has
been delivered to the appropriate public recording official for recordation and
a photocopy of such assignment. Any such original recorded assignment shall be
delivered to the Trustee within 180 days following the execution of this
Agreement.
If the Depositor cannot deliver the original title insurance policy
concurrently with the execution and delivery of this Agreement, the Depositor
shall, promptly deliver each such original title insurance policy as soon as
such policy becomes available but in no event later than 120 days following the
execution of this Agreement.
All rights arising out of Mortgage Loans including, without limitation, all
funds received on or in connection with a Mortgage Loan shall be held by the
Depositor in trust for the benefit of the Certificateholders. The Depositor
shall maintain a complete set of books and records for each Mortgage Loan which
shall be clearly marked to reflect the ownership of each Mortgage Loan by the
Certificateholders.
It is the express intent of this Agreement that the conveyance of the
Mortgage Loans by the Depositor to the Trustee
26
as provided in this Section 2.1 be, and be construed as, a sale of the Mortgage
Loans by the Depositor to the Trustee and that the sale of the Certificates to
the Certificateholders, if they are sold, be, and be construed as, a sale of a
100% interest in the Mortgage Loans and the Trust Fund to such
Certificateholders. It is, further, not the intention of this Agreement that
such conveyance be deemed a pledge of the Mortgage Loans by the Depositor to the
Trustee to secure a debt or other obligation of the Depositor. However, in the
event that, notwithstanding the intent of this Agreement, the Mortgage Loans are
held to be property of the Depositor, or if for any other reason this Agreement
is held or deemed to create a security interest in the Mortgage Loans, then (a)
this Agreement shall also be deemed to be a security agreement within the
meaning of Divisions 8 and 9 of the [applicable] Uniform Commercial Code; (b)
the conveyance provided for in this Section 2.1 shall be deemed to be a grant by
the Depositor to the Trustee for the benefit of the Certificateholders of a
security interest in all of the Depositor's right, title and interest in and to
the Mortgage Loans and all amounts payable to the holders of the Mortgage Loans
in accordance with the terms thereof and all proceeds of the conversion,
voluntary or involuntary, of the foregoing into cash, instruments, securities or
other property, including without limitation all amounts, other than investment
earnings, from time to time held or invested in the Certificate Account or the
Distribution Account, whether in the form of cash, instruments, securities or
other property; (c) the possession by the Trustee or any Custodian of Mortgage
Notes and such other items of property as constitute instruments, money,
negotiable documents or chattel paper shall be deemed to be "in possession by
the secured party" for purposes of perfecting the security interest pursuant to
Section 9-305 of the [applicable] Uniform Commercial Code; and (d) notifications
to persons holding such property, and acknowledgments, receipts or confirmations
from persons holding such property, shall be deemed notifications to, or
acknowledgments, receipts or confirmations from, financial intermediaries,
bailees or agents (as applicable) of the Trustee for the benefit of the
Certificateholders for the purpose of perfecting such security interest under
applicable law (except that nothing in this clause (d) shall cause any person to
be deemed to be an agent of the Trustee for any purpose other than for
perfection of such security interest unless, and then only to the extent,
expressly appointed and authorized by the Trustee in writing). The Depositor and
the Trustee, upon directions from the Depositor, shall, to the extent consistent
with this Agreement, take such actions as may be necessary to ensure that, if
this Agreement were deemed to create a security interest in Mortgage Loans, such
security interest would be deemed to be a perfected security interest of first
priority under applicable law and will be maintained as such throughout the term
of this Agreement.
27
The Trustee is authorized to appoint any bank or trust company approved by
the Depositor as Custodian of the documents or instruments referred to under (i)
through (v) above, and to enter into a Custodial Agreement for such purpose and
any documents delivered thereunder shall be delivered to the Custodian and any
Officer's Certificates delivered with respect thereto shall be delivered to the
Trustee and the Custodian.
Section 2.2. Acceptance by Trustee. The Trustee acknowledges, subject to
the provisions of Section 2.1 and to any document exceptions reported pursuant
to the Trustee's reviews as described below, receipt of the Mortgage Notes, the
Mortgages, the assignments and the Officer's Certificates referred to in Section
2.1, above, and declares that it holds and will hold such documents and the
other documents constituting a part of the Mortgage Files delivered to it as
Trustee in trust, upon the trusts herein set forth, for the use and benefit of
all present and future Certificateholders. The Trustee acknowledges that, as of
the date of the execution of this Agreement, the Mortgage Files have been
delivered to the Trustee and the Trustee has conducted a preliminary review of
the Mortgage Files. The Trustee further acknowledges that such review included a
review of the Mortgage Notes to determine that the appropriate Mortgage Notes
have been delivered and properly endorsed, that the related Mortgages and
assignments thereof have been delivered and that the related original title
insurance policies, if available, have been delivered. In connection with such
review, the Trustee shall have delivered an exceptions report indicating any
discrepancies relating to such review. In addition, the Trustee agrees, for the
benefit of Certificateholders, to review each Mortgage File within 45 days, or
with respect to assignments which must be recorded, within 180 days, after
execution of this Agreement to ascertain that all required documents set forth
in items (i)-(iii), (v) and, to the extent delivered to the Trustee, item (iv)
of Section 2.1 have been executed and received, and that such documents relate
to the Mortgage Loans identified in Exhibit D annexed hereto, and in so doing
the Trustee may rely on the purported due execution and genuineness of any such
document and on the purported genuineness of any signature thereon. The Trustee
shall have no duty to verify or determine whether any Mortgage File should
contain documents described in Section 2.1(iv). The Trustee shall be under no
duty to make any independent examination of any documents contained in each
Mortgage File beyond the review specifically required herein. The Trustee makes
no representations as to (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in each Mortgage File or any of
the Mortgage Loans identified on the Mortgage Loan Schedule, or (ii) the
collectability, insurability, effectiveness or suitability of any such Mortgage
Loan. If at the conclusion of such 45-day period or 180-day period the Trustee
finds any
28
document constituting a part of a Mortgage File not to have been executed or
received or to be unrelated to the Mortgage Loans identified in said Exhibit D
(each such finding, a "material defect"), the Trustee shall promptly notify the
Depositor, which shall have a period of 90 days after such notice within which
to correct or cure any such material defect; provided, however, that if the
Trustee shall not have received a document by reason of the fact that such
document shall not have been returned by the appropriate recording office then
the Depositor shall have until a date one year later from the Cut-Off Date to
correct or cure such defect. The Depositor hereby covenants and agrees that, if
any such material defect as defined above is not corrected or cured, the
Depositor will, not later than 90 days in the case of repurchase referred to
below or not later than 75 days in the case of a substitution referred to below
after the Trustee's notice to it respecting such defect either (i) repurchase
the related Mortgage Loan at a price equal to 100% of the Principal Balance of
such Mortgage Loan (or any property acquired in respect thereof) plus accrued
interest on such Principal Balance at the Mortgage Pass-Through Rate to the next
scheduled Installment Due Date of such Mortgage Loan, less any Nonrecoverable
Advances made with respect to any such Mortgage Loan or (ii) substitute for any
Mortgage Loan; provided, however that if the Principal Balance of the original
Mortgage Loan exceeds the principal balance of the Substitute Mortgage Loan, an
amount equal to that difference shall be deposited by the Depositor in the
Certificate Account; [(provided, further, however that no such substitution may
occur after 90 days of the Closing Date unless the Trustee shall have received
from the Depositor an Opinion of Counsel to the effect that the Mortgage Loan to
be replaced is "defective" within the meaning of Section 860G(a)(4)(B)(ii) of
the Code and within the meaning of the [applicable REMIC Provisions of any
State] and other applicable jurisdictions),] to which such material defect
relates a different mortgage loan (a "Substitute Mortgage Loan") maturing no
later than and not more than two years earlier than the Mortgage Loan being
substituted for and having a principal balance equal to or less than and a
Mortgage Interest Rate equal to or greater than the Mortgage Interest Rate of
the Mortgage Loan being substituted for, the same Index, Gross Margin, Payment
Cap, Maximum and Minimum Rates as the Mortgage Loan being substituted for, a
Loan-to-Value Ratio equal to or less than the Loan-to-Value Ratio of the
Mortgage Loan being substituted for and otherwise having such characteristics so
that the representations and warranties of the Depositor set forth in Section
2.3 hereof would not have been incorrect had such Substitute Mortgage Loan
originally been a Mortgage Loan. Monthly Payments due with respect to Substitute
Mortgage Loans in the month of substitution are not a part of the Trust Fund and
will be retained by the Master Servicer. The Depositor shall notify the Rating
Agency of any such substitution. For the month
29
of substitution, distributions to Certificateholders will include the Monthly
Payment due on the Mortgage Loan being substituted for in such month. The
purchase price for the Repurchased Mortgage Loan or property shall be deposited
by the Depositor in the Certificate Account and in the case of a Substitute
Mortgage Loan, the Mortgage File relating thereto shall be delivered to the
Trustee or the Custodian. Upon receipt by the Trustee of written notification of
such deposit signed by a Servicing Officer or the new Mortgage File, as the case
may be, and an Officer's Certificate that such repurchase or substitution is in
accordance with this Agreement, the Trustee shall release or cause to be
released to the Depositor the related Mortgage File for the Mortgage Loan being
repurchased or substituted for, as the case may be and shall execute and deliver
or cause to be executed and delivered such instrument of transfer or assignment
presented to it by the Depositor, in each case without recourse, as shall be
necessary to transfer to the Depositor the Trustee's interest in such original
or repurchased Mortgage Loan or property and the Trustee shall have no further
responsibility with regard to such files. It is understood and agreed that the
obligation of the Depositor to substitute a new Mortgage Loan for or repurchase
any Mortgage Loan or property as to which such a material defect in a
constituent document exists shall constitute the sole remedy respecting such
defect available to Certificateholders or the Trustee on behalf of
Certificateholders, but such obligation shall survive termination of this
Agreement. Neither the Trustee nor the Custodian shall be responsible for
determining whether any assignment or mortgage delivered pursuant to Section
2.1(ii) is in recordable form or, if recorded, has been properly recorded.
Section 2.3. Representations and Warranties of the Depositor. The
Depositor hereby represents and warrants to the Trustee:
(i) that the information set forth in the Mortgage Loan Schedule
appearing as an exhibit to this Agreement is true and correct in all
material respects at the date or dates respecting which such information is
furnished as specified therein;
(ii) that the information relating to the Mortgage Loans set forth in
the Prospectus, Prospectus Supplement and the [Form 8-A] filed pursuant to
the Securities Exchange Act of 1934 relating to offering of the
Certificates is true and correct in all material respects at the date or
dates respecting which such information is furnished as specified therein;
(iii) that as of the date of the transfer of the Mortgage Loans to
the Trustee, the Depositor is the sole
30
owner and holder of each Mortgage Loan free and clear of all liens,
pledges, charges or security interests of any nature and has full right and
authority, subject to no interest or participation of, or agreement with,
any other party, to sell and assign the same;
(iv) that as of the date of initial issuance of the Certificates, no
payment of principal of or interest on or in respect of any Mortgage Loan
is [89] days or more past due from the Due Date of such Mortgage Loan;
(v) that to the best of the Depositor's knowledge, as of the date of
the transfer of the Mortgage Loans to the Trustee, there is no valid
offset, defense or counterclaim to any Mortgage Note or Mortgage;
(vi) that as of the date of the initial issuance of the Certificates,
there is, to the best of the Depositor's knowledge, no proceeding pending
or threatened for the total or partial condemnation of any of the Mortgaged
Property and the Mortgaged Property is free of material damage and is in
good repair and neither the Mortgaged Property nor any improvement located
on or being part of the Mortgaged Property is in violation of any
applicable zoning law or regulation;
(vii) that each Mortgage Loan complies in all material respects with
applicable state or federal laws, regulations and other requirements,
pertaining to usury, equal credit opportunity and disclosure laws, and each
Mortgage Loan was not usurious at the time of origination;
(viii) that to the best of the Depositor's knowledge, as of the date
of the initial issuance of the Certificates, all taxes, governmental
assessments and insurance premiums previously due and owing with respect to
the Mortgaged Property have been paid;
(ix) that each Mortgage Note and the related Mortgage are genuine and
each is the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms except as such enforcement may be
limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and by general
equity principles (regardless of whether such enforcement is considered in
a proceeding in equity or at law); all parties to the Mortgage Note and the
Mortgage had legal capacity to execute the Mortgage Note and the Mortgage;
and each Mortgage Note and Mortgage have been duly and properly executed by
the Mortgagor;
31
(x) that each Mortgage is a valid and enforceable first lien on the
property securing the related Mortgage Note, and that each Mortgage Loan is
covered by an ALTA mortgagee title insurance policy or other form of policy
or insurance generally acceptable to FNMA or FHLMC, issued by, and is a
valid and binding obligation of, a title insurer acceptable to FNMA or
FHLMC insuring the originator, its successor and assigns, as to the lien of
the Mortgage in the original principal amount of the Mortgage Loan subject
only to (a) the lien of current real property taxes and assessments not yet
due and payable, (b) covenants, conditions and restrictions, rights of way,
easements and other matters of public record as of the date of recording of
such Mortgage acceptable to mortgage lending institutions in the area in
which the Mortgaged Property is located or specifically referred to in the
appraisal performed in connection with the origination of the related
Mortgage Loan and (c) such other matters to which like properties are
commonly subject which do not individually, or in the aggregate, materially
interfere with the benefits of the security intended to be provided by the
Mortgage;
(xi) that as of the initial issuance of the Certificates, neither
the Depositor nor any prior holder of any Mortgage has, except as the
Mortgage File may reflect, modified the Mortgage in any material respect;
satisfied, cancelled or subordinated such Mortgage in whole or in part;
released such Mortgaged Property in whole or in part from the lien of the
Mortgage; or executed any instrument of release, cancellation, modification
or satisfaction;
(xii) that each Mortgaged Property consists of a fee simple estate,
a leasehold estate condominium form of ownership in real property or a
share interest in a cooperative corporation in the case of a Co-op Loan;
[(xiii) no more than __% of the Mortgage Loans consist of [Mortgage
Loans with [Limited Mortgage Documentation];]
[(xiv) no more than __% of the Mortgage Loans consist of [Buy-down
Mortgage Loans];]
[(xv) no more than __% of the Mortgage Loans consist of Mortgage
Loans that accrue Deferred Interest;]
(xvi) the condominium projects that include the condominiums that are
the subject of any condominium loan or Co-op Loan are generally acceptable
to FNMA or FHLMC;
(xvii) no foreclosure action is threatened or has been commenced
(except for the filing of any notice of default)
32
with respect to the Mortgage Loan; and except for payment delinquencies not
in excess of [__] days, to the best of the Depositor's knowledge, there is
no default, breach, violation or event of acceleration existing under the
Mortgage or the related Mortgage Note and no event which, with the passage
of time or with notice and the expiration of any grace or cure period,
would constitute a default, breach, violation or event of acceleration; and
the Depositor has not waived any default, breach, violation or event of
acceleration;
(xviii) each Mortgage Loan which can be converted from an adjustable
rate Mortgage Loan to a fixed rate Mortgage Loan gives the Mortgagor the
right at one or more times during the term of such Mortgage Loan to elect
to convert from one interest rate to another. In the event of a conversion,
the new rate of interest is determined pursuant to the terms of the
Mortgage Loan itself, which terms are intended to approximate a market rate
of interest for newly originated mortgages at the time of conversion;
(xix) that each Mortgage Loan is in one of the forms contained in
Exhibit E and each provision of the Mortgage Note, including, without
limitation, the interest rate and payment amount adjustments of the
Mortgage Note, are in conformity with and are being serviced in conformity
with Exhibit E;
(xx) that based upon a representation by each Mortgagor at the
time of origination or assumption of the applicable Mortgage Loan, ____% of
the Mortgage Loans measured by Principal Balance were to be secured by a
primary, owner-occupied residence and no more than ____% of the Mortgage
Loans measured by Principal Balance secured by non-owner-occupied
residences;
(xxi) that an appraisal of each Mortgaged Property was conducted at
the time of origination of the related Mortgage Loan, and that each such
appraisal was conducted in accordance with FNMA or FHLMC criteria, on FNMA
or FHLMC forms and comparables on at least three properties were obtained;
(xxii) that no Mortgage Loan had a Loan-to-Value Ratio at origination
in excess of 125%;
(xxiii) the Mortgage Loans were not selected in a manner to adversely
affect the interests of the Certificateholders and the Depositor knows of
no conditions which reasonably would cause it to expect any Mortgage Loan
to become delinquent or otherwise lose value;
33
(xxiv) each Mortgage Loan was either (A) originated directly by or
closed in the name of either: (i) a savings and loan association, savings
bank, commercial bank, credit union, insurance company, or similar
institution which is supervised and examined by a federal or state
authority or (ii) a mortgagee approved by the Secretary of Housing and
Urban Development pursuant to Sections 203 and 211 of the National Housing
Act or (B) originated or underwritten by an entity employing underwriting
standards consistent with the underwriting standards of an institution as
described in subclause (A)(i) or (A)(ii) above;
[(xxv) each Mortgage Loan is a "qualified mortgage" within the
meaning of Section 860G of the Internal Revenue Code of 1986.]
It is understood and agreed that the representations and warranties set
forth in this Section 2.3 shall survive delivery of the respective Mortgage
Files to the Trustee, or to a Custodian, as the case may be. Upon discovery by
the Depositor, Master Servicer, the Trustee or any Custodian of a breach of any
of the foregoing representations and warranties (referred to herein as a
"breach"), without regard to any limitation set forth in such representation or
warranty concerning the knowledge of the Depositor as to the facts stated
therein, which breach materially and adversely affects the interests of the
Certificateholders in the related Mortgage Loan, the party discovering such
breach shall give prompt written notice to the others and to the Rating Agency.
Within 90 days of its discovery or its receipt [or the Mortgage Asset
Seller's receipt] of notice of breach, the Depositor shall [or shall cause the
Mortgage Asset Seller to] cure such breach in all material respects or shall
repurchase the Mortgage Loan or any property acquired in respect thereof from
the Trustee at the repurchase price equal to 100% of the Principal Balance of
such Mortgage Loan plus accrued interest on such Principal Balance at the
Mortgage Interest Rate to the next scheduled Installment Due Date of such
Mortgage Loan or remove such Mortgage Loan from the Trust Fund and substitute in
its place a Substitute Mortgage Loan or Loans with the characteristics set forth
in Section 2.2 above for Substitute Mortgage Loans, provided such substitution
is effected not later than 90 days after the Closing Date (or not later than two
years of the Closing Date [provided that the Trustee shall receive from the
Depositor an Opinion of Counsel to the effect that the Mortgage Loan to be
replaced is "defective" within the meaning of Section 860G(4)(B)(ii) of the Code
and within the meaning of the [applicable REMIC Provisions of any State] and
other applicable jurisdictions]). It is understood and agreed that the
obligation of the Depositor to repurchase or substitute [or cause the
34
Mortgage Asset Seller to repurchase or substitute] any Mortgage Loan or property
as to which a breach has occurred and is continuing shall constitute the sole
remedy respecting such breach available to Certificateholders or the Trustee on
behalf of Certificateholders, and such obligation shall survive as the
obligation of ABN AMRO Mortgage Corporation or its successors.
[Section 2.4. Authentication and Delivery of Certificates; Designation of
Certificates as REMIC Regular and Residual Interests.
(a) The Trustee acknowledges the transfer to the extent provided herein
and assignment to it of the Trust Fund and, concurrently with such transfer and
assignment, has caused to be authenticated and delivered to or upon the order of
the Depositor, in exchange for the Trust Fund, Certificates evidencing the
entire ownership of the Trust Fund.
(b) The Depositor hereby designates the Class A and Class B Certificates
as "regular interests" in a REMIC within the meaning of Section 860G(a)(1) of
the Code, and designates the Class R Certificate as the single class of
"residual interest" within the meaning of Section 860G(a)(2) of the Code.]
[Section 2.5. Designation of Startup Day. The Closing Date is hereby
designated as the "startup day" of the REMIC within the meaning of Section
860G(a)(9) of the Code.]
[Section 2.6. No Contributions. The Trustee shall not accept or make any
contribution of cash to the Trust Fund after 90 days of the Closing Date, and
shall not accept or make any contribution of other assets to the Trust Fund
unless it shall have received an Opinion of Counsel to the effect that the
inclusion of such assets in the Trust Fund will not cause the Trust Fund to fail
to qualify as a REMIC at any time that any Class A or Class B Certificates are
outstanding or subject the Trust Fund to any tax on contributions to the REMIC
under Section 860G(d) of the Code or under the [applicable REMIC Provisions of
any State] or other applicable jurisdiction.]
Section 2.7. Representations and Warranties of the Master Servicer. The
Master Servicer hereby represents, warrants and covenants to the Trustee for the
benefit of Certificateholders that, as of the date of execution of this
Agreement:
(a) the Master Servicer is a corporation duly formed and validly existing
under the laws of the State of Illinois;
(b) the execution and delivery of this Agreement by the Master Servicer
and its performance of and compliance with the terms of this Agreement will not
violate the Master Servicer's
35
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 Master Servicer is a party or which may be applicable to the Master 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 Master 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 Master 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 Master Servicer or its properties or might have consequences
that would affect its performance hereunder; and
(e) no litigation is pending or, to the best of the Master Servicer's
knowledge, threatened against the Master Servicer which would prohibit its
entering into this Agreement or performing its obligations under this Agreement;
and
(f) as long as the Master Servicer has any obligations to service the
Mortgage Loans hereunder (and it has not assigned such obligations pursuant to
Section 3.1(c)), it shall be a FNMA or a FHLMC-qualified servicer.
It is understood and agreed that the representations and warranties set
forth in this Section 2.7 shall survive delivery of the respective Mortgage
Files to the Trustee, or to a Custodian, as the case may be.
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.1. [Master Servicer to Act as Servicer and Tax Matters Person;
Administration of the Mortgage Loans.]
(a) The Master Servicer shall service and administer the Mortgage Loans on
behalf of the Trust Fund solely in the best interests of and for the benefit of
the Certificateholders (as
36
determined by the Master Servicer in its reasonable judgment) and the Trustee
(as trustee for Certificateholders) in accordance with the terms of this
Agreement and the respective Mortgage Loans and, to the extent consistent with
such terms, in the same manner in which, and with the same care, skill, prudence
and diligence with which, it services and administers similar mortgage loans for
other portfolios, giving due consideration to customary and usual standards of
practice of prudent institutional residential mortgage lenders and loan
servicers, and taking into account its other obligations hereunder, but without
regard to:
(i) any relationship that the Master Servicer, any sub-servicer or
any Affiliate of the Master Servicer or any sub-servicer may have with the
related Mortgagor;
(ii) the ownership of any Certificate by the Master Servicer or any
Affiliate of the Master Servicer;
(iii) the Master Servicer's or any sub-servicer's right to receive
compensation for its services hereunder or with respect to any particular
transaction; or
(iv) the ownership, or servicing or management for others, by the
Master Servicer or any sub-servicer, of any other mortgage loans or
property.
To the extent consistent with the foregoing and subject to any express
limitations set forth in this Agreement, the Master Servicer shall seek to
maximize the timely and complete recovery of principal and interest on the
Mortgage Notes; provided, however, that nothing herein contained shall be
construed as an express or implied guarantee by the Master Servicer of the
collectability of the Mortgage Loans. Subject only to the above-described
servicing standards and the terms of this Agreement and of the respective
Mortgage Loans, the Master Servicer, as an independent contractor, shall service
and administer the Mortgage Loans and shall have full power and authority,
acting alone or through one or more subservicers or agents (subject to paragraph
(c) of this Section 3.1), to do any and all things in connection with such
servicing and administration which it may deem necessary or desirable for the
purpose of conserving the assets of the Trust. Without limiting the generality
of the foregoing, the Master Servicer shall and is hereby authorized and
empowered by the Trustee to continue to execute and deliver, on behalf of
itself, the Certificateholders and the Trustee or any of them, any and all
financing statements, continuation statements and other documents or instruments
necessary to maintain the lien on each Mortgaged Property and related
collateral; and modifications, waivers, consents or amendments to or with
respect to any documents contained in the related Mortgage File; and any
37
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 related Mortgaged Properties.
[Notwithstanding the foregoing, the Master Servicer shall not modify, amend,
waive or otherwise consent to the change of the terms of any of the Mortgage
Loans (including without limitation extending the stated maturity date of any
Mortgage Loan or forgiving principal of or interest on any Mortgage Loan),
except as permitted by Section 3.2 hereof. The Master Servicer shall service and
administer the Mortgage Loans in accordance with applicable law and shall
provide to the Mortgagors any reports required to be provided to them thereby.]
To enable the Master Servicer to carry out its servicing and administrative
duties hereunder, upon the Master Servicer's written request accompanied by the
forms of any documents requested, the Trustee shall execute and deliver to the
Master Servicer any powers of attorney and other documents necessary or
appropriate and the Trustee shall not be responsible for releasing such powers
of attorney. The Trustee shall not be responsible for, and the Master Servicer
shall indemnify the Trustee for, any action taken by the Master Servicer
pursuant to the application of any such power of attorney. The relationship of
the Master Servicer (and of any successor thereto) to the Trustee under this
Agreement is intended by the parties to be that of an independent contractor and
not that of a joint venturer, partner or agent.
[(b) The Master Servicer, Trustee and Depositor, intend that the Trust
Fund formed hereunder shall constitute, and that the affairs of the Trust Fund
shall be conducted so as to qualify it as, a "real estate mortgage investment
conduit" as defined in and in accordance with the REMIC Provisions. The Master
Servicer is hereby appointed as the initial "tax matters person" pursuant to
Section 4.8. In furtherance of such intention, and subject to Section 4.8, the
Master Servicer covenants and agrees that it shall act as attorney-in-fact and
agent for any person that is the "tax matters person" within the meaning of
Section 6231(a)(7) of the Code (and, subject to Section 4.8 hereof, the Master
Servicer is hereby appointed to act as the initial tax matters person) on behalf
of the Trust Fund and that in such capacity it shall: (a) prepare and file, or
cause to be prepared and filed, a federal tax return (as well as any other
federal and state information and other returns) using a calendar year as the
taxable year for the Trust Fund when and as required by the REMIC Provisions;
(b) make (or cause to be made) an election, on behalf of the Trust Fund, to be
treated as a REMIC on the Federal tax return and any applicable state or local
returns of the Trust Fund for its first taxable year, in accordance with the
REMIC Provisions; (c) prepare and forward, or cause to be prepared and
forwarded, to the Certificateholders all information reports as and when
required to be provided to them in accordance with the
38
REMIC Provisions; (d) conduct the affairs of the Trust Fund at all times that
any Class A or Class B Certificates are outstanding so as to maintain the status
thereof as a REMIC under the REMIC Provisions; and (e) not knowingly or
intentionally take any action or omit to take any action that would cause the
termination of the REMIC status of the Trust Fund.]
(c) The Master Servicer may enter into sub-servicing agreements with third
parties with respect to any of its respective obligations hereunder, provided
that (1) any such agreement shall be consistent with the provisions of this
Agreement and (2) no sub-servicer retained by the Master Servicer shall grant
any modification, waiver or amendment to any Mortgage Loan without the approval
of the Master Servicer. Any such sub-servicing agreement may permit the sub-
servicer to delegate its duties to agents or subcontractors so long as the
related agreements or arrangements with such agents or subcontractors are
consistent with the provisions of this Section 3.1(c).
Any sub-servicing agreement entered into by the Master Servicer with a
Person other than the Depositor shall provide that it may be assumed or
terminated by the Trustee if the Trustee has assumed the duties of the Master
Servicer [or any Back-up Servicer], without cost or obligation to the assuming
or terminating party or the Trust Fund, upon the assumption by such party of the
obligations of the Master Servicer pursuant to Section 7.5.
Any sub-servicing agreement, and any other transactions or services
relating to the Mortgage Loans involving a sub-servicer, including (if
applicable) the Depositor in its capacity as sub-servicer under a sub-servicing
agreement and not in its capacity as a party to this Agreement, shall be deemed
to be between the Master Servicer and such sub-servicer (including the
Depositor) alone, and the Trustee and the Certificateholders shall not be deemed
parties thereto and shall have no claims, rights, obligations, duties or
liabilities with respect to the sub-servicer, except as set forth in Section
3.1(d).
[(d) If the Back-Up Servicer assumes the obligations of the Master Servicer
in accordance with Section 3.14, such Back-Up Servicer, to the extent necessary
to permit such Back-Up Servicer to carry out the provisions of Section 7.5,
shall, without act or deed on the part of the Trustee or such Back-Up Servicer,
succeed to all of the rights and obligations of the Master Servicer under any
sub-servicing agreement entered into pursuant to Section 3.1(c). In such event,
the Trustee or the Back-Up Servicer shall be deemed to have assumed all of the
Master Servicer's interest therein and to have replaced the Master Servicer as a
party to such sub-servicing agreement to the same extent as if such sub-
servicing agreement had been assigned to the Trustee or such
39
Back-Up Servicer, except that the Master Servicer shall not thereby be relieved
of any liability or obligations under such sub-servicing agreement.
In the event that the Trustee or any Back-Up Servicer assumes the servicing
obligations of the Master Servicer, upon request of the Trustee or such Back-Up
Servicer, the Master Servicer shall at its own expense deliver to the Trustee or
such Back-Up Servicer (as the case may be) all documents and records relating to
any sub-servicing agreement and the Mortgage Loans then being serviced
thereunder and an accounting of amounts collected and held by it, if any, and
will otherwise use its best efforts to effect the orderly and efficient transfer
of any sub-servicing agreement to the Trustee or the Back-Up Servicer.]
(e) Costs incurred by the Master Servicer in effectuating the timely
payment of taxes and assessments on the Mortgaged Property securing a Mortgage
Note shall be recoverable by the Master Servicer pursuant to Section 3.3. The
Master Servicer shall ensure all such taxes and assessments are timely paid.
The Master Servicer, as initial servicer, shall pay all of its costs and
proven damages incurred with respect to or arising out of any allegation of
impropriety in its servicing of the Mortgage Loans. Further, the Master Servicer
shall not be entitled to reimbursement or indemnification from either the Trust
Fund or the Certificateholders with respect to any such costs, claims and
damages.
(f) Notwithstanding any sub-servicing agreement, any of the provisions of
this Agreement relating to agreements or arrangements between the Master
Servicer and any Person (including the Depositor) acting as sub-servicer (or its
agents or subcontractors) or any reference to actions taken through any Person
(including the Depositor) acting as sub-servicer or otherwise, the Master
Servicer shall remain obligated and primarily 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 Depositor or any other
Person acting as sub-servicer (or its agents or subcontractors) to the same
extent and under the same terms and conditions as if the Master Servicer alone
were servicing and administering the Mortgage Loans. The Master Servicer shall
be entitled to enter into an agreement with any sub-servicer providing for
indemnification of the Master Servicer by such sub-servicer (including the
Depositor), and nothing contained in this Agreement shall be deemed to limit or
modify such indemnification, but no such agreement for indemnification shall be
deemed to limit or modify this Agreement.
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Section 3.2. Collection of Certain Mortgage Loan Payments; Certificate
Account.
(a) The Master Servicer shall make reasonable efforts to collect all
payments called for under the terms and provisions of the Mortgage Loans, and
shall, to the extent such procedures shall be consistent with this Agreement,
follow such collection procedures as it follows with respect to conventional
mortgage loans it services for itself and any of its Affiliates, including
providing reasonable advance notice to Mortgagors of Balloon Payments due if
required by the Mortgage Note or by state law; provided, however, that the
Master Servicer agrees not to permit any modification with respect to any
Mortgage Loan that would change the manner in which the Mortgage Interest Rate
is computed, forgive any principal or interest or change the term of such
Mortgage Loan. Consistent with the foregoing, the Master Servicer may in its
discretion (i) waive any assumption fee, late payment charge or other charge in
connection with a Mortgage Loan, and (ii) arrange a schedule, running for no
more than 180 days after the scheduled Installment Due Date for payment of any
installment on any Mortgage Note, after the stated maturity date of any Balloon
Payment or after the due date of any other payment due under the related
Mortgage Note for the liquidation of delinquent items, provided that the Master
Servicer shall continue to be obligated to make Advances in accordance with
Section 4.3 during the continuance of such period. [With respect to any Mortgage
Loans which provide for the right of the holder thereof to call for early
repayment thereof at times specified therein, neither the Trustee nor the Master
Servicer shall exercise any such right, except that the Trustee shall exercise
such right at the written direction of the Master Servicer set forth in an
Officer's Certificate in connection with a default under the related Note.]
(b) The Master Servicer shall establish and maintain a separate account as
set forth in Article I (the "Certificate Account"), and shall on the Closing
Date credit any amounts representing scheduled payments of principal and
interest due after the Cut-off Date but received by the Master Servicer on or
before the Closing Date, which may exclude the Retained Yield, and thereafter on
a daily basis the following payments and collections received or made by it,
which may exclude the Retained Yield (other than in respect of principal of and
interest on the Mortgage Loans due on or before the Cut-off Date):
(i) All Mortgagor payments on account of principal, including
Principal Prepayments on the Mortgage Loans;
(ii) All Mortgagor payments on account of interest on the Mortgage
Loans, which may be net of that portion thereof
41
which the Master Servicer is entitled to retain as Administration Fees
pursuant to Section 3.9, as adjusted pursuant to Section 4.6;
(iii) All Liquidation Proceeds net of any amounts specifically
excluded under paragraph (f) in the definition of Pool Distribution;
(iv) All proceeds received by the Master Servicer under any title,
hazard or other insurance policy covering any Mortgage Loan or the related
Mortgaged Property, other than proceeds to be applied to the restoration or
repair of the property subject to the related Mortgage or released to the
Mortgagor in accordance with the Master Servicer's normal servicing
procedures;
(v) All Advances made by the Master Servicer pursuant to Section
4.3;
(vi) All Repurchase Proceeds;
(vii) any amounts required to be deposited pursuant to Section 3.2(c)
in connection with net losses realized on Permitted Investments with
respect to funds held in the Certificate Account;
(viii) all income and gain realized from any investment of the funds
in the Certificate Account in Permitted Investments; and
(ix) All other amounts required to be deposited in the Certificate
Account pursuant to this Agreement;
provided, however, with respect to any payment of interest received by the
Master Servicer in respect of a Mortgage Loan (whether paid by a Mortgagor or
received as Liquidation Proceeds, insurance proceeds or otherwise) which is less
than the full amount of interest due with respect to the related Mortgage Loan,
the Master Servicer shall deduct therefrom, for the benefit of the Depositor who
shall be paid the amount so deducted, as the Retained Yield only that portion of
such payment of interest that bears the same relationship to the total amount of
such payment of interest as the Retained Yield in respect of the related
Mortgage Loan bears to the Mortgage Interest Rate then borne by such Mortgage
Loan during the period to which such payment is attributable.
(c) The Master Servicer may invest the funds in the Certificate Account in
Permitted Investments which shall mature not later than the second Business Day
preceding the next Distribution Date unless the Certificate Account is
maintained
42
with the Trustee in which case they may mature one Business Day prior to the
Distribution Date. The Permitted Investments may not be sold or disposed of
prior to their maturity. All such Permitted Investments shall be made in the
name of the Master Servicer (in its capacity as such) or its nominee. All income
and gain realized from any such investment shall be for the benefit of the
[Master Servicer], and shall be payable to the [Master Servicer]. The amount of
any losses incurred in respect of any such investments shall be deposited in the
Certificate Account by the Master Servicer, out of its own funds immediately as
realized without right to reimbursement therefor.
(d) The foregoing requirements for deposit in the Certificate Account
shall be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of those described in the
last paragraph of this Section 3.2 and payments in the nature of late payment
charges, assumption fees [or Escrow Payments] need not be deposited by the
Master Servicer in the Certificate Account. All funds deposited by the Master
Servicer in the Certificate Account shall be held by it in trust in the
Certificate Account until disbursed in accordance with Section 4.1 or withdrawn
in accordance with Section 3.3; provided, however, that the Master Servicer
shall withdraw such funds and deposit them in such manner as to not result in a
downgrading or withdrawal of the rating then assigned to the Certificates by the
Rating Agency. If the Master Servicer deposits in the Certificate Account any
amount not required to be deposited therein, it may at any time withdraw such
amount from the Certificate Account pursuant to Section 3.3(j) of this
Agreement.
Certain of the Mortgage Loans may provide for payment by the Mortgagor of
amounts to be used for payment of taxes, assessments, hazard or other insurance
premiums or comparable items for the account of the Mortgagor. The Master
Servicer may deal with these amounts in accordance with its normal servicing
procedures.
Section 3.3. Permitted Withdrawals from the Certificate Account. The
Master Servicer may, from time to time, make withdrawals from the Certificate
Account for the following purposes:
(a) to reimburse itself for Advances made by it pursuant to Section 3.4 or
4.3, the Master Servicer's right to reimburse itself pursuant to this subclause
(a) being limited to amounts received on or in respect of particular Mortgage
Loans [or REO Property] (including, for this purpose, Liquidation Proceeds and
amounts representing proceeds of insurance policies covering the related
Mortgaged Properties [or REO Properties] which represent late recoveries of
payments of principal and/or interest
43
respecting which any such Advance was made) or to reimburse itself for Advances
from funds in the Certificate Account held for future distribution or
withdrawal, such funds to be replaced by the Master Servicer to the extent that
funds in the Certificate Account on a future Distribution Date are less than the
payment required to be made to the Certificateholders therefrom as of such
future Distribution Date;
(b) (i) to reimburse itself from Liquidation Proceeds for Liquidation
Expenses, (ii) for amounts expended by it pursuant to Section 3.7 in good faith
in connection with the restoration of damaged property and (iii) to the extent
that Liquidation Proceeds after such reimbursement are in excess of the
Principal Balance of the related Mortgage Loan together with accrued and unpaid
interest thereon at the applicable Mortgage Pass-Through Rate to the date of
such liquidation, net of any related Advances which were unreimbursed prior to
the receipt of such Liquidation Proceeds, to pay to itself any unpaid
Administration Fees, and any assumption fees, late payment charges or other
Mortgage charges on the related Mortgage Loan;
(c) to pay to itself from any Mortgagor payment as to interest or other
recovery with respect to a particular Mortgage Loan, to the extent permitted by
this Agreement, that portion of any payment as to interest in excess of interest
at the applicable Mortgage Pass-Through Rate which the Master Servicer is
entitled to retain as Administration Fees pursuant to Section 3.9 or otherwise;
(d) to reimburse itself for expenses incurred by and recoverable by or
reimbursable to it pursuant to Section 3.1 or 3.5 after the related Mortgagor
has reimbursed the Trust Fund for such expenses or following liquidation of the
related Mortgage Loan, or pursuant to Section 6.3; or
(e) to pay to itself with respect to each Mortgage Loan or property
acquired in respect thereof that has been repurchased pursuant to Section 2.2 or
2.3 or purchased by the Class R Certificateholder pursuant to Section 9.1 all
amounts received thereon and not distributed as of the date on which the related
Principal Balance is determined;
(f) to reimburse itself for any Nonrecoverable Advances;
(g) to disburse to the Trustee in order that the Trustee may make payments
to Certificateholders in the amounts and in the manner provided for in Section
4.1;
(h) to pay the Master Servicer any net interest or other income earned and
received on or investment income received with respect to funds in the
Certificate Account;
44
(i) amounts in respect of the Retained Yield; and
(j) to make payments to itself or others pursuant to any provision of this
Agreement and to remove any amounts not required to be deposited therein and to
clear and terminate the Certificate Account pursuant to Section 9.1.
Since in connection with withdrawals pursuant to subclauses (a), (b), (c)
and (e) the Master Servicer's entitlement thereto is limited to collections or
other recoveries on the related Mortgage Loan, the Master Servicer shall keep
and maintain a separate accounting for each Mortgage Loan for the purpose of
justifying any withdrawal from the Certificate Account pursuant to such
subclauses.
[Section 3.4. Taxes, Assessments and Similar Items. With respect to each
Mortgage Loan, the Master Servicer shall maintain accurate records with respect
to each related Mortgaged Property reflecting the status of taxes, assessments
and other similar items that are or may become a lien on the related Mortgaged
Property and the status of insurance premiums payable with respect thereto. The
Master Servicer shall require that payments for taxes, assessments, insurance
premiums and other similar items be made by the Mortgagor at the time they first
become due. If a Mortgagor fails to make any such payment on a timely basis, the
Master Servicer shall advance the amount of any shortfall unless the Master
Servicer determines in its good faith judgment that such advance would not be
ultimately recoverable from future payments and collections on the related
Mortgage Loan (including without limitation Insurance Proceeds and Liquidation
Proceeds), or otherwise. The Master Servicer shall be entitled to reimbursement
of advances it makes pursuant to the preceding sentence, together with interest
thereon at the rate of ___% per annum, from amounts received on or in respect of
the related Mortgage Loan respecting which such advance was made or if such
advance has become nonrecoverable, in either case to the extent permitted by
Section 3.3 of this Agreement. [No costs incurred by the Master Servicer in
effecting the payment of taxes and assessments on the Mortgaged Properties
shall, for the purpose of calculating distributions to Certificateholders, be
added to the amount owing under the related Mortgage Loans, notwithstanding that
the terms of such Mortgage Loans so permit.]
Section 3.5. Maintenance of Insurance. The Master Servicer shall also
cause to be maintained for each Mortgage Loan fire and hazard insurance with
extended coverage as is customary in the area where the Mortgaged Property is
located in an amount which is at least equal to the lesser of (i) the Principal
Balance of such Mortgage Loan and (ii) the replacement value costs of
improvements securing such Mortgage Loan. The Master Servicer shall cause to be
maintained fire and hazard insurance with
45
extended coverage on each REO Property in an amount which is at least equal to
the greater of (i) an amount not less than is necessary to avoid the application
of any co-insurance clause contained in the related fire and hazard insurance
policy and (ii) the replacement cost of the improvements which are a part of
such property. The Master Servicer shall also cause to be maintained for each
Mortgage Loan with a Loan-to-Value Ratio greater than 80% a primary mortgage
insurance policy which will cover at least [75]% of the original fair market
value of the related Mortgaged Property until such time as the principal balance
of such Mortgage Loan is reduced to 80% of the current fair market value or
otherwise in accordance with applicable law. The Master Servicer on behalf of
the Trustee as Mortgagee shall maintain or cause the related Mortgagor to
maintain for each Mortgage Loan such other insurance on the related Mortgaged
Property as may be required by the terms of the related Mortgage Note. If the
Mortgaged Property is in an area identified in the Federal Register by the Flood
Emergency Management Agency as having special flood hazards the Master Servicer
will cause to be maintained a flood insurance policy meeting the requirements of
the current guidelines of the Federal Insurance Administration with a generally
acceptable insurance carrier, in an amount representing coverage not less than
the least of (i) the full insurable value, (ii) the maximum amount of insurance
which is available under the Flood Disaster Protection Act of 1973, and (iii)
the Principal Balance of the related Mortgage Loan. The Master Servicer shall
also maintain fire and hazard insurance with extended coverage and, if
applicable, flood insurance on property acquired upon foreclosure, or by deed in
lieu of foreclosure, of any Mortgage Loan in an amount that is at least equal to
the lesser of (i) the maximum insurable value of the improvements which are a
part of such property and (ii) the principal balance owing on such Mortgage Loan
at the time of such foreclosure or grant of deed in lieu of foreclosure plus
accrued interest and related Liquidation Expenses. [If an REO Property was
located at the time of origination of the related Mortgage Loan in a federally
designated special flood hazard area, the Master Servicer will obtain flood
insurance in respect thereof providing substantially the same coverage as
described in the preceding sentence. If at any time during the term of this
Agreement a recovery under a flood or fire and hazard insurance policy in
respect of an REO Property is not available but would have been available if
such insurance were maintained thereon in accordance with the standards applied
to Mortgaged Properties described herein, the Master Servicer shall either (i)
immediately deposit into the Certificate Account from its own funds the amount
that would have been recovered or (ii) apply to the restoration and repair of
the property from its own funds the amount that would have been recovered, if
such application would be consistent with the servicing standard set forth in
Section 3.1.] It is understood and agreed that such insurance shall be
46
with insurers approved by the Master Servicer and that no earthquake or other
additional insurance is to be required of any Mortgagor, other than pursuant to
such applicable laws and regulations or policies of the Master Servicer as shall
at any time be in force and as shall require such additional insurance. Pursuant
to Section 3.2, any amounts collected by the Master Servicer under any insurance
policies maintained pursuant to this Section 3.5 (other than amounts to be
applied to the restoration or repair of the property subject to the related
Mortgage or released to the Mortgagor in accordance with the Master Servicer's
normal servicing procedures) shall be deposited into the Certificate Account,
subject to withdrawal pursuant to Section 3.3. Any cost incurred by the Master
Servicer in maintaining any such insurance shall be recoverable by the Master
Servicer pursuant to Section 3.3. In the event that the Master Servicer shall
obtain and maintain a blanket policy issued by an insurer that qualifies under
the guidelines set forth for the Master Servicer by FNMA or FHLMC, insuring
against hazard losses on all of the Mortgage Loans, then, to the extent such
policy provides coverage in an amount equal to the unpaid principal balance on
the Mortgage Loans without co-insurance and otherwise complies with all other
requirements set forth in the first paragraph of this Section 3.5, it shall
conclusively be deemed to have satisfied its obligation as set forth in such
first paragraph, it being understood and agreed that such policy may contain a
deductible clause, in which case the Master Servicer shall, in the event that
there shall not have been maintained on the related mortgaged or acquired
property an insurance policy complying with the first paragraph of this Section
3.5 and there shall have been a loss which would have been covered by such a
policy had it been maintained, be required to deposit from its own funds into
the Certificate Account or apply to the restoration of the property the amount
not otherwise payable under the blanket policy because of such deductible
clause.
The Master Servicer shall obtain and maintain at its own expense throughout
the term of this Agreement a blanket fidelity bond and an errors and omissions
insurance policy with broad coverage with responsible companies covering the
Master Servicer's officers and employees and other persons acting on behalf of
the Master Servicer in connection with its activities under this Agreement. Any
such fidelity bond and errors and omissions insurance shall provide an amount of
coverage and will maintain such coverage at a level which will permit the Master
Servicer to continue to be a FNMA or a FHLMC-qualified Servicer and shall
protect and insure the Master Servicer against losses, including forgery, theft,
embezzlement, fraud, errors and omissions and negligent acts of such persons. No
provision of this Section 3.5 requiring such fidelity bond and errors and
omissions insurance shall diminish or relieve the Master Servicer from its
duties and obligations as set forth in this Agreement.
47
Section 3.6. Enforcement of Due-on-Sale Clauses; Assumption and
Substitution Agreements. In any case in which property subject to a Mortgage is
conveyed by the Mortgagor, the Master Servicer reserves the right to enforce any
due-on-sale clause contained in the related Mortgage Note or Mortgage, to the
extent permitted under applicable law and governmental regulations, but only to
the extent that such enforcement will not adversely affect or jeopardize
coverage under any related insurance policy or result in legal action by the
Mortgagor. Subject to the foregoing, the Master Servicer is authorized to take
or enter into an assumption or substitution agreement from or with the Person to
whom such property has been or is about to be conveyed. The Master Servicer is
also authorized to release the original Mortgagor from liability upon the
Mortgage Loan and substitute the new Mortgagor as obligor thereon. In connection
with such assumption or substitution, the Master Servicer shall apply such
underwriting standards and follow such practices and procedures as shall be
normal and usual and as it applies to mortgage loans owned solely by it or any
of its Affiliates. The Master Servicer shall notify the Trustee that any such
assumption or substitution agreement has been completed by forwarding to the
Trustee the original copy of such assumption or substitution agreement, which
copy shall be added by the Trustee to the related Mortgage File and shall, for
all purposes, be considered a part of such Mortgage File to the same extent as
all other documents and instruments constituting a part thereof. In connection
with any such assumption or substitution agreement, the interest rate of the
related Mortgage Note shall not be changed, [and with respect to any such
assumption [the Maximum Rate and the Minimum Rate shall not be changed and the
Seller hereby waives any contractual right under the related Mortgage Note [but
the Maximum Rate and the Minimum Rate shall be recast to equal the original
percentage specified in the related Mortgage Note above the interest of the
related Mortgage Note in effect on the date of assumption] [provided, that in
the event the assumption of any Mortgage Loan would cause the Maximum Rate to
decrease below the Maximum Rate in effect for such Mortgage Loan at the time of
issuance of the Certificates, the Seller [shall] repurchase such Mortgage Loan,
subject to applicable REMIC Provisions, from the Trust Fund at a purchase price
equal to the unpaid principal balance of such Mortgage Loan plus interest at the
Mortgage Pass-Through Rate, less unreimbursed Advances]. Any fee collected by
the Master Servicer for entering into an assumption or substitution of liability
agreement will be retained by the Master Servicer as servicing compensation.
Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Master Servicer shall not be deemed to be in default, breach or
any other violation of its obligations hereunder by reason of any conveyance by
the Mortgagor of the Mortgaged Property or any assumption of a
48
Mortgage Loan by operation of law which the Master Servicer in good faith
determines it may be restricted by law from preventing, for any reason
whatsoever.
Section 3.7. Realization upon Defaulted Mortgage Loans.
(a) [Consistent with the servicing standard set forth in Section 3.1 and
with a view to the best economic interest of the Trust Fund,] the Master
Servicer shall foreclose upon or otherwise comparably convert [(which may
include acquisition of an REO Property)] the Mortgaged Properties securing such
of the Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments
pursuant to Section 3.2. In connection with such foreclosure or other
conversion, the Master Servicer shall follow such practices and procedures as it
shall deem necessary or advisable and as shall be normal and usual in its
general mortgage servicing activities. The foregoing is subject to the proviso
that the Master Servicer shall not be required to expend its own funds in
connection with any foreclosure or to restore any damaged property unless it
shall determine (i) that such foreclosure and/or restoration will increase the
Liquidation Proceeds to Certificateholders after reimbursement to itself for
such expenses and (ii) that such expenses will be recoverable to it through
Liquidation Proceeds (respecting which it shall have priority for purposes of
withdrawal from the Certificate Account pursuant to Section 3.3). Any gain on
foreclosure or other conversion of a Liquidated Mortgage Loan shall be
distributed to the Class R Certificateholder. The Master Servicer shall be
responsible for all other costs and expenses incurred by it in any such
proceedings; provided, however, that it shall be entitled to reimbursement
thereof (as well as any Administration Fees and other amounts due it, if any),
to the extent, but only to the extent, that withdrawals from the Certificate
Account with respect thereto are permitted under Section 3.3. Within 30 days
after receipt of Liquidation Proceeds in respect of a Liquidated Mortgage Loan,
the Master Servicer shall provide to the Trustee a statement of accounting for
the related Liquidated Mortgage Loan, including without limitation (i) the
Mortgage Loan number, (ii) the date the Loan was acquired in foreclosure or deed
in lieu, and the date the Mortgage Loan became a Liquidated Mortgage Loan, (iii)
the gross sales price and the related selling and other expenses, (iv) accrued
interest calculated from the foreclosure date to the liquidation date, and (v)
such other information as the Trustee may reasonably specify.
(b) Prior to any such foreclosure, the Master Servicer may, at its option,
repurchase any Mortgage Loan which is 90 days or more delinquent and which the
Master Servicer determines in good faith would otherwise become subject to
foreclosure proceedings or any Mortgage Loan as to which the Mortgagor tenders a
deed in
49
lieu of foreclosure at a price equal to the outstanding Principal Balance of the
Mortgage Loan plus accrued interest at the Mortgage Pass-Through Rate to the
next Installment Due Date. Any such repurchase shall be deemed a Principal
Prepayment for purposes under this Agreement.
(c) The Trust Fund shall not acquire any real property (or personal
property incident to such real property) except in connection with a default or
imminent default of a Mortgage Loan. Based on a report prepared by an
Independent Person who regularly conducts environmental audit that the Mortgaged
Property for which foreclosure proceedings are contemplated is in compliance
with applicable environmental laws, and there are no circumstances present at
such Mortgaged Property relating to the use, management or disposal of any
hazardous materials, wastes, or petroleum based materials for which
investigation, testing, monitoring, containment, clean-up or remediation could
be required under any federal, state or local law or that it would be in the
best economic interest of the Trust Fund to acquire title to such Mortgaged
Property and further to take such actions as would be necessary and appropriate
to effect such compliance and/or respond to such circumstances, the Master
Servicer will not conduct such foreclosure proceedings. If the Master Servicer
otherwise becomes aware, under its customary servicing procedures, of an
environmental hazard with respect to a Mortgage Loan for which foreclosure
proceedings are contemplated, the Master Servicer will not conduct such
foreclosure proceedings unless it determines in good faith that the liability
associated with the environmental hazard will be less than the Liquidation
Proceeds to be realized from the sale of the related Mortgaged Property. In the
event that the Trust Fund acquires any real property (or personal property
incident to such real property) in connection with a default or imminent default
of a Mortgage Loan, such REO Property shall be disposed of by the Trust Fund
within two years after its acquisition by the Trust Fund unless the Trustee
shall have received from the Master Servicer an Opinion of Counsel to the effect
that the holding by the Trust Fund of such REO Property subsequent to two years
after its acquisition will not cause the Trust Fund to fail to qualify as a
REMIC under the REMIC Provisions at any time that any Class A or Class B
Certificates are outstanding, in which case such REO Property shall be disposed
of as soon as possible by the Trust Fund but in no event shall be held longer
than the maximum period of time during which the Trust Fund is then permitted to
hold such REO Property and remain qualified as a REMIC under the REMIC
Provisions. The Master Servicer shall manage, conserve, protect and operate each
such REO Property for the Certificateholders solely for the purpose of its
prompt disposition and sale in a manner which does not cause such REO Property
to fail to qualify as "foreclosure property" within the meaning of Section
860G(a)(8) of the Code. Pursuant to its efforts to sell such REO
50
Property, the Master Servicer shall either itself or through an agent selected
by the Master Servicer protect and conserve such REO Property in the same manner
and to such extent as is customary in the locality where such property is
located and may, incident to its conservation and protection of the interests of
the Certificateholders, rent the same, or any part thereof, as the Master
Servicer deems to be in the best interest of the Master Servicer and the
Certificateholders for the period prior to the sale of such REO Property.
[(d) In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be issued to the Trustee, or to its nominee on behalf of
Certificateholders. Notwithstanding any such acquisition of title and
cancellation of the related Mortgage Loan, such Mortgage Loan shall (except for
purposes of Section 9.1) be considered to be a Mortgage Loan held in the Trust
Fund until such time as the related REO Property shall be sold by the Trust Fund
and shall be reduced only by collections net of expenses. Consistent with the
foregoing, for purposes of all calculations hereunder, so long as such Mortgage
Loan shall be considered to be an outstanding Mortgage Loan, it shall be assumed
that, notwithstanding that the indebtedness evidenced by the related Mortgage
Note shall have been discharged, such Mortgage Note and, for purposes of
determining the Scheduled Principal Balance thereof, the related amortization
schedule in effect at the time of any such acquisition of title remain in
effect.
(e) The Master Servicer shall not acquire for the benefit of the Trust
Fund any personal property pursuant to this Section 3.7 unless either:
(i) such personal property is incident to real property (within the
meaning of Section 856(e)(1) of the Code) so acquired by the Master
Servicer for the benefit of the Trust Fund;
(ii) the Master Servicer shall have requested and received an
Opinion of Counsel (which opinion shall be an expense of the Trust Fund) to
the effect that the holding of such personal property by the Trust Fund
will not cause the imposition of a tax on the Trust Fund under the REMIC
Provisions or cause the Trust Fund to fail to qualify as a REMIC at any
time that any Certificate is outstanding.]
Section 3.8. Trustee to Cooperate; Release of Mortgage Files. Upon the
payment in full of any Mortgage Loan, or the receipt by the Master Servicer of a
notification that the payment in full will be escrowed in a manner customary for
such purposes, the Master Servicer will immediately notify the Trustee by an
51
Officer's Certificate (which Officer's Certificate shall include a statement to
the effect that all amounts received in connection with such payment which are
required to be deposited in the Certificate Account pursuant to Section 3.2 have
been or will be so deposited) and shall by such Officer's Certificate request
delivery to it of the Mortgage File. Upon receipt of such Officer's Certificate
and request, the Trustee shall promptly release or cause to be released the
related Mortgage File to the Master Servicer. From time to time and as
appropriate for the servicing or foreclosure of any Mortgage Loan, the Trustee
shall, upon written request of the Master Servicer and delivery to the Trustee
of a trust receipt signed by a Servicing Officer, release or cause to be
released the related Mortgage File to the Master Servicer and shall execute such
documents furnished to it as shall be necessary to the prosecution of any such
proceedings. Such trust receipt shall obligate the Master Servicer to return
each and every document previously requested from the Mortgage File to the
Trustee when the need therefor by the Master Servicer no longer exists unless
the Mortgage Loan shall be liquidated, in which case, upon receipt of a
certificate of a Servicing Officer similar to that hereinabove specified, the
trust receipt shall be released by the Trustee to the Master Servicer by
delivery to a Servicing Officer and the Trustee shall have no further
responsibility with respect to such Mortgage Files.
Section 3.9. Servicing Compensation. The Master Servicer, shall be
entitled to retain or, if not retained, to withdraw from the Certificate Account
as servicing compensation its Administration Fee out of each payment on account
of interest on each Mortgage Loan, subject to adjustment as provided in Section
4.6. The Master Servicer shall also be entitled to payment of unpaid
Administration Fees with respect to a delinquent Mortgage Loan out of
Liquidation Proceeds with respect to such Mortgage Loan, to the extent permitted
by Section 3.3(b). Servicing compensation in the form of assumption fees, late
payment charges or otherwise shall be retained by the Master Servicer and need
not be deposited in the Certificate Account. The Master Servicer shall also be
entitled to additional servicing compensation out of Liquidation Proceeds to the
extent provided in Section 3.3(b). The Master Servicer shall be required to pay
all expenses incurred by it in connection with its servicing activities
hereunder (including maintenance of the blanket hazard insurance policy and the
blanket fidelity bond and errors and omissions policy required by Section 3.5)
and shall not be entitled to reimbursement therefor except as specifically
provided in Sections 3.1, 3.3, 3.5 and 3.7.
Section 3.10. Reports to the Trustee; Certificate Account Statements. By
the tenth calendar day of each month, the Master Servicer shall deliver or cause
to be delivered to the Trustee or its designee a statement in electronic or
written form as may be
52
agreed upon by the Master Servicer and the Trustee containing the information
described in Section 4.4 and such other information as may be necessary for the
Trustee to compute the amounts to be distributed to the Certificateholders by
the Trustee. Not later than 25 days after each Distribution Date, the Master
Servicer shall forward or cause to be forwarded to the Trustee a statement,
certified by a Servicing Officer, setting forth the status of the Certificate
Account as of the close of business on the related Distribution Date, stating
that all distributions required to be made by this Agreement have been made (or
if any required distribution has not been made, specifying the nature and status
thereof) and showing, for the period covered by such statement, the aggregate of
deposits into and withdrawals from the Certificate Account for each category of
deposit specified in Section 3.2 and each category of withdrawal specified in
Section 3.3. Such statement shall also include information as to the aggregate
Principal Balance of all of the Mortgage Loans as of the last day of the
calendar month immediately preceding such Distribution Date. Copies of such
statement shall be provided to any Certificateholder upon request by the Master
Servicer, or by the Trustee so long as the Trustee has received the report as
stipulated above at the Master Servicer's expense if the Master Servicer shall
fail to provide such copies.
Section 3.11. Annual Statement as to Compliance. The Master Servicer
will deliver to the Trustee, on or before [April 30] of each year, beginning
[April 30], 199_, an Officer's Certificate stating as to each signer thereof,
that (i) a review of the activities of the Master Servicer during the preceding
calendar year and of performance under this Agreement has been made under such
officer's supervision, and (ii) to the best of such officer's knowledge, based
on such review, the Master Servicer has fulfilled all of its obligations under
this Agreement throughout such year, or if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof. Copies of such statement shall be
provided to the Rating Agency and to any Certificateholder upon request by the
Master Servicer, or by the Trustee at the Master Servicer's expense if the
Master Servicer shall fail to provide such copies and the Trustee is aware that
the Master Servicer has not so provided copies and so long as the Trustee shall
have received the report as stipulated above.
Section 3.12. Annual Independent Public Accountants' Servicing Report.
On or before April 30 of each year, beginning April 30, 199_, the Master
Servicer, at its expense, shall cause a firm of independent public accountants
who are members of the American Institute of Certified Public Accountants to
furnish a statement to the Trustee and the Rating Agency to the effect that such
firm has examined certain documents and records relating to
53
the servicing of the Mortgage Loans and that, either (a) on the basis of such
examination conducted substantially in compliance with the audit program for
mortgages serviced for FHLMC, such firm is of the opinion that such servicing
has been conducted in compliance with the manner of servicing set forth in
agreements substantially similar to this Agreement except for (i) such
exceptions as such firm shall believe to be immaterial and (ii) such other
exceptions as shall be set forth in such statement or, (b) that their
examination conducted substantially in compliance with the uniform single audit
program for mortgage bankers disclosed no exceptions or errors in records
relating to mortgage loans serviced for others that in their opinion are
material and that Paragraph 4 of that program requires them to report. Copies of
such statement shall be provided to Certificateholders upon request by the
Master Servicer, or by the Trustee at the Master Servicer's expense if the
Master Servicer shall fail to provide such copies and the Trustee is aware that
the Master Servicer has not so provided copies and so long as the Trustee shall
have received the report as stipulated above.
Section 3.13. Access to Certain Documentation and Information Regarding
the Mortgage Loans. The Master Servicer shall provide access to the Trustee or
to its designees at its request, and to Certificateholders which are savings and
loan associations, banks or insurance companies, the OTS, the FDIC and the
Supervisory Agents and examiners of the OTS and the FDIC or examiners of any
other federal or state banking or insurance regulatory authority to the
documentation regarding the Mortgage Loans if so required by applicable
regulations of the OTS or other regulatory authority, such access to be afforded
without charge but only upon reasonable request and during normal business hours
at the offices of the Master Servicer designated by it. The Trustee or its
designee may copy any document or electronic record maintained by the Master
Servicer hereunder.
[Section 3.14. Back-up Servicer. [ABN AMRO Bank N.V.] agrees to serve as
back-up servicer (the "Back-up Servicer") after notice of termination given in
accordance with Section 7.5, and agrees to assume the rights, obligations and
the duties of the Master Servicer, including those specified in Section 4.3
hereof if the Master Servicer fails to perform such duties, subject to Section
7.5 hereof and provided that it shall have no liability for any act of the
Master Servicer prior to such assumption. In the event that the rating of the
long-term debt obligations of the Back-up Servicer is downgraded by any Rating
Agency and any Rating Agency notifies the Master Servicer or the Trustee that
the rating of the Class A Certificates shall be downgraded or withdrawn as a
result of such long-term debt obligation downgrade, the Master Servicer shall,
at its option, either (x) replace the Back-up Servicer with a successor back-up
servicer acceptable to the Rating Agency and having the
54
qualifications for a successor Master Servicer set forth in Section 7.5(b)
hereof, provided, however, prior to such Certificate downgrade the Back-up
Servicer shall be provided a reasonable opportunity to satisfy the Rating Agency
that no such Certificate downgrade should occur or (y) deliver to the Trustee
(outside and separate from the Trust Fund) Permitted Investments to be held in
the name of the Trustee for the benefit of the Certificateholders to secure the
obligations of the Master Servicer to make advances pursuant to Section 4.3, in
such manner and amount as is satisfactory to all Rating Agencies (but in no
event to have a fair market value on the date of delivery in excess of [1%] of
the initial Pool Balance) [provided, however, that the Master Servicer also
delivers to the Trustee an opinion of counsel to the effect that such deposit
shall not be treated as a contribution to the REMIC giving rise to a prohibited
transaction tax.]]
Section 3.15. Sale of Defaulted Mortgage Loans and REO Properties.
(a) With respect to any Defaulted Mortgage Loan or REO Property which the
Master Servicer has determined to sell in accordance with the standards set
forth in Section 3.7, the Master Servicer shall deliver to the Trustee an
Officer's Certificate to the effect that no satisfactory arrangements can be
made for collection of delinquent payments thereon pursuant to Section 3.2, and,
consistent with the servicing standard set forth in Section 3.1 and with a view
to the best economic interest of the Trust Fund, the Master Servicer has
determined to sell such Mortgage Loan in accordance with this Section 3.15. The
Master Servicer may then offer to sell to any Person any Defaulted Mortgage Loan
or any REO Property or, subject to the following sentence, purchase any such
Defaulted Mortgage Loan or REO Property (in each case at the Repurchase Price
therefor), but shall, in any event, so offer to sell any REO Property no later
than the time determined by the Master Servicer to be sufficient to result in
the sale of such REO Property within the period specified in Section 3.7(c). The
Master Servicer shall accept the highest bid received from any Person for any
Defaulted Mortgage Loan or any REO Property in an amount at least equal to the
Repurchase Price therefor or, at its option, if it has received no bid at least
equal to the Repurchase Price therefor, purchase the Defaulted Mortgage Loan or
REO Property at the Repurchase Price.
In the absence of any such bid or purchase by the Master Servicer, the
Master Servicer shall accept the highest bid received from any Person that is
determined by the Master Servicer to be a fair price for such Defaulted Mortgage
Loan or REO Property, if the highest bidder is a Person other than an Interested
Person, or is determined to be such a price by the
55
Trustee, if the highest bidder is an Interested Person. [Notwithstanding
anything to the contrary herein, neither the Trustee, in its individual
capacity, nor any of its Affiliates may bid for or purchase any Defaulted
Mortgage Loan or any REO Property pursuant hereto.]
The Master Servicer shall not be obligated by either of the foregoing
paragraphs or otherwise to accept the highest bid if the Master Servicer
determines, in accordance with the servicing standard stated in Section 3.1,
that rejection of such bid would be in the best interests of the
Certificateholders. In addition, the Master Servicer may accept a lower bid if
it determines, in accordance with the servicing standard stated in Section 3.1,
that acceptance of such bid would be in the best interests of the
Certificateholders (for example, if the prospective buyer making the lower bid
is more likely to perform its obligations, or the terms offered by the
prospective buyer making the lower bid are more favorable). In the event that
the Master Servicer determines with respect to any REO Property that the bids
being made with respect thereto are not in the best interests of the
Certificateholders and that the end of the two-year period referred to in
Section 3.7(c) with respect to such REO Property is approaching, the Master
Servicer shall seek an extension of such two-year period in the manner described
in Section 3.7(c).
(b) In determining whether any bid received from an Interested Person
represents a fair price for any Defaulted Mortgage Loan or any REO Property, the
Trustee may conclusively rely on the opinion of an Independent appraiser or
other expert in real estate matters retained by the Trustee. In determining
whether any bid constitutes a fair price for any Defaulted Mortgage Loan or any
REO Property, the Master Servicer or the Trustee (or, if applicable, such
appraiser) shall take into account, and any appraiser or other expert in real
estate matters shall be instructed to take into account, as applicable, among
other factors, the period and amount of any delinquency on the affected
Defaulted Mortgage Loan, the physical condition of the related Mortgaged
Property or such REO Property, the state of the local economy and the Trust
Fund's obligation to dispose of any REO Property within the time period
specified in Section 3.7(c).
(c) The Master Servicer shall act on behalf of the Trust Fund in
negotiating and taking any other action necessary or appropriate in connection
with the sale of any Defaulted Mortgage Loan or REO Property, including the
collection of all amounts payable in connection therewith. Any sale of a
Defaulted Mortgage Loan or any REO Property shall be without recourse to, or
representation or warranty by, the Trustee, the Depositor, the Master Servicer
or the Trust Fund (except that any contract of sale and assignment and
conveyance documents may contain customary warranties of title, so long as the
only recourse for
56
breach thereof is to the Trust Fund), and, if consummated in accordance with the
terms of this Agreement, neither the Master Servicer, the Depositor nor the
Trustee shall have any liability to the Trust Fund or any Certificateholder with
respect to the purchase price therefor accepted by the Master Servicer or the
Trustee.
(d) The proceeds of any sale after deduction of the expenses of such sale
incurred in connection therewith shall be promptly deposited in the Certificate
Account in accordance with Section 3.2(b).
Section 3.16. Delegation of Duties. In the ordinary course of business, the
Master Servicer or the Trustee may at any time delegate any duties hereunder to
any Person who agrees to conduct such duties in accordance with the applicable
terms of this Agreement. In case of such delegation, the Master Servicer or the
Trustee shall supervise, administer, monitor and oversee the activities of such
Person hereunder to insure that such Person performs such duties in accordance
herewith and shall be responsible for the acts and omissions of such Person to
the same extent as it is responsible for its own actions or omissions hereunder.
Any such delegations shall not relieve the Master Servicer or the Trustee of its
liability and responsibility with respect to such duties, and shall not
constitute a resignation within the meaning of Section 6.4 hereof and shall be
revocable by any successor Master Servicer or the Trustee.
[Section 3.17. Maintenance of Special Hazard Insurance Policy. __________
and/or the Master Servicer will obtain a Special Hazard Insurance Policy for the
Mortgage Pool. The Special Hazard Insurance Policy for the Mortgage Pool will be
issued by [name of insurer] (the "Special Hazard Insurer").] Except as provided
below, the Master Servicer covenants and agrees to supervise and ensure the
maintenance and administration of the Special Hazard Insurance Policy unless
coverage under such Special Hazard Insurance Policy is exhausted through the
payment of claims.
The Master Servicer shall exercise its best reasonable efforts to maintain
the Special Hazard Insurance Policy, unless coverage thereunder has been
exhausted through payment of claims, and will pay the premium for the Special
Hazard Insurance Policy on a timely basis. In the event the Special Hazard
Insurance Policy is cancelled or terminated for any reason other than exhaustion
of coverage through payment of claims, the Master Servicer will exercise its
best reasonable efforts to obtain from another insurer a replacement policy
comparable to the Special Hazard Insurance Policy with a total coverage that is
equal to the then existing coverage of the Special Hazard Insurance Policy;
provided that if the cost of any such replacement policy
57
is greater than the cost of the terminated Special Hazard Insurance Policy, the
amount of coverage under the replacement Special Hazard Insurance Policy may be
reduced to a level such that the applicable premium will not exceed the cost of
the Special Hazard Insurance Policy that was replaced.
Subject to the foregoing limitations, each Special Hazard Insurance Policy
shall provide that, when there has been damage to the Mortgaged Property
securing a defaulted Mortgage Loan and to the extent such damage is not covered
by the standard hazard insurance policy, if any, maintained by the Mortgagor,
the Special Hazard Insurer will pay the lesser of (i) the cost of repair or
replacement of such Mortgaged Property or (ii) upon transfer of such Mortgaged
Property to the Special Hazard Insurer, the unpaid principal balance of such
Mortgage Loan at the time of acquisition of such Mortgaged Property by
foreclosure or deed in lieu of foreclosure, plus accrued interest to the date of
claim settlement (excluding late charges and penalty interest) and certain
expenses incurred in respect of such Mortgaged Property. No claim may be validly
presented under the Special Hazard Insurance Policy unless (i) hazard insurance
on the Mortgaged Property has been kept in force and other reimbursable
protection, preservation and foreclosure expenses have been paid (all of which
must be approved in advance as necessary by the insurer) and (ii) the insured
has acquired title to the Mortgaged Property as a result of default by the
Mortgagor. If the sum of the unpaid principal balance plus accrued interest and
certain expenses is paid by the Special Hazard Insurer, the amount of further
coverage under the Special Hazard Insurance Policy will be reduced by such
amount less any net proceeds from the sale of the Mortgaged Property. Any amount
paid as the cost of repair of the Mortgaged Property will further reduce
coverage by such amount.
[Section 3.18. Letter of Credit. ________ and/or the Master Servicer will
obtain a standby Letter of Credit in favor of the Trustee issued by
________________ (the "L/C Bank") for the Mortgage Pool. Except as provided
below, the Master Servicer hereby covenants and agrees to exercise its best
reasonable efforts to maintain or cause the Letter of Credit to be maintained to
the extent and in the form and amount and for the purposes set forth in this
Agreement. In the event that the Letter of Credit is cancelled or terminated for
any reason or on or before the thirtieth day prior to the expiration date of the
Letter of Credit, the Master Servicer shall give prompt written notice to the
Rating Agency and the Trustee and the Master Servicer shall exercise its best
efforts to obtain a replacement letter of credit, acceptable to the Rating
Agency, comparable in its terms to the Letter of Credit. Prior to delivering any
replacement letter of credit to the Trustee, the Master Servicer shall obtain
confirmation from the Rating Agency that such
58
replacement letter of credit would not have adversely affected the then-current
rating assigned to the Certificates by the Rating Agency at the time of such
rating. The cost of obtaining and maintaining any replacement letter of credit
shall be borne by the Master Servicer.
The maximum obligation of the L/C Bank under the Letter of Credit will be
to honor requests for payment thereunder up to a certain aggregate fixed dollar
amount, net of unreimbursed payments thereunder. The duration of coverage and
the amount and frequency of any reduction in coverage provided by the Letter of
Credit will be [___________] or such terms as will be in compliance with the
requirements established by the Rating Agency without adversely affecting the
rating assigned to the Certificates. The amount available under the Letter of
Credit shall be reduced to the extent of the unreimbursed payments thereunder.
The obligations of the L/C Bank under the Letter of Credit will expire [30 days]
after the latest of the scheduled final maturity dates of the Mortgage Loans or
the repurchase of all Mortgage Loans in the Mortgage Pool.
The Master Servicer shall, not later than three business days prior to each
Distribution Date, determine whether a payment under the Letter of Credit will
be necessary on the Distribution Date and will, no later than the third business
day prior to such Distribution Date, advise the L/C Bank and the Trustee of its
determination, setting forth the amount of any required payment. On the
Distribution Date, the L/C Bank will be required to honor the Trustee's request
for payment thereunder in an amount equal to the lesser of (A) the remaining
amount available under the Letter of Credit or (B) the outstanding principal
balances of any Mortgage Loan with respect to which foreclosure proceedings have
been commenced or with respect to which the Master Servicer has agreed to accept
a deed to the property in lieu of foreclosure that has not been purchased by
[_______] [the Master Servicer] pursuant to the terms of this Agreement, to be
assigned on such Distribution Date (together with accrued and unpaid interest
thereon at the related Mortgage Interest Rate to the related Installment Due
Date). The proceeds of such payments under the Letter of Credit will be
deposited into the Certificate Account and will be distributed to
Certificateholders on such Distribution Date, except to the extent of any
unreimbursed Advances or Administration Fees.]
[Section 3.19. Appointment of a Special Servicer. The Master Servicer has
entered into a Special Servicing Agreement with the Special Servicer. Pursuant
to the Special Servicing Agreement, the Special Servicer may instruct the Master
Servicer and if applicable, any sub-Servicer, to commence or delay foreclosure
proceedings with respect to delinquent Mortgage Loans.]
59
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS; ADVANCES;
STATEMENTS AND REPORTS
Section 4.1. Distributions. Subject to Section 9.1 hereof respecting the
final distribution, not later than the Business Day next preceding each
Distribution Date, the Master Servicer, shall disburse to the Trustee for
deposit in a Distribution Account which shall be an Eligible Account maintained
by the Trustee and the Trustee shall distribute from such amounts on each
Distribution Date to each Certificateholder of record on the preceding Record
Date the amount to be distributed to the Certificateholder according to the
interest of such Certificateholder as set forth in the Holder's Certificate and
as specified in this Agreement. The Distribution Account shall be held in the
name of the Trustee for the benefit of the Certificateholders and amounts on
deposit therein shall remain uninvested. The distribution will be made by check
mailed by first class mail to the Certificateholder at the address appearing in
the Certificate Register, or in the event the Certificateholder is the
registered owner of Certificates with an aggregate initial Certificate Balance
equal to or greater than $__________ with respect to the Certificates and the
Certificateholder has so notified the Trustee in writing five Business Days
prior to the applicable Record Date (which notice the Trustee may rely on until
it receives further notice from the Certificateholder), by wire transfer in
immediately available funds to the account of such Holder at a bank or other
financial or depository institution specified in such notice having appropriate
facilities therefor. In the event that the Trustee is not acting as Certificate
Registrar, the Trustee shall have no liability for its failure to make
distributions to Certificateholders required by this Agreement in the event it
has been unable to obtain all information regarding the identity of
Certificateholders and the interests of each in the Trust Fund to be disbursed
to each Certificateholder required in order to make such distributions; provided
however, that in such case the Trustee shall make such distributions immediately
upon identification of the Certificateholders and their respective amount.
Section 4.2. Subordination; Priority of Distributions.
(a) All of the right, title and interest of the Class B Certificateholders
to receive distributions in respect thereof 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 Class B
Certificateholders shall bear all Excess Credit Losses, Bankruptcy Losses up to
the
60
Bankruptcy Loss Limit, Fraud Losses up to the Fraud Loss Limit and Special
Hazard Losses up to the Special Hazard Loss Limit until the Class B Principal
Balance equals zero.
(b) If the Class B Principal Balance is zero, all Excess Credit Losses,
Fraud Losses, Special Hazard Losses and Bankruptcy Losses to the extent not
previously allocated shall be allocated to the Class A Certificates on the
related Distribution Date.
Section 4.3. Advances.
(a) If on any Determination Date the Master Servicer determines that any
monthly payments of principal and interest due on the immediately preceding
Installment Due Date have not been received, the Master Servicer, to the extent
it determines such amounts are recoverable, shall make an advance ("Advance") on
or before the Business Day prior to the related Distribution Date in an amount
equal to the amount of such delinquent monthly payments, after adjustment of any
delinquent interest payment to interest at the applicable Mortgage Pass-Through
Rate, less an amount, if any, the Master Servicer has determined would not be
recoverable from Liquidation Proceeds or otherwise. For purposes of this Section
4.3, 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 therewith, the Trustee acquired and continues to own the
Mortgaged Properties on behalf of the Certificateholders. If the Master Servicer
shall have determined to make an Advance, it shall on the related Determination
Date furnish a statement to the Trustee (the information in such statement to be
made available to Certificateholders upon request) setting forth the amount to
be advanced on the next succeeding Distribution Date, and shall by the Business
Day prior to such Distribution Date either (i) deposit in the Certificate
Account an amount equal to the Advance, if any, (ii) cause to be made an
appropriate entry in the records of the Certificate Account that funds in such
account being held for future distribution or withdrawal have been, as provided
by this Section 4.3, used by the Master Servicer to make such Advance, or (iii)
any combination of (i) and (ii) above, aggregating the amount of such Advance.
Any such Advance shall be included with the distribution to the
Certificateholders on the related Distribution Date. The Master Servicer will
notify the Trustee on the date that an Advance, if any, has been made. If the
Master Servicer determines not to make an Advance, it shall on the related
Determination Date furnish to the Trustee and the Rating Agency an Officer's
Certificate of such determination. Any funds being held for future distribution
to Certificateholders and so used shall be replaced by the Master Servicer by
deposit in the Certificate Account on or before any
61
future Distribution Date to the extent that funds in the Certificate Account on
such Distribution Date shall be less than payments to Certificateholders
required to be made on such date. The Master Servicer shall be entitled to be
reimbursed from the Certificate Account for all Advances and Nonrecoverable
Advances as provided in Section 3.3.
(b) In the event that the Master Servicer fails to make an Advance as
required pursuant to Section 4.3(a) by the end of the Business Day prior to the
Distribution Date, the Trustee shall make such Advance by making a direct
deposit of such amount to the Distribution Account on the Distribution Date and
the Trustee shall have (and shall be subrogated to) all rights of recovery and
reimbursement for or in request of such Advance to the same extent as the Master
Servicer would have under this Agreement if the Master Servicer had made such
Advance.
Section 4.4. Statements to Certificateholders. (a) On each Distribution
Date, the Trustee shall furnish each Class A Certificateholder and the Rating
Agency a statement setting forth to the extent applicable the following
information with respect to such Distribution Date:
(i) the aggregate amount of such distribution to the Holders of the
Class A Certificates allocable to principal on the Mortgage Loans,
separately identifying the aggregate amount of any Principal Prepayments
included herein;
(ii) the aggregate amount of such distribution to the Holders of the
Class A Certificates allocable to interest on the Mortgage Loans;
(iii) the Class A Principal Balance;
(iv) the Class A Percentage;
(v) the Class A and Class B Prepayment Entitlement;
(vi) the aggregate amount of any Advances included in the amounts
actually distributed to the Certificateholders;
(vii) the aggregate amount of Deferred Interest, if any, added to the
Pool Principal Balance with respect to the related Prepayment Period;
(viii) the aggregate Principal Balance of the Mortgage Loans and the
number of Mortgage Loans as of the close of business on the last day of the
related Prepayment Period prior to the immediately preceding Installment
Due Date, after giving effect to payments allocated to principal reported
under clause (i) above;
62
(ix) the related amount of the Administration Fees (as adjusted
pursuant to Section 4.6 by amounts paid by the Master Servicer pursuant to
Section 3.9) retained or withdrawn from the Certificate Account by the
Master Servicer and the amount of additional servicing compensation
received by the Master Servicer attributable to penalties, fees, excess
Liquidation Proceeds and other items;
(x) the number and aggregate Principal Balances of Mortgage Loans
delinquent with respect to (a) one Monthly Payment, (b) 60 days, (c) 90
days and (d) in foreclosure, as of the close of business on the last day of
the related Prepayment Period prior to the immediately preceding
Installment Due Date;
(xi) if the distribution to the Holders of the Class A Certificates is
less than the full amount that would be distributable to such Holders if
there were sufficient funds available therefor, the amount of the shortfall
and the allocation thereof as between principal and interest;
(xii) the total book value and the number of Mortgaged Properties
acquired through foreclosure or grant of a deed in lieu of foreclosure in
respect of any Mortgage Loan as of the close of business on the last day of
the related Prepayment Period prior to the immediately preceding
Installment Due Date and any income, including rental income, realized with
respect to foreclosed property; the Principal Balance of all Mortgage Loans
as of the day the related Mortgaged Properties were acquired through
foreclosure or grant of deed in lieu of foreclosure;
(xiii) the weighted average Mortgage Pass-Through Rate as of the
Installment Due Date of the month immediately preceding the Month of the
Distribution Date;
(xiv) the amount of Fraud Losses, if any, with respect to the related
Prepayment Period and the cumulative amount of Fraud Losses since the Cut-
off Date;
(xv) the amount of Bankruptcy Losses, if any, with respect to the
related Prepayment Period and the cumulative amount of Bankruptcy Losses
since the Cut-off Date;
(xvi) the amount of Special Hazard Losses, if any, with respect to the
related Prepayment Period and the cumulative amount of Special Hazard
Losses since the Cut-off Date;
(xvii) the amount of Excess Credit Losses, if any, during the related
Prepayment Period and the cumulative amount of Excess Credit Losses since
the Cut-off Date;
63
(xviii) all Advance recovered during the related Prepayment Period; and
(xix) the amount of the Class B Principal Balance.
(b) The Trustee shall forward to each Class B Certificateholder on each
Distribution Date a statement setting forth the same information as is contained
in the statement for Class A Certificateholders pursuant to this Section 4.4,
which can be a part of the statement sent to the Class A Certificateholders
revised to the extent applicable to reflect the distributions to the Class B
Certificateholders. In addition, such statement shall set forth, in the case of
Class B Certificateholders, the amounts withheld and paid to the Class A
Certificateholders on such Distribution Date, together with such other
information as the Trustee deems necessary or appropriate.
(c) Upon reasonable advance notice in writing if required by federal
regulation, the Merger Servicer will provide to each Certificateholder that is a
savings association, bank or insurance company certain reports and access to
information and documentation regarding the Mortgage Loans sufficient to permit
such Certificateholder to comply with applicable regulations of the applicable
regulatory authorities with respect to investment in the Certificates; provided
that the Master Servicer shall be entitled to be reimbursed by each such
Certificateholder for the Master Servicer's actual expenses incurred in
providing such reports and access.
(d) Within 30 days following the end of each calendar year, the Master
Servicer shall furnish to the Trustee, or the Trustee shall prepare, a statement
relating in the aggregate to the Certificates and the Trustee shall furnish to
each person who at any time during the calendar year was a Certificateholder
(a) a statement containing the information set forth in subclauses (i) and (ii)
above, for such calendar year, and (b) such other customary information as the
Trustee deems necessary or desirable for Certificateholders to prepare their tax
returns. Such obligations of the Master Servicer and the Trustee shall be deemed
to have been satisfied to the extent that substantially comparable information
shall be provided by the Master Servicer pursuant to any requirements of the
Code.
(e) On each Distribution Date the Trustee shall forward or cause to be
forwarded by mail to each Holder of a Class R Certificate and to the Master
Servicer a copy of the report forwarded to the Holders of Class A and Class B
Certificates on such Distribution Date.
(f) Within a reasonable period of time after the end of each calendar year,
the Trustee shall furnish or cause to be
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furnished to each Person who at any time during the calendar year was the Holder
of the Class R Certificate a statement containing the information set forth in
clause 4.4(a). This duty of the Trustee shall be deemed to have been satisfied
to the extent that substantially comparable information shall be provided by the
Trustee or the Master Servicer pursuant to any requirements of the Code.
(g) The Master Servicer shall give prompt written notice to the Rating
Agency of any Special Hazard Losses, Fraud Loss or Bankruptcy Loss.
Section 4.5. Foreclosure Reports. Each year beginning in 199_ the Master
Servicer shall make any reports of foreclosures and abandonments of any
Mortgaged Property required by Section 6050J of the Code. In order to facilitate
this reporting process, the Master Servicer, on or before February 28th of each
year, commencing with 199_, shall provide to the Internal Revenue Service and
the Trustee reports relating to each instance occurring during the previous
calendar year in which the Master Servicer (i) on behalf of the Trustee acquires
an interest in a Mortgaged Property through foreclosure or other comparable
conversion in full or partial satisfaction of a Mortgage Loan, or (ii) knows or
has reason to know that a Mortgaged Property has been abandoned. The reports
from the Master Servicer shall be in form and substance sufficient to meet the
reporting requirements imposed by such Section 6050J.
Section 4.6. Adjustment of Administration Fees with Respect to Prepaid
Mortgage Loans. The aggregate amount of the Administration Fee subject to
retention from deposit into or withdrawal from the Certificate Account by the
Master Servicer, in any month of distribution shall be decreased by an amount
equal to one month's interest at the applicable Mortgage Pass-Through Rate on
any Mortgage Loan with respect to which a Principal Prepayment [in full] (plus
that portion of the prepayment received which constitutes the principal
component of any Monthly Payment currently due at the time of receipt of such
prepayment) was made by a Mortgagor in the related Prepayment Period between
Installment Due Dates, less the aggregate amount of all interest (adjusted to
the applicable Mortgage Pass-Through Rates) actually paid by such Mortgagor with
respect to such Principal Prepayment for the period from the preceding
Installment Due Dates for such Mortgage Loan to the date of such Principal
Prepayment. The Master Servicer shall include the amount of any reduction in the
Administration Fee as described herein with the distribution to the
Certificateholders on the related Distribution Date. Notwithstanding the
foregoing, the amount by which the Administration Fee may be reduced with
respect to the related Prepayment Period pursuant to this Section 4.6 shall not
exceed the lesser of (i) 1/12th of ____% of
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the aggregate Principal Balance of the Mortgage Loans or (ii) the aggregate
amount of the Administration Fee that was collected during the related
Prepayment Period by the Master Servicer, and the rights of the
Certificateholders to such portion of the Administration Fee shall not be
cumulative. Except with respect to any Mortgage Loan with scheduled principal
payments due on the first day of the month, in the event any such Mortgage Loan
is prepaid in full in a given month on a date after the scheduled principal
payment due date of such Mortgage Loan in such month, the Master Servicer shall
retain, as an increase in the Administration Fee, the amount of the Mortgagor's
payments attributable to interest at the applicable Mortgage Pass-Through Rate
paid on the Mortgage Loan from the scheduled principal payment due date of such
Mortgage Loan to the date of prepayment.
[Section 4.7. Prohibited Transactions Taxes and Other Taxes.
(a) In the event that any tax (including a tax on "prohibited transactions"
as defined in Section 860F(a)(2) of the Code and including any and all interest,
penalties, fines and additions to tax, as well as any and all reasonable counsel
fees and out-of-pocket expenses incurred in contesting the imposition of such
tax) is imposed on the Trust Fund and is not otherwise paid pursuant to Section
4.7(c) hereof, the Master Servicer shall pay such taxes when and as the same
shall be due and payable (but such obligation shall not prevent the Master
Servicer, the Trustee, or any other appropriate Person from contesting any such
tax in appropriate proceedings and shall not prevent the Master Servicer from
withholding payment of such tax, if permitted by law, pending the outcome of
such proceedings); provided, that the Master Servicer shall be entitled to be
indemnified for any such taxes (excluding taxes referred to in Section 4.7(c))
to the extent set forth in Section 6.3 hereof so long as the Master Servicer's
failure to exercise reasonable care with respect to the performance of its
duties hereunder was not the primary cause of the imposition of such taxes. If
the Master Servicer is indemnified for such taxes pursuant to this Section
4.7(a), such amount shall be first charged against amounts otherwise
distributable to the Holders of the Class R Certificate on a pro rata basis,
then against amounts otherwise distributable to the Holders of the Class A and
the Class B Certificates on a pro rata basis. The Trustee is hereby authorized
to retain from amounts otherwise distributable to the Certificateholders
sufficient funds to reimburse the Master Servicer for the payment of such tax
for which the Master Servicer is entitled to indemnification.
(b) The Class R Certificateholder shall pay on written demand, and shall
indemnify and hold harmless the Trust Fund from and against, any and all taxes
on "prohibited transactions" as defined in Section 860F(a)(2) of the Code
(including, for this
66
purpose, any and all interest, penalties, fines and additions to tax, as well as
any and all reasonable counsel fees and out-of-pocket expenses incurred in
contesting the imposition of such tax) imposed on the Trust Fund as a result of
a purchase by the Class R Certificateholder of a Mortgage Loan pursuant to
Section 9.1 hereof unless the Class R Certificateholder's failure to exercise
reasonable care was not the primary cause of the imposition of such prohibited
transaction taxes.
(c) The Master Servicer shall pay on written demand, and shall indemnify
and hold harmless the Trust Fund from and against, any and all taxes imposed on
the Trust Fund (including, for this purpose, any and all interest, penalties,
fines and additions to tax, as well as any and all reasonable counsel fees and
out-of-pocket expenses incurred in contesting the imposition of such tax).
[Section 4.8. Tax Administration.
(a) The [Master Servicer] is hereby appointed as the initial "tax matters
person" for the REMIC within the meaning of Section 6231(a)(7) of the Code. For
tax years commencing after any transfer by the Master Servicer of its interest
in the Class R Certificates, the holder of the greatest Percentage Interest in
the Class R Certificate at year end shall be designated as the "tax matters
person" with respect to that year, provided however, that the [Master Servicer]
shall obtain the consent of such Class R Certificateholder to appointment of the
Master Servicer as attorney-in-fact and agent for the "tax matters person."
(b) The [Master Servicer], as a fiduciary defined in Section 7701(a)(6) of
the Code, shall, after it prepares or causes to be prepared such returns, sign
and file the annual income tax return (Form 1066) as well as such other federal
and state information and other returns as it may require under the REMIC
Provisions (including, but not limited to, Schedule Q of Form 1066 which shall
also be provided quarterly by the [Master Servicer] to the Class R
Certificateholder) for the Trust Fund (unless it is advised by the Master
Servicer that the filing of such returns is no longer required under the Code),
based on a taxable year for the Trust Fund that is the calendar year. The
Trustee shall, at its expense, prepare or cause to be prepared all such annual
income tax returns and information returns. [The income tax return filed for the
first taxable year of the Trust Fund shall include the REMIC election referred
to in Section 2.5 hereof.]
(c) In order to enable the Trustee to perform its duties as set forth in
this Section 4.8, the Master Servicer agrees to provide any tax forms,
instruments or other documents related
67
thereto, as the Trustee may reasonably request, including, without limitation,
any tax forms, instruments or other documents prepared by the Master Servicer
pursuant to this Section 4.8 In order to enable the Trustee to perform its
duties as set forth in this Section 4.8, the Master Servicer shall use its best
efforts to cause to be delivered to the Trustee within ten (10) days after the
Closing Date all information or data that the Trustee determines to be relevant
for tax purposes to the valuations and offering prices of the Class A
Certificates and the Class B Certificates, including, without limitation, the
price, yield, prepayment assumption and projected cash flows of the Class A
Certificates and the Class B Certificates. Thereafter, the Master Servicer shall
use its best efforts to provide to the Trustee, promptly upon request therefor,
any such additional information or data that the Trustee may, from time to time,
request in order to enable the Trustee to perform its duties as set forth in
this Section 4.8.]
Section 4.9. Equal Status of Administration Fee. The right of the Master
Servicer to receive its Administration Fee will be equal and not subordinate to
the right of the Certificateholders to receive principal and interest payments
based on their interests as provided herein. The Master Servicer's
Administration Fee may be collected from Monthly Payments as received pursuant
to Section 3.2 without deposit into the Certificate Account, whereas the
Certificateholders' distributions shall be made on a delayed basis as set forth
in the terms of the Certificates.
[Section 4.10. Appointment of Paying Agent and Certificate Administrator.
The Master Servicer or the Trustee may each appoint an Eligible Institution to
act as a paying agent (the "Paying Agent") or a certificate administrator (the
"Certificate Administrator"), as the case may be, in order to delegate to such
Eligible Institution any of its duties under this Agreement to administer the
issuance, transfer and exchange of the Certificates, administer payments to
Certificateholders or prepare information related to the Certificates; provided,
that the Master Servicer and the Trustee shall remain primarily responsible for
any duties so delegated; provided, further, that the Master Servicer and the
Trustee shall receive no additional compensation in connection with such
appointment and delegation. The Master Servicer or the Trustee, as the case may
be, shall send written notice to each other and to all Certificateholders of any
appointment pursuant to this Section 4.10.]
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ARTICLE V
THE CERTIFICATES
Section 5.1. The Certificates. The Class A shall be issued in minimum
denominations of $___________ and integral multiples of $___________ (except for
one Class A Certificate that evidences such additional Denomination which will
result in all Class A Certificates evidencing the appropriate principal balance
of Mortgage Loans), the Class B Certificate shall be issued in minimum
denominations of $___________ and integral multiples of $___________ (except for
one Class B Certificate that evidences such additional Denomination which will
result in all Class B Certificates evidencing the appropriate principal balance
of the Mortgage Loans) (each, a "Single Certificate") and shall be substantially
in the form set forth as Exhibit A and Exhibit B, respectively. The Class R
Certificate shall be issuable solely as a single Class R Certificate evidencing
the entire Percentage Interest in the Class R Distribution. On original issue
the Certificates shall be executed and delivered by the Depositor to the Trustee
for authentication and redelivery upon the order of the [Master Servicer] upon
receipt by the Trustee of the documents specified in Section 2.1 (subject to any
document exceptions reported pursuant to the Trustee's review according to the
provisions of Section 2.2). The Certificates shall be executed by manual or
facsimile signature on behalf of the Depositor by its Chairman or Vice Chairman
of the Board, its President or one of its Vice Presidents. Certificates bearing
the manual or facsimile signatures of individuals who were at any time the
proper officers of the Depositor shall bind the Depositor notwithstanding that
such individuals or any of them have ceased to hold such offices prior to the
authentication and delivery of such Certificates or did not hold such offices at
the date of such Certificates. No Certificate shall be entitled to any benefit
under this Agreement, or be valid for any purpose, unless there appears on such
Certificate a certificate of authentication substantially in the form provided
for herein executed by the Trustee by manual signature, and such certificate of
authentication upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication.
Pending the preparation of definitive Certificates, the Master Servicer may
execute and deliver, and upon the order of the Depositor the Trustee shall
authenticate and redeliver, temporary Certificates which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any
denomination, substantially of the tenor of the definitive Certificates in lieu
of which they are issued and with such variations as the officers of the Master
Servicer executing such
69
Certificates may determine, as evidenced by their execution of such
Certificates.
If temporary Certificates are issued, the Master Servicer will cause
definitive Certificates to be prepared without unreasonable delay and delivered
to the Trustee within 10 Business Days of the Closing Date. After the
preparation of definitive Certificates, the temporary Certificates shall be
exchangeable for definitive Certificates upon surrender of the temporary
Certificates at the office or agency of the Master Servicer maintained for such
purpose pursuant to Section 5.5, without charge to the Holder. Upon surrender
for cancellation of any one or more temporary Certificates, the Master Servicer
shall execute and deliver and the Trustee shall authenticate and redeliver in
exchange therefor a like principal amount of definitive Certificates of the same
Percentage Interest. Until so exchanged the temporary Certificates shall in all
respects be entitled to the same benefits under this Agreement as definitive
Certificates of the same Percentage Interest. The Master Servicer shall provide
the Trustee, on a continuous basis, an adequate inventory of certificates to
facilitate issuance and transfer of certificates.
Section 5.2. Registration of Transfer and Exchange of Certificates.
(a) The Master Servicer shall cause to be kept at one of the offices or
agencies to be maintained by the Master Servicer in accordance with the
provisions of Section 5.5 a Certificate Register in which, subject to such
reasonable regulations as it may prescribe, the Master Servicer shall provide
for the registration of transfers and exchanges of Certificates as herein
provided. The Trustee is hereby initially appointed Certificate Registrar for
the purpose of registering transfers and exchanges of Certificates as herein
provided.
(b) Every Certificate presented or surrendered for transfer or exchange
shall (if so required by the Master Servicer, the Certificate Registrar or the
Trustee) be duly endorsed by, or be accompanied by a written instrument of
transfer in form and such other documents or other writings satisfactory to the
Master Servicer and the Certificate Registrar duly executed by, the holder
thereof or his attorney duly authorized in writing. Subject to the two preceding
paragraphs, upon surrender for registration of transfer of any Certificate at
any office or agency of the Master Servicer maintained for such purpose pursuant
to Section 5.5, the Master Servicer shall prepare and execute, and the Trustee
shall date, authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Certificates of a like aggregate Percentage
Interest.
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(c) At the option of the Certificateholders, Certificates may be exchanged
for other Certificates of a like aggregate Percentage Interest upon surrender of
the Certificates to be exchanged at any such office or agency. Whenever any
Certificates are so surrendered for exchange, the Master Servicer shall prepare
and execute, and the Trustee shall date, authenticate and deliver, the
Certificates which the Certificateholder making the exchange is entitled to
receive.
(d) No transfer of the Class A Certificates shall be made to an "employee
benefit plan" as defined in Section 3(3) of ERISA which is subject to Title I of
ERISA, a "plan" as defined in Section 4975 of the Code, or an entity deemed to
hold plan assets of any such employee benefit plan or plan (each, a "Plan
Entity") unless at the time of such transfer:
(i) The Class A Certificates qualify as "publicly-offered securities"
within the meaning of 29 C.F.R. (S) 2510.3-101(b)(2);
(ii) The Class A Certificates qualify for Prohibited Transaction
Exemption 83-1 (under 48 Federal Register 895 (1983)) and
immediately after the transfer, the transferee will not hold more
than 25% of the Class A Certificates; or
(iii) The Class A Certificates qualify for an individual prohibited
transaction exemption granted to the managing or co-managing
underwriter and the transferee is an "accredited investor" as
defined in Rule 501(a)(1) of Regulation D under the 1933 Act.
No transfer of the Class B or R Certificates shall be made to any Plan
Entity. The Trustee, the Certificate Registrar and/or the Master Servicer may
require the prospective transferee to certify to the Trustee, the Certificate
Registrar and/or the Master Servicer in writing the facts establishing that the
transferee is not a Plan Entity, or that a requirement specified above for
transfer of a Class A Certificate to a Plan Entity is satisfied.
(e) No transfer of the Class B or Class R Certificates shall be made unless
such transfer is made pursuant to an effective registration statement under the
Securities Act or is exempt from the registration requirements under said Act.
In the event that a transfer is to be made in reliance upon an exemption from
the Securities Act, the Trustee may require, in order to assure compliance with
the Securities Act, that the Certificateholder desiring to effect such transfer
and such Certificateholder's prospective transferee each certify to the Trustee
and
71
the Master Servicer in writing the facts surrounding the transfer. In the event
that, in the sole judgment of the Trustee, such certification of facts does not
on its face establish the availability of an exemption under Section 4(2) and
4(5) or another provision of the Securities Act, the Trustee may require an
Opinion of Counsel satisfactory in form and substance to it and the Master
Servicer that such transfer may be made pursuant to an exemption from the
Securities Act, which Opinion of Counsel shall not be obtained at the expense of
the Trustee, the Trust Fund or the Master Servicer.
(f) The Class R Certificate shall not be transferred, sold, pledged or
otherwise disposed of to any person having a net worth of less than $__________.
In the event that the Class R Certificate is proposed to be transferred, the
proposed transferee shall, prior thereto, certify to the Trustee in writing that
it satisfies the net worth requirement set forth in the preceding sentence.
[(g) Prior to the registration of any transfer, sale, pledge or other
disposition of any Class R Certificate, the proposed transferee shall certify in
writing to the Trustee, in an affidavit, that such transferee is not a
Disqualified Organization (as defined in Section 860E(e)(5) of the Code). In
addition, the Trustee may require, prior to and as a condition of such transfer,
the delivery by the proposed transferee of an Opinion of Counsel, satisfactory
in form and substance to the Trustee, that such proposed transferee is not a
Disqualified Organization. Notwithstanding the registration in the Register of
any transfer, sale, pledge or other disposition of the Class R Certificate to a
Disqualified Organization, such registration shall be of no legal force or
effect whatsoever and such Disqualified Organization shall not be deemed to be a
Certificateholder for any purpose hereunder, including (but not limited to) the
receipt of distributions on such Class R Certificate. In addition, any transfer,
sale, pledge or other disposition of the Class R Certificate to a Pass-Thru
Entity (as defined in Section 860E(e)(6)(B) of the Code) shall not be effective
unless the proposed transferee shall have agreed in writing, in such form as the
Trustee may require, to provide to the Trustee such information as the Trustee
may reasonably require concerning any record interest holder or principal of
such Pass-Thru Entity who is or was a Disqualified Organization. Any Class R
Certificateholder, by its acceptance thereof, shall be deemed for all purposes
to have consented to the provisions of this paragraph. The restrictions
described in this paragraph shall not apply to a transfer of a Class R
Certificate if the Trustee has received an Opinion of Counsel to the effect that
the restrictions described in this paragraph are not necessary to avoid the
imposition of tax on the Trust Fund or the
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disqualification of the Trust Fund as a REMIC under the REMIC Provisions.]
(h) The Trustee shall have no liability to the Trust Fund arising from a
transfer of a Class B or the Class R Certificate in reliance upon a
certification, ruling or Opinion of Counsel described in this Section 5.2.
(i) No service charge shall be made to a Certificateholder for any transfer
or exchange of Certificates, but the Certificate Registrar 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 Certificates.
(j) All Certificates surrendered for transfer or exchange shall be
cancelled by the Certificate Registrar or the Trustee in accordance with their
standard procedures.
(k) The Master Servicer will cause the Certificate Registrar (unless the
Trustee is acting as Certificate Registrar) to provide to the Trustee notice of
each transfer of a Certificate and an updated copy of the Certificate Register
in June and December of each year.
Section 5.3. Mutilated, Destroyed, Lost or Stolen Certificates. If (i) any
mutilated Certificate is surrendered to the Certificate Registrar, or the Master
Servicer and the Certificate Registrar receive evidence to their satisfaction of
the destruction, loss or theft of any Certificate, and (ii) there is delivered
to the Master Servicer and the Certificate Registrar such security or indemnity
as may be required by them to save each of them harmless, then, in the absence
of notice to the Master Servicer or the Certificate Registrar that such
Certificate has been acquired by a bona fide purchaser, the Master Servicer
shall execute and the Trustee 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 Percentage Interest. Upon the issuance of any new
Certificate under this Section 5.3, the Master Servicer may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Certificate Registrar) connected therewith. Any replacement
Certificate issued pursuant to this Section 5.3 shall constitute complete and
indefeasible evidence of ownership in the Trust Fund, as if originally issued,
whether or not the lost, stolen, or destroyed Certificate shall be found at any
time.
Section 5.4. Persons Deemed Owners. Prior to the due presentation of a
Certificate for registration of transfer, the Depositor, the Master Servicer,
the Trustee, the Certificate
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Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name any Certificate is
registered as the owner of such Certificate for the purpose of receiving
distributions pursuant to Section 4.1, and for all other purposes whatsoever,
and neither the Depositor, the Master Servicer, the Trustee, the Certificate
Registrar nor any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar shall be affected by notice to the contrary.
Section 5.5. Maintenance of Office or Agency. The Trustee will maintain, at
its expense, an office or agency where Certificates may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Certificate Registrar in respect of the Certificates and this Agreement may
be served. The Trustee initially designates the Corporate Trust Office and the
principal corporate trust office of the Authenticating Agent, if any, as its
offices and agencies for said purposes.
ARTICLE VI
THE DEPOSITOR AND THE MASTER SERVICER
Section 6.1. Liability of the Depositor and the Master Servicer. The
Depositor and the Master Servicer shall each be liable in accordance herewith
only to the extent of the obligations specifically imposed by this Agreement and
undertaken hereunder by the Depositor and the Master Servicer herein.
Section 6.2. Merger or Consolidation of the Depositor or the Master
Servicer. Subject to the following paragraph, the Depositor and the Master
Servicer each will keep in full effect its existence, rights and franchises as
corporations, each under the laws of the jurisdiction of its incorporation, and
will obtain and preserve its qualification to do business as a foreign
corporation in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Agreement, the
Certificates or any of the Mortgage Loans and to perform its respective duties
under this Agreement.
The Depositor or the Master Servicer may be merged or consolidated with or
into any Person, or transfer all or substantially all of its assets to any
Person, in which case any Person resulting from any merger or consolidation to
which the Depositor or Master Servicer shall be a party, or any Person
succeeding to the business of the Depositor or Master Servicer, shall be the
successor of the Depositor or Master Servicer hereunder, without the execution
or filing of any paper or any
74
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
Section 6.3. Limitation on Liability of the Master Servicer and Others.
Neither the Master Servicer nor any of the directors, officers, employees or
agents of the Master Servicer shall be under any liability to the Trust Fund or
the Certificateholders for any action taken or for refraining from the taking of
any action in good faith pursuant to this Agreement, or for errors in judgment;
provided, however, that this provision shall not protect any director, officer,
employee or agent of the Master Servicer against any liability which would
otherwise be imposed by reason of willful misfeasance, bad faith or gross
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder, nor shall this provision protect the Master
Servicer against any liability that would otherwise be imposed by reason of
negligence in the performance of duties hereunder. The Master Servicer and any
director, officer, employee or agent of the Master Servicer may rely in good
faith on any document of any kind prima facie properly executed and submitted by
any Person respecting any matters arising hereunder. The Master Servicer and any
director, officer, employee or agent of the Master Servicer shall be indemnified
by the Trust Fund and held harmless against any loss, liability or expense
incurred in connection with any legal action relating to this Agreement or the
Certificates, other than any loss, liability or expense, in the case of the
Master Servicer and any director, officer, employee or agent of the Master
Servicer, incurred by reason of willful misfeasance, bad faith or gross
negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder or, in the case of the Master
Servicer, as Master Servicer, incurred by reason of negligence in the
performance of any duties hereunder. The Master Servicer shall not be under any
obligation to appear in, prosecute or defend any legal action which is not
incidental to its duties to service the Mortgage Loans in accordance with this
Agreement and which in its opinion may involve it in any expense or liability;
provided, however, that the Master Servicer may in its discretion undertake any
such action which it may deem necessary or desirable in respect of this
Agreement and the rights and duties of the parties hereto and the interests of
the Certificateholders hereunder. In such event, the legal expenses and costs of
such action and any liability resulting therefrom shall be expenses, costs and
liabilities of the Trust Fund, and the Master Servicer shall be entitled to be
reimbursed therefor out of the Certificate Account as provided by Section 3.3.
Section 6.4. Master Servicer Not to Resign. The Master Servicer shall not
resign from the obligations and duties hereby imposed on it, except upon
determination that its duties
75
hereunder are no longer permissible under applicable law or are in material
conflict by reason of applicable law with any other activities carried on by it,
the other activities of the Master Servicer so causing such a conflict being of
a type and nature carried on by the Master Servicer at the date of this
Agreement. Any such determination permitting the resignation of the Master
Servicer shall be evidenced by an Opinion of Counsel to such effect delivered to
the Trustee. The Master Servicer shall notify the Rating Agency of any such
resignation. No such resignation shall become effective until the Back-up
Servicer or other successor servicer shall have assumed the Master Servicer's
responsibilities and obligations in accordance with Section 7.5 hereof.
Notwithstanding the limitations stated above, the Master Servicer may
transfer its obligations, duties and rights hereunder without the consent of the
Certificateholders, provided that (i) the Master Servicer obtains the prior
written consent of the Rating Agency, (ii) the transferee is a FNMA- or FHLMC-
approved servicer having a net worth of not less than $______________, (iii) the
successor servicer assumes all of the Master Servicer's responsibilities and
obligations (except the repurchase obligations set forth in Sections 2.2 and 2.3
hereof, which shall remain obligations of the Depositor) in accordance with
Section 7.5 hereof, and (iv) the then-current rating of the Class A Certificates
will not be reduced as a result of such transfer, and (v) has, in the reasonable
opinion of the Trustee, the qualifications, resources and experience to properly
carry out, observe and perform the duties, obligations and responsibilities of
Master Servicer hereunder; provided however, that the foregoing clause (v) is
intended solely for the benefit of (and may be exercised or waived at the sole
discretion of) the Trustee, to enable the Trustee to assure itself that any
successor Master Servicer has such acceptable qualifications, resources and
experience, and such clause (v) is not intended to be for the benefit of, and
shall not be relied upon or enforced by, any Certificateholder, and provided
further that, any consent to such transfer will not be unreasonably withheld by
the Trustee.
ARTICLE VII
DEFAULT
Section 7.1. Events of Default. In case one or more of the following Events
of Default by the Master Servicer shall occur and be continuing, that is to say:
(i) any failure by the Master Servicer to distribute or cause to be
distributed to the Certificateholders any
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payment (other than an Advance) required to be made under the terms of the
Certificates and this Agreement which continues unremedied for a period of
five days after the date upon which written notice of such failure,
requiring the same to be remedied, shall have been given to the Master
Servicer by the Trustee or the Holders of Certificates evidencing, in
aggregate, not less than 25% of the Trust Fund or 51% of the aggregate
Percentage Interests of any Class of Certificates;
(ii) any failure on the part of the Master Servicer duly to observe or
perform in any material respect any other of the covenants or agreements on
the part of the Master Servicer in the Certificates or in this Agreement
which continues unremedied for a period of 60 days after the date on which
written notice of such failure, requiring the same to be remedied, shall
have been given to the Master Servicer by the Trustee, or to the Master
Servicer and the Trustee by the Holders of Certificates evidencing, in
aggregate, not less than 25% of the Trust Fund or 51% of the aggregate
Percentage Interests of any class of certificates;
(iii) a decree or order of a court or agency or supervisory authority
having jurisdiction in the premises for the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt, marshalling
of assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Master
Servicer and such decree or order shall have remained in force undischarged
or unstayed for a period of 60 days;
(iv) the Master Servicer shall consent to the appointment of a
conservator or receiver or liquidator or liquidating committee in any
insolvency, readjustment of debt, marshalling of assets and liabilities,
voluntary liquidation or similar proceedings of or relating to the Master
Servicer or of or relating to all or substantially all of its property;
(v) the Master Servicer shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take advantage
of any applicable insolvency or reorganization statute, make an assignment
for the benefit of its creditors or voluntarily suspend payment of its
obligations; or
(vi) any failure of the Master Servicer to make any Advance required
to be made from its own funds pursuant to Section 4.3(a) which continues
unremedied for a period of
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one Business Day after the date upon which such Advance was to have been
made;
then, if an Event of Default described in clauses (i)-(v) of this Section 7.1
shall occur, and in each and every such case, subject to applicable law, so long
as an Event of Default shall not have been remedied, either the Trustee or the
Holders of Certificates evidencing, in aggregate, not less than 25% of the Trust
Fund or 51% of the aggregate Percentage Interests of any Class of Certificates
by notice in writing to the Master Servicer [and the Back-up Servicer] (and to
the Trustee if given by the Certificateholders [and the Back-up Servicer if
given by the Trustee]) may terminate all of the rights and obligations of the
Master Servicer under this Agreement, but without prejudice to any rights it may
have to reimbursement of expenses, Advances and other advances of its own funds
as Master Servicer to the extent permitted by this Agreement, other than the
Depositor's (or its successors') obligation to repurchase any Mortgage Loans
pursuant to Section 2.2 or 2.3 shall survive any such termination. If an Event
of Default described in clause (vi) hereof shall occur, the Trustee shall, by
notice in writing to the Master Servicer [and the Back-up Servicer], which shall
be telecopied to the Master Servicer, immediately terminate all of the rights
and obligations of the Master Servicer, under this Agreement and in and to the
Mortgage Loans and the proceeds thereof. On or after the receipt by the Master
Servicer of such written notice, all authority and power of the Master Servicer
under this Agreement, whether with respect to the Certificates or the Mortgage
Loans or otherwise, shall pass to and be vested in [the Trustee or the Back-up
Servicer] pursuant to and under this Section 7.1 (subject to the provisions of
Section 7.5 in the case of [the Trustee or the Back-up Servicer]); and, without
limitation, the Trustee is hereby authorized and empowered to execute and
deliver, on behalf of the Master Servicer, as attorney-in-fact or otherwise, any
and all documents and other instruments, and to do or accomplish all other acts
or things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or assignment of
the Mortgage Loans and related documents or otherwise at the expense of the
Master Servicer. The Master Servicer agrees to cooperate with the Trustee [and
the Back-up Servicer] in effecting the termination of the Master Servicer's
responsibilities and rights hereunder and shall promptly provide the Trustee all
documents and records whether in written or electronic form reasonably requested
by it to enable [it] [the Back-up Servicer] to assume the Master Servicer's
functions hereunder and shall promptly also transfer to the Trustee of this
Agreement all amounts which then have been or should have been deposited in the
Certificate Account by the Master Servicer or which are thereafter received with
respect to the Mortgage Loans as well as any escrowed funds held by it or in
connection with its servicing activities hereunder. The Master
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Servicer and the Trustee shall give the Rating Agency notice of any Event of
Default.
Section 7.2. Other Remedies of Trustee. During the continuance of any Event
of Default, so long as such Event of Default shall not have been remedied, the
Trustee, in addition to the rights specified in Section 7.1, shall have the
right, in its own name as trustee of an express trust, to take all actions now
or hereafter existing at law, in equity or by statute to enforce its rights and
remedies and to protect the interests, and enforce the rights and remedies, of
the Certificateholders (including the institution and prosecution of all
judicial, administrative and other proceedings and the filing of proofs of claim
and debt in connection therewith). Except as otherwise expressly provided in
this Agreement, no remedy provided for by this Agreement shall be exclusive of
any other remedy, and each and every remedy shall be cumulative and in addition
to any other remedy and no delay or omission to exercise any right or remedy
shall impair any such right or remedy or shall be deemed to be a waiver of any
Event of Default.
Section 7.3. Directions by Certificateholders and Duties of Trustee During
Event of Default. During the continuance of any Event of Default, Holders of
Certificates evidencing, in aggregate, not less than 25% of the Trust Fund or
51% of the aggregate Percentage Interests of any Class of Certificates may
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred upon the
Trustee under this Agreement, provided, however, that the Trustee shall be under
no obligation to pursue any such remedy, or to exercise any of the trusts or
powers vested in it by this Agreement (including, without limitation, (i) the
conducting or defending of any administrative action or litigation hereunder or
in relation hereto and (ii) the terminating of the Master Servicer or any
successor servicer from its rights and duties as servicer hereunder) at the
request, order or direction of any of the Certificateholders, unless such
Certificateholders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby and, provided further, that, subject to the provisions of
Section 8.1, the Trustee shall have the right to decline to follow any such
direction if the Trustee, in accordance with an Opinion of Counsel, determines
that the action or proceeding so directed may not lawfully be taken or if the
Trustee in good faith determines that the action or proceeding so directed would
involve it in personal liability or be unjustly prejudicial to the non-assenting
Certificateholders or if the Trustee has received contrary directions pursuant
to this Section.
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Section 7.4. Action upon Certain Failures of Master Servicer and upon Event
of Default. In the event that the Trustee shall have knowledge of any failure of
the Master Servicer specified in Section 7.1(i) or (ii) which would become an
Event of Default upon the Master Servicer's failure to remedy the same after
notice, the Trustee may, but need not if the Trustee deems it not in the
Certificateholders' best interest, give notice thereof to the Master Servicer.
In the event that the Trustee shall have knowledge of an Event of Default, the
Trustee shall give prompt written notice thereof to the Certificateholders and
to the Rating Agency. For all purposes of this Agreement, in the absence of
actual knowledge by a Responsible Officer of the Trustee, the Trustee shall not
be deemed to have knowledge of any failure of the Master Servicer as specified
in Section 7.1(i) and (ii) or any Event of Default unless notified thereof in
writing by the Master Servicer or by a Certificateholder.
Section 7.5. Appointment of [Back-up Servicer].
(a) When the Master Servicer receives a notice of termination pursuant to
Section 7.1 or the Trustee receives the resignation of the Master Servicer
evidenced by an Opinion of Counsel pursuant to Section 6.4, [the Trustee] [or
the Back-up Servicer], shall become the successor in all respects to the Master
Servicer in its capacity as Master Servicer under this Agreement and the
transactions set forth or provided for herein, provided however, that [the
Trustee's] [or the Back-up Servicer's] obligation to make any Advances shall be
no greater than set forth in Section 4.3 of this Agreement, and [the Trustee]
[or the Back-up Servicer] shall have all the rights and powers and be subject to
all the responsibilities, duties and liabilities relating thereto placed on the
Master Servicer by the terms and provisions hereof (except those contained in
Sections 2.2 and 2.3) and in its capacity as such successor shall have the same
limitation of liability herein granted to the Master Servicer and provided
further that [the Trustee] [or the Back-up Servicer] shall not be required to
make an Advance from its own funds if such Advance would be prohibited by law.
As compensation therefor, [the Trustee] [or the Back-up Servicer] shall be
entitled to receive monthly an amount not to exceed the Administration Fee as
agreed by [the Trustee] [or the Back-up Servicer] and the Master Servicer,
together with such other servicing compensation in the form of assumption fees,
late charges, prepayment fees or otherwise as provided in Section 3.9. If the
agreed amount is less than the Administration Fee, the excess shall be paid to
the Class R Certificateholder. If [the Trustee] [or the Back-up Servicer] and
the Master Servicer shall not agree on the amount of such compensation, the
Trustee shall solicit bids for a successor servicer as described in Section
7.5(b), provided, however, if no successor servicer is
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obtained through the bidding process, [the Trustee] [or the Back-up Servicer]
may act as such, or may pursuant to Section 7.5(b) appoint a successor servicer
to act as such, for the Administration Fee together with such other servicing
compensation as provided in Section 3.9. In no event shall [the Trustee's] [or
the Back-up Servicer's] assumption of or succession to the obligations of the
Master Servicer make [the Trustee] [or the Back-up Servicer] liable for any
actions or omissions of the Master Servicer in its capacity as Master Servicer.
(b) Notwithstanding the above, the Trustee may and shall, if [it] [or the
Back-up Servicer] is unable (or unwilling due to disagreement on compensation as
provided in Section 7.5(a)) to act as Master Servicer, appoint, or petition a
court of competent jurisdiction to appoint, any established housing and home
finance institution, bank or mortgage servicing institution which is an approved
FNMA or FHLMC servicer having a net worth of not less than $________________ and
meeting such other standards as are set forth in Section 6.4 hereof for a
successor to the Master Servicer hereunder in the assumption of all or any part
of the responsibilities, duties or liabilities of the Master Servicer hereunder
(except the repurchase obligations set forth in Sections 2.2 and 2.3 hereof,
which shall remain obligations of the Depositor); provided, however, that until
such appointment and assumption, the Trustee will continue to perform the
servicing obligations pursuant to this Agreement (and until such time shall be
entitled to receive the Administration Fees pursuant to Section 3.9). The
compensation of any successor servicer so appointed shall be equal to the
Administration Fees specified in Section 3.9 together with such other
compensation as is provided in said Section 3.9. In the event the Trustee is
required to solicit bids as provided above, the Trustee shall solicit, by public
announcement, bids from housing and home finance institutions, banks and
mortgage servicing institutions acceptable to the Trustee and meeting the
qualifications set forth above in this Section for the purchase of the servicing
functions. Such public announcement shall specify that the successor servicer
shall be entitled to the full amount of the Administration Fee on the aggregate
unpaid principal balance of the Mortgage Loans as servicing compensation for
servicing the Mortgage Loans, together with the other servicing compensation in
the form of assumption fees, late payment charges, prepayment fees or otherwise
as provided in Section 3.9. Within 45 days after any such public announcement,
the Trustee shall negotiate and effect the sale, transfer and assignment of the
servicing rights and responsibilities hereunder (except the repurchase
obligations set forth in Section 2.2 and 2.3 hereof, which shall remain
obligations of the Depositor) to the qualified party submitting the highest
qualifying bid. The Trustee shall deduct all costs and expenses of any public
announcement and of any
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sale, transfer and assignment of the servicing rights and responsibilities
hereunder from any sum received by the Trustee from the successor to the Master
Servicer in respect of such sale, transfer and assignment. After such
deductions, the remainder of such sum shall be paid by the Trustee to the Class
R Certificateholder at the time of such sale, transfer and assignment to the
Master Servicer's successor.
(c) The Master Servicer agrees to cooperate with the Trustee and any
successor servicer in effecting the termination of the Master Servicer's
servicing responsibilities and rights hereunder and shall promptly provide the
Trustee or such successor servicer, as applicable, all documents and records
reasonably requested by it to enable it to assume the Master Servicer's
functions hereunder and shall promptly also transfer to the Trustee or such
successor servicer, as applicable, all amounts which then have been or should
have been deposited in the Certificate Account [and the Reserve Fund] by the
Master Servicer or which are thereafter received with respect to the Mortgage
Loans. Neither the Trustee nor any other successor servicer shall be deemed to
be in default hereunder by reason of any failure to make, or any delay in
making, any distribution hereunder or any portion thereof caused by the failure
of the Master Servicer to deliver, or any delay in delivering, cash, documents
or records to it.
Section 7.6. Notification to Certificateholders. Upon any termination of
the Master Servicer or appointment of a successor to the Master Servicer, in
each case as provided herein, the Trustee shall as soon as practicable give
written notice thereof to Certificateholders at their respective addresses
appearing in the Certificate Register and the Rating Agency.
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.1. Duties of Trustee. The Trustee, prior to the occurrence of an
Event of Default and after the curing of all Events of Default which may have
occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement. In case an Event of Default has
occurred (which has not been cured), the Trustee, subject to the provisions of
Sections 7.1, 7.3, 7.4 and 7.5, shall exercise such of the rights and powers
vested in it by this Agreement, and use the same degree of care and skill in
their exercise as a prudent person would exercise or use under the circumstances
in the conduct of such person's own affairs. Any permissive right of the Trustee
enumerated in this Agreement shall not be construed as a duty.
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Subject to Sections 8.2(i), 8.3 and 8.4, the Trustee, upon receipt of all
resolutions, certificates, statements, opinions, reports, documents, orders or
other instruments furnished to the Trustee which are specifically required to be
furnished pursuant to any provision of this Agreement, shall examine them to
determine whether they are in the form required by this Agreement. If any such
instrument is found not to conform to the requirements of this Agreement in a
material manner, the Trustee shall take action as it deems appropriate to have
the instrument corrected, and if the instrument is not corrected to the
Trustee's reasonable satisfaction, the Trustee will provide notice thereof to
the Certificateholders and the Rating Agency.
No provision of this Agreement shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act or
its own willful misconduct or in the event the Trustee is acting as successor
servicer pursuant to Section 7.5, to the standard imposed on the Master Servicer
pursuant to Section 6.3 of this Agreement; provided, however, that:
(i) Prior to the occurrence of an Event of Default and after the
curing of all such Events of Default which may have occurred, the duties
and obligations of the Trustee shall be determined solely by the express
provisions of this Agreement, the Trustee shall not be liable except for
the performance of such duties and obligations as are specifically set
forth in this Agreement, no implied covenants or obligations shall be read
into this Agreement against the Trustee and, in the absence of bad faith on
the part of the Trustee, the Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the Trustee and conforming
to the requirements of this Agreement;
(ii) The Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of Certificateholders holding Certificates
which have an aggregate Denomination not less than 25% of the aggregate
Denomination of all Certificates relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Agreement;
(iii) The Trustee shall not be liable for any error of judgment made
in good faith by any Responsible Officer, unless it shall be proved that
the Trustee or such Responsible Officer was negligent in ascertaining the
pertinent facts;
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(iv) The Trustee shall not be liable for any act or omission of the
Depositor (except for its own acts or omissions as Master Servicer
hereunder) or for any but its own acts or omissions; and
(v) The Trustee shall not be deemed to have knowledge of any matter,
including without limitation an Event of Default, unless one of its
Responsible Officers has actual knowledge thereof or unless written notice
thereof, referring to the Certificates, the Depositor, the Trust Fund or
this Agreement is received by the Trustee at its Corporate Trust Office.
None of the provisions contained in this Agreement shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties as Trustee hereunder or in the
exercise of any of its rights or powers if there is reasonable ground for
believing that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it.
Section 8.2. Certain Matters Affecting Trustee. Except as otherwise
provided in Section 8.1:
(i) Before acting or refraining from acting the Trustee may request or
require an Officer's Certificate; the Trustee may rely and shall be
protected in acting or refraining from acting upon any resolution,
Officer's Certificate, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent, order,
appraisal, bond or other paper or document believed by it to be genuine and
to have been signed or presented by the proper party or parties;
(ii) The Trustee may consult with counsel, and any Opinion of Counsel
shall be full and complete authorization and protection in respect of any
action taken or suffered or omitted by it hereunder in good faith and in
accordance with such Opinion of Counsel;
(iii) The Trustee shall not be personally liable for any action taken,
suffered or omitted by it in good faith and believed by it to be authorized
or within the discretion or rights or powers conferred upon it by this
Agreement; and
(iv) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and any such agents or attorneys shall be entitled to all
indemnities and protection afforded to the Trustee. Any designee of the
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Trustee shall be considered its "agent" hereunder whether performing it as
an independent contractor or otherwise.
Section 8.3. Trustee Not Required to Make Investigation. Prior to the
occurrence of an Event of Default hereunder and after the curing of all Events
of Default which may have occurred, the Trustee shall not be bound to ascertain
or inquire as to the performance or observance of any of the terms, conditions,
covenants or agreements herein or to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, bond, Mortgage, Mortgage Note
or other paper or document, unless requested in writing so to do by Holders of
Certificates having a Fractional Undivided Interest not less than 51% of the
Trust Fund; provided, however, that if the payment within a reasonable time to
the Trustee of the costs, expenses or liabilities likely to be incurred by it in
the making of such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to it by the terms of
this Agreement, the Trustee may require reasonable indemnity against such
expense or liability as a condition to so proceeding. The reasonable expense of
every such examination shall be paid by the Depositor or, if paid by the
Trustee, shall be repaid by the Depositor upon demand.
Section 8.4. Trustee Not Liable for Certificates or Mortgage Loans. The
recitals contained herein and in the Certificates (other than the certificate of
authentication on the Certificates) shall be taken as the statements of the
Master Servicer, and the Trustee assumes no responsibility for the correctness
of the same. The Trustee makes no representations or warranties as to the
validity or sufficiency of this Agreement or of the Certificates or of any
Mortgage Loan or related document. The Trustee shall not be accountable for the
use or application by the Master 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 Master Servicer in respect of the Mortgage Loans deposited into the
Certificate Account by the Master Servicer or for investment of any such
amounts.
Neither the Trustee nor any of the directors, officers, employees or agents
of the Trustee shall be under any liability to the Trust Fund or the
Certificateholders for any action taken or for refraining from the taking of any
action in good faith pursuant to this Agreement, or for errors in judgment while
an Event of Default exists; provided, however, that this provision shall not
protect the Trustee or any such person against any liability which would
otherwise be imposed by reason of willful misfeasance, bad faith or negligence
in the performance of duties. The Trustee and any director, officer, employee
or agent of the Trustee shall be indemnified by the Master Servicer and
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held harmless against any loss, liability or expense, including reasonable
attorneys' fees, incurred in connection with or related to the Trustee's
performance of its powers and duties under this Agreement (including, without
limitation, performance under Section 8.1 hereof), or any action relating to
this Agreement or the Certificates, or the performance of the Trustee's duties
hereunder, other than any loss, liability or expense incurred by any such Person
by reason of willful misfeasance, bad faith or negligence in the performance of
duties. Any such losses, liabilities and expenses resulting therefrom shall be
losses, liabilities and expenses of the Master Servicer. The indemnification
provided hereunder shall survive termination of this Agreement.
Section 8.5. Trustee May Own Certificates. The Trustee and any agent of
the Trustee in its individual or any other capacity may become the owner of or a
pledgee of the Certificates with the same rights it would have if it were not
Trustee or such agent.
Section 8.6. Master Servicer to Pay Trustee's Fees and Expenses. The
Master Servicer covenants and agrees to pay to the Trustee monthly (or as
otherwise agreed), and the Trustee shall be entitled to receive, reasonable
compensation (which shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust) for all services rendered by
it in the execution of the trusts hereby created and in the exercise and
performance of any of the powers and duties hereunder of the Trustee, and the
Master Servicer shall pay or reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances, including reasonable attorneys'
fees, incurred or made by the Trustee in accordance with any of the provisions
of this Agreement (including the reasonable compensation and the expenses and
disbursements of its counsel and of all persons not regularly in its employ)
except any such expense, disbursement or advance as may arise from its
negligence or bad faith. The Master Servicer shall indemnify the Trustee for
any liability of or assessment against the Trustee resulting from any error in
any tax or tax information returns prepared or caused to be prepared by the
Master Servicer.
Section 8.7. Eligibility Requirements for Trustee. The Trustee hereunder
shall at all times be a corporation or association organized and doing business
under the laws of any state or the United States of America, authorized under
such laws to exercise corporate trust powers, having a combined capital and
surplus of at least $__________ and subject to supervision or examination by
federal or state authority. The Trustee shall not control the Master Servicer
nor be a parent of or a subsidiary of the Master Servicer. If such corporation
or association publishes reports of condition at least annually, pursuant to law
or to the requirements of the aforesaid supervising or examining
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authority, then for the purposes of this Section 8.7 the combined capital and
surplus of such corporation or association shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 8.7, the Trustee shall resign
immediately in the manner and with the effect specified in Section 8.8.
Section 8.8. Resignation and Removal of Trustee. The Trustee may at any
time resign and be discharged from the trusts hereby created by giving written
notice of resignation to the Master Servicer. Such notice shall also be
furnished to the Rating Agency. Upon receiving such notice of resignation, the
Master Servicer shall promptly appoint a successor trustee by written
instrument, in duplicate, one copy of which instrument shall be delivered to the
resigning Trustee and one copy to the successor trustee. If no successor
trustee shall have been so appointed and have accepted appointment within 30
days after the giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a successor
trustee at the expense of the Master Servicer as long as the Master Servicer is
acting as the Master Servicer at such time.
If at any time the Trustee shall cease to be eligible in accordance with
the provisions of Section 8.7 and shall fail to resign after written request for
the Trustee's resignation by the Master Servicer, or if at any time the Trustee
shall become incapable of acting, or shall be adjudged a bankrupt or insolvent,
or a receiver of the Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then,
with or without cause, the Master Servicer may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the Trustee so removed and one copy to the
successor trustee.
The Holders of Certificates having a Fractional Undivided Interest
aggregating not less than 51% of the aggregate Denomination of all Certificates
may at any time remove the Trustee and appoint a successor trustee by written
instrument or instruments, in triplicate, signed by such holders or their
attorneys-in-fact duly authorized, one complete set of which instrument or
instruments shall be delivered to the Master Servicer, one complete set to the
Trustee so removed and one complete set to the successor so appointed.
Any resignation or removal of the Trustee and appointment of a successor
trustee pursuant to any of the provisions of this
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Section 8.8 shall become effective upon acceptance of appointment by the
successor trustee as provided in Section 8.9.
Section 8.9. Successor Trustee. Any successor trustee appointed as
provided in Section 8.8 shall execute, acknowledge and deliver to the Master
Servicer and to its predecessor trustee an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the predecessor trustee
shall become effective, and such successor trustee, without any further act,
deed or conveyance, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor hereunder, with like effect as if
originally named as trustee herein. The predecessor trustee shall deliver or
cause to be delivered to the successor trustee all Mortgage Files and related
documents and statements held by it hereunder (other than any Mortgage Files at
the time held by the Custodian, if it shall agree to become the agent of any
successor trustee hereunder), and the Master Servicer and the predecessor
trustee shall execute and deliver such instruments and do such other things as
may reasonably be required for more fully and certainly vesting and confirming
in the successor trustee all such rights, powers, duties and obligations.
No successor trustee shall accept appointment as provided in this Section
8.9 unless at the time of such acceptance such successor trustee shall be
eligible under the provisions of Section 8.7.
Upon acceptance of appointment by a successor trustee as provided in this
Section 8.9, the Master Servicer shall mail notice of the succession of such
trustee hereunder to all holders of Certificates at their addresses as shown in
the Certificate Register and to the Rating Agency. If the Master Servicer fails
to mail such notice within ten days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to be mailed at
the expense of the Master Servicer.
Section 8.10. Merger or Consolidation of Trustee. Any Person into which
the Trustee may be merged or converted or with which it may be consolidated, or
any Person resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any Person succeeding to the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided that such Person shall be eligible under the provisions of Section 8.7,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding.
Section 8.11. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions hereof, at any
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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 Master Servicer and the Trustee acting jointly shall have the
power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee to act as co-trustee or co-trustees, jointly
with the Trustee, or separate trustee or separate trustees, of all or any part
of the Trust Fund, and to vest in such Person or Persons, in such capacity, such
title to the Trust Fund, or any part thereof, and, subject to the other
provisions of this Section 8.11, such powers, duties, obligations, rights and
trusts as the Master Servicer and the Trustee may consider necessary or
desirable. If the Master Servicer shall not have joined in such appointment
within 15 days after the receipt by it of a request so to do, or in case an
Event of Default shall have occurred and be continuing, the Trustee alone shall
have the power to make such appointment. Each co-trustee or separate trustee
hereunder shall be required to meet the terms of eligibility as a successor
trustee under Section 8.7 hereunder but no notice to holders of Certificates of
the appointment of co-trustee(s) or separate trustee(s) shall be required under
Section 8.9 hereof.
In the case of any appointment of a co-trustee or separate trustee pursuant
to this Section 8.11, all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co-trustee jointly, except
to the extent that under any law of any jurisdiction in which any particular act
or acts are to be performed (whether as Trustee hereunder or as successor to the
Master Servicer hereunder), the Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust Fund or a portion
thereof in any such jurisdiction) shall be exercised and performed by such
separate trustee or co-trustee at the direction of the Trustee.
Any notice, request or other writing given to the Trustee shall be deemed
to have been given to each of the then separate trustees and co-trustees, as
effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Trustee. Every such instrument shall be filed with the Trustee.
89
Any separate trustee or co-trustee may, at any time, constitute the Trustee
its agent or attorney-in-fact, with full power and authority, to the extent not
prohibited by law, to do any lawful act under or in respect of this Agreement on
its behalf and in its name. If any separate trustee or co-trustee shall die,
become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section 8.12. Appointment of Custodians. The Trustee may, with the consent
of the Master Servicer, appoint one or more Custodians, not affiliated with the
Master Servicer, to review, pursuant to Section 2.2 hereof, and hold all or a
portion of the Mortgage Files as agent for the Trustee, by entering into a
Custodial Agreement; provided, however, that if the Trustee delegates an
affiliate to act as a custodian, no such Custodial Agreement needs to be entered
into so long as the Trustee remains Custodian of record under this Agreement.
Subject to Article VIII, the Trustee agrees to comply with the terms of each
Custodial Agreement and to enforce the terms and provisions thereof against the
Custodian for the benefit of the Certificateholders. Any Custodian appointed
shall be an institution subject to supervision by federal or state authority,
shall have combined capital and surplus of at least $__________ and shall be
qualified to do business in the jurisdiction in which it holds any Mortgage
File.
Section 8.13. Authenticating Agent.
--------------------
(a) The Trustee may appoint from time to time an authenticating agent (the
"Authenticating Agent") which shall be authorized to act on behalf of the
Trustee in authenticating Certificates. Wherever reference is made in this
Agreement to the authentication of Certificates by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication on behalf of the Trustee by the Authenticating Agent and a
certificate of authentication executed on behalf of the Trustee by the
Authenticating Agent. Any successor Authenticating Agent must be acceptable to
the Master Servicer and have a principal office and place of business in
_______, __________________ or ________________, __________, have a combined
capital and surplus of at least $__________, and be authorized to do a trust
business and subject to supervision or examination by federal or state
authorities.
(b) Any corporation into which the Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency business
of
90
the Authenticating Agent, shall continue to be the Authenticating Agent without
the execution or filing of any paper or any further act on the part of the
Trustee or the Authenticating Agent.
(c) The Authenticating Agent may at any time resign by giving at least 30
days' advance written notice of resignation to the Trustee and to the Master
Servicer. The Trustee may at any time terminate the agency of the
Authenticating Agent by giving written notice of termination to the
Authenticating Agent and to the Master Servicer. Upon receiving a notice of
resignation or upon such a termination, or in case at any time the
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 8.13, the Trustee promptly shall appoint a successor
Authenticating Agent, shall give written notice of such appointment to the
Master Servicer and shall mail notice of such appointment to all
Certificateholders. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers, duties
and responsibilities of its predecessor hereunder, with like effect as if
originally named as Authenticating Agent herein. No successor Authenticating
Agent shall be appointed unless eligible under the provisions of this Section
8.13.
(d) The Authenticating Agent shall have no responsibility or liability for
any action taken by it as such at the direction of the Trustee. Any reasonable
compensation paid to the Authenticating Agent shall be a reimbursable expense
under Section 8.6.
ARTICLE IX
TERMINATION
Section 9.1. Termination upon Purchase by the Class R Certificateholder or
Liquidation of All Mortgage Loans. The respective obligations and
responsibilities of the Master Servicer and the Trustee created hereby (other
than the obligation to make payments to Certificateholders as hereafter set
forth in this Section 9.1 and obligations to the Trustee in Sections 8.4 and
8.6) shall terminate upon the earlier of (i) the later of the final payment or
other liquidation (or any Advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund and the disposition of all property acquired in
respect of any Mortgage Loan or (ii) the purchase by the Class R
Certificateholder of all Mortgage Loans at a price equal to the sum of (a) the
principal balance of each Mortgage Loan plus accrued interest thereon at the
applicable Mortgage Pass-Through Rate to the next scheduled Installment Due
Date, less any Nonrecoverable Advances made with respect to any such Mortgage
Loans and (b) the fair market value of all acquired property in
91
respect of Mortgage Loans, less any Nonrecoverable Advances made with respect to
any such Mortgage Loans, such fair market value to be determined by an appraiser
selected by the Trustee or (iii) the purchase by the Master Servicer, so long as
the Master Servicer is the Class R Certificateholder, of all outstanding Class A
Certificates and Class B Certificates and delivery of such Certificates to the
Trustee; provided, however, that in no event shall the trust created hereby
continue beyond the expiration of 60 years from the date of the execution and
delivery of this Agreement; and provided further, that a "plan of liquidation"
in accordance with Section 860F of the Code must be adopted in conjunction with
any termination effected pursuant to subclauses (i), (ii), or (iii) of this
Section 9.1.
The Class R Certificateholder is hereby granted the right to purchase the
Mortgage Loans pursuant to clause (ii) above, provided however that such right
shall be conditioned upon the Principal Balances of such Mortgage Loans, at the
time of any such purchase, aggregating an amount less than 10% of the aggregate
Principal Balance of the Mortgage Loans on the Cut-off Date, after deduction of
payments due on or before such date.
Notice of any termination pursuant to clause (i) or (ii) above, specifying
the Distribution Date upon which all Certificateholders may surrender their
Certificates to the Trustee for payment and cancellation, shall be given
promptly by the Trustee (upon direction by the Master Servicer no less than 10
days prior to the date such notice is to be mailed) by letter to
Certificateholders and the Rating Agency mailed by first class mail no later
than the 25th day of the month preceding the month of such final distribution
specifying (i) the Distribution Date upon which final payment on the
Certificates will be made upon presentation and surrender of Certificates at the
office or agency of the Trustee therein designated, (ii) the amount of any such
final payment and (iii) that the Record Date otherwise applicable to such
Distribution Date is not applicable, payments being made only upon presentation
and surrender of the Certificates at the office or agency of the Trustee therein
specified. The Trustee shall give such notice to the Certificate Registrar and
the Rating Agency at the time such notice is given to the Certificateholders.
Upon any such notice, the duties of the Certificate Registrar shall terminate.
In the event such notice is given in connection with the Class R
Certificateholder's election to purchase, the Class R Certificateholder shall
deposit in the Certificate Account on the applicable Distribution Date an amount
equal to the above-described purchase price and upon such deposit
Certificateholders will be entitled to the amount of such purchase price but not
amounts in excess thereof, all as provided herein. Upon presentation and
surrender of the Certificates pursuant to any termination under this Section
9.1, the Trustee shall cause to be distributed to
92
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
Class R Certificateholder elected to so purchase, the purchase price calculated
as above provided. Upon any termination pursuant to clause (iii) above, or upon
certification to the Trustee by a Servicing Officer following such final
deposit, the Trustee and any Custodians shall promptly release to the Master
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.
In the event that all of the Certificateholders shall not surrender their
Certificates for cancellation within three months after the time specified in
the above-mentioned written notice, the Trustee 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 shall take appropriate and reasonable
steps as directed by the Master Servicer, to contact the remaining
Certificateholders concerning surrender of their Certificates, and the cost
thereof shall be paid out of the funds and other assets which remain in trust
hereunder.
Section 9.2. Trusts Irrevocable. Except as expressly provided herein, all
trusts created hereby are irrevocable.
[Section 9.3. Additional Termination Requirements.
(a) In the event the Class R Certificateholder exercises its purchase
option as provided in Section 9.1, the Trust Fund shall be terminated in
accordance with the following additional requirements, unless the Trustee has
received an Opinion of Counsel to the effect that the failure of the Trust Fund
to comply with the requirements of this Section 9.3 will not (i) result in the
imposition of taxes on "prohibited transactions" of the Trust Fund as described
in Section 860F(a)(2) of the Code, or (ii) cause the Trust Fund to fail to
qualify as a REMIC at any time that any Class A or Class B Certificates are
outstanding:
(A) Within 90 days prior to the final Distribution Date set forth in
the notice given by the Class R Certificateholder under Section 9.1, the
holder of the Class R Certificate shall prepare the documents associated
with and shall adopt a plan of complete liquidation of the Trust Fund; and
93
(B) At or after the time of adoption of such a plan of complete
liquidation and at or prior to the final Distribution Date, the Master
Servicer as agent of the Trustee shall sell all of the assets of the Trust
Fund to the Class R Certificateholder for cash in accordance with such plan
of liquidation; provided, however, that in the event that a calendar
quarter ends after the time of adoption of such a plan of complete
liquidation but prior to the final Distribution Date, the Master Servicer
shall not sell any of the assets of the Trust Fund prior to the close of
that calendar quarter.
(b) By its acceptance of the Class R Certificate, the Class R
Certificateholder hereby agrees to adopt such a plan of complete liquidation and
to take such other action in connection therewith as may be reasonably requested
by the Master Servicer.]
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.1. Amendment. This Agreement may be amended from time to time
by the Depositor and the Trustee, without the consent of any of the
Certificateholders, (a) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision herein, or
to make any other provisions with respect to matters or questions arising under
this Agreement, or [(b) to modify, eliminate or add to any provisions to such
extent as shall be necessary to maintain the qualification of the Trust Fund as
a REMIC at all times that any Class A or B Certificates are outstanding,
provided that the Trustee has received an Opinion of Counsel to the effect that
such action is necessary or desirable to maintain such qualification,] provided
that such action under clauses (a) and (b) above shall not, as evidenced by an
Opinion of Counsel, adversely affect in any material respect the interests of
any Certificateholder.
This Agreement may also be amended from time to time by the Depositor and
the Trustee with the consent of the Holders of Certificates evidencing, in
aggregate, not less than 50% of the Trust Fund for the purpose of adding any
provisions or changing in any manner or eliminating any of the provisions of
this Agreement or of modifying in any manner the rights of the Holders of
Certificates; provided, however, that no such amendment shall (a) reduce in any
manner the amount of, or delay the timing of, payments received on Mortgage
Loans which are required to be distributed in respect of any Certificate without
the consent of the Holder of such Certificate; (b) adversely affect in any
material respect the interest of the Holders of the Class A
94
Certificates in a manner other than as described in (a) above without the
consent of the Holders of Class A Certificates aggregating not less than 66-2/3%
of the aggregate Percentage Interest evidenced by all Class A Certificates; (c)
adversely affect in any material respect the interest of the Holders of the
Class B Certificates in a manner other than as described in clause (a) above
without the consent of the Holders of Class B Certificates aggregating not less
than 66-2/3% of the aggregate Percentage Interest evidenced by all Class B
Certificates; (d) adversely affect in any material respect the interest of the
Class R Certificateholder without the consent of the Holders of the Class R
Certificate; (e) change in any material respect the rights and obligations of
the Master Servicer [or the Back-up Servicer] under this Agreement without the
prior written consent of such party; or (f) reduce the aforesaid percentage of
the Certificates the Holders of which are required to consent to any such
amendments without the consent of the Holders of all Certificates then
outstanding; [provided, that for the purposes of this Agreement, the Holder of
the Class R Certificate shall have no right to vote at all times that any Class
A or B Certificates are outstanding if such amendment relates to the
modification, elimination or addition of any provision necessary to maintain the
qualification of the Trust Fund as a REMIC.]
[Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel to the effect that such amendment will not cause
the Trust Fund to fail to qualify as a REMIC at any time that any Class A or
Class B Certificates are outstanding.]
As soon as practicable after the execution of any such amendment, the
Trustee shall furnish written notification of the substance of such amendment to
each Certificateholder and the Rating Agency.
It shall not be necessary for the consent of the Certificateholders under
this Section 10.1 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
Section 10.2. Recordation of Agreement. This Agreement (or an abstract
hereof, if acceptable by the applicable recording office) is subject to
recordation in all appropriate public offices for real property records in all
the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other
95
appropriate public recording office or elsewhere, such recordation to be
effected by the Master Servicer at its expense, but only after the Depositor has
delivered to the Trustee an Opinion of Counsel to the effect that such
recordation materially and beneficially affects the interests of the
Certificateholders.
For the purpose of facilitating the recordation of this Agreement as herein
provided and for other purposes, this Agreement may be executed simultaneously
in any number of counterparts, each of which counterparts shall be deemed to be
an original, and such counterparts shall constitute but one and the same
instrument.
Section 10.3. Limitation on Rights of Certificateholders. The death or
incapacity of any Certificateholder shall not operate to terminate this
Agreement or the Trust Fund, nor entitle such Certificateholder's legal
representatives or heirs to claim an accounting or take any action or proceeding
in any court for a partition or winding up of the Trust Fund, nor otherwise
affect the rights, obligations and liabilities of the parties hereto or any of
them.
Except as otherwise expressly provided herein no Certificateholder, solely
by virtue of its status as a Certificateholder, shall have any right to vote or
in any manner otherwise control the operation and management of the Trust Fund,
or the obligations of the parties hereto, nor shall anything herein set forth,
or contained in the terms of the Certificates, be construed so as to constitute
the Certificateholders from time to time as partners or members of an
association, nor shall any Certificateholder be under any liability to any third
person by reason of any action taken by the parties to this Agreement pursuant
to any provision hereof.
No Certificateholder, solely by virtue of its status as Certificateholder,
shall have any right by virtue or by availing of any provision of this Agreement
to institute any suit, action or proceeding in equity or at law upon or under or
with respect to this Agreement, unless such holder previously shall have given
to the Trustee a written notice of default and of the continuance thereof, as
hereinbefore provided, and unless also the Holders of Certificates evidencing,
in aggregate, not less than 25% of the Trust Fund shall have made written
request upon the Trustee to institute such action, suit or proceeding in its own
name as Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Trustee, for 60 days after its receipt of
such notice, request and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding; it being understood and intended,
and being expressly covenanted by each
96
Certificateholder with every other Certificateholder and the Trustee, that no
one or more holders of Certificates shall have any right in any manner whatever
by virtue or by availing of any provision of this Agreement to affect, disturb
or prejudice the rights of the Holders of any other of such Certificates, or to
obtain or seek to obtain priority over or preference to any other such Holder,
or to enforce any right under this Agreement, except in the manner herein
provided and for the benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section 10.3, each and every
Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
Section 10.4. Governing Law; Jurisdiction. THIS AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF [ILLINOIS] (WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF
THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 10.5. Notices. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered at or mailed by certified or registered mail, return receipt requested
(a) in the case of the Depositor, to ABN AMRO Mortgage Corporation, 000 Xxxx
Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000, Attention: Xxxxx Xxxxxxx --
Director - ABN AMRO Mortgage Operations, or such other address as may hereafter
be furnished to the Master Servicer and the Trustee in writing by the Depositor,
(b) in the case of the Master Servicer, to LaSalle Home Mortgage Corporation,
0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx 00000, Attention: Master Servicer
or such other address as may hereafter be furnished to the Depositor and the
Trustee in writing by the Master Servicer and (c) in the case of the Trustee, to
the Corporate Trust Office, or such other address as may hereafter be furnished
to the Depositor and the Master Servicer in writing by the Trustee, in each case
Attention: Corporate Trust Department. Any notice required or permitted to be
mailed to a Certificateholder shall be given by first class mail, postage
prepaid, at the address of such Holder as shown in the Certificate Register. Any
notice mailed or transmitted within the time prescribed in this Agreement shall
be conclusively presumed to have been duly given, whether or not the addressee
receives such notice; provided that any demand, notice or communication to or
upon the Depositor, the Master Servicer or the Trustee shall not be effective
until received.
Section 10.6. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or
97
terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the holders thereof.
Section 10.7. Sale of Class A Certificates. The Depositor shall notify the
Rating Agency of any sale of its interest in the Class A Certificates.
IN WITNESS WHEREOF, the Depositor, the Master Servicer and the Trustee have
caused their names to be signed hereto by their respective officers thereunto
duly authorized, all as of the day and year first above written.
98
ABN AMRO MORTGAGE CORPORATION,
as Depositor
By
-------------------------------------
Its
------------------------------------
----------------------------,
as Trustee
By
-------------------------------------
Its
------------------------------------
[LASALLE HOME MORTGAGE CORPORATION],
as Master Servicer
By
-------------------------------------
Its
------------------------------------
99
STATE OF )
----------- : ss.:
COUNTY OF )
----------
On ________________, 199__ before me, ____________________________,
personally appeared _______________________, a ___________________ of ABN AMRO
Mortgage Corporation, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to
the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of which
the person(s) acted, executed the instrument.
WITNESS my hand and official seal
Signature (Seal)
-------------------------
STATE OF )
----------- : ss.:
COUNTY OF )
----------
On the ___ of ______, 199__ before me, personally appeared
_______________ known to me to be ____________ of _________________________, one
of the corporations that executed the within instrument and also known to me to
be the person who executed it on behalf of said corporation, and acknowledged to
me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
---------------------------------
Notary Public
[NOTARIAL SEAL]
STATE OF )
----------- : ss.:
COUNTY OF )
----------
On this ___ day of ______, 199__, before me, personally appeared
______________, known to me to be _______________ of
_______________________________ and one of the corporations that executed the
within instrument and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
------------------------------
Notary Public
[NOTARIAL SEAL]
EXHIBIT A
[FORM OF FACE OF CLASS A CERTIFICATE]
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS
THE HOLDER HEREOF DELIVERS TO THE TRUSTEE THE CERTIFICATION, RULING OR OPINION
OR OPINIONS OF COUNSEL REQUIRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.2
OF THE REQUIRED POOLING AND SERVICING AGREEMENT.
[Solely for U.S. 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 issue date of this Certificate is ______ ___, 19__.
Because the rates of interest on the Mortgage Loans are variable, the total
amount of original issue discount ("OID"), for federal income tax purposes,
cannot be calculated. The annual yield to maturity cannot be predicted at this
time because it is variable. Assuming that the Mortgage Loans underlying the
Certificates prepay at the prepayment assumption used by the issuer in pricing
this Certificate, the amount of OID attributable to the short period is $_______
per $100,000 Denomination, computed under the exact method as defined in
proposed Treasury regulations.
THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF THE
DEPOSITOR, THE MASTER SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE
AFFILIATES. THIS CERTIFICATE DOES NOT CONSTITUTE A SAVINGS ACCOUNT OR DEPOSIT
AND NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS WILL BE INSURED
OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENT AGENCY NOR HAS THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENT AGENCY PASSED UPON THE ACCURACY OF THE INFORMATION CONTAINED HEREIN.
THIS CERTIFICATE HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED HEREIN. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
A-1
MORTGAGE PASS-THROUGH CERTIFICATE
evidencing an undivided interest in Mortgage Loans representing beneficial
ownership of certain monthly distributions from a pool of [adjustable] [fixed]
rate mortgage loans secured by one- to four-unit residential properties
originated or acquired by
ABN AMRO Mortgage Corporation,
as Depositor
(Not an interest in or obligation of the Depositor)
Certificate No.
Class A
Series 19__-1
Cut-off Date _________, 19__
Issue Date __________, 19__
Denomination $
Aggregate Denomination
of all Class A
Certificates $___________
Initial Pass-Through Rate
CUSIP No. ______________
THE PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE [INCREASED BY A PORTION BY
DEFERRED INTEREST ACCRUING ON THE MORTGAGE LOANS AND] DECREASED BY PRINCIPAL
PAYMENTS HEREON. ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE
CERTIFICATES, THE PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE DIFFERENT FROM
THE DENOMINATION SHOWN ABOVE. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN
ITS CURRENT PRINCIPAL AMOUNT BY INQUIRY OF THE TRUSTEE.
THIS CERTIFIES THAT is the registered
owner of an undivided interest in a trust fund (the "Trust Fund") consisting of
(i) a pool of residential mortgage loans (the "Mortgage Loans") originated or
acquired by ABN AMRO Mortgage Corporation (hereinafter in its capacity as
Depositor under the Pooling and Servicing Agreement described below called the
"Depositor," which term includes any successor entity under the Pooling and
Servicing Agreement referred to below), (ii) such amounts as from time to time
may be held by the Master Servicer in the Certificate Account, the Pre-Funding
Account, if any, [and the Reserve Fund] established and maintained by the
Depositor pursuant to the Pooling and Servicing Agreement, (iii) the
A-2
insurance policies, if any, relating to each Mortgage Loan and (iv) property
which secured a Mortgage Loan and which has been acquired by foreclosure or deed
in lieu of foreclosure. The Trust Fund was created pursuant to a Pooling and
Servicing Agreement dated as of the Cut-off Date specified above (the "Pooling
and Servicing Agreement") among the Depositor, the Master Servicer and
____________________, as trustee (the "Trustee"). This Certificate is one of a
duly authorized issue of Certificates designated as Mortgage Pass-Through
Certificates of the Series and Class specified above (the "Class A
Certificates"), and issued under and subject to the terms, provisions and
conditions of the Pooling and Servicing Agreement, to which Pooling Servicing
Agreement the holder of this Certificate by virtue of the acceptance hereof
assents and by which such holder is bound. A summary of certain of the pertinent
provisions of the Pooling and Servicing Agreement is set forth below. Also
issued under the Pooling and Servicing Agreement are Mortgage Pass-Through
Certificates of the same Series, Class B (the "Class B Certificates") and a
Residual Certificate of the same Series representing the "residual interests" in
the Trust Fund (the "Residual Certificate"). The Class A, Class B and Residual
Certificates are herein collectively called the "Certificates."
Any term used herein which is defined in the Pooling and Servicing
Agreement shall have the meaning assigned thereto in such agreement, and nothing
herein shall be deemed inconsistent with that meaning.
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 hereon has been executed by or on
behalf of the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Pooling and Servicing Agreement, or be valid
for any purpose.
IN WITNESS WHEREOF, the Depositor has caused this Certificate to be duly
executed under its official seal.
ABN AMRO MORTGAGE CORPORATION,
as Depositor
By: __________________________
[President]
A-3
DATED:
[SEAL]
Attest:
By: _________________________
Secretary
A-4
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS A CERTIFICATES REFERRED TO IN THE WITHIN-MENTIONED
POOLING AND SERVICING AGREEMENT.
______________________________
as Authenticating Agent
______________________________
Authorized Signer
A-5
[FORM OF REVERSE OF CLASS A CERTIFICATE]
ABN AMRO MORTGAGE CORPORATION
MORTGAGE PASS-THROUGH CERTIFICATE, CLASS A, SERIES 19__-[ ]
The Trustee will distribute 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 the month after the month in which the Cut-off
Date occurs, to the Person in whose name this Certificate is registered at the
close of business on the last Business Day of the calendar month preceding the
month of such distribution (the "Record Date"), an amount equal to the product
of the Percentage Interest in the Class A Distribution evidenced by this
Certificate and the Class A Distribution. [The Mortgage Loans underlying this
Certificate may in certain cases accrue Deferred Interest. The amount of
Deferred Interest accrued on a Mortgage Loan will be added to the Principal
Balance thereof and will accrue interest at the Mortgage Interest Rate.]
As provided for in the Pooling and Servicing Agreement, the right,
title and interest of the Class A Certificateholders to receive distributions in
respect thereof on any Distribution Date shall be senior to the rights of the
Class B Certificateholders to receive distributions in respect of the Class B
Certificates. The Class B Certificateholders shall bear all Excess Credit
Losses, Bankruptcy Losses up to the Bankruptcy Loss Limit, Fraud Losses up to
the Fraud Loss Limit and Special Hazard Losses up to the Special Hazard Loss
Limit until the Class B Principal Balance equals zero. All Excess Credit Losses,
Fraud Losses up to the Fraud Loss Limit, Special Hazard Losses up to the Special
Hazard Limit and Bankruptcy Losses up to the Bankruptcy Loss Limit, to the
extent not allocated to the Class B Certificateholders shall be allocated to the
Class A Certificates on the related Distribution Date.
Distributions on this Certificate will be made by the Trustee by check
mailed to the address of the Person entitled thereto as such name and address
shall appear on the Certificate Register or, if the aggregate Certificate Amount
of the Certificates held by the Certificateholder is in excess of $_________ and
the Certificateholder so requests by notifying the Trustee in writing as
specified in the Pooling and Servicing Agreement, by wire transfer in
immediately available funds to the account specified in writing by the
Certificateholder to the Trustee. Notwithstanding the above, the final
distribution on this Certificate will be made after due notice by the Master
Servicer of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency of the Trustee designated
in such notice.
A-6
The Pooling and Servicing Agreement permits the amendment thereof and
the modification of the rights and obligations of the Depositor, the Master
Servicer and the Certificateholders under the Pooling and Servicing Agreement
from time to time by the Depositor and the Trustee with the consent of the
Holders of Certificates evidencing, in aggregate, not less than 50% of the Trust
Fund for the purpose of adding any provisions or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Holders of Certificates; provided, 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 in
respect of any Certificate without the consent of the Holder of such
Certificate;
(ii) adversely affect in any material respect the interest of the
Holders of the Class A Certificates in a manner other than as described in
(i) above without the consent of the Holders of Class A Certificates
aggregating not less than 66-2/3% of the aggregate Percentage Interest
evidenced by all Class A Certificates;
(iii) adversely affect in any material respect the interest of the
Holders of the Class B Certificates in a manner other than as described in
clause (i) above without the consent of the Holders of Class B Certificates
aggregating not less than 66-2/3% of the aggregate Percentage Interest
evidenced by all Class B Certificates;
(iv) adversely affect in any material respect the interest of the
Class R Certificateholder without the consent of the Holders of the Class R
Certificate;
(v) change in any material respect the rights and obligations of the
Master Servicer [or the Back-up Servicer] under the Pooling and Servicing
Agreement without the prior written consent of such party; or
(vi) reduce the aforesaid percentage of the Certificates the Holders
of which are required to consent to amendments to the Pooling and Servicing
Agreement without the consent of the Holders of all Certificates then
outstanding; [provided, that the Holder of the Class R Certificate shall
have no right to vote at all times that any Class A or B Certificates are
outstanding if such amendment of the Pooling and Serving Agreement relates
to the modification, elimination or addition of any provision
A-7
necessary to maintain the qualification of the Trust Fund as a REMIC;]
provided, that for the purposes of the Pooling and Servicing Agreement, the
holder of the Residual Certificate shall vote only with respect to items (i) and
(iii) above.
Any such consent by the holder of this Certificate shall be conclusive
and binding on such holder and upon all future holders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Pooling and Servicing Agreement also permits the amendment
thereof, in certain limited, circumstances, without the consent of the holders
of any of the Certificates (including amendment or modification to cure any
ambiguity).
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, the transfer of this Certificate is
registrable on the Certificate Register upon surrender of this Certificate for
registration of transfer at the offices or agencies maintained by the
Certificate Registrar in the County of ____________, __________, or
____________, ________, duly endorsed by, or accompanied by a written instrument
of transfer in form satisfactory to the Master Servicer and the Certificate
Registrar duly executed by, the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Class A Certificates for
the same aggregate Percentage Interest will be issued to the designated
transferee or transferees.
The Class A Certificates are issuable only as registered Certificates
without coupons evidencing a minimum Denomination of $_________ (except for one
odd Certificate) and greater integral multiples of $ . As provided in the
Pooling and Servicing Agreement and subject to certain limitations therein set
forth, this Certificate is exchangeable for one or more new Class A Certificates
evidencing a like aggregate Percentage Interest, as requested by the holder
surrendering the same.
No service charge will be made to the Certificateholders for any such
registration of transfer or exchange, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. The Depositor, the Master Servicer and the
Trustee and any agent of the Depositor, the Master Servicer or the Trustee may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and neither the Depositor, the Master Servicer nor the
A-8
Trustee nor any such agent shall be affected by notice to the contrary.
The obligations created by the Pooling and Servicing Agreement and the
Trust Fund created thereby (other than the obligation to make payments to
Certificateholders pursuant to the Pooling and Servicing Agreement) shall
terminate upon the payment to the Class A and Class B Certificateholders and the
Residual Certificateholder of all amounts due them under the Pooling and
Servicing Agreement. In no event, however, will the trust created by the
Pooling and Servicing Agreement continue beyond a date 60 years after the date
of the execution and delivery of the Pooling and Servicing Agreement.
A-9
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applications of laws or regulations:
TEN COM--as tenants in common
UNF GIFT MIN ACT--......(Minor) under Uniform Gifts To Minors Act....
(State)
Custodian ....... (Cust)
TEN ENT -- as tenants by the entireties
JT TEN -- as joint tenants with right of survivorship and not as
tenants in common
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
------------------------------
-------------------------------------------------------------------------------
Please print or typewrite name and address including postal zip code of assignee
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
The within Certificate and all rights thereunder, hereby irrevocably
constituting and appointing ________________________________________ attorney
transfer said Certificate on the books of the Certificate Registrar, with full
power of substitution in the premises.
Dated:_____________
___________________________________________________________
NOTICE: The signature to this assignment must correspond
with the name as written upon the face of the written
instrument in every particular, without alteration or
enlargement, or any change whatever.
A-10
EXHIBIT B
[FORM OF FACE OF CLASS B CERTIFICATE]
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS
THE HOLDER HEREOF DELIVERS TO THE TRUSTEE THE CERTIFICATION, RULING OR OPINION
OR OPINIONS OF COUNSEL REQUIRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.2
OF THE REQUIRED POOLING AND SERVICING AGREEMENT.
[Solely for U.S. 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 issue date of this Certificate is ______ ___, 19__.]
Because the rates of interest on the Mortgage Loans are variable, the total
amount of original issue discount ("OID"), for federal income tax purposes,
cannot be calculated. The annual yield to maturity cannot be predicted at this
time because it is variable. Assuming that the Mortgage Loans underlying the
Certificates prepay at the prepayment assumption used by the issuer in pricing
this Certificate, the amount of OID attributable to the short period is $_______
per $100,000 Denomination, computed under the exact method as defined in
proposed Treasury regulations.
THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF THE
DEPOSITOR, THE MASTER SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE
AFFILIATES. THIS CERTIFICATE DOES NOT CONSTITUTE A SAVINGS ACCOUNT OR DEPOSIT
AND NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS WILL BE INSURED
OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENT AGENCY NOR HAS THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENT AGENCY PASSED UPON THE ACCURACY OF THE INFORMATION CONTAINED HEREIN.
THIS CERTIFICATE HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED HEREIN. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
B-1
MORTGAGE PASS-THROUGH CERTIFICATE
evidencing an undivided interest in Mortgage Loans representing beneficial
ownership of certain monthly distributions from a pool of [adjustable] [fixed]
rate mortgage loans secured by one- to four-unit residential properties
originated or acquired by
ABN AMRO MORTGAGE CORPORATION,
as Depositor
(Not an interest in or obligation of the Depositor)
Certificate No.
Series 19__ - ___ Class B
Cut-off Date ___________ __, 19
Issue Date ___________ __, 19
Denomination $
Aggregate Denomination
of all Class B Certificates $_______________________
Initial Pass-Through Rate ______
THE PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE [INCREASED BY A PORTION OF
DEFERRED INTEREST ACCRUING ON MORTGAGE LOANS] DECREASED BY PRINCIPAL PAYMENTS
HEREON. ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE
PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION
SHOWN ABOVE. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT
PRINCIPAL AMOUNT BY INQUIRY OF THE TRUSTEE.
THIS CERTIFIES THAT is the registered owner
of an undivided interest in a trust fund (the "Trust Fund") consisting of (i) a
pool of residential mortgage loans (the "Mortgage Loans") originated or acquired
by ABN AMRO Mortgage Corporation (hereinafter in its capacity as Depositor under
the Pooling and Servicing Agreement described below called the "Depositor,"
which term includes any successor entity under the Pooling and Servicing
Agreement referred to below), (ii) such amounts as from time to time may be held
by the Master Servicer in the Certificate Account, the Pre-Funding Account, if
any, [and the Reserve Fund] established and maintained by the Depositor pursuant
to the Pooling and Servicing Agreement, (iii) the insurance policies, if any,
relating to each Mortgage Loan and (iv) property which secured a Mortgage Loan
and which has been acquired by foreclosure or deed in lieu of foreclosure. The
Trust Fund was created pursuant to a Pooling and Servicing Agreement dated as of
the Cut-off Date specified above (the "Pooling and Servicing Agreement") among
the Depositor, the Master Servicer and ____________________, as trustee (the
B-2
"Trustee"). This Certificate is one of a duly authorized issue of Certificates
designated as Mortgage Pass-Through Certificates of the Series and Class
specified above (the "Class B Certificates"), and issued under and subject to
the terms, provisions and conditions of the Pooling and Servicing Agreement, to
which Pooling and Servicing Agreement the holder of this Certificate by virtue
of the acceptance hereof assents and by which such holder is bound. A summary
of certain of the pertinent provisions of the Pooling and Servicing Agreement is
set forth below. Also issued under the Pooling and Servicing Agreement are a
Residual Certificate of the same Series representing the "residual interests" in
the Trust Fund (the "Residual Certificate"), and Mortgage Pass-Through
Certificates of the same Series, Class A (the "Class A Certificates"). The
Class A, Class B and Residual Certificates are herein collectively called the
"Certificates."
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 hereon has been executed by or on
behalf of the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Pooling and Servicing Agreement, or be valid
for any purpose.
IN WITNESS WHEREOF, the Depositor has caused this Certificate to be duly
executed under its official seal.
ABN AMRO MORTGAGE CORPORATION,
as Depositor
By: __________________________
[President]
DATED:
[SEAL]
Attest:
By: _________________________
Secretary
B-3
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS B CERTIFICATES REFERRED TO IN THE WITHIN-MENTIONED
POOLING AND SERVICING AGREEMENT.
______________________________
as Authenticating Agent
______________________________
Authorized Signer
B-4
[FORM OF REVERSE OF CLASS B CERTIFICATE]
ABN AMRO MORTGAGE CORPORATION
MORTGAGE PASS-THROUGH CERTIFICATE, CLASS B, SERIES 19__-[ ]
The Depositor will distribute 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 the month after the month in which the Cut-off
Date occurs, to the Person in whose name this Certificate is registered at the
close of business on the last Business Day of the calendar month preceding the
month of such distribution (the "Record Date"), an amount equal to the product
of the Percentage Interest in the Class B Distribution evidenced by this
Certificate and the Class B Distribution. [The Mortgage Loans underlying this
Certificate may in certain cases accrue Deferred Interest. The amount of
Deferred Interest accrued on a Mortgage Loan will be added to the Principal
Balance thereof and will accrue interest at the Mortgage Interest Rate.]
As provided for in the Pooling and Servicing Agreement, the right, title
and interest of the Class B Certificateholders to receive distributions in
respect thereof on any Distribution Date shall be subordinate to the rights of
the Class A Certificateholders to receive distributions in respect of the Class
A Certificates. The Class B Certificateholders shall bear all Excess Credit
Losses, Bankruptcy Losses up to the Bankruptcy Loss Limit, Fraud Losses up to
the Fraud Loss Limit and Special Hazard Losses up to the Special Hazard Loss
Limit until the Class B Principal Balance equals zero. All Excess Credit
Losses, Fraud Losses up to the Fraud Loss Limit, Special Hazard Losses up to the
Special Hazard Limit and Bankruptcy Losses up to the Bankruptcy Loss Limit, to
the extent not allocated to the Class B Certificateholders shall be allocated to
the Class A Certificates on the related Distribution Date.
Holders of Class B Certificates are not required to refund any amounts
which have previously been properly distributed to them.
Distributions on this Certificate will be made by the Trustee by check
mailed to the address of the Person entitled thereto as such name and address
shall appear on the Certificate Register or, if the aggregate Certificate Amount
of the Certificates held by the Certificateholder is in excess of $_____________
and the Certificateholder so requests by notifying the Trustee in writing as
specified in the Pooling and Servicing Agreement, by wire transfer in
immediately available funds to the account specified in writing by the
Certificateholder to the Trustee. Notwithstanding the above, the final
distribution on this Certificate will be made after due notice by the Depositor
B-5
of the pendency of such distribution and only upon presentation and surrender of
this Certificate at the office or agency of the Trustee designated in such
notice.
The Pooling and Servicing Agreement permits the amendment thereof and
the modification of the rights and obligations of the Depositor, the Master
Servicer and the Certificateholders under the Pooling and Servicing Agreement
from time to time by the Depositor and the Trustee with the consent of the
Holders of Certificates evidencing, in aggregate, not less than 50% of the Trust
Fund for the purpose of adding any provisions or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Holders of Certificates; provided, 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 in
respect of any Certificate without the consent of the Holder of such
Certificate;
(ii) adversely affect in any material respect the interest of the
Holders of the Class A Certificates in a manner other than as described in
(i) above without the consent of the Holders of Class A Certificates
aggregating not less than 66-2/3% of the aggregate Percentage Interest
evidenced by all Class A Certificates;
(iii) adversely affect in any material respect the interest of the
Holders of the Class B Certificates in a manner other than as described in
clause (i) above without the consent of the Holders of Class B Certificates
aggregating not less than 66-2/3% of the aggregate Percentage Interest
evidenced by all Class B Certificates;
(iv) adversely affect in any material respect the interest of the
Class R Certificateholder without the consent of the Holders of the Class R
Certificate;
(v) change in any material respect the rights and obligations of the
Master Servicer or the Back-up Servicer under the Pooling and Servicing
Agreement without the prior written consent of such party; or
(vi) reduce the aforesaid percentage of the Certificates the Holders
of which are required to consent to amendments to the Pooling and Servicing
Agreement without the consent of the Holders of all Certificates then
outstanding; [provided, that the Holder of the Class R Certificate shall
have no right to vote at all times that any Class A or B Certificates are
outstanding if such
B-6
amendment of the Pooling and Serving Agreement relates to the modification,
elimination or addition of any provision necessary to maintain the
qualification of the Trust Fund as a REMIC;]
provided, that for the purposes of the Pooling and Servicing Agreement, the
holder of the Residual Certificate shall vote only with respect to items (i) and
(iii) above.
Any such Consent by the holder of this Certificate shall be conclusive
and binding on such holder and upon all future holders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Pooling and Servicing Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the holders of
any of the Certificates (including amendment or modification to cure any
ambiguity).
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, the transfer of this Certificate is
registrable on the Certificate Register upon surrender of this Certificate for
registration of transfer at the offices or agencies maintained by the
Certificate Registrar in the County of ____________, __________, or
____________, ________, duly endorsed by, or accompanied by a written instrument
of transfer in form satisfactory to the Master Servicer and the Certificate
Registrar duly executed by, the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Class B Certificates for
the same aggregate Percentage Interest will be issued to the designated
transferee or transferees.
The Class B Certificates are issuable only as registered Certificates
without coupons evidencing a minimum Denomination of $_________ (except for one
odd Certificate) and greater integral multiples of $ . As provided in the
Pooling and Servicing Agreement and subject to certain limitations therein set
forth, this Certificate is exchangeable for one or more new Class B Certificates
evidencing a like aggregate Percentage Interest, as requested by the holder
surrendering the same.
No service charge will be made to the Certificateholders for any such
registration of transfer or exchange, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. The Depositor, the Master Servicer and the
Trustee and any agent of the Depositor, the Master Servicer or the Trustee may
treat the Person in whose name this Certificate is registered as the owner
hereof for all
B-7
purposes, and neither the Depositor, the Master Servicer nor the Trustee nor any
such agent shall be affected by notice to the contrary.
The obligations created by the Pooling and Servicing Agreement and the
Trust Fund created thereby (other than the obligation to make payments to
Certificateholders pursuant to the Pooling and Servicing Agreement) shall
terminate upon the payment to the Class A and Class B Certificateholders and the
Residual Certificateholder of all amounts due them under the Pooling and
Servicing Agreement. In no event, however, will the trust created by the
Pooling and Servicing Agreement continue beyond a date 60 years after the date
of the execution and delivery of the Pooling and Servicing Agreement.
B-8
IN WITNESS WHEREOF, the Depositor has caused this Certificate to be duly
executed under its official seal.
ABN AMRO MORTGAGE CORPORATION,
as Depositor
By:
----------------------------------------------
[President]
DATED:
[SEAL]
Attest:
By:
-------------------------------------------------
Secretary
B-9
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS B CERTIFICATES REFERRED TO IN THE WITHIN-MENTIONED
POOLING AND SERVICING AGREEMENT.
_________________________________
as Authenticating Agent
_________________________________
Authorized Xxxxxx
B-10
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applications of laws or regulations:
TEN COM--as tenants in common
UNF GIFT MIN ACT--......(Minor) under Uniform Gifts To Minors Act....
(State)
Custodian ....... (Cust)
TEN ENT -- as tenants by the entireties
JT TEN -- as joint tenants with right of survivorship and not as
tenants in common
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
------------------------------
-------------------------------------------------------------------------------
Please print or typewrite name and address including postal zip code of assignee
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
The within Certificate and all rights thereunder, hereby irrevocably
constituting and appointing ________________________________________ attorney
transfer said Certificate on the books of the Certificate Registrar, with full
power of substitution in the premises.
Dated:_____________
___________________________________________________________
NOTICE: The signature to this assignment must correspond
with the name as written upon the face of the written
instrument in every particular, without alteration or
enlargement, or any change whatever.
B-11
[EXHIBIT C]
[FORM OF FACE OF RESIDUAL CERTIFICATE]
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A AND
CLASS B CERTIFICATES AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS
THE HOLDER HEREOF DELIVERS TO THE TRUSTEE THE CERTIFICATION, RULING OR OPINION
OR OPINIONS OF COUNSEL REQUIRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.2
OF THE POOLING AND SERVICING AGREEMENT.
Solely for U.S. 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 issue date of this Certificate is ______,
19__
THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF THE
DEPOSITOR, THE MASTER SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE
AFFILIATES. THIS CERTIFICATE DOES NOT CONSTITUTE A SAVINGS ACCOUNT OR DEPOSIT
AND NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS WILL BE INSURED
OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENT AGENCY NOR HAS THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENT AGENCY PASSED UPON THE ACCURACY OF THE INFORMATION CONTAINED HEREIN.
THIS CERTIFICATE HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED HEREIN. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
RESIDUAL CERTIFICATE
evidencing an undivided interest in Mortgage Loans representing beneficial
ownership of certain monthly distribution from a pool of [adjustable] [fixed]
rate mortgage loans secured by one- to four-unit residential properties
originated or acquired by
C-1
ABN AMRO MORTGAGE CORPORATION,
as Depositor
(Not an interest in or obligation of the Depositor)
Certificate No. 1
Series 19__-__
Class Residual Certificate
Issue Date _____________ __, 19__
_____________ __, 19__
THIS CERTIFICATE HAS NO STATED PRINCIPAL AMOUNT.
THIS CERTIFIES THAT is the registered owner
of an undivided interest in a trust fund (the "Trust Fund") consisting of (i) a
pool of residential mortgage loans (the "Mortgage Loans") originated or acquired
by ABN AMRO Mortgage Corporation, (hereinafter in its capacity as Depositor
under the Pooling and Servicing Agreement described below called the
"Depositor," which term includes any successor entity under the Pooling and
Servicing Agreement referred to below), (ii) such amounts as from time to time
may be held by the Master Servicer in the Certificate Account and the Pre-
Funding Account, if any, [and the Reserve Fund] established and maintained by
the Depositor pursuant to the Pooling and Servicing Agreement, (iii) the
insurance policies, if any, relating to each Mortgage Loan and (iv) property
which secured a Mortgage Loan and which has been acquired by foreclosure or deed
in lieu of foreclosure. The Trust Fund was created pursuant to a Pooling and
Servicing Agreement dated as of the Cut-off Date specified above (the "Pooling
and Servicing Agreement") among the Depositor, the Master Servicer and
____________________, as trustee (the "Trustee"). This Certificate is a duly
authorized and issued Residual Certificate of the Series and Class specified
above (the "Residual Certificate"), and issued under and subject to the terms,
provisions and conditions of the Pooling and Servicing Agreement, to which
Pooling and Servicing Agreement the holder of this Certificate by virtue of the
acceptance hereof assents and by which such holder is bound. A summary of
certain of the pertinent provisions of the Pooling and Servicing Agreement is
set forth below. Also issued under the Pooling and Servicing Agreement are
Mortgage Pass-Through Certificates of the same Series, Class B (the "Class B
Certificates"), and Mortgage Pass-Through Certificates of the same Series, Class
A (the "Class A Certificates"). The Class A, Class B and Residual Certificates
are herein Collectively called the "Certificates."
Any term used herein which is defined in the Pooling and Servicing
Agreement shall have the meaning assigned in the Pooling and Servicing
Agreement, and nothing herein shall be deemed inconsistent with that meaning.
C-2
Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Pooling and Servicing Agreement, or be valid
for any purpose.
The holder of this Certificate shall be entitled to receive the following
distributions: the amounts, if any, which remain on deposit in the Certificate
Account, after payment to the Class A and Class B Certificateholders of the
amounts set forth in Section 9.1 of the Pooling and Servicing Agreement, and
subject to the conditions set forth therein.
The amounts set forth above shall be payable after the occurrence of the
events set forth in the first paragraph of Section 9.1 of the Pooling and
Servicing Agreement.
The holder of the Residual Certificate is not required to refund any
amounts which have previously been properly distributed to it.
Distributions on this Certificate will be made by the Trustee by check
mailed to the address of the Person entitled thereto as such name and address
shall appear on the Certificate Register or, if the aggregate Certificate Amount
of the Certificates held by the Certificateholder is in excess of $_____________
and the Certificateholder so requests by notifying the Trustee in writing as
specified in the Pooling and Servicing Agreement, by wire transfer in
immediately available funds to the account specified in writing by the
Certificateholder to the Trustee. Notwithstanding the above, the final
distribution on this Certificate will be made after due notice by the Depositor
of the pendency of such distribution and only upon presentation and surrender of
this Certificate at the office or agency of the Trustee designated in such
notice.
The Pooling and Servicing Agreement permits the amendment thereof and
the modification of the rights and obligations of the Depositor, the Master
Servicer and the Certificateholders under the Pooling and Servicing Agreement
from time to time by the Depositor and the Trustee with the consent of the
Holders of Certificates evidencing, in aggregate, not less than 50% of the Trust
Fund for the purpose of adding any provisions or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Holders of Certificates; provided, 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 in
respect of any Certificate without the consent of the Holder of such
Certificate;
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(ii) adversely affect in any material respect the interest of the
Holders of the Class A Certificates in a manner other than as described in
(i) above without the consent of the Holders of Class A Certificates
aggregating not less than 66-2/3% of the aggregate Percentage Interest
evidenced by all Class A Certificates;
(iii) adversely affect in any material respect the interest of the
Holders of the Class B Certificates in a manner other than as described in
clause (i) above without the consent of the Holders of Class B Certificates
aggregating not less than 66-2/3% of the aggregate Percentage Interest
evidenced by all Class B Certificates;
(iv) adversely affect in any material respect the interest of the
Class R Certificateholder without the consent of the Holders of the Class R
Certificate;
(v) change in any material respect the rights and obligations of
the Master Servicer or the Back-up Servicer under the Pooling and Servicing
Agreement without the prior written consent of such party; or
(vi) reduce the aforesaid percentage of the Certificates the Holders
of which are required to consent to amendments to the Pooling and Servicing
Agreement without the consent of the Holders of all Certificates then
outstanding; [provided, that the Holder of the Class R Certificate shall
have no right to vote at all times that any Class A or B Certificates are
outstanding if such amendment of the Pooling and Serving Agreement relates
to the modification, elimination or addition of any provision necessary to
maintain the qualification of the Trust Fund as a REMIC;]
provided, that for the purposes of the Pooling and Servicing Agreement, the
holder of the Residual Certificate shall vote only with respect to items (i) and
(iii) above.
Any such Consent by the holder of this Certificate shall be conclusive
and binding on such holder and upon all future holders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange herefore or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Pooling and Servicing Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the holders of
any of the Certificates (including amendment or modification to cure any
ambiguity).
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, the transfer of
C-4
this Certificate is registrable on the Certificate Register upon surrender of
this Certificate for registration of transfer at the offices or agencies
maintained by the Certificate Registrar in the County of ____________,
__________, or ____________, ________, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Master Servicer and
the Certificate Registrar duly executed by, the holder hereof or such holder's
attorney duly authorized in writing, and thereupon a new Residual Certificate
will be issued to the designated transferee.
The Residual Certificate is issuable only as a registered Certificate
without coupons or any Denomination.
No service charge will be made to the Certificateholders for any such
registration of transfer or exchange, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. The Depositor, the Master Servicer and the
Trustee and any agent of the Depositor, the Master Servicer or the Trustee may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and neither the Depositor, the Master Servicer nor the
Trustee nor any such agent shall be affected by notice to the contrary.
The obligations created by the Pooling and Servicing Agreement and the
Trust Fund created thereby (other than the obligation to make payments to
Certificateholders pursuant to the Pooling and Servicing Agreement) shall
terminate upon the payment to the Class A and Class B Certificateholders and the
Residual Certificateholder of all amounts due them under the Pooling and
Servicing Agreement. In no event, however, will the trust created by the Pooling
and Servicing Agreement continue beyond a date 60 years after the date of the
execution and delivery of the Pooling and Servicing Agreement.
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IN WITNESS WHEREOF, the Depositor has caused this Certificate to be duly
executed under its official seal.
ABN AMRO MORTGAGE CORPORATION,
as Depositor
By:
-----------------------------------
[President]
DATED:
[SEAL]
Attest:
By:
-----------------------------------
Secretary
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TRUSTEE'S CERTIFICATE OF AUTHENTICATION
THIS IS THE RESIDUAL CERTIFICATE REFERRED TO IN THE WITHIN-MENTIONED
POOLING AND SERVICING AGREEMENT.
-----------------------------------
as Authenticating Agent
-----------------------------------
Authorized Xxxxxx
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ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applications of laws or regulations:
TEN COM--as tenants in common
UNF GIFT MIN ACT--......(Minor) under Uniform Gifts To Minors Act....
(State)
Custodian ....... (Cust)
TEN ENT -- as tenants by the entireties
JT TEN -- as joint tenants with right of survivorship and not as
tenants in common
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
-------------------------------
--------------------------------------------------------------------------------
Please print or typewrite name and address including postal zip code of assignee
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
The within Certificate and all rights thereunder, hereby irrevocably
constituting and appointing ________________________________________ attorney
transfer said Certificate on the books of the Certificate Registrar, with full
power of substitution in the premises.
Dated:_____________
-----------------------------------------------------------
NOTICE: The signature to this assignment must correspond
with the name as written upon the face of the written
instrument in every particular, without alteration or
enlargement, or any change whatever.
C-8
