================================================================================
ABN AMRO MORTGAGE CORPORATION
Depositor
and
ABN AMRO MORTGAGE GROUP, INC.
Servicer
and
JPMORGAN CHASE BANK
Trustee
_____________________
POOLING AND SERVICING AGREEMENT
Dated as of June 1, 2003
_____________________
$506,658,316
Mortgage Pass-Through Certificates
Series 2003-8
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
CONVEYANCE OF TRUST FUND;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.1 CONVEYANCE OF TRUST FUND..............................................................40
Section 2.2 ACCEPTANCE BY TRUSTEE.................................................................43
Section 2.3 REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR WITH RESPECT TO THE LOANS.............45
Section 2.4 AUTHENTICATION AND DELIVERY OF CERTIFICATES; DESIGNATION OF CERTIFICATES AS
REMIC REGULAR AND RESIDUAL INTERESTS....................................................................49
Section 2.5 DESIGNATION OF STARTUP DAY............................................................51
Section 2.6 NO CONTRIBUTIONS......................................................................51
Section 2.7 REPRESENTATIONS AND WARRANTIES OF THE SERVICER........................................51
ARTICLE III
ADMINISTRATION AND SERVICING OF LOANS
Section 3.1 SERVICER TO ACT AS SERVICER; ADMINISTRATION OF THE LOANS..............................53
Section 3.2 COLLECTION OF CERTAIN LOAN PAYMENTS; CUSTODIAL ACCOUNT FOR P&I........................56
Section 3.3 PERMITTED WITHDRAWALS FROM THE CUSTODIAL ACCOUNT FOR P&I..............................58
Section 3.4 TAXES, ASSESSMENTS AND SIMILAR ITEMS; ESCROW ACCOUNTS.................................59
Section 3.5 MAINTENANCE OF INSURANCE..............................................................60
Section 3.6 ENFORCEMENT OF DUE-ON-SALE CLAUSES; ASSUMPTION AND SUBSTITUTION AGREEMENTS
........................................................................................................62
Section 3.7 REALIZATION UPON DEFAULTED LOANS......................................................62
Section 3.8 TRUSTEE TO COOPERATE; RELEASE OF MORTGAGE FILES.......................................64
Section 3.9 SERVICING COMPENSATION................................................................65
Section 3.10 REPORTS TO THE TRUSTEE; CUSTODIAL ACCOUNT FOR P&I STATEMENTS..........................65
Section 3.11 ANNUAL STATEMENT AS TO COMPLIANCE.....................................................66
Section 3.12 ANNUAL INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING REPORT...............................66
Section 3.13 ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING THE LOANS...................67
Section 3.14 [RESERVED]............................................................................67
Section 3.15 SALE OF DEFAULTED LOANS AND REO PROPERTIES............................................67
Section 3.16 DELEGATION OF DUTIES..................................................................69
Section 3.17 [RESERVED]............................................................................69
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Section 3.18 [RESERVED]............................................................................69
Section 3.19 APPOINTMENT OF A SPECIAL SERVICER.....................................................69
Section 3.20 ALLOCATION OF REALIZED LOSSES.........................................................69
Section 3.21 MAINTENANCE OF THE ROUNDING ACCOUNT; COLLECTIONS THEREUNDER...........................70
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS; ADVANCES;
STATEMENTS AND REPORTS
Section 4.1 DISTRIBUTIONS TO CERTIFICATEHOLDERS...................................................72
Section 4.2 STATEMENTS TO CERTIFICATEHOLDERS; EXCHANGE ACT REPORTING..............................77
Section 4.3 ADVANCES BY THE SERVICER; DISTRIBUTION REPORTS TO THE TRUSTEE.........................80
Section 4.4 NONRECOVERABLE ADVANCES...............................................................81
Section 4.5 FORECLOSURE REPORTS...................................................................81
Section 4.6 ADJUSTMENT OF SERVICING FEES WITH RESPECT TO PAYOFFS OR CURTAILMENTS..................81
Section 4.7 PROHIBITED TRANSACTIONS TAXES AND OTHER TAXES.........................................81
Section 4.8 TAX ADMINISTRATION....................................................................82
Section 4.9 EQUAL STATUS OF SERVICING FEE.........................................................83
Section 4.10 APPOINTMENT OF PAYING AGENT AND CERTIFICATE ADMINISTRATOR.............................83
ARTICLE V
THE CERTIFICATES
Section 5.1 THE CERTIFICATES......................................................................84
Section 5.2 CERTIFICATES ISSUABLE IN CLASSES; DISTRIBUTIONS OF PRINCIPAL AND INTEREST;
AUTHORIZED DENOMINATIONS................................................................................90
Section 5.3 REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES.................................90
Section 5.4 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.....................................91
Section 5.5 PERSONS DEEMED OWNERS.................................................................92
Section 5.6 TEMPORARY CERTIFICATES................................................................92
Section 5.7 BOOK-ENTRY FOR BOOK-ENTRY CERTIFICATES................................................92
Section 5.8 NOTICES TO CLEARING AGENCY............................................................93
Section 5.9 DEFINITIVE CERTIFICATES...............................................................94
ARTICLE VI
THE DEPOSITOR AND THE SERVICER
Section 6.1 LIABILITY OF THE DEPOSITOR AND THE SERVICER...........................................95
Section 6.2 MERGER OR CONSOLIDATION OF THE DEPOSITOR OR THE SERVICER..............................95
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Section 6.3 LIMITATION ON LIABILITY OF THE SERVICER AND OTHERS....................................95
Section 6.4 SERVICER NOT TO RESIGN................................................................96
ARTICLE VII
DEFAULT
Section 7.1 EVENTS OF DEFAULT.....................................................................97
Section 7.2 OTHER REMEDIES OF TRUSTEE.............................................................98
Section 7.3 DIRECTIONS BY CERTIFICATEHOLDERS AND DUTIES OF TRUSTEE DURING EVENT OF DEFAULT........98
Section 7.4 ACTION UPON CERTAIN FAILURES OF SERVICER AND UPON EVENT OF DEFAULT....................99
Section 7.5 APPOINTMENT OF SUCCESSOR SERVICER.....................................................99
Section 7.6 NOTIFICATION TO CERTIFICATEHOLDERS...................................................101
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.1 DUTIES OF TRUSTEE....................................................................102
Section 8.2 CERTAIN MATTERS AFFECTING TRUSTEE....................................................104
Section 8.3 TRUSTEE NOT REQUIRED TO MAKE INVESTIGATION...........................................104
Section 8.4 TRUSTEE NOT LIABLE FOR CERTIFICATES OR LOANS.........................................105
Section 8.5 TRUSTEE MAY OWN CERTIFICATES.........................................................105
Section 8.6 SERVICER TO PAY TRUSTEE'S FEES AND EXPENSES..........................................105
Section 8.7 ELIGIBILITY REQUIREMENTS FOR TRUSTEE.................................................106
Section 8.8 RESIGNATION AND REMOVAL OF TRUSTEE...................................................106
Section 8.9 SUCCESSOR TRUSTEE....................................................................107
Section 8.10 MERGER OR CONSOLIDATION OF TRUSTEE...................................................108
Section 8.11 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE........................................108
Section 8.12 APPOINTMENT OF CUSTODIANS............................................................109
Section 8.13 AUTHENTICATING AGENT.................................................................109
Section 8.14 BLOOMBERG............................................................................110
Section 8.15 CALCULATION OF LIBOR.................................................................110
ARTICLE IX
TERMINATION
Section 9.1 TERMINATION UPON PURCHASE BY THE SERVICER OR LIQUIDATION OF ALL LOANS................112
Section 9.2 TRUSTS IRREVOCABLE...................................................................113
Section 9.3 ADDITIONAL TERMINATION REQUIREMENTS..................................................113
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ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.1 AMENDMENT............................................................................115
Section 10.2 RECORDATION OF AGREEMENT.............................................................116
Section 10.3 LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS...........................................116
Section 10.4 GOVERNING LAW; JURISDICTION..........................................................117
Section 10.5 NOTICES..............................................................................117
Section 10.6 SEVERABILITY OF PROVISIONS...........................................................118
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EXHIBITS
Exhibit A - Forms of Certificates
Exhibit B - Form of Residual Certificate
Exhibit C-1 - Form of Interim Certification
Exhibit C-2 - Form of Final Certification
Exhibit D - Schedule of Loans
Exhibit E - Fields of Loan Information
Exhibit F - Form of Transferor Certificate for Privately Offered Certificates
Exhibit G - Form of Transferee's Certificate for Privately Offered Certificates
Exhibit H - [Reserved]
Exhibit I - Form of Transferor Certificate
Exhibit J - Form of Transferee Affidavit and Agreement
Exhibit K - Form of Additional Matter Incorporated into the Form of the Certificates
Exhibit L - Form of Rule 144A Investment Representation
Exhibit M - Aggregate Planned Principal Balances
Exhibit N - [Reserved]
Exhibit O - [Reserved]
Exhibit P - [Reserved]
Exhibit Q - Bloomberg Data
Exhibit R - Form of Special Servicing Agreement
Exhibit S - Form of Form 10-K Certificate
Exhibit T - Form of Back-up Certification to Form 10-K Certificate
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This Pooling and Servicing Agreement, dated and effective as of June 1,
2003 (this "Agreement"), is executed by and among ABN AMRO Mortgage Corporation,
as depositor (the "Depositor"), ABN AMRO Mortgage Group, Inc., as servicer (the
"Servicer"), and JPMorgan Chase Bank, as trustee (the "Trustee"). Capitalized
terms used in this Agreement and not otherwise defined have the meanings
ascribed to such terms in Article I hereof.
PRELIMINARY STATEMENT
The Depositor at the Closing Date is the owner of the Loans and the other
property being conveyed by it to the Trustee for inclusion in the Trust Fund. On
the Closing Date, the Depositor will acquire the Certificates from the Trust
Fund as consideration for its transfer to the Trust Fund of the Loans and
certain other assets and will be the owner of the Certificates. The Depositor
has duly authorized the execution and delivery of this Agreement to provide for
the conveyance to the Trustee of the Loans and the issuance to the Depositor of
the Certificates representing in the aggregate the entire beneficial ownership
of the Trust Fund. All covenants and agreements made by the Depositor, the
Servicer and the Trustee herein with respect to the Loans and the other property
constituting the Trust Fund are for the benefit of the Holders from time to time
of the Certificates. The Depositor and the Servicer are entering into this
Agreement, and the Trustee is accepting the trust created hereby, for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged.
The Certificates issued hereunder, other than the Class B-3, Class B-4 and
Class B-5 Certificates have been offered for sale pursuant to a Prospectus,
dated January 23, 2003, and a Prospectus Supplement, dated June 24, 2003 of the
Depositor (together, the "Prospectus"). The Class B-3, Class B-4 and Class B-5
Certificates have been offered for sale pursuant to a Private Placement
Memorandum dated June 26, 2003. The Trust Fund created hereunder is intended to
be the "Trust" as described in the Prospectus and the Private Placement
Memorandum and the Certificates are intended to be the "Certificates" described
therein.
As provided herein, the Trustee will elect to treat the segregated pool of
assets consisting of the Loans and other related assets in the Trust Fund
subject to this Agreement as a REMIC for federal income tax purposes, and such
segregated pool of assets will be designated as "REMIC I." Component R-1 of the
Class R Certificate will represent the sole class of "residual interests" in
REMIC I for purposes of the REMIC Provisions under federal income tax law.
As provided herein, the Trustee will elect to treat the segregated pool of
assets consisting of the REMIC I Regular Interests as a REMIC for federal income
tax purposes, and such segregated pool of assets will be designated as "REMIC
II." Component R-2 of the Class R Certificate will represent the sole class of
"residual interests" in REMIC II for purposes of the REMIC Provisions under
federal income tax law. The following table irrevocably sets forth the
designations, the Remittance Rate and initial Class Principal Balance for each
Class of Certificates which, together with the Class R-2 Component, constitute
the entire beneficial interests in REMIC II. Determined solely for purposes of
satisfying Treasury regulation section 1.860G-1(a)(4)(iii), the "latest possible
maturity date" for each of the REMIC I Regular Interests and for each Class of
Certificates shall be the first Distribution Date that is at least two years
after the end of the remaining amortization
schedule of the Loan in the Mortgage Pool that has, as of the Closing Date, the
longest remaining amortization schedule, irrespective of its scheduled maturity.
The following table sets forth the designation, Remittance Rate, initial Class
Principal Balance, and Last Scheduled Distribution Date for each Class of
Certificates comprising the beneficial interests in REMIC II and the Class R
Certificate:
INITIAL CLASS
PRINCIPAL
REMITTANCE OR NOTIONAL LAST SCHEDULED
DESIGNATION RATE (1) BALANCE DISTRIBUTION DATE*
----------- -------- ------- ------------------
Class A-1 4.00% $ 63,216,000.00 June 25, 2033
Class A-2 5.50% $ 57,329,999.99(2) June 25, 2033
Class A-3 4.50% $ 16,206,000.00 June 25, 2033
Class A-4(3)(4) 5.25% $ 44,448,797.00 June 25, 2033
Class A-5 5.50% $ 58,144,000.00 June 25, 2033
Class A-6 5.50% $ 10,689,000.00 June 25, 2033
Class A-7 5.50% $ 1,695,000.00 June 25, 2033
Class A-8 5.50% $ 6,877,500.00 June 25, 2033
Class A-9 5.50% $ 22,939,500.00 June 25, 2033
Class A-10 5.50% $ 5,000,000.00 June 25, 2033
Class A-11 5.50% $ 3,330,000.00 June 25, 2033
Class A-12 5.50% $ 5,500,000.00 June 25, 2033
Class A-13 5.50% $ 4,000,000.00 June 25, 2033
Class A-14 (5) $ 8,000,000.00 June 25, 2033
Class A-15 (6) $ 12,000,000.00 June 25, 2033
Class A-16 5.50% $ 9,000,000.00 June 25, 2033
Class A-17 5.50% $ 2,000,000.00 June 25, 2033
Class A-18 5.50% $ 12,301,000.00 June 25, 2033
Class A-19 5.50% $ 5,019,000.00 June 25, 2033
Class A-20 5.25% $ 450,000.00 June 25, 2033
Class A-21 5.75% $ 450,000.00 June 25, 2033
Class A-22 4.00% $ 136,190,000.00 June 25, 2033
Class A-23 5.50% $ 35,615,000.00 June 25, 2033
Class A-24 5.50% $ 7,838,000.00 June 25, 2033
Class A-25 5.00% $ 1,000,000.00 June 25, 2033
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Class A-26 6.00% $ 1,000,000.00 June 25, 2033
Class A-27 (7) $ 5,866,666.00 June 25, 2033
Class A-28 (8) $ 2,133,334.00 June 25, 2033
Class A-29(3)(4) 5.50% $ 4,939,000.86 June 25, 2033
Class A-30 5.50% $ 2,020,399.00(9) June 25, 2033
Class A-31 (10) $ 1,333,333.00 June 25, 2033
Class A-32 (11) $ 636,191.00 June 25, 2033
Class A-33 (12) $ 30,476.00 June 25, 2033
Class A-34 (13) $ 2,946,428.00 June 25, 2033
Class A-35 (14) $ 803,572.00 June 25, 2033
Class A-X 5.50% $ 11,876,235.79(15) June 25, 2033
Class A-P 0.00%(16) $ 2,140,632.32 June 25, 2033
Class M 5.50% $ 6,079,900.00 June 25, 2033
Class B-1 5.50% $ 3,293,279.00 June 25, 2033
Class B-2 5.50% $ 1,317,312.00 June 25, 2033
Class B-3 5.50% $ 709,322.00 June 25, 2033
Class B-4 5.50% $ 759,987.00 June 25, 2033
Class B-5 5.50% $ 759,987.43 June 25, 2033
Class R+ 5.50% $ 100(17) June 25, 2033
---------------------------
* The Distribution Date in the month of the maturity date for the latest
maturing Loan.
+ The Class R Certificate is entitled to receive the Residual Distribution
Amount and Excess Liquidation Proceeds.
(1) Interest distributed to the Certificates (other than the Principal Only
Certificates) on each Distribution Date will have accrued during the
related Interest Accrual Period (as defined herein) at the applicable per
annum Remittance Rate.
(2) The Class A-2 Certificates will accrue interest on the Class A-2 Notional
Amount (as defined herein).
(3) The Class A-4 Certificates and Class A-29 Certificates will generally not
be entitled to receive any distributions of principal, Principal
Prepayments or Liquidation Proceeds until the Distribution Date in July
2008.
(4) All Realized Losses, other than Excess Losses, otherwise allocable to the
Class A-4 Certificates will be allocated to the Class A-29 certificates as
set forth herein, until the Class Principal Balance of the Class A-29
Certificates is reduced to zero.
(5) Interest will accrue on the Class A-14 Certificates with respect to the
initial Distribution Date at a per annum rate equal to 2.81000000%, and as
to any Distribution Date thereafter, will be a per annum rate equal to
LIBOR plus 1.50% (subject to a maximum rate of 7.00% per annum and a
minimum rate of 1.50% per annum).
(6) Interest will accrue on the Class A-15 Certificates with respect to the
initial Distribution Date at a per annum rate equal to 7.29333333%, and as
to any Distribution Date thereafter, will be a per annum rate equal to
8.16666666% minus the product of LIBOR and 0.66666666 (subject to a maximum
rate of 8.16666666% per annum and a minimum rate of 4.50% per annum).
(7) Interest will accrue on the Class A-27 Certificates with respect to any
Distribution Date on or prior to the Distribution Date in June 2008 at a
per annum rate equal to 4.0000000%, and as to any Distribution Date
thereafter, will be a per annum rate equal to LIBOR plus 1.50% (subject to
a maximum rate of 7.50% per annum and a minimum rate of 1.50% per annum).
(8) Interest will accrue on the Class A-28 Certificates with respect to any
Distribution Date on or prior to the Distribution Date in June 2008 at a
per annum rate equal to 9.62499824%, and as to any Distribution Date
thereafter, will be a per annum rate equal to 16.49999531% minus the
product of LIBOR and 2.74999882 (subject to a maximum rate of 16.49999531%
per annum and a minimum rate of 0.00% per annum).
(9) The Class A-30 Certificates will accrue interest on the Class A-30 Notional
Amount (as defined herein).
(10) Interest will accrue on the Class A-31 Certificates with respect to any
Distribution Date on or prior to the Distribution Date in June 2004 at a
per annum rate equal
3
to 2.85%, and as to any Distribution Date thereafter, will be a per annum
rate equal to LIBOR plus 0.85% (subject to a maximum rate of 8.25% per
annum and a minimum rate of 0.85% per annum).
(11) Interest will accrue on the Class A-32 Certificates with respect to any
Distribution Date on or prior to the Distribution Date in June 2004 at a
per annum rate equal to 10.47903736%, and as to any Distribution Date
thereafter, will be a per annum rate equal to 14.67065228% minus the
product of LIBOR and 2.09580746 (subject to a maximum rate of 14.67065228%
per annum and a minimum rate of 0.00% per annum).
(12) Interest will accrue on the Class A-33 Certificates with respect to any
Distribution Date on or prior to the Distribution Date in June 2004 at a
per annum rate equal to 17.50%, and as to any Distribution Date thereafter,
will be a per annum rate equal to 323.74842281% minus the product of LIBOR
and 43.74977468 (subject to a maximum rate of 17.50% per annum and a
minimum rate of 0.00% per annum).
(13) Interest will accrue on the Class A-34 Certificates with respect to any
Distribution Date on or prior to the Distribution Date in June 2005 at a
per annum rate equal to 3.15%, and as to any Distribution Date thereafter,
will be a per annum rate equal to LIBOR plus 1.45% (subject to a maximum
rate of 7.00% per annum and a minimum rate of 1.45% per annum).
(14) Interest will accrue on the Class A-35 Certificates with respect to any
Distribution Date on or prior to the Distribution Date in June 2005 at a
per annum rate equal to 14.11665886%, and as to any Distribution Date
thereafter, will be a per annum rate equal to 20.34998656% minus the
product of LIBOR and 3.66666334 (subject to a maximum rate of 20.34998656%
per annum and a minimum rate of 0.00% per annum).
(15) The Class A-X Certificates will accrue interest on the Class A-X Notional
Amount (as defined herein).
(16) The Class A-P Certificates will not be entitled to distributions of
interest and will receive principal only in respect of the Loans with
Pass-Through Rates that are less than 5.50% per annum.
(17) The Class R Certificate will be comprised of two components, component R-1,
which represents the sole residual interest in REMIC I (as defined herein),
and component R-2, which represents the sole residual interest in REMIC II
(as defined herein).
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W I T N E S S E T H
-------------------
In consideration of the mutual agreements herein contained, the Depositor,
the Servicer and the Trustee agree as follows:
ARTICLE I
DEFINITIONS
Whenever used herein, the following words and phrases, unless the context
otherwise requires, shall have the meanings specified in this Article:
ADJUSTABLE RATE CERTIFICATES: The Class A-14, Class A-15, Class A-27, Class
A-28, Class A-31, Class A-32, Class A-33, Class A-34 and Class A-35
Certificates.
ADVANCE: An Advance made by the 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 Servicer or the Depositor to
determine whether any Person is an Affiliate of such party.
AGGREGATE CERTIFICATE PRINCIPAL BALANCE: At any given time, the sum of the
then current Class Principal Balances of all Classes of Certificates.
AGGREGATE PLANNED PRINCIPAL BALANCE: For any Distribution Date, the amount
set forth in the table attached hereto as Exhibit M for such Distribution Date,
for the aggregate Class Principal Balance of the Class A-1, Class A-3, Class
A-18, Class A-19, Class A-22, Class A-23 and Class A-24 Certificates.
AGREEMENT: This Pooling and Servicing Agreement and all amendments and
supplements hereto.
ALTA: The American Land Title Association, or any successor.
ANNIVERSARY: Each anniversary of the Cut-off Date.
APPRAISED VALUE: The amount set forth in an appraisal made by or for the
mortgage originator in connection with its origination of each Loan.
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ASSIGNMENT: An assignment of the Mortgage, notice of transfer or equivalent
instrument, in recordable form, sufficient under the laws of the jurisdiction
where the related Mortgaged Property is located to reflect of record the sale
and assignment of the Loan to the Trustee, which assignment, notice of transfer
or equivalent instrument may, if permitted by law, be in the form of one or more
blanket assignments covering Mortgages secured by Mortgaged Properties located
in the same county.
AUTHENTICATING AGENT: Any authenticating agent appointed by the Trustee
pursuant to Section 8.13.
AUTHORIZED DENOMINATION: With respect to the Certificates (other than the
Retail Certificates, Interest Only Certificates, Junior Subordinate Certificates
and the Class R Certificate), an initial Certificate Principal Balance equal to
$25,000 each and integral multiples of $1 in excess thereof. With respect to the
Retail Certificates (other than the Retail Lottery), an initial Certificate
Principal Balance equal to $1,000 each and integral multiples of $1 in excess
thereof. With respect to the Retail Lottery Certificates, an initial Certificate
Principal Balance equal to $1,000 each and integral multiples of $1,000 in
excess thereof. With respect to the Class A-2 Certificates and Class A-30
Certificates, an Initial Notional Amount equal to $500,000 each and integral
multiples of $1 in excess thereof. With respect to the Class A-X Certificates,
an Initial Notional Amount equal to $100,000 each and integral multiples of $1
in excess thereof. With respect to the Class R Certificate, one Certificate with
a Percentage Interest equal to 100%. With respect to the Junior Subordinate
Certificates, an Initial Certificate Principal Balance equal to $100,000 each
and integral multiples of $1 in excess thereof, except with respect to the Class
B-5 Certificates, which may be issued in a different amount that is not a
multiple of $1.
AVAILABLE DISTRIBUTION AMOUNT: With respect to the Loans, the sum of the
following amounts:
(1) the total amount of all cash received by or on behalf of the Servicer
with respect to the Loans by the Determination Date for such Distribution Date
and not previously distributed (including Liquidation Proceeds and Insurance
Proceeds), except:
(a) all Prepaid Monthly Payments;
(b) all Curtailments received after the applicable Prepayment Period
(together with any interest payment received with such Curtailments to the
extent that it represents the payment of interest accrued on a related Loan
subsequent to the applicable Prepayment Period);
(c) all Payoffs received after the applicable Prepayment Period
(together with any interest payment received with such Payoffs to the
extent that it represents the payment of interest accrued on such Loan for
the period subsequent to the applicable Prepayment Period);
6
(d) Insurance Proceeds and Liquidation Proceeds on the Loans received
after the applicable Prepayment Period;
(e) all amounts in the Custodial Account for P & I which are due and
reimbursable to the Servicer pursuant to the terms of this Agreement;
(f) the Servicing Fee for each Loan; and
(g) Excess Liquidation Proceeds;
(2) to the extent advanced by the Servicer and not previously distributed,
the amount of any Advance made by the Servicer to the Trustee with respect to
such Distribution Date relating to the Loans;
(3) to the extent advanced by the Servicer and not previously distributed,
any amount payable as Compensating Interest by the Servicer on such Distribution
Date relating to such Loans; and
(4) the total amount, to the extent not previously distributed, of all cash
received by the Distribution Date by the Trustee or the Servicer, in respect of
a Purchase Obligation under Section 2.2 and Section 2.3 or any permitted
repurchase of a Loan.
BANKRUPTCY COVERAGE: As of the Cut-Off Date, $100,000, and thereafter, the
initial Bankruptcy Coverage amount, less (a) any scheduled or permissible
reduction in the amount of Bankruptcy Coverage pursuant to this definition and
(b) Bankruptcy Losses allocated to the Certificates. The Bankruptcy Coverage may
be reduced upon written confirmation from each Rating Agency that such reduction
will not adversely affect the then current ratings assigned to the Certificates
by each Rating Agency.
BANKRUPTCY LOSS: A loss on a Loan arising out of (i) a reduction in the
scheduled Monthly Payment for such Loan by a court of competent jurisdiction in
a case under the United States Bankruptcy Code, other than any such reduction
that arises out of clause (ii) of this definition of "Bankruptcy Loss,"
including, without limitation, any such reduction that results in a permanent
forgiveness of principal, or (ii) with respect to any Loan, a valuation, by a
court of competent jurisdiction in a case under such Bankruptcy Code, of the
related Mortgaged Property in an amount less than the then outstanding Principal
Balance of such Loan.
BENEFICIAL HOLDER: A Person holding a beneficial interest in any Book-Entry
Certificate as or through a DTC Participant or an Indirect DTC Participant or a
Person holding a beneficial interest in any Definitive Certificate.
BOOK-ENTRY CERTIFICATES: The Class A Certificates, the Class M
Certificates, the Class B-1 Certificates and the Class B-2 Certificates,
beneficial ownership and transfers of which shall be made through book entries
as described in Section 5.7.
7
BUSINESS DAY: Any day other than a Saturday, a Sunday, or a day on which
banking institutions in Chicago, Illinois or New York, New York, are authorized
or obligated by law or executive order to be closed.
CERTIFICATE: Any one of the Certificates issued pursuant to this Agreement,
executed by the Trustee and authenticated by or on behalf of the Trustee
hereunder in substantially one of the forms set forth in Exhibits A and B
hereto. The additional matter appearing in Exhibit K shall be deemed
incorporated into Exhibits A and B as though set forth at the end of Exhibit A
and at the end of Exhibit B, as applicable.
CERTIFICATE ACCOUNT: The separate trust account created and maintained with
the Trustee or any other bank or trust company acceptable to each Rating Agency
which is incorporated or organized under the laws of the United States or any
state thereof, which account shall bear a designation clearly indicating that
the funds deposited therein are held in trust for the benefit of the Trustee on
behalf of the Certificateholders or any other account serving a similar function
acceptable to each Rating Agency. Funds in the Certificate Account in respect of
the Loans and amounts withdrawn from the Certificate Account attributable to the
Loans shall be accounted for separately. If the Trustee has appointed a
Certificate Administrator pursuant to Section 4.10, funds on deposit in the
Certificate Account may be invested in Eligible Investments and reinvestment
earnings thereon shall be paid to the Certificate Administrator as additional
compensation for the Certificate Administrator's performance of the duties
delegated to it by the Trustee. Funds deposited in the Certificate Account
(exclusive of the Servicing Fee) shall be held in trust for the
Certificateholders and for the uses and purposes set forth in Section 3.2,
Section 3.3 and Section 4.1.
CERTIFICATE ADMINISTRATOR: As defined in Section 4.10.
CERTIFICATE ADMINISTRATOR AND TRUSTEE FEE: For each Loan, a fee per annum
equal to 0.0100%, of the outstanding Principal Balance thereof which shall be
paid by the Servicer to the Certificate Administrator and the Trustee.
CERTIFICATE DISTRIBUTION AMOUNT: (I) For any Distribution Date prior to the
Credit Support Depletion Date, the Available Distribution Amount shall be
distributed to the Certificates in the following amounts and priority:
(A) with respect to the Senior Certificates, to the extent of the
Available Distribution Amount on such Distribution Date:
(i) first, to the Class A-P Certificates, the Discount Fractional
Principal Amount for such Distribution Date;
(ii) second, to the Senior Certificates (other than the Class A-P
Certificates) previously unpaid and then current Interest
Distribution Amounts, pro rata according to such amount payable
to the extent of the amounts available;
8
(iii) third, the Senior Principal Amount to the Senior Certificates
then entitled to principal (other than the Class A-P
Certificates), in the following order of priority:
(a) first, to the Class R Certificate, until its Class Principal
Balance has been reduced to zero; and
(b) second, the Senior Principal Amount remaining after the
distribution, if any, in clause (iii)(a) above shall be
distributed in the following manner and order of priority:
(1) first, to the Class A-4 Certificates and Class A-29
Certificates, pro rata, up to the Lockout Principal
Amount for such Distribution Date, until their Class
Principal Balances have been reduced to zero;
(2) second, to the Class X-0, Xxxxx X-0, Class A-18, Class
A-19, Class A-22, Class A-23 and Class A-24
Certificates to the extent necessary to reduce their
aggregate Class Principal Balance to their Aggregate
Planned Principal Balance for such Distribution Date,
concurrently as follows:
(i) 27.5499755775% of the amount distributable under
clause (iii)(b)(2) above to the Class A-1, Class
A-18 and Class A-19 Certificates, sequentially, in
that order, in each case until its Class Principal
Balance has been reduced to zero; and
(ii) 72.4500244225% of the amount distributable under
clause (iii)(b)(2) above shall be distributed to
the following Classes of Certificates in the
following manner and order of priority:
(a) first, to the Class A-22 Certificates, until
its Class Principal Balance has been reduced
to zero;
(b) second, to the Class A-3 Certificates and
Class A-23 Certificates, pro rata, until
their Class Principal Balances have been
reduced to zero; and
(c) third, concurrently as follows:
9
(0) 00.0000000000% of the amount
distributable under clause
(iii)(b)(2)(ii)(c) above to the Class
X- 00 Certificates, until its Class
Principal Balance has been reduced to
zero; and
(0) 00.0000000000% of the amount
distributable under clause
(iii)(b)(2)(ii)(c) above to the Class X-
00 Certificates, until its Class
Principal Balance has been reduced to
zero;
(3) third, concurrently as follow:
(a) 49.6339514548% of the amount distributable under
clause (iii)(b)(3) above shall be distributed to
the following Classes of Certificates in the
following manner and order of priority:
(i) first, to the Class A-5 Certificates, until
its Class Principal Balance has been reduced
to zero;
(ii) second, to the Class A-6 Certificates and
Class A-17 Certificates, pro rata, until
their Class Principal Balances have been
reduced to zero;
(iii) third, to the Class A-7 Certificates, until
its Class Principal Balance has been reduced
to zero; and
(iv) fourth, to the Class A-8, Class A-20,
Class X- 00, Class A-25 and Class A-26
Certificates, pro rata, until their Class
Principal Balances have been reduced to
zero; and
(b) 50.3660485452% of the amount distributable under
clause (iii)(b)(3) above shall be distributed to
the following Classes of Certificates in the
following manner and order of priority:
10
(i) first, to the Class A-9, Class A-14, Class
X- 00, Class A-16, Class A-27, Class A-28,
Class A-31, Class A-32, Class A-33, Class
A-34 and Class A-35 Certificates, pro rata,
until their Class Principal Balances have
been reduced to zero;
(ii) second, to the Class A-10 Certificates and
Class A-11 Certificates, sequentially, in
that order, in each case until its Class
Principal Balance has been reduced to zero;
and
(iii) third, to the Class A-12 Certificates and
Class A-13 Certificates, pro rata, until
their Class Principal Balances have been
reduced to zero;
(4) fourth, to the Class X-0, Xxxxx X-0, Class A-18, Class
A-19, Class A-22, Class A-23 and Class A-24
Certificates, without regard to their Aggregate Planned
Principal Balance for such Distribution Date, in the
manner and order of priority set forth in clause
(iii)(b)(2) above, until their Class Principal Balances
have been reduced to zero;
(5) fifth, to the Lockout Certificates, pro rata, until
their Class Principal Balances have been reduced to
zero; and
(iv) fourth, to the Class A-P Certificates, up to the Subordinate
Principal Amount (determined without regard to the proviso of such
definition) for such Distribution Date, the Discount Fractional Principal
Shortfall amount payable to the Class A-P Certificates on previous
Distribution Dates pursuant to clause (I)(A)(v) of this definition of
"Certificate Distribution Amount" and remaining unpaid from such previous
Distribution Dates; and
(v) fifth, to the Class A-P Certificates, up to the Subordinate
Principal Amount (determined without regard to the proviso of such
definition) for such Distribution Date (less any amounts distributed to the
Class A-P Certificates pursuant to paragraph (I)(A)(iv)), the Discount
Fractional Principal Shortfall; provided that any amounts distributed in
respect of the Discount Fractional Principal Shortfall pursuant to
paragraph (I)(A)(iv) or this paragraph (I)(A)(v) of this definition of
"Certificate Distribution Amount" shall not cause a further reduction of
the Class A-P Class Principal Balance; and
(B) with respect to the Senior Certificates and Subordinate Certificates,
on any Distribution Date prior to the Credit Support Depletion Date, to the
extent of the Available Distribution Amount remaining:
11
(i) first, to the Class M, Class B-1, Class B-2, Class B-3, Class B-4
and Class B-5 Certificates, in their order of seniority, the
following:
(a) their respective amounts of previously unpaid and then
current Interest Distribution Amounts;
(b) their pro rata share, according to their respective Class
Principal Balances, of the Subordinate Principal Amount allocable pursuant
to the definition of "Subordinate Principal Amount" herein, until their
Class Principal Balances have been reduced to zero;
(ii) second, to the Senior Certificates and Subordinate Certificates
in their order of seniority, the amount of unreimbursed Realized
Losses previously allocated to such Class of Certificates, if any,
provided, that any amounts distributed in respect of losses pursuant
to this paragraph (I)(B)(ii) of this definition of "Certificate
Distribution Amount" shall not cause a further reduction in the Class
Principal Balances of the Senior Certificates or Subordinate
Certificates; and
(iii) third, to the Class R Certificate, the Residual Distribution
Amount;
(II) for any Distribution Date on or after the Credit Support Depletion
Date, the Available Distribution Amount remaining, shall be distributed to
the outstanding Senior Certificates in the following amounts and priority:
(a) first, to the Class A-P Certificates, the Discount Fractional
Principal Amount for such Distribution Date;
(b) second, to the Senior Certificates (excluding the Principal
Only Certificates), previously unpaid and then current Interest
Distribution Amounts, pro rata, according to such amount payable to the
extent of amounts available;
(c) third, to the Senior Certificates (other than the Interest
Only Certificates and the Class A-P Certificates), the Senior Principal
Amount, pro rata, according to their respective Class Principal Balances;
(d) fourth, to the Senior Certificates (other than the Interest
Only Certificates), pro rata, according to their respective Class Principal
Balances, the amount of unreimbursed Realized Losses previously allocated
to such Class; and
(e) fifth, to the Class R Certificate, the Residual Distribution
Amount for such Distribution Date.
CERTIFICATE PRINCIPAL BALANCE: For each Certificate of any Class, the
portion of the related
12
Class Principal Balance, if any, represented by such Certificate.
CERTIFICATE REGISTER AND CERTIFICATE REGISTRAR: The register maintained and
the registrar appointed, respectively, pursuant to Section 5.3. Initially, the
Certificate Registrar shall be LaSalle Bank National Association.
CERTIFICATEHOLDER OR HOLDER: The person in whose name a Certificate is
registered in the Certificate Register, except that, solely for the purposes of
giving any consent pursuant to this Agreement, any Certificate registered in the
name of the Depositor, the Certificate Administrator, the Servicer or any
Affiliate thereof shall be deemed not to be outstanding and the Percentage
Interest evidenced thereby shall not be taken into account in determining
whether the requisite percentage of Percentage Interests necessary to effect any
such consent has been obtained; provided, that the Trustee, the Certificate
Registrar and the Paying Agent may conclusively rely upon an Officer's
Certificate to determine whether any Person is an Affiliate of the Depositor,
the Certificate Administrator or the Servicer.
CERTIFICATEHOLDERS' REPORT: As defined in Section 4.2(a).
CLASS: All Certificates having the same priority and rights to payments
from the Available Distribution Amount, designated as a separate Class, as set
forth in the forms of Certificates attached hereto as Exhibits A and B.
CLASS A CERTIFICATES: The Class A-1, Class A-2, Class A-3, Class A-4, Class
A-5, Class A-6, Class A-7, Class A-8, Class A-9, Class A-10, Class A-11, Class
A-12, Class A-13, Class A-14, Class A-15, Class A-16, Class A-17, Class A-18,
Class A-19, Class A-20, Class A-21, Class A-22, Class A-23, Class A-24, Class
A-25, Class A-26, Class A-27, Class A-28, Class A-29, Class A-30, Class A-31,
Class A-32, Class A-33, Class A-34, Class A-35, Class A-P and Class A-X
Certificates, collectively, and designated as such on the face thereof in
substantially the forms attached hereto as Exhibit A.
CLASS A-14 INTEREST RATE: With respect to the initial Distribution Date, a
per annum rate equal to 2.81000000%, and as to any Distribution Date thereafter,
will be a per annum rate equal to LIBOR plus 1.50% (subject to a maximum rate of
7.00% per annum and a minimum rate of 1.50% per annum).
CLASS A-15 INTEREST RATE: With respect to the initial Distribution Date, a
per annum rate equal to 7.29333333%, and as to any Distribution Date thereafter,
will be a per annum rate equal to 8.16666666% minus the product of LIBOR and
0.66666666 (subject to a maximum rate of 8.16666666% per annum and a minimum
rate of 4.50% per annum).
CLASS A-27 INTEREST RATE: With respect to any Distribution Date on or prior
to the Distribution Date in June 2008, a per annum rate equal to 4.0000000%, and
as to any Distribution Date thereafter, will be a per annum rate equal to LIBOR
plus 1.50% (subject to a maximum rate of 7.50% per
13
annum and a minimum rate of 1.50% per annum).
CLASS A-28 INTEREST RATE: With respect to any Distribution Date on or prior
to the Distribution Date in June 2008, a per annum rate equal to 9.62499824%,
and as to any Distribution Date thereafter, will be a per annum rate equal to
16.49999531% minus the product of LIBOR and 2.74999882 (subject to a maximum
rate of 16.49999531% per annum and a minimum rate of 0.00% per annum).
CLASS A-31 INTEREST RATE: With respect to any Distribution Date on or prior
to the Distribution Date in June 2004 at a per annum rate equal to 2.85%, and as
to any Distribution Date thereafter, will be a per annum rate equal to LIBOR
plus 0.85% (subject to a maximum rate of 8.25% per annum and a minimum rate of
0.85% per annum).
CLASS A-32 INTEREST RATE: With respect to any Distribution Date on or prior
to the Distribution Date in June 2004 at a per annum rate equal to 10.47903736%,
and as to any Distribution Date thereafter, will be a per annum rate equal to
14.67065228% minus the product of LIBOR and 2.09580746 (subject to a maximum
rate of 14.67065228% per annum and a minimum rate of 0.00% per annum).
CLASS A-33 INTEREST RATE: With respect to any Distribution Date on or prior
to the Distribution Date in June 2004 at a per annum rate equal to 17.50%, and
as to any Distribution Date thereafter, will be a per annum rate equal to
323.74842281% minus the product of LIBOR and 43.74977468 (subject to a maximum
rate of 17.50% per annum and a minimum rate of 0.00% per annum).
CLASS A-34 INTEREST RATE: With respect to any Distribution Date on or prior
to the Distribution Date in June 2005 is 3.15% per annum, and as to any
Distribution Date thereafter, will be a per annum rate equal to LIBOR plus 1.45%
(subject to a maximum rate of 7.00% per annum and a minimum rate of 1.45% per
annum).
CLASS A-35 INTEREST RATE: With respect to any Distribution Date on or prior
to the Distribution Date in June 2005 at a per annum rate equal to 14.11665886%,
and as to any Distribution Date thereafter, will be a per annum rate equal to
20.34998656% minus the product of LIBOR and 3.66666334 (subject to a maximum
rate of 20.34998656% per annum and a minimum rate of 0.00% per annum).
CLASS A-2 NOTIONAL AMOUNT: As of the Closing Date, $57,329,999 and
thereafter, with respect to any Distribution Date, will be equal to (a) the sum
of (i) 1.50% of the Class Principal Balance of the Class A-1 Certificates, (ii)
1.00% of the Class Principal Balance of the Class A-3 Certificates and (iii)
1.50% of the Class Principal Balance of the Class A-22 Certificates, divided by
(b) 5.50%.
CLASS A-30 NOTIONAL AMOUNT: As of the Closing Date, $2,020,399 and
thereafter, with respect to any Distribution Date, will be equal to (a) 0.25% of
the Class Principal Balance of the Class A-4 Certificates, divided by (b) 5.50%.
14
CLASS A-X NOTIONAL AMOUNT: As of the Closing Date approximately $11,876,235
and thereafter, with respect to any Distribution Date will equal the total
Principal Balance, as of the first day of the month preceding such Distribution
Date (after giving effect to all payments scheduled to be made on such
Distribution Date whether or not received), of the Premium Loans multiplied by
the following fraction:
the weighted average of the Pass-Through Rates of the
PREMIUM LOANS AS OF THE FIRST DAY OF SUCH MONTH MINUS 5.50%
-----------------------------------------------------------
5.50%
CLASS NOTIONAL AMOUNT: With respect to the Class A-2, Class A-30 and Class
A-X Certificates, the Class A-2 Notional Amount, the Class A-30 Notional Amount
and the Class A-X Notional Amount, respectively.
CLASS PRINCIPAL BALANCE: For any Class of Certificates (other than the
Interest Only Certificates), the applicable initial Class Principal Balance set
forth in the Preliminary Statement hereto, corresponding to the rights of such
Class in payments of principal due to be passed through to Certificateholders
from principal payments on the Loans, as reduced from time to time by (x)
distributions of principal to Certificateholders of such Class and (y) the
portion of Realized Losses allocated to the Class Principal Balance of such
Class pursuant to Section 3.20 with respect to a given Distribution Date. For
any Distribution Date, the reduction of the Class Principal Balance of any Class
of Certificates pursuant to Section 3.20 shall be deemed effective prior to the
determination and distribution of principal on such Class pursuant to the
definition of "Certificate Distribution Amount". Notwithstanding the foregoing,
the Class Principal Balance of the most subordinate Class of Certificates
outstanding at any time shall be equal to the aggregate Scheduled Principal
Balance of all of the Loans less the Class Principal Balance of all other
Classes of Certificates. The Class Principal Balance for the Class A-1
Certificates shall be referred to as the "Class A-1 Principal Balance", the
Class Principal Balance for the Class A-2 Certificates shall be referred to as
the "Class A-2 Principal Balance" and so on. The Class Principal Balances of the
Interest Only Certificates shall be zero.
CLASS R CERTIFICATE: The Certificate designated as "Class R" on the face
thereof in substantially the form attached hereto as Exhibit B, that is composed
of Components R-1 and R-2 each of which has been designated as the sole class of
"residual interests" in REMIC I and REMIC II, respectively, pursuant to Section
2.4.
CLASS R CERTIFICATEHOLDER: The registered Holder of the Class R
Certificate.
CLEARING AGENCY: An organization registered as a "clearing agency" pursuant
to Section 17A of the Securities and Exchange Act of 1934, as amended, which
initially shall be DTC.
CLOSING DATE: June 26, 2003.
15
CODE: The Internal Revenue Code of 1986, as amended.
COMPENSATING INTEREST: For any Distribution Date, with respect to the Loans
contained therein, the lesser of (i) the sum of (a) one-twelfth of 0.125% of the
aggregate outstanding Principal Balance of each Loan as of the related Due Date
and (b) the aggregate Prepayment Earnings and (ii) the aggregate Uncollected
Interest.
CORPORATE TRUST OFFICE: The corporate trust office of the Trustee in the
State of Texas, at which at any particular time its corporate trust business
with respect to this Agreement shall be administered, which office at the date
of the execution of this Agreement is located at 000 Xxxxxx Xxxxxx, 0xx Xxxxx,
Xxxxxxx, Xxxxx 00000, Attention: Xxxxx Xxxxxxx.
CREDIT SUPPORT DEPLETION DATE: The first Distribution Date on which the
aggregate of the Class Principal Balances of the Subordinate Certificates has
been or will be reduced to zero as a result of principal distributions thereon
and the allocation of Realized Losses on such Distribution Date.
CURTAILMENT: Any payment of principal on a Loan, made by or on behalf of
the related Mortgagor, other than a Monthly Payment, a Prepaid Monthly Payment
or a Payoff, which is applied to reduce the outstanding Principal Balance of the
Loan.
CUSTODIAL ACCOUNT FOR P&I: The custodial account for principal and interest
established and maintained by, or at the direction of, the Servicer and caused
by the Servicer to be established and maintained pursuant to Section 3.2(b) (i)
with the corporate trust department of the Trustee or another financial
institution approved by the Servicer such that the rights of such Servicer, the
Trustee and the Certificateholders thereto shall be fully protected against the
claims of any creditors of the Servicer and of any creditors or depositors of
the institution in which such account is maintained, (ii) within FDIC insured
accounts (or other accounts with comparable insurance coverage acceptable to
each Rating Agency) created and maintained, by or at the direction of the
Servicer, and monitored by the Servicer or (iii) in a separate non-trust account
without FDIC or other insurance in an Eligible Institution. In the event that a
Custodial Account for P&I is established pursuant to clause (ii) of the
preceding sentence, amounts held in such Custodial Account for P&I shall not
exceed the level of deposit insurance coverage on such account; accordingly,
more than one Custodial Account for P&I may be established.
CUSTODIAL AGREEMENT: The agreement, if any, among the Servicer, the Trustee
and a Custodian providing for the safekeeping of the Mortgage Files on behalf of
the Certificateholders.
CUSTODIAN: A custodian which is appointed pursuant to a Custodial
Agreement. Any
16
Custodian so appointed shall act as agent on behalf of the Trustee, and shall be
compensated by the Trustee at no additional charge to the Servicer. The Trustee
shall remain at all times responsible under the terms of this Agreement,
notwithstanding the fact that certain duties have been assigned to a Custodian.
CUT-OFF DATE: June 1, 2003.
DATA: As defined in Section 8.14.
DECEASED HOLDER: A beneficial Holder of a Retail Lottery Certificate who
was living at the time such Retail Lottery Certificate was acquired and whose
executor, authorized personal representative, surviving tenant by the entirety,
surviving joint tenant or surviving tenant in common or other person endowed to
act on behalf of such Beneficial Holder causes to be furnished to the Trustee or
Paying Agent evidence of such Beneficial Holder's death satisfactory to the
Trustee or Paying Agent and any tax waivers requested by the Trustee or Paying
Agent. The Trustee or Paying Agent shall be entitled to rely upon any evidence
of death or tax waiver so furnished to it
DEFAULTED LOAN: As of any Determination Date, any Loan for which any
payment of principal of or interest on such Loan is more than 89 days past due,
determined without giving effect to any grace period permitted by the related
Mortgage or Mortgage Note or any other document in the Mortgage File.
DEFINITIVE CERTIFICATES: As defined in Section 5.7.
DENOMINATION: The amount specified on a Certificate as representing the
aggregate Principal Balance of the Loans as of the Cut-Off Date evidenced by
such Certificate.
DEPOSITOR: ABN AMRO Mortgage Corporation, a Delaware corporation, or its
successor-in-interest.
DEPOSITORY: DTC or any successor thereto.
DEPOSITORY AGREEMENT: The Letter of Representations, dated June 26, 2003 by
and among DTC, the Depositor and the Trustee.
DETERMINATION DATE: A day not later than the 10th day (or, if such 10th day
is not a Business Day, the Business Day immediately succeeding such 10th day)
preceding a related Distribution Date in the month in which such Distribution
Date occurs.
DISCOUNT FRACTION: For any Discount Loan, the following fraction:
5.50% - THE PASS-THROUGH RATE ON SUCH DISCOUNT LOAN
---------------------------------------------------
5.50%
17
DISCOUNT FRACTIONAL PRINCIPAL AMOUNT: On each Distribution Date, an amount
equal to the product of the Discount Fraction multiplied by the sum of (i)
scheduled payments of principal on each Discount Loan due on or before the
related Due Date in respect of which no distribution has been made on any
previous Distribution Date and which were received by the Determination Date, or
which have been advanced as part of an Advance with respect to such Distribution
Date, (ii) the principal portion received in respect of each Discount Loan
during the Prepayment Period of (a) Curtailments, (b) Insurance Proceeds, (c)
the amount, if any, of the principal portion of the Purchase Price pursuant to a
Purchase Obligation or any repurchase of a Discount Loan permitted hereunder and
(d) Liquidation Proceeds and (iii) the principal portion of Payoffs received in
respect of Discount Loans during the applicable Prepayment Period.
DISCOUNT FRACTIONAL PRINCIPAL SHORTFALL: For any Distribution Date, an
amount equal to the Discount Fraction of any Realized Loss on a Discount Loan,
other than a Special Hazard Loss, Fraud Loss or Bankruptcy Loss in excess of the
Special Hazard Coverage, Fraud Coverage or Bankruptcy Coverage, as applicable.
DISCOUNT LOAN: The Loans having Pass-Through Rates of less than 5.50%.
DISQUALIFIED ORGANIZATION: A "disqualified organization" as defined in
Section 860E(e)(5) of the Code, and, for purposes of Section 5.1 herein, as
defined in Section 5.1(b).
DISTRIBUTION DATE: With respect to distributions on the Certificates, the
25th day (or, if such 25th day is not a Business Day, the Business Day
immediately succeeding such 25th day) of each month, with the first such date
being July 25, 2003. The "related Due Date" for any Distribution Date is the Due
Date immediately preceding such Distribution Date.
DTC: The Depository Trust Company.
DTC PARTICIPANT: A broker, dealer, bank, other financial institution or
other Person for whom DTC effects book-entry transfers and pledges of securities
deposited with DTC.
DUE DATE: The first day of each calendar month, which is the day on which
the Monthly Payment for each Loan is due.
ELIGIBLE ACCOUNT: Any account or accounts held and established by the
Servicer or the Trustee in trust for the Certificateholders at any Eligible
Institution, or any trust account or accounts maintained with the trust
department of a federal or state chartered depository institution or trust
company acting in its fiduciary capacity.
ELIGIBLE INSTITUTION: An institution having (i) the highest short-term debt
rating, and one of the two highest long-term debt ratings of each Rating Agency,
(ii) with respect to any Custodial Account for P&I, an unsecured long-term debt
rating of at least one of the two highest unsecured
18
long-term debt ratings of each Rating Agency, or (iii) the approval of each
Rating Agency.
ELIGIBLE INVESTMENTS: Any one or more of the following obligations or
securities payable on demand or having a scheduled maturity on or before the
Business Day preceding the following Distribution Date (or, with regard to the
Certificate Account maintained with the Trustee or the Certificate
Administrator, having a scheduled maturity on or before the following
Distribution Date; provided that, such Eligible Investments shall be managed by,
or be an obligation of, the institution that maintains the Certificate Account
if such Eligible Investments mature on the Distribution Date), regardless of
whether issued by the Depositor, the Servicer, the Trustee or any of their
respective Affiliates and having at the time of purchase, or at such other time
as may be specified, the required ratings, if any, provided for in this
definition:
(a) direct obligations of, or guaranteed as to full and timely payment
of principal and interest by, the United States or any agency or instrumentality
thereof, provided, that such obligations are backed by the full faith and credit
of the United States of America;
(b) direct obligations of, or guaranteed as to timely payment of
principal and interest by, FHLMC, FNMA or the Federal Farm Credit System,
provided, that any such obligation, at the time of purchase or contractual
commitment providing for the purchase thereof, is qualified by each Rating
Agency as an investment of funds backing securities rated "AAA" (the initial
rating of the Class A Certificates);
(c) demand and time deposits in or certificates of deposit of, or
bankers' acceptances issued by, any bank or trust company, savings and loan
association or savings bank, provided, that the short-term deposit ratings
and/or long-term unsecured debt obligations of such depository institution or
trust company (or in the case of the principal depository institutions in a
holding company system, the commercial paper or long-term unsecured debt
obligations of such holding company) have, in the case of commercial paper, the
highest rating available for such securities by each Rating Agency and, in the
case of long-term unsecured debt obligations, one of the two highest ratings
available for such securities by each Rating Agency, or in each case such lower
rating as will not result in the downgrading or withdrawal of the rating or
ratings then assigned to any Class of Certificates by any Rating Agency but in
no event less than the initial rating of the Senior Certificates;
(d) general obligations of or obligations guaranteed by any state of
the United States or the District of Columbia receiving one of the two highest
long-term debt ratings available for such securities by each Rating Agency, or
such lower rating as will not result in the downgrading or withdrawal of the
rating or ratings then assigned to any Class of Certificates by any Rating
Agency;
(e) commercial or finance company paper (including both
non-interest-bearing discount obligations and interest-bearing obligations
payable on demand or on a specified date not more than one year after the date
of issuance thereof) that is rated by each Rating Agency in its highest
short-term unsecured rating category at the time of such investment or
contractual
19
commitment providing for such investment, and is issued by a corporation the
outstanding senior long-term debt obligations of which are then rated by each
Rating Agency in one of its two highest long-term unsecured rating categories,
or such lower rating as will not result in the downgrading or withdrawal of the
rating or ratings then assigned to any Class of Certificates by any Rating
Agency but in no event less than the initial rating of the Senior Certificates;
(f) guaranteed reinvestment agreements issued by any bank, insurance
company or other corporation rated in one of the two highest rating levels
available to such issuers by each Rating Agency at the time of such investment,
provided, that any such agreement must by its terms provide that it is
terminable by the purchaser without penalty in the event any such rating is at
any time lower than such level;
(g) repurchase obligations with respect to any security described in
clause (a) or (b) above entered into with a depository institution or trust
company (acting as principal) meeting the rating standards described in (c)
above;
(h) securities bearing interest or sold at a discount that are issued
by any corporation incorporated under the laws of the United States of America
or any State thereof and rated by each Rating Agency in one of its two highest
long-term unsecured rating categories at the time of such investment or
contractual commitment providing for such investment; provided, however, that
securities issued by any such corporation will not be Eligible Investments to
the extent that investment therein would cause the outstanding principal amount
of securities issued by such corporation that are then held as part of the
Certificate Account to exceed 20% of the aggregate principal amount of all
Eligible Investments then held in the Certificate Account;
(i) units of taxable money market funds (including those for which the
Trustee or any affiliate thereof receives compensation with respect to such
investment) which funds have been rated by each Rating Agency in its highest
rating category or which have been designated in writing by each Rating Agency
as Eligible Investments with respect to this definition;
(j) if previously confirmed in writing to the Trustee, any other
demand, money market or time deposit, or any other obligation, security or
investment, as may be acceptable to each Rating Agency as a permitted investment
of funds backing securities having ratings equivalent to the initial rating of
the Class A Certificates; and
(k) such other obligations as are acceptable as Eligible Investments
to each Rating Agency;
provided, however, that such instrument continues to qualify as a "cash flow
investment" pursuant to Code Section 860G(a)(6) and that no instrument or
security shall be an Eligible Investment if (i) such instrument or security
evidences a right to receive only interest payments or (ii) the right to receive
principal and interest payments derived from the underlying investment provides
a yield to maturity in excess of 120% of the yield to maturity at par of such
underlying investment.
20
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
ESCROW ACCOUNT: As defined in Section 3.4.
ESCROW PAYMENT: Any payment received by the Servicer for the account of any
Mortgagor for application toward the payment of taxes, insurance premiums,
assessments and similar items in respect of the related Mortgaged Property.
EVENT OF DEFAULT: Any event of default as specified in Section 7.1.
EXCESS LIQUIDATION PROCEEDS: With respect to any Distribution Date, the
excess, if any, of aggregate Liquidation Proceeds in the applicable Prepayment
Period over the amount that would have been received if a Payoff had been made
on the last day of such applicable Prepayment Period with respect to each Loan
which became a Liquidated Loan during such applicable Prepayment Period.
EXCESS LOSS: A Special Hazard Loss incurred on a Loan in excess of the
Special Hazard Coverage, a Fraud Loss incurred on a Loan in excess of the Fraud
Coverage and a Bankruptcy Loss incurred on a Loan in excess of the Bankruptcy
Coverage.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended.
FDIC: Federal Deposit Insurance Corporation, or any successor thereto.
FEDERAL FUNDS RATE: means, for any day, the rate set forth in the weekly
statistical release designated as H.15(519), or any successor publication,
published by the Federal Reserve Bank of New York on the preceding Business Day
opposite the caption "Federal Funds (Effective)"; or, if for any relevant day
such rate is not so published on any such preceding Business Day, the rate for
such day will be the arithmetic mean as determined by the Trustee of the rates
for the last transaction in overnight Federal funds arranged before 9:00 a.m.
(New York City time) on that day by each of three leading brokers of Federal
funds transactions in New York City selected by the Trustee.
FHA: Federal Housing Administration, or any successor thereto.
FHLMC: Xxxxxxx Mac, or any successor thereto.
FINAL CERTIFICATION: The certification substantially in the form of Exhibit
C-2 attached hereto.
FITCH: Fitch Ratings, provided, that at any time it is a Rating Agency.
FNMA: Xxxxxx Xxx, or any successor thereto.
FRAUD COVERAGE: As of the Cut-Off Date approximately $5,066,583, and
thereafter, the Fraud
21
Coverage will generally be equal to (1) prior to the third Anniversary, an
amount equal to (a) 1.00% of the aggregate Principal Balance of all Loans as of
the Cut-Off Date minus (b) the aggregate amounts allocated to the Certificates
with respect to Fraud Losses on such Loans up to such date of determination and
(2) from the third to the fifth Anniversary, an amount equal to (a) 0.50% of the
aggregate Principal Balance of all of the Loans as of the Due Date of the
calendar month preceding the most recent Anniversary minus (b) the aggregate
amounts allocated to the Certificates with respect to Fraud Losses on the Loans
since the most recent Anniversary up to such date of determination. On and after
the fifth Anniversary, the Fraud Coverage will be zero. The Fraud Coverage may
be reduced upon written confirmation from each Rating Agency that such reduction
will not adversely affect the then current ratings assigned to the Certificates
by each Rating Agency.
FRAUD LOSS: The occurrence of a loss on a Loan arising from any action,
event or state of facts with respect to such Loan which, because it involved or
arose out of any dishonest, fraudulent, criminal, negligent or knowingly
wrongful act, error or omission by the Mortgagor, originator (or assignee
thereof) of such Loan, Lender, or the Servicer, would result in an exclusion
from, denial of, or defense to coverage which otherwise would be provided by an
insurance policy previously issued with respect to such Loan.
INDEPENDENT: When used with respect to any specified Person, any such
Person who (i) is in fact independent of the Depositor and the Servicer, (ii)
does not have any direct financial interest or any material indirect financial
interest in the Depositor or the Servicer or any Affiliate of either and (iii)
is not connected with the Depositor or the Servicer as an officer, employee,
promoter, underwriter, trustee, partner, director or person performing similar
functions.
INDIRECT DTC PARTICIPANTS: Entities such as banks, brokers, dealers or
trust companies that clear through or maintain a custodial relationship with a
DTC Participant, either directly or indirectly.
INSURANCE PROCEEDS: Amounts paid or payable by the insurer under any
insurance policy (including any replacement policy permitted under this
Agreement), covering any Loan or Mortgaged Property, including, without
limitation, any flood insurance policy, primary mortgage insurance policy or
hazard insurance policy required pursuant to Section 3.5, any title insurance
policy required pursuant to Section 2.3, and any FHA insurance policy or VA
guaranty.
INTEREST ACCRUAL PERIOD: For all Classes of Certificates, the calendar
month preceding the month in which the Distribution Date occurs.
INTEREST DISTRIBUTION AMOUNT: On any Distribution Date, for any Class of
Certificates (other than the Principal Only Certificates), the amount of
interest accrued on the respective Class Principal Balance or Class Notional
Amount, as applicable, at 1/12th of the related Remittance Rate for such Class
during the applicable Interest Accrual Period (computed on the basis of a
360-day year of twelve 30-day months), before giving effect to allocations of
Realized Losses in connection with such Distribution Date or distributions to be
made on such Distribution Date, reduced by
22
Uncompensated Interest Shortfall and the interest portion of Realized Losses
allocated to such Class pursuant to the definition of "Uncompensated Interest
Shortfall" and Section 3.20. The Interest Distribution Amount for the Principal
Only Certificates on any Distribution Date shall equal zero.
INTEREST ONLY CERTIFICATES: The Class A-2, Class A-30 and Class A-X
Certificates.
INTERESTED PERSON: The Depositor, the Servicer, any Holder of a
Certificate, or any Affiliate of any such Person.
INTERIM CERTIFICATION: The certification substantially in the form of
Exhibit C-1 attached hereto.
JUNIOR SUBORDINATE CERTIFICATES: The Class B-3, Class B-4 and Class B-5
Certificates, collectively.
LIBOR: The per annum rate established by the Trustee or the Certificate
Administrator, if any, in accordance with Section 8.15.
LIBOR BUSINESS DAY: Any day on which dealings in United States dollars are
transacted in the London interbank market.
LIBOR DETERMINATION DATE: The second LIBOR Business Day before the first
day of the related Interest Accrual Period.
LIVING HOLDER: A Beneficial holder of a Retail Lottery Certificate who is
not a Deceased Holder.
LIQUIDATED LOAN: A Loan as to which the Servicer has determined in
accordance with its customary servicing practices that all amounts which it
expects to recover from or on account of such Loan, whether from Insurance
Proceeds, Liquidation Proceeds or otherwise, have been recovered. For purposes
of this definition, acquisition of a Mortgaged Property by the Trust Fund shall
not constitute final liquidation of the related Loan.
LIQUIDATION EXPENSES: Reasonable out of pocket expenses incurred by the
Servicer in connection with the liquidation of any Defaulted Loan or property
acquired in respect thereof, including, without limitation, legal fees and
expenses, any unreimbursed amount expended by the Servicer pursuant to Section
3.7 respecting the related Loan and any unreimbursed expenditures for real
property taxes or for property restoration or preservation relating to the
Mortgaged Property that secured such Loan.
LIQUIDATION PRINCIPAL: The principal portion of Liquidation Proceeds
received with respect to each Loan which became a Liquidated Loan (but not in
excess of the Principal Balance thereof) during the applicable Prepayment
Period, exclusive of the Discount Fraction of Liquidation Proceeds
23
received with respect to each Discount Loan, if any.
LIQUIDATION PROCEEDS: Amounts after deduction of amounts reimbursable under
Section 3.7 received and retained in connection with the liquidation of
Defaulted Loans (including the disposition of REO Property), whether through
foreclosure or otherwise, other than Insurance Proceeds.
LOANS: The Mortgages and the related Mortgage Notes, each transferred and
assigned to the Trustee pursuant to the provisions hereof as from time to time
are held as part of the Trust Fund, as so identified in the Loan Schedule. Each
of the Loans is referred to individually in this Agreement as a "Loan".
LOAN SCHEDULE: The schedule, as amended from time to time, of Loans
attached hereto as Exhibit D, which shall set forth as to each Loan the
following, among other things:
(i) the loan number of the Loan;
(ii) the city, state and zip code of the Mortgaged Property;
(iii) the Mortgage Interest Rate as of the Cut-Off Date;
(iv) the original term and maturity date of the related Mortgage Note;
(v) the original Principal Balance;
(vi) the first payment date;
(vii) the Monthly Payment in effect as of the Cut-Off Date;
(viii) the date of the last paid installment of interest;
(ix) the unpaid Principal Balance as of the close of business on the
Cut-Off Date;
(x) the Loan-to-Value ratio at origination;
(xi) the type of property and the Original Value of the Mortgaged
Property;
(xii) whether a primary mortgage insurance policy is in effect as of
the Cut-Off Date;
(xiii) the nature of occupancy at origination;
(xiv) the servicing fee;
24
(xv) the county in which Mortgaged Property is located, if available;
and
(xvi) the closing date.
LOAN-TO-VALUE RATIO: The original principal amount of a Loan divided by the
Original Value; however, references to "current Loan-to-Value Ratio" shall mean
the then current Principal Balance of a Loan divided by the Original Value.
LOCKOUT PERCENTAGE: For any Distribution Date (which shall not be greater
than 100%) will equal the sum of: (i) the aggregate Class Principal Balance of
the Class A-4 Certificates and Class A-29 Certificates immediately preceding
such Distribution Date; divided by (ii) the aggregate Scheduled Principal
Balance of all Loans immediately preceding such Distribution Date (exclusive of
the Discount Fraction of the Discount Loans).
LOCKOUT PRINCIPAL AMOUNT: For any Distribution Date will equal the sum of
(i) the product of (a) 0% for any Distribution Date prior to the Distribution
Date in July 2008, and thereafter, the Lockout Percentage and (b) the Principal
Payment Amount (exclusive of the portion thereof attributable to the Discount
Fractional Principal Amount); and (ii) the product of: (a) the Lockout
Percentage; (b) the Step Down Percentage; and (c) the sum of the following
amounts with respect to the Loans: (1) the Principal Prepayment Amount
(exclusive of the portion thereof attributable to the Discount Fractional
Principal Amount); and (2) the Liquidation Principal.
MONTHLY PAYMENT: The scheduled payment of principal and interest on a Loan
which is due on the related Due Date for such Loan after giving effect to any
reduction in the amount of interest collectible from any Mortgagor pursuant to
the Relief Act.
MORTGAGE: The mortgage, deed of trust or other instrument securing a
Mortgage Note.
MORTGAGE FILE: As defined in Section 2.1.
MORTGAGE INTEREST RATE: For any Loan, the per annum rate at which interest
accrues on such Loan pursuant to the terms of the related Mortgage Note without
regard to any reduction thereof as a result of the Relief Act.
MORTGAGE NOTE: The note or other evidence of indebtedness evidencing the
indebtedness of a Mortgagor under a Loan.
MORTGAGE POOL: All of the Loans.
MORTGAGED PROPERTY: With respect to any Loan, the real property, together
with improvements thereto, securing the indebtedness of the Mortgagor under the
related Loan.
MORTGAGOR: The obligor on a Mortgage Note.
25
NONRECOVERABLE ADVANCE: With respect to any Loan, any Advance which the
Servicer shall have determined to be a Nonrecoverable Advance pursuant to
Section 4.4 and which was, or is proposed to be, made by such Servicer.
NON-U.S. PERSON: A Person that is not a U.S. Person.
OFFICER'S CERTIFICATE: With respect to any Person, a certificate signed by
the Chairman of the Board, the President or a Vice-President of such Person (or,
in the case of a Person which is not a corporation, signed by the person or
persons having like responsibilities), and delivered to the Trustee.
OPINION OF COUNSEL: A written opinion of counsel, who may be outside or
salaried counsel for the Depositor or the Servicer, or any Affiliate of the
Depositor or the Servicer, acceptable to the Trustee; provided, that with
respect to REMIC matters, matters relating to the determination of Eligible
Accounts or matters relating to transfers of Certificates, such counsel shall be
Independent.
ORIGINAL VALUE: With respect to any Loan other than a Loan originated for
the purpose of refinancing an existing mortgage debt, the lesser of (a) the
Appraised Value (if any) of the Mortgaged Property at the time the Loan was
originated or (b) the purchase price paid for the Mortgaged Property by the
Mortgagor. With respect to a Loan originated for the purpose of refinancing
existing mortgage debt, the Original Value shall be equal to the Appraised Value
of the Mortgaged Property at the time the Loan was originated or the appraised
value at the time the refinanced mortgage debt was incurred.
OTS: The Office of Thrift Supervision, or any successor thereto.
OWNERSHIP INTEREST: As defined in Section 5.1(b).
PASS-THROUGH ENTITY: As defined in Section 5.1(b).
PASS-THROUGH RATE: For each Loan and for any date of determination, a per
annum rate equal to the Mortgage Interest Rate for such Loan less the applicable
per annum percentage rate of the Servicing Fee. For each Loan, any calculation
of monthly interest at such rate shall be based upon annual interest at such
rate (computed on the basis of a 360-day year of twelve 30-day months) on the
unpaid Principal Balance of the related Loan divided by twelve, and any
calculation of interest at such rate by reason of a Payoff shall be based upon
annual interest at such rate on the outstanding Principal Balance of the related
Loan multiplied by a fraction, the numerator of which is the number of days
elapsed from the Due Date of the last scheduled payment of principal and
interest to, but not including, the date of such Payoff, and the denominator of
which is (a) for Payoffs received on a Due Date, 360, and (b) for all other
Payoffs, 365.
PAYING AGENT: As defined in Section 4.10.
26
PAYOFF: Any Mortgagor payment of principal on a Loan equal to the entire
outstanding Principal Balance of such Loan, if received in advance of the last
scheduled Due Date for such Loan and accompanied by an amount of interest equal
to accrued unpaid interest on the Loan to the date of such payment-in-full.
PERCENTAGE INTEREST: (a) With respect to the right of each Certificate of a
particular Class in the distributions allocated to such Class, "Percentage
Interest" shall mean the percentage undivided beneficial ownership interest
evidenced by such Certificate of such Class, which percentage shall equal:
(i) with respect to any Regular Interest Certificate (other than the
Interest Only Certificates), its Certificate Principal Balance divided by
the applicable Class Principal Balance;
(ii) with respect to the Interest Only Certificates, the portion of
the respective Class Notional Amount evidenced by such Certificate divided
by the respective Class Notional Balance; and
(iii) with respect to the Class R Certificate, the percentage set
forth on the face of such Certificate.
(b) With respect to the rights of each Certificate in connection with
Sections 5.9, 7.1, 7.3, 8.3 and 10.1, "Percentage Interest" shall mean the
percentage undivided beneficial interest evidenced by such Certificate in the
Trust Fund, which for purposes of such rights only shall equal:
(i) with respect to any Certificate (other than the Interest Only
Certificates), the product of (x) 97.00% and (y) the percentage calculated
by dividing its Certificate Principal Balance by the Aggregate Certificate
Principal Balance; provided, however, that the product in (x) above shall
be increased by one percent (1%) upon each retirement of an Interest Only
Certificate;
(ii) with respect to each Interest Only Certificate, one percent (1%)
of such Certificate Percentage Interest as calculated by paragraph (a)(ii)
of this definition; and
(iii) with respect to the Class R Certificate, zero.
PERMITTED TRANSFEREE: With respect to the holding or ownership of any
Residual Certificate, any Person other than (i) the United States, a State or
any political subdivision thereof, or any agency or instrumentality of any of
the foregoing, (ii) a foreign government or International Organization, or any
agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in Code Section 521) which is
exempt from the taxes imposed by Chapter 1 of the Code (unless such organization
is subject to the tax imposed by Section 511 of the Code on unrelated business
taxable income), (iv) rural electric and telephone cooperatives described
27
in Code Section 1381(a)(2)(C), (v) any electing large partnership under Section
775 of the Code, (vi) any Person from whom the Trustee or the Certificate
Registrar has not received an affidavit to the effect that it is not a
"disqualified organization" within the meaning of Section 860E(e)(5) of the
Code, and (vii) any other Person so designated by the Depositor based upon an
Opinion of Counsel that the transfer of an Ownership Interest in a Residual
Certificate to such Person may cause the Trust Fund to fail to qualify as two
REMICs at any time that the Certificates are outstanding. The terms "United
States," "State" and "International Organization" shall have the meanings set
forth in Code Section 7701 or successor provisions. A corporation shall not be
treated as an instrumentality of the United States or of any State or political
subdivision thereof if all of its activities are subject to tax, and, with the
exception of the FHLMC, a majority of its board of directors is not selected by
such governmental unit.
PERSON: Any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
PLAN: As defined in Section 5.1(d).
PREMIUM LOANS: The Loans having Pass-Through Rates in excess of 5.50% per
annum.
PREPAYMENT EARNINGS: For any Distribution Date with respect to each Loan on
which a Payoff or Curtailment was received by the Servicer during the Prepayment
Period, the aggregate of the interest earned by the Servicer from investment of
each such Payoff or Curtailment from the date of receipt of such Payoff or
Curtailment until the last day of such Prepayment Period (net of investment
losses).
PREPAYMENT INTEREST: For any Distribution Date with respect to a Loan for
which a Payoff or Curtailment was received by the Servicer during the Prepayment
Period, an amount of interest thereon at the applicable Pass-Through Rate from
the first day of such Prepayment Period to the date of receipt thereof.
PREPAYMENT INTEREST SHORTFALL: For any Distribution Date, an amount equal
to the sum of all interest shortfalls resulting from Payoffs and Curtailments
during the related Prepayment Period, to the extent not covered by Compensating
Interest.
PREPAID MONTHLY PAYMENT: Any Monthly Payment received prior to its
scheduled Due Date, which is intended to be applied to a Loan on its scheduled
Due Date and held in the related Custodial Account for P&I until the Withdrawal
Date following its scheduled Due Date.
PREPAYMENT PERIOD: The calendar month immediately preceding any
Distribution Date.
PRINCIPAL BALANCE: At the time of any determination, the principal balance
of a Loan remaining to be paid at the close of business on the Cut-Off Date,
after deduction of all principal
28
payments due on or before the Cut-Off Date whether or not paid, reduced by all
amounts distributed or to be distributed to Certificateholders through the
Distribution Date in the month of determination that are reported as allocable
to principal of such Loan. In the case of a Substitute Loan, "Principal Balance"
shall mean, at the time of any determination, the principal balance of such
Substitute Loan transferred to the Trust Fund on the date of substitution,
reduced by all amounts distributed or to be distributed to Certificateholders
through the Distribution Date in the month of determination that are reported as
allocable to principal of such Substitute Loan.
The Principal Balance of a Loan (including a Substitute Loan) shall not be
adjusted solely by reason of any bankruptcy or similar proceeding or any
moratorium or similar waiver or grace period. Whenever a Realized Loss has been
incurred with respect to a Loan during a calendar month, the Principal Balance
of such Loan shall be reduced by the amount of such Realized Loss as of the
Distribution Date next following the end of such calendar month after giving
effect to the allocation of Realized Losses and distributions of principal to
the Certificates.
PRINCIPAL ONLY CERTIFICATES: The Class A-P Certificates.
PRINCIPAL PAYMENT: Any payment of principal on a Loan other than a
Principal Prepayment.
PRINCIPAL PAYMENT AMOUNT: On any Distribution Date, the sum of (i) the
scheduled principal payments on the Loans due on the related Due Date, (ii) the
principal portion of repurchase proceeds received with respect to any Loan which
was repurchased by the Depositor pursuant to a Purchase Obligation or as
permitted by this Agreement during the calendar month preceding the month of the
Distribution Date, and (iii) any other unscheduled payments of principal which
were received with respect to any Loan during the applicable Prepayment Period,
other than Payoffs, Curtailments and Liquidation Principal.
PRINCIPAL PREPAYMENT: Any payment of principal on a Loan which constitutes
a Payoff or a Curtailment.
PRINCIPAL PREPAYMENT AMOUNT: On any Distribution Date, the sum of (i)
Curtailments received during the applicable Prepayment Period and (ii) Payoffs
received during the applicable Prepayment Period.
PRO RATA ALLOCATION: The allocation of the principal portion of certain
losses relating to a Loan to the Senior Certificates (other than the Principal
Only Certificates and the Interest Only Certificates) and/or to the Subordinate
Certificates, as applicable, pro rata according to their respective Certificate
Principal Balances (except (1) if the loss is recognized with respect to a
Discount Loan, in which event the Discount Fraction of such loss will be
allocated to the Principal Only Certificates, and the remainder of such loss
will be allocated as described above in this definition without regard to this
parenthetical and (2) all Realized Losses, except Excess Losses, otherwise
allocable to the Class A-4 Certificates will be allocated to the Class A-29
Certificates, until the Class Principal Balance of the Class A-29 Certificates
has been reduced to zero) in
29
reduction thereof, and the allocation of the interest portion of such losses to
such Certificates, as applicable (other than the Principal Only Certificates),
pro rata according to the amount of interest accrued but unpaid on each such
Class in reduction thereof and then pro rata according to their outstanding
Certificate Principal Balances, in reduction thereof.
PURCHASE OBLIGATION: An obligation of the Depositor to repurchase Loans
under the circumstances and in the manner provided in Section 2.2 or Section
2.3.
PURCHASE PRICE: With respect to any Loan to be purchased pursuant to a
Purchase Obligation, or any Loan to be purchased or repurchased relating to an
REO Property, an amount equal to the sum of the Principal Balance thereof, plus
accrued and unpaid interest thereon, if any, to the last day of the calendar
month in which the date of repurchase occurs at a rate equal to the applicable
Mortgage Interest Rate; provided, however, that no Loan shall be purchased or
required to be purchased pursuant to Section 2.3, or more than two years after
the Closing Date under Section 2.2, unless (a) the Loan to be purchased is in
default, or default is in the judgment of the Depositor reasonably imminent, or
(b) the Depositor, at its expense, delivers to the Trustee an Opinion of Counsel
to the effect that the purchase of such Loan will not give rise to a tax on a
prohibited transaction, as defined in Section 860F(a) of the Code; provided,
further, that in the case of clause (b) above, the Depositor will use its
reasonable efforts to obtain such Opinion of Counsel if such opinion is
obtainable.
RANDOM LOT: With respect to any Distribution Date on which a mandatory
distribution is to be made on any Retail Lottery Certificate (as described in
Section 4.1(e)), the method by which the Depository will determine which Retail
Lottery Certificate will be paid principal, using its established random lot
procedures or, if such Certificates are no longer represented by a Book-Entry
Certificate, using the Paying Agent's, or if no Paying Agent has been appointed
hereunder, the Trustee's procedures.
RATING AGENCY: Initially, each of S&P and Fitch; thereafter, each
nationally recognized statistical rating organization that has rated the
Certificates at the request of the Depositor, or their respective successors in
interest.
RATINGS: As of any date of determination, the ratings, if any, of the
Certificates as assigned by each Rating Agency.
REALIZED LOSS: For any Distribution Date, with respect to any Loan which
became a Liquidated Loan during the related applicable Prepayment Period, the
sum of (i) the principal balance of such Loan remaining outstanding and the
principal portion of Nonrecoverable Advances actually reimbursed with respect to
such Loan (the principal portion of such Realized Loss), and (ii) the accrued
interest on such Loan remaining unpaid and the interest portion of
Nonrecoverable Advances actually reimbursed with respect to such Loan (the
interest portion of such Realized Loss). For any Distribution Date, with respect
to any Loan which is not a Liquidated Loan, the amount of the Bankruptcy Loss
incurred with respect to such Loan as of the related Due Date will be treated as
a Realized Loss.
30
RECORD DATE: With respect to each Distribution Date and each Class of
Certificates, the close of business on the last Business Day of the month
immediately preceding the month of the related Distribution Date.
REGULAR INTEREST CERTIFICATES: The Certificates, other than the Class R
Certificate.
RELIEF ACT: The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended.
RELIEF ACT INTEREST SHORTFALL: With respect to any Distribution Date and
Loan, any reduction in the amount of interest collectible on such Loan for the
most recently ended calendar month immediately preceding such Distribution Date
as a result of the application of the Relief Act or other similar state law.
REMIC: A real estate mortgage investment conduit, as such term is defined
in the Code.
REMIC I: The pool of assets (other than any Escrow Account or Accounts)
consisting of the Trust Fund.
REMIC I REGULAR INTERESTS: The regular interests in REMIC I as described in
Section 2.4 of this Agreement.
REMIC II: The pool of assets consisting of the REMIC I Regular Interests
and all payments of principal or interest on or with respect to the REMIC I
Regular Interests after the Cut-Off Date.
REMIC PROVISIONS: Sections 860A through 860G of the Code, related Code
provisions and regulations promulgated thereunder, as the foregoing may be in
effect from time to time.
REMITTANCE RATE: For each Class of interest bearing Certificates, the per
annum rate set forth as the Remittance Rate for such Class in the Preliminary
Statement hereto.
REO PROPERTY: A Mortgaged Property, title to which has been acquired by the
Servicer on behalf of the Trust Fund through foreclosure, deed in lieu of
foreclosure or otherwise.
RESIDUAL CERTIFICATES: The Class R Certificate, which is being issued in a
single class. Components R-1 and R-2 of the Class R Certificate is hereby
designated the sole Class of "residual interests" in REMIC I and REMIC II,
respectively, for purposes of Section 860G(a)(2) of the Code.
RESIDUAL DISTRIBUTION AMOUNT: On any Distribution Date, any portion of the
Available Distribution Amount remaining after all distributions to the
Certificates pursuant to the definition of Certificate Distribution Amount
(including the Class R Certificate only to the extent of any distributions to
the Class R Certificate pursuant to clause (I)(A)(iii)(a) of such definition).
Upon termination of the obligations created by this Agreement and the Trust Fund
created hereby, the amounts which remain on deposit in the Certificate Account
after payment to the Certificateholders
31
RESPONSIBLE OFFICER: When used with respect to the Trustee or any Seller,
the Chairman or Vice-Chairman of the Board of Directors or Trustees, the
Chairman or Vice-Chairman of the Executive or Standing Committee of the Board of
Directors or Trustees, the President, the Chairman of the Committee on Trust
Matters, any Vice-President, any Assistant Vice-President, the Secretary, any
Assistant Secretary, the Treasurer, any Assistant Treasurer, the Cashier, any
Assistant Cashier, any Trust Officer or Assistant Trust Officer, the Controller,
any Assistant Controller or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above-designated
officers and in each case having direct responsibility for the administration of
this Agreement, and also, with respect to a particular matter, any other officer
to whom such matter is referred because of such officer's knowledge of and
familiarity with the particular subject. When used with respect to the Servicer,
the Chairman or Vice-Chairman of the Board of Directors or Trustees, the
Chairman or Vice-Chairman of the Executive or Standing Committee of the Board of
Directors or Trustees, the President, any Vice-President, the Secretary, any
Assistant Secretary, the Treasurer, any Assistant Treasurer, the Controller and
any Assistant Controller or any other officer of the Servicer customarily
performing functions similar to those performed by any of the above-designated
officers and also, with respect to a particular matter, any other officer to
whom such matter is referred because of such officer's knowledge of and
familiarity with the particular subject. When used with respect to the Depositor
or any other Person, the Chairman or Vice-Chairman of the Board of Directors,
the Chairman or Vice-Chairman of any executive committee of the Board of
Directors, the President, any Vice-President, the Secretary, any Assistant
Secretary, the Treasurer, any Assistant Treasurer, or any other officer of the
Depositor customarily performing functions similar to those performed by any of
the above-designated officers and also, with respect to a particular matter, any
other officer to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject.
RETAIL CERTIFICATES: The Class A-3, Class A-4, Class A-5, Class A-6, Class
A-7, Class A-8, Class A-9, Class A-10, Class A-11, Class A-12, Class A-13, Class
A-14, Class A-15, Class A-16, Class A-17, Class A-18, Class A-19, Class A-20,
Class A-21, Class A-23, Class A-24, Class A-25, Class A-26, Class A-27, Class
A-28, Class A-29, Class A-31, Class A-32, Class A-33, Class A-34 and Class A-35
Certificates.
RETAIL LOTTERY CERTIFICATES: The Class A-13, Class A-16 and Class A-17
Certificates.
ROUNDING ACCOUNT: The separate trust account established by the Credit
Suisse First Boston LLC with respect to each Class of Retail Lottery
Certificates as of the Closing Date each with a deposit of $999.99 and
maintained by the Trustee or the Certificate Registrar pursuant to Section 3.21,
which account shall bear a designation clearly indicating that the funds
deposited therein are held in trust for the benefit of the Trustee on behalf of
each Class of Retail Lottery Certificateholders, or any other account serving a
similar function acceptable to each Rating Agency, and which account provides
that the Trustee or the Certificate Registrar may make, or cause to be made,
withdrawals as provided in Section 3.21 hereof.
ROUNDING AMOUNT: With respect to each Rounding Account, the amount of
funds, if any,
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needed to be withdrawn from such account and used to round the amount of any
principal distributions to any Class of Retail Lottery Certificates on any
Distribution Date upward to the next higher integral multiple of $1,000.
S&P: Standard & Poor's, a division of The McGraw Hill Companies, Inc.
provided, that at any time it is a Rating Agency.
SCHEDULED PRINCIPAL BALANCE: With respect to any Loan as of any
Distribution Date, the unpaid principal balance of such Loan as specified in the
amortization schedule at the time relating thereto (before any adjustment to
such schedule by reason of bankruptcy or similar proceeding or any moratorium or
similar waiver or grace period) as of the first day of the month preceding the
month of such Distribution Date, after giving effect to any previously applied
Curtailments, the payment of principal due on such first day of the month and
any reduction of the principal balance of such Loan by a bankruptcy court,
irrespective of any delinquency in payment by the related Mortgagor.
SECURITIES ACT: The Securities Act of 1933, as amended.
SELLER: ABN AMRO Mortgage Group, Inc.
SENIOR CERTIFICATES: The Class A and Class R Certificate, collectively.
SENIOR LIQUIDATION AMOUNT: The aggregate, for each Loan which became a
Liquidated Loan during the applicable Prepayment Period, of the lesser of: (i)
the Senior Percentage of the Principal Balance of such Loan (exclusive of the
Discount Fraction thereof, if applicable), and (ii) the Senior Prepayment
Percentage of the Liquidation Principal with respect to such Loan.
SENIOR PERCENTAGE: As of the Closing Date, approximately 97.44%, and
thereafter, with respect to any Distribution Date, the sum of the Class
Principal Balances of the Senior Certificates (other than the Class A-P
Certificates) divided by the aggregate Scheduled Principal Balance of all Loans
(reduced by the Discount Fraction of the Discount Loans), in each case
immediately prior to such Distribution Date.
SENIOR PREPAYMENT PERCENTAGE: (i) On any Distribution Date occurring before
the Distribution Date in the month of July 2008, 100%; (ii) on any other
Distribution Date on which the Senior Percentage for such Distribution Date
exceeds the initial Senior Percentage as of the Cut-Off Date, 100%; and (iii) on
any other Distribution Date in each of the months of July 2008 and thereafter,
100%, unless:
(a) the mean aggregate Principal Balance of the Loans which are 60 or
more days delinquent (including loans in foreclosure and property held by
the Trust Fund) for each of the immediately preceding six calendar months
is less than or equal to 50% of the Subordinate Amount as of such
Distribution Date, and
33
(b) cumulative Realized Losses on the Loans allocated to the
Subordinate Certificates are less than or equal to the following amounts:
PERCENTAGE OF THE SUBORDINATE
DISTRIBUTION DATE OCCURRING IN AMOUNT AS OF THE CUT-OFF DATE
------------------------------ -----------------------------
July 2008 through June 2009.................. 30%
July 2009 through June 2010.................. 35%
July 2010 through June 2011.................. 40%
July 2011 through June 2012.................. 45%
July 2012 and thereafter..................... 50%
in which case, the Senior Prepayment Percentage shall be as follows:
DISTRIBUTION DATE OCCURRING IN SENIOR PREPAYMENT PERCENTAGE
------------------------------ ----------------------------
July 2003 through June 2008................. 100%
July 2008 through June 2009................. SENIOR PERCENTAGE + 70% of
SUBORDINATE PERCENTAGE
July 2009 through June 2010................. SENIOR PERCENTAGE + 60% of
SUBORDINATE PERCENTAGE
July 2010 through June 2011................. SENIOR PERCENTAGE + 40% of
SUBORDINATE PERCENTAGE
July 2011 through June 2012................. SENIOR PERCENTAGE + 20% of
SUBORDINATE PERCENTAGE
July 2012 and thereafter.................... SENIOR PERCENTAGE
If on any Distribution Date the allocation to the Senior Certificates
(other than the Class A-P Certificates) of Principal Prepayments in the
percentage required would reduce the sum of the Class Principal Balances of the
Senior Certificates (other than the Class A-P Certificates) below zero, the
Senior Prepayment Percentage for such Distribution Date shall be limited to the
percentage necessary to reduce such sum to zero. Notwithstanding the foregoing,
however, on each Distribution Date, the Class A-P Certificates will receive the
Discount Fraction of all principal payments, including, without limitation,
Principal Prepayments, received in respect of each Discount Loan.
SENIOR PRINCIPAL AMOUNT: For any Distribution Date, an amount equal to the
sum of (a) the Senior Percentage of the Principal Payment Amount for the Loans
(exclusive of the Discount Fractional Principal Amount), (b) the Senior
Prepayment Percentage of the Principal Prepayment Amount for the Loans
(exclusive of the Discount Fractional Principal Amount) and (c) the Senior
Liquidation Amount.
SENIOR SUBORDINATE CERTIFICATES: The Class M, Class B-1 and Class B-2
Certificates, collectively.
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SERVICER: ABN AMRO Mortgage Group, Inc., a Delaware corporation, or any
successor thereto appointed as provided pursuant to Section 7.5, acting to
service and administer such Loans pursuant to Section 3.1.
SERVICER'S SECTION 3.10 REPORT: A report delivered by the Servicer to the
Trustee or the Certificate Administrator pursuant to Section 3.10.
SERVICING FEE: For each Loan, the fee paid to the Servicer to perform
primary servicing functions with respect to such Loan, equal to the per annum
rate of 0.2500% for each Loan in the Loan Schedule on the outstanding Principal
Balance of such Loan.
SERVICING OFFICER: Any individual involved in, or responsible for, the
administration and servicing of the Loans whose name and specimen signature
appear on a list of servicing officers furnished to the Trustee on the Closing
Date by the Servicer in the form of an Officer's Certificate, as such list may
from time to time be amended.
SPECIAL HAZARD COVERAGE: As of the Cut-Off Date approximately $8,415,215,
and thereafter on each anniversary of the Cut-Off Date, the Special Hazard
Coverage shall be reduced, but not increased, to an amount equal to the lesser
of (1) the greatest of (a) the aggregate Principal Balance of the Loans located
in the single California zip code area containing the largest aggregate
Principal Balance of the Loans, (b) 1% of the aggregate unpaid Principal Balance
of the Loans and (c) twice the unpaid Principal Balance of the largest single
Loan, in each case calculated as of the Due Date in the immediately preceding
month, and (2) the initial Special Hazard Coverage as of the Cut-Off Date as
reduced by the Special Hazard Losses allocated to the Certificates since the
Cut-Off Date. Special Hazard Coverage may be reduced upon written confirmation
from each Rating Agency that such reduction will not adversely affect the then
current ratings assigned to the Certificates by each Rating Agency.
SPECIAL HAZARD LOSS: The occurrence of any direct physical loss or damage
to a Mortgaged Property not covered by a standard hazard maintenance policy with
extended coverage which is caused by or results from any cause except: (i) fire,
lightning, windstorm, hail, explosion, riot, riot attending a strike, civil
commotion, vandalism, aircraft, vehicles, smoke, sprinkler leakage, except to
the extent of that portion of the loss which was uninsured because of the
application of a co-insurance clause of any insurance policy covering these
perils; (ii) normal wear and tear, gradual deterioration, inherent vice or
inadequate maintenance of all or part thereof; (iii) errors in design, faulty
workmanship or materials, unless the collapse of the property or a part thereof
ensues and then only for the ensuing loss; (iv) nuclear reaction or nuclear
radiation or radioactive contamination, all whether controlled or uncontrolled
and whether such loss be direct or indirect, proximate or remote or be in whole
or in part caused by, contributed to or aggravated by a peril covered by this
definition of Special Hazard Loss; (v) hostile or warlike action in time of
peace or war, including action in hindering, combating or defending against an
actual, impending or expected attack (a) by any government or sovereign power
(dejure or defacto), or by an authority maintaining or using military, naval or
air forces, (b) by military, naval or air forces, or (c) by an agent of any such
35
government, power, authority or forces; (vi) any weapon of war employing atomic
fission or radioactive force whether in time of peace or war; (vii)
insurrection, rebellion, revolution, civil war, usurped power or action taken by
governmental authority in hindering, combating or defending against such
occurrence; or (viii) seizure or destruction under quarantine or customs
regulations, or confiscation by order of any government or public authority.
STEP DOWN PERCENTAGE: For any Distribution Date will be the percentage
indicated below:
DISTRIBUTION DATE OCCURRING IN STEP DOWN PERCENTAGE
------------------------------ --------------------
July 2003 through June 2008....................... 0%
July 2008 through June 2009....................... 30%
July 2009 through June 2010....................... 40%
July 2010 through June 2011....................... 60%
July 2011 through June 2012....................... 80%
July 2012 and thereafter.......................... 100%
SUBORDINATE AMOUNT: The excess of the aggregate Scheduled Principal Balance
of the Loans over the Senior Certificate Principal Balance.
SUBORDINATE CERTIFICATES: The Class M, Class B-1, Class B-2, Class B-3,
Class B-4 and Class B-5 Certificates, collectively, and designated as such on
the face thereof in substantially the form attached hereto as Exhibits A-1 and
A-2 and for purposes of this Agreement, the "order of seniority" from highest to
lowest of such certificates shall be the order designated in the beginning of
this definition.
SUBORDINATE LIQUIDATION AMOUNT: The excess, if any, of the aggregate of
Liquidation Principal for all the Loans which became Liquidated Loans during the
applicable Prepayment Period, over the related Senior Liquidation Amount for
such Distribution Date.
SUBORDINATE PERCENTAGE: As of the Closing Date approximately 2.56%, and
thereafter, with respect to any Distribution Date, the excess of 100% over the
Senior Percentage for such date.
SUBORDINATE PREPAYMENT PERCENTAGE: As of the Closing Date, approximately
0%, and thereafter, with respect to any Distribution Date, the excess of 100%
over the Senior Prepayment Percentage.
SUBORDINATE PRINCIPAL AMOUNT: On any Distribution Date, will be equal to
the sum of:
(1) the Subordinate Percentage of the Principal Payment Amount
(exclusive of the portion thereof attributable to the Discount Fractional
Principal Amount);
(2) the Subordinate Principal Prepayment Amount; and
36
(3) the Subordinate Liquidation Amount;
provided, however, that the Subordinate Principal Amount shall be reduced by the
amounts required to be distributed to the Principal Only Certificates with
respect to the Discount Fractional Principal Shortfall on such Distribution
Date.
Any reduction in the Subordinate Principal Amount pursuant to the proviso
above shall offset the amount calculated pursuant to clause (1), clause (3) and
clause (2), in such order of priority. On any Distribution Date, the Subordinate
Principal Amount shall be allocated pro rata, by Class Principal Balance, among
the Classes of Subordinate Certificates and paid in the order of distribution to
such Classes pursuant to clause (I)(b) of the definition of "Certificate
Distribution Amount" herein, except as otherwise stated in such definition.
Notwithstanding the foregoing, on any Distribution Date prior to distributions
on such date, if the Subordination Level for any Class of Subordinate
Certificates is less than such percentage as of the Closing Date, the pro rata
portion of the Subordinate Principal Prepayment Amount otherwise allocable to
the Class or Classes junior to such Class will be distributed to the most senior
Class of the Subordinate Certificates for which the Subordination Level is less
than such percentage as of the Closing Date, and to the Classes of Subordinate
Certificates senior thereto, pro rata according to the Class Principal Balances
of such Classes.
SUBORDINATE PRINCIPAL PREPAYMENT AMOUNT: On any Distribution Date, the
Subordinate Prepayment Percentage of the Principal Prepayment Amount for the
Loans (exclusive of the portion thereof attributable to the Discount Fractional
Principal Amount).
SUBORDINATION LEVEL: On any specified date, with respect to any Class of
Subordinate Certificates, the percentage obtained by dividing: (1) the sum of
the Class Principal Balances of all Classes of Certificates which are
subordinate in right of payment to such Class as of such date before giving
effect to distributions or allocations of Realized Losses on the Loans on such
date; by (2) the sum of the Class Principal Balances of all Classes of
Certificates as of such date before giving effect to distributions or
allocations of Realized Losses on the Loans on such date.
SUBSTITUTE LOAN: As defined in Section 2.2.
TAX MATTERS PERSON: The Holder of the Class R Certificate issued hereunder
or any Permitted Transferee of such Class R Certificateholder shall be the
initial "tax matters person" for the REMIC within the meaning of Section
6231(a)(7) of the Code. For tax years commencing after any transfer of the Class
R Certificate, the holder of the greatest Percentage Interest in the Class R
Certificate at year end shall be designated as the Tax Matters Person with
respect to that year. If the Tax Matters Person becomes a Disqualified
Organization, the last preceding Holder of such Authorized Denomination of the
Class R Certificate that is not a Disqualified Organization shall be Tax Matters
Person pursuant to Section 5.1(c). If any Person is appointed as tax matters
person by the Internal Revenue Service pursuant to the Code, such Person shall
be Tax Matters Person.
37
TRANSFER: As defined in Section 5.1(b).
TRANSFEREE: As defined in Section 5.1(b).
TRANSFEREE AFFIDAVIT AND AGREEMENT: As defined in Section 5.1(c)(i)(B).
TRUST FUND: The corpus of the trust created pursuant to Section 2.1 of this
Agreement. The Trust Fund consists of (i) the Loans and all rights pertaining
thereto; (ii) such assets as from time to time may be held by the Trustee
(except amounts representing the Servicing Fee and amounts on deposit in Escrow
Accounts); including the Certificate Account and all amounts deposited therein
pursuant to the applicable provisions of this Agreement; (iii) such assets as
from time to time may be held by the Servicer in a Custodial Account for P&I
related to the Loans (except amounts representing the Servicing Fee); (iv)
property which secured a Loan and which has been acquired by foreclosure or deed
in lieu of foreclosure after the Cut-Off Date; (v) amounts paid or payable by
the insurer under any FHA insurance policy and proceeds of any VA guaranty and
any other insurance policy related to any Loan or the Mortgage Pool and (vi) the
rights and remedies of the Depositor contained in Section 8 of the Mortgage Loan
Purchase Agreement dated as of the Closing Date, between the Seller and the
Depositor.
TRUSTEE: JPMorgan Chase Bank, a New York state banking corporation, or its
successor-in-interest as provided in Section 8.9, or any successor trustee
appointed as herein provided.
UNCOLLECTED INTEREST: With respect to any Distribution Date for any Loan on
which a Payoff or Curtailment was made by a Mortgagor during the related
Prepayment Period, an amount equal to one month's interest at the applicable
Pass-Through Rate on such Loan less the amount of interest actually paid by the
Mortgagor with respect to such Payoff or Curtailment.
UNCOMPENSATED INTEREST SHORTFALL: For any Distribution Date, the excess, if
any, of (i) the sum of (a) aggregate Uncollected Interest and (b) any shortfall
in interest collections in the calendar month immediately preceding such
Distribution Date resulting from a Relief Act Interest Shortfall over (ii)
Compensating Interest, which excess shall be allocated to each Class of
Certificates pro rata according to the amount of interest accrued thereon in
reduction thereof.
UNDERWRITERS: Credit Suisse First Boston LLC and ABN AMRO Financial
Services, Inc.
U.S. PERSON: A citizen or resident of the United States, a corporation or
partnership (including an entity treated as a corporation or partnership for
federal income tax purposes) created or organized in, or under the laws of, the
United States or any state thereof or the District of Columbia (except, in the
case of a partnership, to the extent provided in regulations) or an estate whose
income is subject to United States federal income tax regardless of its source,
or a trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more such U.S.
Persons have the authority to control all substantial decisions of the
38
trust. To the extent prescribed in regulations by the Secretary of the Treasury,
which have not yet been issued, a trust which was in existence on August 20,
1996 (other than a trust treated as owned by the grantor under subpart E of part
1 of subchapter J of chapter 1 of the Code), and which was treated as a U.S.
Person on August 20, 1996 may elect to continue to be treated as a U.S. Person
notwithstanding the previous sentence.
VA: The Department of Veterans Affairs, formerly known as the Veterans
Administration, or any successor thereto.
WITHDRAWAL DATE: The Business Day immediately preceding the related
Distribution Date.
All references to the origination date or original date in the Loan
Schedule with respect to a Loan shall refer to the date upon which the related
Mortgage Note was originated or modified, whichever is later.
39
ARTICLE II
CONVEYANCE OF TRUST FUND;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.1 CONVEYANCE OF TRUST FUND. The Depositor, concurrently with the
execution and delivery hereof, does hereby irrevocably sell, convey and assign
to the Trustee and REMIC I without recourse all the right, title and interest of
the Depositor in and to the Trust Fund and to REMIC II without recourse all the
right, title and interest of the Depositor in and to the REMIC I Regular
Interests, for the benefit respectively of REMIC II and the Certificateholders,
including all interest and principal received by the Depositor with respect to
the Loans after the Cut-Off Date (and including without limitation scheduled
payments of principal and interest due after the Cut-Off Date but received by
the Depositor on or before the Cut-Off Date, but not including payments of
principal and interest due on the Loans on or before the Cut-Off Date). The
Depositor, at its own expense, shall file or cause to be filed protective Form
UCC-1 financing statements with respect to the Loans in the State of Delaware or
other applicable jurisdiction, listing itself as "Debtor" under such financing
statement and listing the Trustee, for the benefit of the Certificateholders, as
"Secured Party" under such financing statement.
In connection with such assignment, the Depositor does hereby deliver to,
and deposit with, the Trustee for the benefit of the Certificateholders the
following documents or instruments with respect to each Loan so assigned:
(i) The original Mortgage Note (or, if the original Mortgage Note has
been lost or destroyed, a lost note affidavit and indemnity) bearing all
intervening endorsements endorsed, "Pay to the order of JPMorgan Chase
Bank, as Trustee, for the benefit of the Certificateholders of ABN AMRO
Mortgage Corporation Series 2003-8 Attn: Institutional Services, 000 Xxxxxx
Xxxxxx, 00xx Xxxxx, Xxxxxxx, Xxxxx 00000, without recourse" and signed in
the name of the Seller by an Authorized Officer showing an unbroken chain
of title from the originator thereof to the person endorsing;
(ii) (a) The original Mortgage with evidence of recording thereon, and
if the Mortgage was executed pursuant to a power of attorney, a certified
true copy of the power of attorney certified by the recorder's office, with
evidence of recording thereon, or certified by a title insurance company or
escrow company to be a true copy thereof; provided, that if such original
Mortgage or power of attorney cannot be delivered with evidence of
recording thereon on or prior to the Closing Date because of a delay caused
by the public recording office where such original Mortgage has been
delivered for recordation or because such original Mortgage has been lost,
the Depositor shall deliver or cause to be delivered to the Trustee a true
and correct copy of such Mortgage, together with (1) in the case of a delay
caused by the public recording office, an Officer's Certificate signed by a
Responsible Officer of the Seller stating that such original Mortgage has
been dispatched to the
40
appropriate public recording official for recordation or (2) in the case of
an original Mortgage that has been lost, a certificate by the appropriate
county recording office where such Mortgage is recorded or from a title
insurance company or escrow company indicating that such original was lost
and the copy of the original mortgage is a true and correct copy;
(b) The original Assignment to "JPMorgan Chase Bank, as Trustee for
the benefit of the Certificateholders," which assignment shall be in form
and substance acceptable for recording, or a copy certified by the Seller
as a true and correct copy of the original Assignment which has been sent
for recordation. Subject to the foregoing, such assignments may, if
permitted by law, be by blanket assignments for Loans covering Mortgaged
Properties situated within the same county. If the Assignment is in blanket
form, a copy of the Assignment shall be included in the related individual
Mortgage File.
(iii) The originals of any and all instruments that modify the terms
and conditions of the Mortgage Note, including but not limited to
modification, consolidation, extension and assumption agreements including
any adjustable rate mortgage (ARM) rider, if any,
(iv) The originals of all required intervening assignments, if any,
with evidence of recording thereon, and if such assignment was executed
pursuant to a power of attorney, a certified true copy of the power of
attorney certified by the recorder's office, with evidence of recording
thereon, or certified by a title insurance company or escrow company to be
a true copy thereof; provided, that if such original assignment or power of
attorney cannot be delivered with evidence of recording thereon on or prior
to the Closing Date because of a delay caused by the public recording
office where such original assignment has been delivered for recordation or
because such original Assignment has been lost, the Depositor shall deliver
or cause to be delivered to the Trustee a true and correct copy of such
Assignment, together with (a) in the case of a delay caused by the public
recording office, an Officer's Certificate signed by a Responsible Officer
of the Seller stating that such original assignment has been dispatched to
the appropriate public recording official for recordation or (b) in the
case of an original assignment that has been lost, a certificate by the
appropriate county recording office where such assignment is recorded or
from a title insurance company or escrow company indicating that such
original was lost and the copy of the original assignment is a true and
correct copy; and
(v) The original mortgagee policy of title insurance (including, if
applicable, the endorsement relating to the negative amortization of the
Loans) or in the event such original title policy is unavailable, any one
of an original title binder, an original preliminary title report or an
original title commitment or a copy thereof certified by the title company
with the original policy of title insurance to follow within 180 days of
the Closing Date.
The documents and instruments set forth in clauses (i) - (v) above shall be
called, collectively, the "Mortgage File".
41
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 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 to the effect that such recordation is
not necessary to protect the Trustee's and the Certificateholders' interest in
the related Mortgage Loans, in which case such Assignments shall be delivered to
the Trustee for the benefit of the Certificateholders in recordable form. If the
Depositor cannot deliver the original Assignment concurrently with the execution
and delivery of this Agreement solely because it is in the process of being
prepared and recorded or because of a delay caused by the public recording
office where such original Assignment has been delivered for recordation, the
Depositor shall deliver a blanket Officer's Certificate covering all such
Assignments stating that such original Assignment is in the process of being
prepared and recorded or it has been delivered to the appropriate public
recording official for recordation. Any such original recorded Assignment shall
be delivered to the Trustee within 180 days following the execution of this
Agreement.
If the Depositor cannot deliver the original title insurance policy
concurrently with the execution and delivery of this Agreement, the Depositor
shall promptly deliver each such original title insurance policy as soon as such
policy becomes available but in no event later than 120 days following the
execution of this Agreement.
All rights arising out of Loans including, without limitation, all funds
received on or in connection with a Loan shall be held by the Depositor in trust
for the benefit of the Certificateholders. The Depositor shall maintain a
complete set of books and records for each Loan which shall be clearly marked to
reflect the ownership of each Loan by the Certificateholders.
It is the express intent of this Agreement that the conveyance of the Loans
by the Depositor to the Trustee as provided in this Section 2.1 be, and be
construed as, a sale of the Loans by the Depositor to the Trustee and that the
sale of the Certificates to the Certificateholders, if they are sold, be, and be
construed as, a sale of a 100% interest in the Loans and the Trust Fund to such
Certificateholders. It is, further, not the intention of this Agreement that
such conveyance be deemed a pledge of the Loans by the Depositor to the Trustee
to secure a debt or other obligation of the Depositor. However, in the event
that, notwithstanding the intent of this Agreement, the Loans are held to be
property of the Depositor, or if for any other reason this Agreement is held or
deemed to create a security interest in the Loans, then (a) this Agreement shall
also be deemed to be a security agreement within the meaning of Articles 8 and 9
of the New York Uniform Commercial Code; (b)
42
the conveyance provided for in this Section 2.1 shall be deemed to be a grant by
the Depositor to the Trustee for the benefit of the Certificateholders of a
security interest in all of the Depositor's right, title and interest in and to
the Loans and all amounts payable to the holders of the Loans in accordance with
the terms thereof and all proceeds of the conversion, voluntary or involuntary,
of the foregoing into cash, instruments, securities or other property, including
without limitation all amounts, other than investment earnings, from time to
time held or invested in the Certificate Account, whether in the form of cash,
instruments, securities or other property; (c) the possession by the Trustee or
any Custodian of Mortgage Notes and such other items of property as constitute
instruments, money, negotiable documents or chattel paper shall be deemed to be
"in possession by the secured party" for purposes of perfecting the security
interest pursuant to Section 9-313 of the New York Uniform Commercial Code; and
(d) notifications to persons holding such property, and acknowledgments,
receipts or confirmations from persons holding such property, shall be deemed
notifications to, or acknowledgments, receipts or confirmations from, financial
intermediaries, bailees or agents (as applicable) of the Trustee for the benefit
of the Certificateholders for the purpose of perfecting such security interest
under applicable law (except that nothing in this clause (d) shall cause any
person to be deemed to be an agent of the Trustee for any purpose other than for
perfection of such security interest unless, and then only to the extent,
expressly appointed and authorized by the Trustee in writing). The Depositor and
the Trustee, upon directions from the Depositor, shall, to the extent consistent
with this Agreement, take such actions as may be necessary to ensure that, if
this Agreement were deemed to create a perfected security interest in Loans,
such security interest would be deemed to be a perfected security interest of
first priority under applicable law and will be maintained as such throughout
the term of this Agreement.
The Trustee is authorized to appoint LaSalle Bank National Association,
Standard Federal Bank, N.A. or any bank or trust company approved by the
Depositor as Custodian of the documents or instruments referred to under (i)
through (v) above, and to enter into a Custodial Agreement for such purpose and
any documents delivered thereunder shall be delivered to the Custodian and any
Officer's Certificates delivered with respect thereto shall be delivered to the
Trustee and the Custodian.
Section 2.2 ACCEPTANCE BY TRUSTEE. (a) The Trustee acknowledges, subject to
the provisions of Section 2.1 and to any document exceptions reported pursuant
to the Trustee's reviews as described below, receipt of the Mortgage Notes (or
lost note affidavits and indemnities), the Mortgages, the assignments of the
Mortgages and the Officer's Certificates referred to in Section 2.1 above, and
declares that it holds and will hold such documents and the other documents
constituting a part of the Mortgage Files delivered to it as Trustee in trust,
upon the trusts herein set forth, for the use and benefit of all present and
future Certificateholders. The Trustee acknowledges that, as of the date of the
execution of this Agreement, the Mortgage Files have been delivered to the
Trustee and the Trustee has conducted a preliminary review of the Mortgage
Files. The Trustee further acknowledges that such review included a review of
the Mortgage Notes (or lost note affidavits and indemnities) to determine that
the appropriate Mortgage Notes (or lost note affidavits and indemnities) have
been delivered and endorsed in the manner set forth in Section 2.1(i). In
connection with such review, the Trustee shall have delivered an exceptions
report indicating any
43
discrepancies relating to such review.
(b) No later than 90 days after the Closing Date, the Trustee agrees, for
the benefit of the Certificateholders, to review each Mortgage File delivered to
it and to execute and deliver, or cause to be executed and delivered, to the
Depositor and the Trustee an Interim Certification substantially in the form
attached hereto as Exhibit C-1. In conducting such review, the Trustee agrees to
ascertain that all required documents set forth in items (i), (ii) and (v) and,
to the extent delivered to the Trustee, items (iii) and (iv) of Section 2.1 have
been executed and received, and that such documents relate to the Loans
identified in Exhibit D annexed hereto, and in so doing the Trustee may rely on
the purported due execution and genuineness of any such document and on the
purported genuineness of any signature thereon. The Trustee shall have no duty
to verify or determine whether any Mortgage File should contain documents
described in Sections 2.1(iii) and (iv). 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. The Trustee shall be under no duty or obligation to
inspect, review or make any independent examination of any documents contained
in each Mortgage File beyond the review specifically required herein. The
Trustee makes no representations as to (i) the validity, legality, sufficiency,
enforceability or genuineness of any of the documents contained in each Mortgage
File or any of the Loans identified on the Loan Schedule, or (ii) the
collectability, insurability, effectiveness or suitability of any such Loan. If
at the conclusion of such 90-day period the Trustee finds any document
constituting part of the Mortgage File not to have been executed or received, or
to be unrelated to the Loans identified in Exhibit D (each such finding, a
"material defect"), the Trustee shall promptly notify the Depositor, which shall
have a period of 90 days after the REMIC has received such notice to correct or
cure any such material defect; provided, however, that if the Trustee shall not
have received a document by reason of the fact that such document shall not have
been returned by the appropriate recording office then the Depositor shall have
until a date one year later from the Cut-Off Date to correct or cure such
defect. The Depositor hereby covenants and agrees that, if any such material
defect as defined above is not corrected or cured, the Depositor will, within 90
days of the REMIC having received notice, either (i) repurchase the related Loan
at a price equal to 100% of the Principal Balance of such Loan (or any property
acquired in respect thereof) plus accrued interest on such Principal Balance at
the applicable Mortgage Interest Rate to the next scheduled Due Date of such
Loan or (ii) substitute for any Loan to which such material defect relates a
different mortgage loan (a "Substitute Loan") maturing no later than and not
more than two years earlier than the Loan being substituted for; and having a
principal balance equal to or less than the Loan being substituted for and a
Mortgage Interest Rate equal to or greater than the Mortgage Interest Rate of
the Loan being substituted for, a Loan-to-Value Ratio equal to or less than the
Loan-to-Value Ratio of the Loan being substituted for and otherwise having such
characteristics so that the representations and warranties of the Depositor set
forth in Section 2.3 hereof would not have been incorrect had such Substitute
Loan originally been a Loan; provided, however, that if the Principal Balance of
the original Loan exceeds the principal balance of the Substitute Loan, an
amount equal to that difference shall be deposited by the Depositor in the
Certificate Account; provided, further, that if the defect would cause the Loan
to be other than a "qualified mortgage" as defined in Section 860(G)(a)(3) of
the Code such cure, repurchase or substitution must occur within
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90 days from the date such material defect was discovered, unless the Trustee
shall have received from the Depositor an Opinion of Counsel to the effect that
such cure, repurchase or substitution will not adversely affect the REMIC status
of REMIC I and REMIC II or constitute a prohibited transaction or substitution
under the REMIC provisions of the Code, and, if applicable, within the meaning
of the REMIC Provisions of the particular State, if any, which would impose a
tax on the Trust Fund.
(c) In addition, the Trustee agrees, for the benefit of Certificateholders,
to review each Mortgage File delivered to it within 180 days after the Closing
Date, or with respect to assignments which must be recorded, within 180 days,
after execution of this Agreement and to execute and deliver, or cause to be
executed and delivered, to the Depositor and the Trustee a Final Certification
substantially in the form attached hereto as Exhibit C-2. In conducting such
review, the Trustee agrees that if at the conclusion of such 180-day period the
Trustee finds a material defect, the Trustee shall promptly notify the
Depositor, which shall have a period of 90 days after the REMIC has received
such notice to correct or cure any such material defect. The Depositor hereby
covenants and agrees that, if any such material defect as defined above is not
corrected or cured, the Depositor will, within 90 days of the REMIC having
received such notice, either repurchase the related Loan or substitute for any
Loan to which such material defect relates in accordance with this Agreement.
Monthly Payments due with respect to Substitute Loans in the month of
substitution are not a part of the Trust Fund and will be retained by the
Servicer. The Depositor shall notify each Rating Agency of any such
substitution. For the month of substitution, distributions to Certificateholders
will include the Monthly Payment due on the Loan being substituted for in such
month. The purchase price for the repurchased Loan or property shall be
deposited by the Depositor in the Certificate Account and in the case of a
Substitute Loan, the Mortgage File relating thereto shall be delivered to the
Trustee or the Custodian. Upon receipt by the Trustee of written notification of
such deposit signed by a Servicing Officer or the new Mortgage File, as the case
may be, and an Officer's Certificate that such repurchase or substitution is in
accordance with this Agreement, the Trustee shall release or cause to be
released to the Depositor the related Mortgage File for the Loan being
repurchased or substituted for, as the case may be, and shall execute and
deliver or cause to be executed and delivered such instrument of transfer or
assignment presented to it by the Depositor, in each case without recourse, as
shall be necessary to transfer to the Depositor the Trustee's interest in such
original or repurchased Loan or property and the Trustee shall have no further
responsibility with regard to such Loan. It is understood and agreed that the
obligation of the Depositor to substitute a new Loan for or repurchase any Loan
or property as to which such a material defect in a constituent document exists
shall constitute the sole remedy respecting such defect available to
Certificateholders or the Trustee on behalf of Certificateholders, but such
obligation shall survive termination of this Agreement.
Section 2.3 REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR WITH RESPECT TO
THE LOANS. The Depositor hereby represents and warrants to the Trustee as of the
Closing Date with respect to the Loans:
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(i) that the information set forth in the Loan Schedule appearing as
an exhibit to this Agreement is true and correct in all material respects
at the date or dates respecting which such information is furnished as
specified therein;
(ii) that as of the date of the transfer of the Loans to the Trustee,
the Depositor is the sole owner and holder of each Loan free and clear of
all liens, pledges, charges or security interests of any nature and has
full right and authority, subject to no interest or participation of, or
agreement with, any other party, to sell and assign the same;
(iii) that as of the date of initial issuance of the Certificates, no
payment of principal of or interest on or in respect of any Loan is 30 days
or more past due from the Due Date of such Loan;
(iv) that to the best of the Depositor's knowledge, as of the date of
the transfer of the Loans to the Trustee, there is no valid offset, defense
or counterclaim to any Mortgage Note or Mortgage;
(v) that as of the date of the initial issuance of the Certificates,
there is no proceeding pending, or to the best of the Depositor's
knowledge, threatened for the total or partial condemnation of any of the
Mortgaged Property and, to the best of the Depositor's knowledge, the
Mortgaged Property is free of material damage and is in good repair and
neither the Mortgaged Property nor any improvement located on or being part
of the Mortgaged Property is in violation of any applicable zoning law or
regulation;
(vi) that each Loan complies in all material respects with applicable
state or federal laws, regulations and other requirements, pertaining to
usury, equal credit opportunity disclosure laws and all applicable
anti-predatory lending laws, and each Loan was not usurious at the time of
origination;
(vii) that to the best of the Depositor's knowledge, as of the date of
the initial issuance of the Certificates, all insurance premiums previously
due and owing with respect to the Mortgaged Property have been paid and all
taxes and governmental assessments previously due and owing, and which may
become a lien against the Mortgaged Property, with respect to the Mortgaged
Property have been paid;
(viii) that each Mortgage Note and the related Mortgage are genuine
and each is the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms except as such enforcement may be
limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and by general
equity principles (regardless of whether such enforcement is considered in
a proceeding in equity or at law); all parties to the Mortgage Note and the
Mortgage had legal capacity to execute the Mortgage Note and the Mortgage;
and each Mortgage Note and Mortgage have been duly and properly executed by
the Mortgagor;
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(ix) that each Mortgage is a valid and enforceable first lien on the
property securing the related Mortgage Note, and that each Loan is covered
by an ALTA mortgagee title insurance policy or other form of policy or
insurance generally acceptable to FNMA or FHLMC, issued by, and is a valid
and binding obligation of, a title insurer acceptable to FNMA or FHLMC
insuring the originator, its successor and assigns, as to the lien of the
Mortgage in the original principal amount of the Loan subject only to (a)
the lien of current real property taxes and assessments not yet due and
payable, (b) covenants, conditions and restrictions, rights of way,
easements and other matters of public record as of the date of recording of
such Mortgage acceptable to mortgage lending institutions in the area in
which the Mortgaged Property is located or specifically referred to in the
appraisal performed in connection with the origination of the related Loan
and (c) such other matters to which like properties are commonly subject
which do not individually, or in the aggregate, materially interfere with
the benefits of the security intended to be provided by the Mortgage;
(x) that as of the initial issuance of the Certificates, neither the
Depositor nor any prior holder of any Mortgage has, except as the Mortgage
File may reflect, modified the Mortgage in any material respect; satisfied,
canceled or subordinated such Mortgage in whole or part; released such
Mortgaged Property in whole or in part from the lien of the Mortgage; or
executed any instrument of release, cancellation, modification or
satisfaction;
(xi) that each Mortgaged Property consists of a fee simple estate or a
condominium form of ownership in real property;
(xii) no foreclosure action is threatened or has been commenced
(except for the filing of any notice of default) with respect to the Loan;
and except for payment delinquencies not in excess of 30 days, to the best
of the Depositor's knowledge, there is no default, breach, violation or
event of acceleration existing under the Mortgage or the 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;
(xiii) that each Loan was originated on FNMA or FHLMC uniform
instruments for the state in which the Mortgaged Property is located;
(xiv) that based upon a representation by each Mortgagor at the time
of origination or assumption of the applicable Loan, 97.50% of the Loans
measured by Principal Balance were to be secured by primary residences and
no more than 2.50% of the Loans measured by Principal Balance were to be
secured by second homes;
(xv) that an appraisal of each Mortgaged Property was conducted at the
time of origination of the related Loan, and that each such appraisal was
conducted in accordance
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with FNMA or FHLMC criteria, on FNMA or FHLMC forms and comparables on at
least three properties were obtained;
(xvi) that no Loan had a Loan-to-Value Ratio at origination in excess
of 95%;
(xvii) the Loans were not selected in manner to adversely affect the
interests of the Certificateholders and the Depositor knows of no
conditions which reasonably would cause it to expect any Loan to become
delinquent or otherwise lose value;
(xviii) each Loan was either (A) originated directly by or closed in
the name of either: (i) a savings and loan association, savings bank,
commercial bank, credit union, insurance company, or similar institution
which is supervised and examined by a federal or state authority or (ii) a
mortgagee approved by the Secretary of Housing and Urban Development
pursuant to Sections 203 and 211 of the National Housing Act or (B)
originated or underwritten by an entity employing underwriting standards
consistent with the underwriting standards of an institution as described
in subclause (A)(i) or (A)(ii) above;
(xix) each Loan is a "qualified mortgage" within the meaning of
Section 860G of the Code without regard to Section 1.860G-2(f) of the REMIC
Provisions or any similar rule;
(xx) each Loan that has a Loan-to-Value Ratio in excess of 80% is
covered by a primary mortgage insurance policy;
(xxi) that no Loan permits negative amortization or the deferral of
accrued interest; and
(xxii) No Loan is a "high-cost home loan" as defined in the Georgia
Fair Lending Act, as amended, or in the New York Predatory Lending Law,
codified as N.Y. Banking Law ss. 6-l, N.Y. Gen. Bus. Law ss. 771-a, and
N.Y. Real Prop. Acts Law ss. 1302.
It is understood and agreed that the representations and warranties set
forth in this Section 2.3 shall survive delivery of the respective Mortgage
Files to the Trustee, or to a Custodian, as the case may be. Upon discovery by
the Depositor, Servicer, the Trustee or any Custodian of a breach of any of the
foregoing representations and warranties (referred to herein as a "breach"),
without regard to any limitation set forth in such representation or warranty
concerning the knowledge of the Depositor as to the facts stated therein, which
breach materially and adversely affects the interests of the Certificateholders
in the related Loan, the party discovering such breach shall give prompt written
notice to the others and to each Rating Agency.
Within 90 days of its discovery or its receipt or any Seller's receipt of
notice of breach, the Depositor shall or shall cause such Seller to cure such
breach in all material respects or shall repurchase the Loan or any property
acquired in respect thereof from the Trustee at a repurchase price equal to 100%
of the Principal Balance of such Loan plus accrued interest on such Principal
48
Balance at the Mortgage Interest Rate to the next scheduled Due Date of such
Loan or remove such Loan from the Trust Fund and substitute in its place a
Substitute Loan or Loans with the characteristics set forth in Section 2.2 above
for Substitute Loans; provided, however, that if such breach would cause the
Loan to be other than a "qualified mortgage" as defined in Section 860G(a)(3) of
the Code, any such cure, repurchase or substitution must occur within 90 days
from the date such breach was discovered; provided, further, that no
substitution (or cure which would constitute a loan modification for federal
income tax purposes) may be effected any later than two years after the Closing
Date; provided, further, that as a pre-condition to any substitution (or cure
which would constitute a loan modification for federal income tax purposes) to
be effected later than 90 days after the Closing Date (and within two years of
the Closing Date), the Trustee shall receive from the Depositor an Opinion of
Counsel to the effect that such substitution (or cure which would constitute a
loan modification for federal income tax purposes) will not adversely affect the
REMIC status of REMIC I or REMIC II or constitute a prohibited transaction under
the REMIC Provisions of the Code and, if applicable, the REMIC provisions of the
relevant State. If the breach of representation and warranty that gave rise to
the obligation to repurchase or substitute a Loan pursuant to this Section 2.3
was the representation set forth in clause (vi) of this Section 2.3 as it
relates to anti-predatory lending laws, then the Depositor shall cause the
Seller to pay to the Trust Fund, concurrently with and in addition to the
remedies provided in the preceding sentence, an amount equal to any liability,
penalty or reasonable expense up to the time of such repurchase or substitution
that was actually incurred and paid out of or on behalf of the Trust Fund, and
that directly resulted from such breach. Except as expressly set forth herein,
neither the Trustee nor the Servicer is under any obligation to discover any
breach of the above mentioned representations and warranties. It is understood
and agreed that the obligation of the Depositor or the Seller to repurchase or
substitute any Loan or property as to which a breach has occurred and is
continuing shall constitute the sole remedy respecting such breach available to
Certificateholders or the Trustee on behalf of Certificateholders, and such
obligation shall survive as the obligation of the Depositor, the Seller or their
respective successors.
Section 2.4 AUTHENTICATION AND DELIVERY OF CERTIFICATES; DESIGNATION OF
CERTIFICATES AS REMIC REGULAR AND RESIDUAL INTERESTS.
(a) The Trustee acknowledges the transfer to the extent provided herein and
assignment to it of the Trust Fund and, concurrently with such transfer and
assignment, has caused to be authenticated and delivered to or upon the order of
the Depositor, in exchange for the Trust Fund, Certificates evidencing the
entire ownership of the Trust Fund.
(b) This Agreement shall be construed so as to carry out the intention of
the parties that each of REMIC I and REMIC II be treated as a REMIC at all times
prior to the date on which the Trust Fund is terminated. The "regular interests"
(within the meaning of Section 860G(a)(1) of the Code) in REMIC II shall consist
of the Class A Certificates and the Subordinate Certificates. The "residual
interest" (within the meaning of Section 860G(a)(2) of the Code) in REMIC II
shall consist of Component R-2 of the Class R Certificate. The "regular
interests" (within the meaning of Section 860G(a)(1) of the Code) of REMIC I
shall consist of Class A-1 Regular Interest, the Class A-3
49
Regular Interest, the Class A-4 Regular Interest, the Class A-5 Regular
Interest, the Class A-6 Regular Interest, the Class A-7 Regular Interest, the
Class A-8 Regular Interest, the Class A-9 Regular Interest, the Class A-10
Regular Interest, the Class A-11 Regular Interest, the Class A-12 Regular
Interest, the Class A-13 Regular Interest, the Class A-14 Regular Interest, the
Class A-15 Regular Interest, the Class A-16 Regular Interest, the Class A-17
Regular Interest, the Class A-18 Regular Interest, the Class A-19 Regular
Interest, the Class A-20 Regular Interest, the Class A-21 Regular Interest, the
Class A-22 Regular Interest, the Class A-23 Regular Interest, the Class A-24
Regular Interest, the Class A-25 Regular Interest, the Class A-26 Regular
Interest, the Class A-27 Regular Interest, the Class A-28 Regular Interest, the
Class A-29 Regular Interest, the Class A-31 Regular Interest, the Class A-32
Regular Interest, the Class A-33 Regular Interest, the Class A-34 Regular
Interest, the Class A-35 Regular Interest, the Class A-X Regular Interest, the
Class A-P Regular Interest, the Class M Regular Interest, the Class B-1 Regular
Interest, the Class B-2 Regular Interest, the Class B-3 Regular Interest, the
Class B-4 Regular Interest and the Class B-5 Regular Interest. The "residual
interest" (within the meaning of Section 860(G)(a)(2) of the Code) of REMIC I
shall consist of Component R-1 of the Class R Certificate.
(c) All payments with respect to each of the Class A-1, Class A-2, Class
A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class A-9, Class
A-10, Class A-11, Class A-12, Class A-13, Class A-14, Class A-15, Class A-16,
Class A-17, Class A-18, Class A-19, Class A-20, Class A-21, Class A-22, Class
A-23, Class A-24, Class A-25, Class A-26, Class A-27, Class A-28, Class A-29,
Class A-30, Class A-31, Class A-32, Class A-33, Class A-34, Class A-35, Class
A-X, Class A-P, Class M, Class B-1, Class B-2, Class B-3, Class B-4 and Class
B-5 Certificates shall each be considered to have been made solely from the
Regular Interest of REMIC I having the same designation. All principal payments
with respect to each such Class of Certificates (other than the Interest Only
Certificates) shall be considered to have been made solely from the principal
payments of the corresponding Regular Interests of REMIC I, and the Class
Principal Balance of each such Class of Certificate (other than the Interest
Only Certificates) shall be equal at all times to the principal balance of each
such corresponding Regular Interest of REMIC I. All interest payments with
respect to the Class A-X Certificates shall be considered to have been made
solely from the interest payments of the Class A-X Regular Interest of REMIC I,
which shall bear interest equal to the sum, for each Premium Loan, of the excess
of the Pass-Through Rate on such Premium Loan over 5.50%. The interest rate of
each REMIC I Regular Interest Class A-1, Class A-3, Class A-4, Class A-5, Class
A-6, Class A-7, Class A-8, Class A-9, Class A-10, Class A-11, Class A-12, Class
A-13, Class A-14, Class A-15, Class A-16, Class A-17, Class A-18, Class A-19,
Class A-20, Class A-21, Class A-22, Class A-23, Class A-24, Class A-25, Class
A-26, Class A-27, Class A-28, Class A-29, Class A-31, Class A-32, Class A-33,
Class A-34, Class A-35, Class M, Class B-1, Class B-2, Class B-3, Class B-4 and
Class B-5 shall be 5.50%. The Class A-P Regular Interest shall not bear
interest, but will receive principal only in respect of the Discount Loans.
(d) The Class A-2 Certificates shall be considered for federal income tax
purposes to have three component notional principal amounts which are equal to
the principal balance of the Class A-1 Regular Interest, bearing interest at
1.50%, the principal balance of the Class A-3 Regular Interest, bearing interest
at 1.00% and the principal balance of the Class A-22 Regular Interest,
50
bearing interest at 1.50%.
(e) The Class A-30 Certificates shall be considered for federal income tax
purposes to have one component notional principal amount which is equal to the
principal balance of the Class A-4 Regular Interest, bearing interest at 0.25%.
(f) The Class A-X Certificates shall be considered for federal income tax
purposes to have a notional principal amount which is equal to the total
Principal Balance of the Premium Loans.
Section 2.5 DESIGNATION OF STARTUP DAY. The Closing Date is hereby
designated as the "startup day" of each of REMIC I and REMIC II within the
meaning of Section 860G(a)(9) of the Code.
Section 2.6 NO CONTRIBUTIONS. The Trustee shall not accept or make any
contribution of cash to the Trust Fund after 90 days of the Closing Date, and
shall not accept or make any contribution of other assets to the Trust Fund
unless, in either case, it shall have received an Opinion of Counsel to the
effect that the inclusion of such assets in the Trust Fund will not cause either
REMIC I or REMIC II to fail to qualify as a REMIC at any time that any Class A
or Subordinate Certificates are outstanding or subject the Trust Fund to any tax
on contributions to the REMIC under Section 860G(d) of the Code.
Section 2.7 REPRESENTATIONS AND WARRANTIES OF THE SERVICER. The Servicer
hereby represents, warrants and covenants to the Trustee for the benefit of
Certificateholders that, as of the date of execution of this Agreement:
(i) the Servicer is a corporation duly formed and validly existing
under the laws of the State of Delaware;
(ii) the execution and delivery of this Agreement by the Servicer and
its performance of and compliance with the terms of this Agreement will not
violate the Servicer's corporate charter or by-laws or constitute a default
(or an event which, with notice or lapse of time, or both, would constitute
a default) under, or result in the breach of, any material contract,
agreement or other instrument to which the Servicer is a party or which may
be applicable to the Servicer or any of its assets;
(iii) this Agreement, assuming due authorization, execution and
delivery by the Trustee and the Depositor, constitutes a valid, legal and
binding obligation of the Servicer, enforceable against it in accordance
with the terms hereof subject to applicable bankruptcy, insolvency,
reorganization, moratorium and other laws affecting the enforcement of
creditors' rights generally and to general principles of equity, regardless
of whether such enforcement is considered in a proceeding in equity or at
law;
(iv) the Servicer is not in default with respect to any order or
decree of any court
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or any order, regulation or demand of any federal, state, municipal or
governmental agency, which default might have consequences that would
materially and adversely affect the condition (financial or other) or
operations of the Servicer or its properties or might have consequences
that would affect its performance hereunder; and
(v) no litigation is pending or, to the best of the Servicer's
knowledge, threatened against the Servicer which would prohibit its
entering into this Agreement or performing its obligations under this
Agreement as long as the Servicer has any obligations to service the Loans
hereunder (and it has not assigned such obligations pursuant to this
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.
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ARTICLE III
ADMINISTRATION AND SERVICING OF LOANS
Section 3.1 SERVICER TO ACT AS SERVICER; ADMINISTRATION OF THE LOANS.
(a) The Servicer shall service and administer the Loans on behalf of the
Trust Fund solely in the best interests of and for the benefit of the
Certificateholders (as determined by the Servicer in its reasonable judgment)
and the Trustee (as trustee for Certificateholders) in accordance with the terms
of this Agreement and the respective Loans and, to the extent consistent with
such terms, in the same manner in which, and with the same care, skill, prudence
and diligence with which, it services and administers similar mortgage loans for
other portfolios, giving due consideration to customary and usual standards of
practice of prudent institutional residential mortgage lenders and loan
servicers, and taking into account its other obligations hereunder, but without
regard to:
(i) any relationship that the Servicer, any sub-servicer, any special
servicer or any Affiliate of the Servicer, any sub-servicer or any special
servicer may have with the related Mortgagor;
(ii) the ownership of any Certificate by the Servicer, any special
servicer or any Affiliate of the Servicer, any sub-servicer or any special
servicer;
(iii) the Servicer's, any sub-servicer's or any special servicer's
right to receive compensation for its services hereunder or with respect to
any particular transaction; or
(iv) the ownership, or servicing or management for others, by the
Servicer, any sub-servicer or any special servicer, of any other mortgage
loans or property.
To the extent consistent with the foregoing and subject to any express
limitations set forth in this Agreement, the Servicer shall seek to maximize the
timely and complete recovery of principal and interest on the Mortgage Notes;
provided, however, that nothing herein contained shall be construed as an
express or implied guarantee by the Servicer of the collectability of the Loans.
Subject only to the above-described servicing standards and the terms of this
Agreement and of the respective Loans, the Servicer, as an independent
contractor, shall service and administer the Loans and shall have full power and
authority, acting alone or through one or more subservicers, special servicers
or agents (subject to paragraph (c) of this Section 3.1), to do any and all
things in connection with such servicing and administration which it may deem
necessary or desirable for the purpose of conserving the assets of the Trust
Fund. Without limiting the generality of the foregoing, the Servicer shall and
is hereby authorized and empowered by the Trustee to continue to execute and
deliver, on behalf of itself, the Certificateholders and the Trustee or any of
them, any and all financing statements, continuation statements and other
documents or instruments necessary to maintain the lien on each Mortgaged
Property and related collateral; and modifications, waivers,
53
consents or amendments to or with respect to any documents contained in the
related Mortgage File; and any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge and all other
comparable instruments, with respect to the Loans and with respect to the
related Mortgaged Properties. Notwithstanding the foregoing, the Servicer
(whether acting alone or through one or more subservicers, special servicers or
agents) shall not modify, amend, waive or otherwise consent to the change of the
terms of any of the Loans (including without limitation extending the stated
maturity date of any Loan or forgiving principal of or interest on any Loan),
except as permitted by Section 3.2 hereof. The Servicer shall service and
administer the Loans in accordance with applicable law and shall provide to the
Mortgagors any reports required to be provided to them thereby. To enable the
Servicer to carry out its servicing and administrative duties hereunder, upon
the Servicer's written request accompanied by the forms of any documents
requested, the Trustee shall execute and deliver to the Servicer any powers of
attorney and other documents necessary or appropriate and the Trustee shall not
be responsible for releasing such powers of attorney. The Trustee shall not be
responsible for, and the Servicer shall indemnify the Trustee for, any action
taken by the Servicer pursuant to the application of any such power of attorney.
The relationship of the Servicer (and of any successor thereto) to the Trustee
under this Agreement is intended by the parties to be that of an independent
contractor and not that of a joint venturer, partner or agent.
(b) The Servicer, Trustee and Depositor intend that REMIC I and REMIC II
formed hereunder shall constitute, and that the Servicer shall perform its
duties and obligation hereunder so as to qualify each of them as, a "real estate
mortgage investment conduit" as defined in and in accordance with the REMIC
Provisions. The Tax Matters Person, or the Person acting as attorney-in-fact and
agent therefor, shall: (a) prepare and file, or cause to be prepared and filed,
federal tax returns (as well as any other federal and state information and
other returns) using a calendar year as the taxable year when and as required by
the REMIC Provisions; (b) make (or cause to be made) an election, on behalf of
each of REMIC I and REMIC II, to be treated as a REMIC on the Federal tax return
and any applicable state or local returns for the first taxable year, in
accordance with the REMIC Provisions; (c) prepare and forward, or cause to be
prepared and forwarded, to the Certificateholders all information reports
(including, without limitation, the information required in connection with the
computation of the present value of anticipated excess inclusions as required by
Section 1.860E-2(a)(5) of the REMIC Provisions) as and when required to be
provided to them in accordance with the REMIC Provisions; (d) conduct the
affairs of the Trust Fund at all times that REMIC I Regular Interests or REMIC
II Certificates are outstanding so as to maintain the status of each of REMIC I
and REMIC II 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 either REMIC I or REMIC II.
(c) The Servicer may enter into sub-servicing agreements with third parties
with respect to any of its respective obligations hereunder, provided, that (1)
any such agreement shall be consistent with the provisions of this Agreement and
(2) no sub-servicer retained by the Servicer shall grant any modification,
waiver or amendment to any Loan without the approval of the Servicer. Any such
sub-servicing agreement may permit the sub-servicer to delegate its duties to
agents or subcontractors so long as the related agreements or arrangements with
such agents or subcontractors
54
are consistent with the provisions of this Section 3.1(c) as long as the
Servicer has any obligations to service the Loans hereunder (and it has not
assigned such obligations pursuant to this Section 3.1(c)), it shall be a FNMA
or a FHLMC-qualified servicer.
Any sub-servicing agreement entered into by the Servicer with a Person
other than the Depositor shall provide that it may be assumed or terminated by
the Trustee if the Trustee has assumed the duties of the Servicer, without cost
or obligation to the assuming or terminating party or the Trust Fund, upon the
assumption by such party of the obligations of the Servicer pursuant to Section
7.5.
Any sub-servicing agreement, and any other transactions or services
relating to the Loans involving a sub-servicer, including (if applicable) the
Depositor in its capacity as sub-servicer under a sub-servicing agreement and
not in its capacity as a party to this Agreement, shall be deemed to be between
the Servicer and such sub-servicer (including the Depositor) alone, and the
Trustee and the Certificateholders shall not be deemed parties thereto and shall
have no claims, rights, obligations, duties or liabilities with respect to the
sub-servicer, except as set forth in Section 3.1(d).
In the event that the Trustee assumes the servicing obligations of the
Servicer, upon request of the Trustee, the Servicer shall at its own expense
deliver to the Trustee all documents and records relating to any sub-servicing
agreement and the Loans then being serviced thereunder and an accounting of
amounts collected and held by it, if any, and will otherwise use its best
efforts to effect the orderly and efficient transfer of any sub-servicing
agreement to the Trustee.
(d) Costs incurred by the Servicer in effectuating the timely payment of
taxes and assessments on the Mortgaged Property securing a Mortgage Note shall
be recoverable by the Servicer pursuant to Section 3.3. The Servicer shall
ensure all such taxes and assessments are timely paid.
The Servicer, as initial servicer, shall pay all of its costs and proven
damages incurred with respect to or arising out of any allegation of impropriety
in its servicing of the Loans. Further, the Servicer shall not be entitled to
reimbursement or indemnification from either the Trust Fund or the
Certificateholders with respect to any such costs, claims and damages.
(e) Notwithstanding any sub-servicing agreement, any of the provisions of
this Agreement relating to agreements or arrangements between the Servicer and
any Person (including the Depositor) acting as sub-servicer (or its agents or
subcontractors) or any reference to actions taken through any Person (including
the Depositor) acting as sub-servicer or otherwise, the Servicer shall remain
obligated and primarily liable to the Trustee and Certificateholders for the
servicing and administering of the Loans in accordance with the provisions of
this Agreement without diminution of such obligation or liability by virtue of
such sub-servicing agreements or arrangements or by virtue of indemnification
from the Depositor or any other Person acting as sub-servicer (or its agents or
subcontractors) to the same extent and under the same terms and conditions as if
the Servicer alone were servicing and administering the Loans. The Servicer
shall be entitled to enter into an
55
agreement with any sub-servicer providing for indemnification of the Servicer by
such sub-servicer (including the Depositor and the Trustee), and nothing
contained in this Agreement shall be deemed to limit or modify such
indemnification, but no such agreement for indemnification shall be deemed to
limit or modify this Agreement.
Section 3.2 COLLECTION OF CERTAIN LOAN PAYMENTS; CUSTODIAL ACCOUNT FOR P&I.
(a) The Servicer shall make reasonable efforts to collect all payments
called for under the terms and provisions of the Loans, and shall, to the extent
such procedures shall be consistent with this Agreement, follow such collection
procedures as it follows with respect to conventional mortgage loans it services
for itself and any of its Affiliates; provided, however, that the Servicer
agrees not to permit any modification with respect to any Loan that would change
the manner in which the Mortgage Interest Rate is computed, forgive any
principal or interest or change the term of such Loan. Consistent with the
foregoing, the Servicer may in its discretion (i) waive any assumption fee, late
payment charge or other charge in connection with a Loan, and (ii) arrange a
schedule, running for no more than 180 days after the scheduled Due Date, for
payment of any installment on any Mortgage Note or after the due date of any
other payment due under the related Mortgage Note for the liquidation of
delinquent items, provided, that the Servicer shall continue to be obligated to
make Advances in accordance with Section 4.3 during the continuance of such
period. With respect to any Loans which provide for the right of the holder
thereof to call for early repayment thereof at times specified therein, neither
the Trustee nor the Servicer shall exercise any such right, except that the
Trustee shall exercise such right at the written direction of the Servicer set
forth in an Officer's Certificate in connection with a default under the related
Note. Notwithstanding anything herein to the contrary, neither the Servicer nor
any other party may take any action that would cause a "significant
modification" of any Loan within the meaning of the REMIC Provisions that would
cause REMCI I or REMIC II to fail to qualify as a REMIC at any time or cause a
tax to be imposed on the Trust Fund under the REMIC Provisions.
(b) The Servicer shall establish and maintain a separate account as set
forth in Article I (the "Custodial Account for P&I"), and shall on the Closing
Date credit any amounts representing scheduled payments of principal and
interest due after the Cut-off Date but received by the Servicer on or before
the Closing Date, and thereafter on a daily basis the following payments and
collections received or made by it (other than in respect of principal of and
interest on the Loans due on or before the Cut-off Date):
(i) All Mortgagor payments on account of principal, including
Principal Prepayments on the Loans;
(ii) All Mortgagor payments on account of interest on the Loans, which
may be net of that portion thereof which the Servicer is entitled to retain
as Servicing Fees (adjusted for any amounts related to Compensating
Interest) pursuant to Section 3.9, as adjusted pursuant to Section 4.6;
56
(iii) All net Liquidation Proceeds;
(iv) All Insurance Proceeds received by the Servicer, other than
proceeds to be applied to the restoration or repair of the property subject
to the related Mortgage or released to the Mortgagor in accordance with the
Servicer's normal servicing procedures, and all amounts deposited by the
Servicer with respect to the failure to maintain flood or fire and hazard
insurance policies, pursuant to Section 3.5;
(v) All repurchase proceeds from the repurchase of a Loan pursuant to
a Purchase Obligation;
(vi) any amounts required to be deposited pursuant to Section 3.2(c)
in connection with net losses realized on Eligible Investments with respect
to funds held in the Custodial Account for P&I;
(vii) all income and gain realized from any investment of the funds in
the Custodial Account for P&I in Eligible Investments;
(viii) all net income from the renting of REO Property pursuant to
Section 3.7(c); and
(ix) All other amounts required to be deposited in the Custodial
Account for P&I pursuant to this Agreement.
(c) The Servicer may invest the funds in the Custodial Account for P&I in
Eligible Investments which shall mature not later than the second Business Day
preceding the next Distribution Date unless the Custodial Account for P&I is
maintained with the Trustee in which case they may mature one Business Day prior
to the Distribution Date. The Eligible Investments may not be sold or disposed
of prior to their maturity. All such Eligible Investments shall be made in the
name of the Servicer (in its capacity as such) or its nominee. All income and
gain realized from any such investment shall be for the benefit of the Servicer,
and shall be payable to the Servicer. The amount of any losses incurred in
respect of any such investments shall be deposited in the Custodial Account for
P&I by the Servicer, out of its own funds immediately as realized without right
to reimbursement therefor.
(d) The foregoing requirements for deposit in the Custodial Account for P&I
shall be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of those described in the
last paragraph of this Section 3.2 and payments in the nature of late payment
charges or assumption fees need not be deposited by the Servicer in the
Custodial Account for P&I. All funds deposited by the Servicer in the Custodial
Account for P&I shall be held by it in trust in the Custodial Account for P&I
until disbursed in accordance with Section 4.1 or withdrawn in accordance with
Section 3.3; provided, however, that the Servicer shall withdraw such funds and
deposit them in such manner as to not result in a downgrading or
57
withdrawal of the rating then assigned to the Certificates by each Rating
Agency. If the Servicer deposits in the Custodial Account for P&I any amount not
required to be deposited therein, it may at any time withdraw such amount from
the Custodial Account for P&I pursuant to Section 3.3(i) of this Agreement.
Certain of the Loans may provide for payment by the Mortgagor of amounts to
be used for payment of taxes, assessments, hazard or other insurance premiums or
comparable items for the account of the Mortgagor. The Servicer may deal with
these amounts in accordance with its normal servicing procedures.
Section 3.3 PERMITTED WITHDRAWALS FROM THE CUSTODIAL ACCOUNT FOR P&I. The
Servicer may, from time to time, make withdrawals from the Custodial Account for
P&I for the following purposes:
(a) to reimburse itself for Advances made by it pursuant to Section 3.4 or
4.3, the Servicer's right to reimburse itself pursuant to this subclause (a)
being limited to (i) amounts received on or in respect of particular Loans
(including, for this purpose, Liquidation Proceeds and Insurance Proceeds which
represent late recoveries of payments of principal and/or interest respecting
which any such Advance was made and any net income received from the renting of
REO Property pursuant to Section 3.7(c)) and (ii) amounts in the Custodial
Account for P&I held for future distribution or withdrawal, such amounts
referred to in clause (ii) of this subclause (a) to be replaced by the Servicer
to the extent that funds in the Custodial Account for P&I on a future Withdrawal
Date are less than the payment required to be made to the Certificate Account
therefrom as of such future Distribution Date;
(b) (i) to reimburse itself from Liquidation Proceeds for Liquidation
Expenses, (ii) for amounts expended by it pursuant to Section 3.7 in good faith
in connection with the restoration of damaged property and (iii) to the extent
that Liquidation Proceeds after such reimbursement are in excess of the
Principal Balance of the related Loan together with accrued and unpaid interest
thereon at the applicable Pass-Through Rate to the date of such liquidation, net
of any related Advances which were unreimbursed prior to the receipt of such
Liquidation Proceeds, to pay to itself any unpaid Servicing Fees, and any
assumption fees, late payment charges or other Mortgage charges on the related
Loan;
(c) to pay to itself from any Mortgagor payment as to interest or other
recovery with respect to a particular Loan, to the extent permitted by this
Agreement, that portion of any payment as to interest in excess of interest at
the applicable Pass-Through Rate which the Servicer is entitled to retain as
Servicing Fees pursuant to Section 3.9 or otherwise;
(d) to reimburse itself for expenses incurred by and recoverable by or
reimbursable to it pursuant to Section 3.1 or 3.5 after the related Mortgagor
has reimbursed the Trust Fund for such expenses or following liquidation of the
related Loan, or pursuant to Section 6.3;
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(e) to pay to itself with respect to each Loan or property acquired in
respect thereof that has been repurchased pursuant to Section 2.2 or 2.3 or
purchased by the Servicer pursuant to Section 9.1 all amounts received thereon
and not distributed as of the date on which the related Principal Balance is
determined;
(f) to reimburse itself for any Nonrecoverable Advances;
(g) to disburse to the Trustee or its designee in order that the Trustee or
its designee may make payments to Certificateholders in the amounts and in the
manner provided for in Section 4.1;
(h) to pay itself any net interest or other income earned and received on
or investment income received with respect to funds in the Custodial Account for
P&I; and
(i) to make payments to itself or others pursuant to any provision of this
Agreement and to remove any amounts not required to be deposited therein and to
clear and terminate the Custodial Account for P&I pursuant to Section 9.1.
Since in connection with withdrawals pursuant to subclauses (a), (b), (c)
and (e) the Servicer's entitlement thereto is limited to collections or other
recoveries on the related Loan, the Servicer shall keep and maintain a separate
accounting for each Loan for the purpose of justifying any withdrawal from the
Custodial Account for P&I pursuant to such subclauses.
The Servicer shall make the withdrawal referred to in subclause (g) above
and shall deposit the amount so withdrawn into the Certificate Account prior to
4:00 P.M. New York City time on each related Withdrawal Date.
Section 3.4 TAXES, ASSESSMENTS AND SIMILAR ITEMS; ESCROW ACCOUNTS.
(a) The Servicer shall establish and maintain one or more accounts (each,
an "Escrow Account") into which all Escrow Payments shall be promptly deposited
and in which all Escrow Payments shall be retained. Escrow Accounts shall be
Eligible Accounts, and funds in the Escrow Account may be invested in Eligible
Investments. The Servicer shall notify the Trustee in writing of the location
and account number of each Escrow Account it establishes and shall notify the
Trustee prior to any subsequent change thereof. Withdrawals of amounts from an
Escrow Account may be made only to: (i) effect payment of taxes, assessments,
insurance premiums and comparable items; (ii) refund to Mortgagors any sums that
are determined to be overages; (iii) reimbursement to the Servicer for any cost
incurred in paying taxes, insurance premiums and assessments or comparable
items; (iv) pay interest, if required and as described below, to Mortgagors on
balances in the Escrow Account; (v) withdraw interest or other income which may
lawfully be retained by the Trust Fund, for deposit into the Certificate
Account; or (vi) clear and terminate the Escrow Account at the termination of
this Agreement in accordance with Section 9.1. Unless otherwise required by
applicable law, any interest earned on funds in Escrow Accounts shall be
remitted to the related Mortgagors if required by the related Mortgage Note or
otherwise to the Servicer as additional
59
servicing compensation.
(b) With respect to each Loan, the Servicer shall maintain accurate records
with respect to each related Mortgaged Property reflecting the status of taxes,
assessments and other similar items that are or may become a lien on the related
Mortgaged Property and the status of insurance premiums payable with respect
thereto. The Servicer shall require that payments for taxes, assessments,
insurance premiums and other similar items be made by the Mortgagor at the time
they first become due. If a Mortgagor fails to make any such payment on a timely
basis, the Servicer shall advance the amount of any shortfall unless the
Servicer determines in its good faith judgment that such advance would not be
ultimately recoverable from future payments and collections on the related Loan
(including without limitation Insurance Proceeds and Liquidation Proceeds), or
otherwise. The Servicer shall be entitled to reimbursement of advances it makes
pursuant to the preceding sentence, together with interest thereon at the
Federal Funds Rate, from amounts received on or in respect of the related Loan
respecting which such advance was made or if such advance has become
nonrecoverable, in either case to the extent permitted by Section 3.3 of this
Agreement. No costs incurred by the Servicer in effecting the payment of taxes
and assessments on the Mortgaged Properties shall, for the purpose of
calculating distributions to Certificateholders, be added to the amount owing
under the related Loans, notwithstanding that the terms of such Loans so permit.
Section 3.5 MAINTENANCE OF INSURANCE. The Servicer shall also cause to be
maintained for each Loan fire and hazard insurance with extended coverage as is
customary in the area where the Mortgaged Property is located in an amount which
is at least equal to the lesser of (i) the Principal Balance of such Loan or
(ii) the replacement value costs of improvements securing such Loan. The
Servicer shall cause to be maintained fire and hazard insurance with extended
coverage on each REO Property in an amount which is at least equal to the
greater of (i) an amount not less than is necessary to avoid the application of
any co-insurance clause contained in the related fire and hazard insurance
policy or (ii) the replacement cost of the improvements which are a part of such
property. The Servicer shall also cause to be maintained for each Loan with a
Loan-to- Value Ratio greater than 80% a primary mortgage insurance policy which
will cover at least 75% of the original fair market value of the related
Mortgaged Property until such time as the principal balance of such Loan is
reduced to 80% of the current fair market value or otherwise in accordance with
applicable law. The Servicer on behalf of the Trustee as Mortgagee shall
maintain or cause the related Mortgagor to maintain for each Loan such other
insurance on the related Mortgaged Property as may be required by the terms of
the related Mortgage Note. If the Mortgaged Property is in an area identified in
the Federal Register by the Flood Emergency Management Agency as having special
flood hazards the Servicer will cause to be maintained a flood insurance policy
meeting the requirements of the current guidelines of the Federal Insurance
Administration with a generally acceptable insurance carrier, in an amount
representing coverage not less than the least of (i) the full insurable value,
(ii) the maximum amount of insurance which is available under the Flood Disaster
Protection Act of 1973, and (iii) the Principal Balance of the related Loan. The
Servicer shall also maintain fire and hazard insurance with extended coverage
and, if applicable, flood insurance on property acquired upon foreclosure, or by
deed in lieu of foreclosure, of any Loan in an amount that is at least equal to
the lesser of (i) the maximum insurable value of the improvements which are a
part of such property and
60
(ii) the principal balance owing on such Loan at the time of such foreclosure or
grant of deed in lieu of foreclosure plus accrued interest and related
Liquidation Expenses. If an REO Property was located at the time of origination
of the related Loan in a federally designated special flood hazard area, the
Servicer will obtain flood insurance in respect thereof providing substantially
the same coverage as described in the preceding sentence. If at any time during
the term of this Agreement a recovery under a flood or fire and hazard insurance
policy in respect of an REO Property is not available but would have been
available if such insurance were maintained thereon in accordance with the
standards applied to Mortgaged Properties described herein, the Servicer shall
either (i) immediately deposit into the Custodial Account for P&I from its own
funds the amount that would have been recovered or (ii) apply to the restoration
and repair of the property from its own funds the amount that would have been
recovered, if such application would be consistent with the servicing standard
set forth in Section 3.1. It is understood and agreed that such insurance shall
be with insurers approved by the Servicer and that no earthquake or other
additional insurance is to be required of any Mortgagor, other than pursuant to
such applicable laws and regulations or policies of the Servicer as shall at any
time be in force and as shall require such additional insurance. Pursuant to
Section 3.2, any amounts collected by the Servicer under any insurance policies
maintained pursuant to this Section 3.5 (other than amounts to be applied to the
restoration or repair of the property subject to the related Mortgage or
released to the Mortgagor in accordance with the Servicer's normal servicing
procedures) shall be deposited into the Custodial Account for P&I, subject to
withdrawal pursuant to Section 3.3. Any cost incurred by the Servicer in
maintaining any such insurance shall be recoverable by the Servicer pursuant to
Section 3.3. In the event that the Servicer shall obtain and maintain a blanket
policy issued by an insurer that qualifies under the guidelines set forth for
the Servicer by FNMA or FHLMC, insuring against hazard losses on all of the
Loans, then, to the extent such policy provides coverage in an amount equal to
the unpaid principal balance on the Loans without co-insurance and otherwise
complies with all other requirements set forth in the first paragraph of this
Section 3.5, it shall conclusively be deemed to have satisfied its obligation as
set forth in such first paragraph, it being understood and agreed that such
policy may contain a deductible clause, in which case the Servicer shall, in the
event that there shall not have been maintained on the related mortgaged or
acquired property an insurance policy complying with the first paragraph of this
Section 3.5 and there shall have been a loss which would have been covered by
such a policy had it been maintained, be required to deposit from its own funds
into the Custodial Account for P&I or apply to the restoration of the property
the amount not otherwise payable under the blanket policy because of such
deductible clause.
The Servicer shall obtain and maintain at its own expense throughout the
term of this Agreement a blanket fidelity bond and an errors and omissions
insurance policy with broad coverage with responsible companies covering the
Servicer's officers and employees and other persons acting on behalf of the
Servicer in connection with its activities under this Agreement. Any such
fidelity bond and errors and omissions insurance shall provide an amount of
coverage and will maintain such coverage at a level which will permit the
Servicer to continue to be a FNMA or a FHLMC-qualified Servicer and shall
protect and insure the Servicer against losses, including forgery, theft,
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
61
the Servicer from its duties and obligations as set forth in this Agreement.
Section 3.6 ENFORCEMENT OF DUE-ON-SALE CLAUSES; ASSUMPTION AND SUBSTITUTION
AGREEMENTS. In any case in which property subject to a Mortgage is conveyed by
the Mortgagor, the Servicer will enforce any due-on-sale clause contained in the
related Mortgage Note or Mortgage, to the extent permitted under applicable law
and governmental regulations, but only to the extent that such enforcement will
not adversely affect or jeopardize coverage under any related insurance policy
or result in legal action by the Mortgagor. Subject to the foregoing, the
Servicer is authorized to take or enter into an assumption or substitution
agreement from or with the Person to whom such property has been or is about to
be conveyed. The Servicer is also authorized to release the original Mortgagor
from liability upon the Loan and substitute the new Mortgagor as obligor
thereon. In connection with such assumption or substitution, the Servicer shall
apply such underwriting standards and follow such practices and procedures as
shall be normal and usual and as it applies to mortgage loans owned solely by it
or any of its Affiliates. The Servicer shall notify the Trustee that any such
assumption or substitution agreement has been completed by forwarding to the
Trustee the original copy of such assumption or substitution agreement, which
copy shall be added by the Trustee to the related Mortgage File and shall, for
all purposes, be considered a part of such Mortgage File to the same extent as
all other documents and instruments constituting a part thereof. In connection
with any such assumption or substitution agreement, the interest rate of the
related Mortgage Note shall not be changed. Any fee collected by the Servicer
for entering into an assumption or substitution of liability agreement will be
retained by the Servicer as servicing compensation.
Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Servicer shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any conveyance by the
Mortgagor of the Mortgaged Property or any assumption of a Loan by operation of
law which the Servicer in good faith determines it may be restricted by law from
preventing, for any reason whatsoever.
Section 3.7 REALIZATION UPON DEFAULTED LOANS.
(a) Consistent with the servicing standard set forth in Section 3.1 and
with a view to the best economic interest of the Trust Fund, the Servicer shall
foreclose upon or otherwise comparably convert (which may include acquisition of
an REO Property) the Mortgaged Properties securing such of the Loans as come
into and continue in default and as to which no satisfactory arrangements can be
made for collection of delinquent payments pursuant to Section 3.2. In
connection with such foreclosure or other conversion, the Servicer shall follow
such practices and procedures as it shall deem necessary or advisable and as
shall be normal and usual in its general mortgage servicing activities. The
foregoing is subject to the proviso that the Servicer shall not be required to
expend its own funds in connection with any foreclosure or to restore any
damaged property unless it shall determine (i) that such foreclosure and/or
restoration expenses will increase the Liquidation Proceeds to
Certificateholders after reimbursement to itself for such expenses and (ii) that
such expenses will be recoverable to it through Liquidation Proceeds (respecting
which it shall have priority for purposes of withdrawal from the Custodial
Account for P&I pursuant to Section 3.3). Any gain on
62
foreclosure or other conversion of a Liquidated Loan shall be distributed to the
Class R Certificateholder, but only to the extent that such gain is not
necessary to make distributions to the Certificateholders of the other Classes
of Certificates. The Servicer shall be responsible for all other costs and
expenses incurred by it in any such proceedings; provided, however, that it
shall be entitled to reimbursement thereof (as well as any Servicing Fees and
other amounts due it, if any), to the extent, but only to the extent, that
withdrawals from the Custodial Account for P&I with respect thereto are
permitted under Section 3.3. Within 30 days after receipt of Liquidation
Proceeds in respect of a Liquidated Loan, the Servicer shall provide to the
Trustee a statement of accounting for the related Liquidated Loan, including
without limitation (i) the Loan number, (ii) the date the Loan was acquired in
foreclosure or deed in lieu, and the date the Loan became a Liquidated Loan,
(iii) the gross sales price and the related selling and other expenses, (iv)
accrued interest calculated from the foreclosure date to the liquidation date,
and (v) such other information as the Trustee may reasonably specify.
(b) Prior to any such foreclosure, the Servicer may, at its option,
repurchase any Loan which is 30 days or more delinquent; provided that such
repurchase shall only be made if (i) the Servicer has a contractual right to
require the third party seller of such delinquent Loan to repurchase such Loan,
(ii) such repurchase is made to facilitate a repurchase by such third party
seller and (iii) such repurchase is made at a price equal to the Purchase Price.
Any such repurchase shall be deemed a Principal Prepayment for purposes of this
Agreement and all amounts in respect thereof shall be deposited into the
Custodial Account for P&I pursuant to Section 3.2(b).
(c) The Trust Fund shall not acquire any real property (or personal
property incident to such real property) except in connection with a default or
imminent default of a Loan. Based on a report prepared by an Independent Person
who regularly conducts environmental audits that the Mortgaged Property for
which foreclosure proceedings are contemplated is in compliance with applicable
environmental laws, and there are no circumstances present at such Mortgaged
Property relating to the use, management or disposal of any hazardous materials,
wastes, or petroleum based materials for which investigation, testing,
monitoring, containment, clean-up or remediation could be required under any
federal, state or local law or that it would be in the best economic interest of
the Trust Fund to acquire title to such Mortgaged Property and further to take
such actions as would be necessary and appropriate to effect such compliance
and/or respond to such circumstances, the Servicer will not conduct such
foreclosure proceedings. If the Servicer otherwise becomes aware, under its
customary servicing procedures, of an environmental hazard with respect to a
Loan for which foreclosure proceedings are contemplated, the Servicer will not
conduct such foreclosure proceedings unless it determines in good faith that the
liability associated with the environmental hazard will be less than the
Liquidation Proceeds to be realized from the sale of the related Mortgaged
Property. In the event that the Trust Fund acquires any real property (or
personal property incident to such real property) in connection with a default
or imminent default of a Loan, such REO Property shall be disposed of by the
Trust Fund within three years after its acquisition by the Trust Fund unless the
Trustee shall have received from the Servicer an Opinion of Counsel to the
effect that the holding by the Trust Fund of such REO Property subsequent to
three years after its acquisition will not cause REMIC I or REMIC II to fail to
qualify as a REMIC under the REMIC
63
Provisions at any time that any REMIC Regular Interests or Certificates are
outstanding, in which case such REO Property shall be disposed of as soon as
possible by the Trust Fund but in no event shall be held longer than the maximum
period of time during which the Trust Fund is then permitted to hold such REO
Property and allow REMIC I or REMIC II to remain qualified as REMICs under the
REMIC Provisions. The Servicer shall manage, conserve, protect and operate each
such REO Property for the Certificateholders solely for the purpose of its
prompt disposition and sale in a manner which does not cause such REO Property
to fail to qualify as "foreclosure property" within the meaning of Section
860G(a)(8) of the Code. Pursuant to its efforts to sell such REO Property, the
Servicer shall either itself or through an agent selected by the Servicer
protect and conserve such REO Property in the same manner and to such extent as
is customary in the locality where such property is located and may, incident to
its conservation and protection of the interests of the Certificateholders, rent
the same, or any part thereof, as the Servicer deems to be in the best interest
of the Servicer and the Certificateholders for the period prior to the sale of
such REO Property. All proceeds from the renting of such REO Property shall, net
of any costs or expenses of the Servicer in connection therewith, be deposited
into the Custodial Account for P&I pursuant to Section 3.2(b)(viii).
(d) In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be issued to the Trustee, or to its nominee on behalf of
Certificateholders. Notwithstanding any such acquisition of title and
cancellation of the related Loan, such Loan shall (except for purposes of
Section 9.1) be considered to be a Loan held in the Trust Fund until such time
as the related REO Property shall be sold by the Trust Fund and shall be reduced
only by collections net of expenses. Consistent with the foregoing, for purposes
of all calculations hereunder, so long as such Loan shall be considered to be an
outstanding Loan, it shall be assumed that, notwithstanding that the
indebtedness evidenced by the related Mortgage Note shall have been discharged,
such Mortgage Note and, for purposes of determining the Scheduled Principal
Balance thereof, the related amortization schedule in effect at the time of any
such acquisition of title remain in effect.
(e) The Servicer shall not acquire for the benefit of the Trust Fund any
personal property pursuant to this Section 3.7 unless either:
(i) such personal property is incident to real property (within the
meaning of Section 856(e)(1) of the Code) so acquired by the Servicer for
the benefit of the Trust Fund; or
(ii) the Servicer shall have requested and received an Opinion of
Counsel (which opinion shall be an expense of the Trust Fund) to the effect
that the holding of such personal property by the Trust Fund will not cause
the imposition of a tax on the Trust Fund under the REMIC Provisions or
cause REMIC I or REMIC II to fail to qualify as REMICs at any time that any
Certificate is outstanding.
Section 3.8 TRUSTEE TO COOPERATE; RELEASE OF MORTGAGE FILES.
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Upon the payment in full of any Loan, or the receipt by the Servicer of a
notification that the payment in full will be escrowed in a manner customary for
such purposes, the Servicer will immediately notify the Trustee by an Officer's
Certificate (which Officer's Certificate shall include a statement to the effect
that all amounts received in connection with such payment which are required to
be deposited in the Custodial Account for P&I pursuant to Section 3.2 have been
or will be so deposited) and shall by such Officer's Certificate request
delivery to it of the Mortgage File. Upon receipt of such Officer's Certificate
and request, the Trustee shall promptly release or cause to be released the
related Mortgage File to the Servicer. Upon the Trustee's receipt of any release
or reconveyance documents or instruments relating to the Loan paid in full, the
Trustee shall, not later than the 5th succeeding Business Day, execute and
return such documents and instruments to the Servicer. From time to time and as
appropriate for the servicing or foreclosure of any Loan, the Trustee shall,
upon written request of the Servicer and delivery to the Trustee of a trust
receipt signed by a Servicing Officer, release or cause to be released the
related Mortgage File to the Servicer and shall execute such documents furnished
to it as shall be necessary to the prosecution of any such proceedings. Such
trust receipt shall obligate the Servicer to return each and every document
previously requested from the Mortgage File to the Trustee when the need
therefor by the Servicer no longer exists unless the Loan shall be liquidated,
in which case, upon receipt of a certificate of a Servicing Officer similar to
that hereinabove specified, the trust receipt shall be released by the Trustee
to the Servicer by delivery to a Servicing Officer and the Trustee shall have no
further responsibility with respect to such Mortgage Files.
Section 3.9 SERVICING COMPENSATION.
The Servicer shall be entitled to retain or, if not retained, to withdraw
from the Certificate Account as servicing compensation its Servicing Fee out of
each payment on account of interest on each Loan, subject to adjustment as
provided in Section 4.6. The Servicer shall also be entitled to payment of
unpaid Servicing Fees with respect to a delinquent Loan out of Liquidation
Proceeds with respect to such Loan, to the extent permitted by Section 3.3(b).
Servicing compensation in the form of assumption fees, late payment charges or
otherwise shall be retained by the Servicer and need not be deposited in the
Custodial Account for P&I. The Servicer shall also be entitled to additional
servicing compensation out of Liquidation Proceeds to the extent provided in
Section 3.3(b). The Servicer shall be required to pay all expenses incurred by
it in connection with its servicing activities hereunder (including maintenance
of the blanket hazard insurance policy and the blanket fidelity bond and errors
and omissions policy required by Section 3.5) and shall not be entitled to
reimbursement therefor except as specifically provided in Sections 3.1, 3.3, 3.5
and 3.7.
On each Distribution Date, the Servicer shall pay to the Certificate
Administrator and the Trustee the Certificate Administration and Trustee Fee out
of the Servicing Fee retained by the Servicer on such Distribution Date. Such
amounts shall be compensation for the activities of the Certificate
Administrator and the Trustee hereunder. The Certificate Administrator and the
Trustee shall be required to pay all expenses incurred by it in connection with
its activities hereunder and shall not be entitled to reimbursement therefor,
except as specifically provided herein.
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Section 3.10 REPORTS TO THE TRUSTEE; CUSTODIAL ACCOUNT FOR P&I STATEMENTS.
On or before each Determination Date, the Servicer shall deliver or cause
to be delivered to the Trustee or its designee a statement in electronic or
written form as may be agreed upon by the Servicer and the Trustee containing
the information described in Section 4.2 and such other information as may be
necessary for the Trustee to distribute the amounts to be distributed to the
Certificateholders by the Trustee (the "Servicer's Section 3.10 Report"). Not
later than 25 days after each Distribution Date, the Servicer shall forward or
cause to be forwarded to the Trustee a statement, certified by a Servicing
Officer, setting forth the status of the Custodial Account for P&I as of the
close of business on the related Distribution Date, stating that all
distributions from the Custodial Account for P&I required to be made by this
Agreement have been made for the period covered by such statement (or if any
required distribution has not been made, specifying the nature and status
thereof) and showing, for the period covered by such statement, the aggregate of
deposits into and withdrawals from the Custodial Account for P&I for each
category of deposit specified in Section 3.2 and each category of withdrawal
specified in Section 3.3. Such statement shall also include information as to
the aggregate Principal Balance of all of the Loans as of the last day of the
calendar month immediately preceding such Distribution Date. Copies of such
statement shall be provided to any Certificateholder upon request by the
Servicer, or by the Trustee so long as the Trustee has received the report as
stipulated above at the Servicer's expense if the Servicer shall fail to provide
such copies.
Section 3.11 ANNUAL STATEMENT AS TO COMPLIANCE.
Not later than the earlier of (a) March 15 of each calendar year (other
than the calendar year during which the Closing Date occurs) or (b) with respect
to any calendar year during which the Depositor's annual report on Form 10-K is
required to be filed in accordance with the Exchange Act and the rules and
regulations of the Commission, 15 calendar days before the date on which the
Depositor's annual report on Form 10-K is required to be filed in accordance
with the Exchange Act and the rules and regulations of the Commission (or, in
each case, if such day is not a Business Day, the immediately preceding Business
Day), the Servicer will deliver to the Trustee an Officer's Certificate stating
as to each signer thereof, that (i) a review of the activities of the Servicer
during the preceding calendar year and of performance under this Agreement has
been made under such officer's supervision, and (ii) to the best of such
officer's knowledge, based on such review, the Servicer has fulfilled all of its
obligations under this Agreement throughout such year, or if there has been a
default in the fulfillment of any such obligation, specifying each such default
known to such officer and the nature and status thereof. Copies of such
statement shall be provided to each Rating Agency and to any Certificateholder
upon request by the Servicer, or by the Trustee at the Servicer's expense.
Section 3.12 ANNUAL INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING REPORT.
Not later than the earlier of (a) March 15 of each calendar year (other
than the calendar year during which the Closing Date occurs) or (b) with respect
to any calendar year during which the
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Depositor's annual report on Form 10-K is required to be filed in accordance
with the Exchange Act and the rules and regulations of the Commission, 15
calendar days before the date on which the Depositor's annual report on Form
10-K is required to be filed in accordance with the Exchange Act and the rules
and regulations of the Commission (or, in each case, if such day is not a
Business Day, the immediately preceding Business Day), the Servicer, at its
expense, shall cause a firm of independent public accountants who are members of
the American Institute of Certified Public Accountants to furnish a statement to
the Trustee and each Rating Agency to the effect that such firm has examined
certain documents and records relating to the servicing of the Loans and that,
either (a) on the basis of such examination conducted substantially in
compliance with the audit program for mortgages serviced for FHLMC, such firm is
of the opinion that such servicing has been conducted in compliance with the
manner of servicing set forth in agreements substantially similar to this
Agreement except for (i) such exceptions as such firm shall believe to be
immaterial and (ii) such other exceptions as shall be set forth in such
statement or, (b) that their examination conducted substantially in compliance
with the uniform single audit program for mortgage bankers disclosed no
exceptions or errors in records relating to mortgage loans serviced for others
that in their opinion are material and that Paragraph 4 of that program requires
them to report. Copies of such statement shall be provided to Certificateholders
upon request by the Servicer, or by the Trustee at the Servicer's expense.
Section 3.13 ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING THE
LOANS. The Servicer shall provide access to the Trustee or to its designees at
its request, and to Certificateholders which are savings and loan associations,
banks or insurance companies, the OTS, the FDIC and the supervisory agents and
examiners of the OTS and the FDIC or examiners of any other federal or state
banking or insurance regulatory authority to the documentation regarding the
Loans if so required by applicable regulations of the OTS or other regulatory
authority, such access to be afforded without charge but only upon reasonable
request and during normal business hours at the offices of the Servicer
designated by it. The Trustee or its designee may without charge copy any
document or electronic record maintained by the Servicer hereunder.
Section 3.14 [RESERVED].
Section 3.15 SALE OF DEFAULTED LOANS AND REO PROPERTIES.
(a) With respect to any Defaulted Loan or REO Property which the Servicer
has determined to sell in accordance with the standards set forth in Section
3.7, the Servicer shall deliver to the Trustee an Officer's Certificate to the
effect that no satisfactory arrangements can be made for collection of
delinquent payments thereon pursuant to Section 3.2, and, consistent with the
servicing standard set forth in Section 3.1 and with a view to the best economic
interest of the Trust Fund, the Servicer has determined to sell such Defaulted
Loan or REO Property in accordance with this Section 3.15. The Servicer may then
offer to sell to any Person any Defaulted Loan or any REO Property or, subject
to the following sentence, purchase any such Defaulted Loan or REO Property (in
each case at the Purchase Price therefor), but shall in any event, so offer to
sell any REO Property no later than the time determined by the Servicer to be
sufficient to result in the sale of such REO
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Property within the period specified in Section 3.7(c). The Servicer shall
accept the highest bid received from any Person for any Defaulted Loan or any
REO Property in an amount at least equal to the Purchase Price therefor or, at
its option, if it has received no bid at least equal to the Purchase Price
therefor, purchase the Defaulted Loan or REO Property at the Purchase Price.
In the absence of any such bid or purchase by the Servicer, the Servicer
shall accept the highest bid received from any Person that is determined by the
Servicer to be a fair price for such Defaulted Loan or REO Property, if the
highest bidder is a Person other than an Interested Person, or is determined to
be such a price by the Trustee, if the highest bidder is an Interested Person.
Notwithstanding anything to the contrary herein, neither the Trustee, in its
individual capacity, nor any of its Affiliates may bid for or purchase any
Defaulted Loan or any REO Property pursuant hereto.
The Servicer shall not be obligated by either of the foregoing paragraphs
or otherwise to accept the highest bid if the Servicer determines, in accordance
with the servicing standard stated in Section 3.1, that rejection of such bid
would be in the best interests of the Certificateholders. In addition, the
Servicer may accept a lower bid if it determines, in accordance with the
servicing standard stated in Section 3.1, that acceptance of such bid would be
in the best interests of the Certificateholders (for example, if the prospective
buyer making the lower bid is more likely to perform its obligations, or the
terms offered by the prospective buyer making the lower bid are more favorable).
In the event that the Servicer determines with respect to any REO Property that
the bids being made with respect thereto are not in the best interests of the
Certificateholders and that the end of the period referred to in Section 3.7(c)
with respect to such REO Property is approaching, the Servicer shall seek an
extension of such period in the manner described in Section 3.7(c).
(b) In determining whether any bid received from an Interested Person
represents a fair price for any Defaulted Loan or any REO Property, the Trustee
may conclusively rely on the opinion of an Independent appraiser or other expert
in real estate matters retained by the Trustee the expense of which shall be an
expense of the Trust Fund. In determining whether any bid constitutes a fair
price for any Defaulted Loan or any REO Property, the Servicer or the Trustee
(or, if applicable, such appraiser) shall take into account, and any appraiser
or other expert in real estate matters shall be instructed to take into account,
as applicable, among other factors, the period and amount of any delinquency on
the affected Defaulted Loan, the physical condition of the related Mortgaged
Property or such REO Property, the state of the local economy and the Trust
Fund's obligation to dispose of any REO Property within the time period
specified in Section 3.7(c).
(c) The Servicer shall act on behalf of the Trust Fund in negotiating and
taking any other action necessary or appropriate in connection with the sale of
any Defaulted Loan or REO Property, including the collection of all amounts
payable in connection therewith. Any sale of a Defaulted Loan or any REO
Property shall be without recourse to, or representation or warranty by, the
Trustee, the Depositor, the Servicer or the Trust Fund (except that any contract
of sale and assignment and conveyance documents may contain customary warranties
of title, so long as the only recourse for breach thereof is to the Trust Fund),
and, if consummated in accordance with the terms
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of this Agreement, neither the Servicer, the Depositor nor the Trustee shall
have any liability to the Trust Fund or any Certificateholder with respect to
the purchase price therefor accepted by the Servicer or the Trustee.
(d) The proceeds of any sale after deduction of the expenses of such sale
incurred in connection therewith shall be promptly deposited in the Custodial
Account for P&I in accordance with Section 3.2(b).
Section 3.16 DELEGATION OF DUTIES.
In the ordinary course of business, the Servicer or the Trustee may at any
time delegate any duties hereunder to any Person who agrees to conduct such
duties in accordance with the applicable terms of this Agreement. In case of
such delegation, the Servicer or the Trustee shall supervise, administer,
monitor and oversee the activities of such Person hereunder to insure that such
Person performs such duties in accordance herewith and shall be responsible for
the acts and omissions of such Person to the same extent as it is responsible
for its own actions or omissions hereunder. Any such delegations shall not
relieve the Servicer or the Trustee of its liability and responsibility with
respect to such duties, and shall not constitute a resignation within the
meaning of Section 6.4 hereof and shall be revocable by any successor Servicer
or the Trustee.
Section 3.17 [RESERVED].
Section 3.18 [RESERVED].
Section 3.19 APPOINTMENT OF A SPECIAL SERVICER.
The Servicer may enter into a special servicing agreement with an
unaffiliated holder of Subordinate Certificates or a holder of a class of
securities representing interests in such Class of Subordinate Certificates,
such agreement to be (i) substantially in the form of Exhibit R hereto or (ii)
subject to each Rating Agency's acknowledgment that the ratings of the
Certificates in effect immediately prior to the entering into of such agreement
would not be qualified, downgraded or withdrawn and the Certificates would not
be placed on credit review status (except for possible upgrading) as a result of
such agreement. Any such agreement may contain provisions whereby such holder
may instruct the Servicer to commence or delay foreclosure proceedings with
respect to delinquent Loans and may contain provisions for the deposit of cash
by the holder that would be available for distribution to Certificateholders if
Liquidation Proceeds are less than they otherwise may have been had the Servicer
acted in accordance with its normal procedures.
Section 3.20 ALLOCATION OF REALIZED LOSSES.
Prior to each Distribution Date, the Servicer shall determine the amount of
Realized Losses, if any, with respect to each Loan.
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The amount of Realized Losses shall be evidenced by an Officer's
Certificate signed by a Responsible Officer of the Servicer. All Realized
Losses, except for Excess Losses, shall be allocated as follows: (i) for losses
allocable to principal (a) first, to the Subordinate Certificates in reverse
order of seniority until each of their Class Principal Balances have been
reduced to zero and (b) second, to the Senior Certificates (other than the
Interest Only Certificates and Class A-P Certificates), by Pro Rata Allocation,
until the Certificate Principal Balances thereof have been reduced to zero;
PROVIDED, HOWEVER, that prior to the Credit Support Depletion Date if the loss
is recognized with respect to (a) a Discount Loan, the Discount Fraction of such
loss shall be allocated to the Class A-P Certificates and the remainder of such
loss will be allocated as described in clause (i); and (ii) for losses allocable
to interest (a) first, to the Subordinate Certificates in reverse order of
seniority, in reduction of accrued but unpaid interest thereon and then in
reduction of the Class Principal Balance of such Certificates and (b) second, to
the Senior Certificates (other than the Class A-P Certificates) thereof, by Pro
Rata Allocation, until the Certificate Principal Balances thereof have been
reduced to zero.
Excess Losses shall be allocated among the Senior Certificates and the
Subordinate Certificates by Pro Rata Allocation.
On each Distribution Date, after giving effect to the principal
distributions and allocations and reimbursement of losses as provided in this
Agreement (without regard to this paragraph), if the Aggregate Certificate
Principal Balance of all outstanding Classes of Certificates exceeds the
aggregate principal balance of the Loans, after deduction of (i) all principal
payments due on or before the Cut-Off Date in respect of each such Loan whether
or not paid and (ii) all amounts of principal in respect of each such Loan that
have been received or advanced and included in the Available Distribution
Amount, and all losses in respect of such Loans that have been allocated to the
Certificates, on such Distribution Date or prior Distribution Dates, then such
excess will be deemed a principal loss and will be allocated (i) first, to the
Subordinate Certificates in reverse order of seniority until each of their Class
Principal Balances has been reduced to zero, and (ii) second, to the Senior
Certificates, other than the Interest Only Certificates, pro rata according to
their Certificate Principal Balances.
Section 3.21 MAINTENANCE OF THE ROUNDING ACCOUNTS; COLLECTIONS THEREUNDER.
On or prior to the Closing Date, the Trustee or the Certificate Registrar
shall establish a separate Rounding Account for each Class of Retail Lottery
Certificates, and Credit Suisse First Boston LLC shall deposit $999.99 therein
with respect to each Class of Retail Lottery Certificates. The Trustee or the
Certificate Registrar shall maintain such accounts to provide, if needed, the
applicable Rounding Amount on any Distribution Date. On the first Distribution
Date with respect to which the Trustee or the Certificate Registrar determines
that amounts are available out of the applicable Available Distribution Amount
for distributions of principal on the Retail Lottery Certificates, and the
aggregate amount allocable to such distributions of principal is not an amount
equal to an integral multiple of $1,000, the Trustee or the Certificate
Registrar shall withdraw from each Rounding Account the applicable Rounding
Amount. On each succeeding Distribution Date,
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prior to the Credit Support Depletion Date, with respect to which the Trustee or
the Certificate Registrar determines that amounts are available out of the
applicable Available Distribution Amount for distributions of principal on the
Retail Lottery Certificates, the aggregate amount allocable to such Class will
be applied first to replenish any funds withdrawn from the related Rounding
Account on prior Distribution Dates which have not been repaid. If the remainder
of the aggregate amount allocable to distributions of principal to the Retail
Lottery Certificates is not an amount equal to an integral multiple of $1,000,
the Trustee or the Certificate Registrar shall withdraw from the related
Rounding Account, to the extent funds are available therein, the applicable
Rounding Amount.
Any amounts withdrawn by the Trustee or the Certificate Registrar from a
Rounding Account shall be deposited in the Certificate Account for distribution
to the Holders of related Retail Lottery Certificateholders as described in the
immediately preceding paragraph. Funds held in the Certificate Account may be
invested by the Trustee or Certificate Administrator for its own account in
Eligible Investments which shall mature not later than one Business Day prior to
the related Distribution Date or, shall mature not later than the related
Distribution Date if such Eligible Investments are managed by, or are
obligations of, such institution that maintains the Certificate Account.
Each Rounding Account shall be an "outside reserve fund" under the REMIC
Provisions that is beneficially owned for all federal income tax purposes by
Credit Suisse First Boston Corporation LLC.
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ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS; ADVANCES;
STATEMENTS AND REPORTS
Section 4.1 DISTRIBUTIONS TO CERTIFICATEHOLDERS. (a) The Trustee shall
establish and maintain a separate account as set forth in Article I (the
"Certificate Account"), the purpose of which is to accept deposits from the
Servicer and to make distributions to the Certificateholders of the amounts set
forth in this Section 4.1.
(b) On each Distribution Date, the Trustee or the Paying Agent, if any,
shall (i) withdraw from the Certificate Account the Available Distribution
Amount for such Distribution Date and shall distribute to each
Certificateholder, from the amount so withdrawn and to the extent of the
Available Distribution Amount, such Certificateholder's share (based on the
aggregate Percentage Interests represented by the Certificates of the applicable
Class held by such Certificateholder) of the amounts and in the order of
priority as set forth in the definition of "Certificate Distribution Amount" and
(ii) distribute Excess Liquidation Proceeds to the Class R Certificateholder by
wire transfer in immediately available funds for the account of the
Certificateholder or by any other means of payment acceptable to each
Certificateholder of record on the immediately preceding Record Date (other than
as provided in Section 9.1 respecting the final distribution), as specified by
each such Certificateholder and at the address of such Holder appearing in the
Certificate Register; provided, that if the Trustee has appointed a Certificate
Administrator, such distributions in (i) and (ii) above shall be made in
accordance with written statements received from the Certificate Administrator
pursuant to Section 4.2.
(c) All reductions in the Certificate Principal Balance of a Certificate
effected by distributions of principal or allocations of Realized Losses with
respect to Loans made on any Distribution Date shall be binding upon all Holders
of such Certificate and of any Certificate issued upon the registration of
transfer or exchange therefor or in lieu thereof, whether or not such
distribution is noted on such Certificate. The final distribution of principal
of each Certificate (and the final distribution with respect to the Class R
Certificate upon termination of the Trust Fund) shall be payable in the manner
provided above only upon presentation and surrender thereof on or after the
Distribution Date therefor at the office or agency of the Trustee or Certificate
Administrator, if any, specified in the notice delivered pursuant to Section
4.1(d) or Section 9.1.
(d) Whenever, on the basis of Curtailments, Payoffs and Monthly Payments on
the Loans and Insurance Proceeds and Liquidation Proceeds received and expected
to be received during the applicable Prepayment Period, the Trustee believes, or
the Certificate Administrator, if any, has notified the Trustee that it
believes, that the entire remaining unpaid Class Principal Balance of any Class
of Certificates will become distributable on the next Distribution Date, the
Trustee or the Certificate Administrator, if any, shall, no later than the
Determination Date of the month of such Distribution Date, mail or cause to be
mailed to each Person in whose name a Certificate to be so retired is registered
at the close of business on the Record Date, to the Underwriters and to each
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Rating Agency a notice to the effect that:
(i) it is expected that funds sufficient to make such final
distribution will be available in the Certificate Account on such
Distribution Date, and
(ii) if such funds are available, (A) such final distribution will be
payable on such Distribution Date, but only upon presentation and surrender
of such Certificate at the office or agency of the Certificate Registrar
maintained for such purpose (the address of which shall be set forth in
such notice), and (B) no interest shall accrue on such Certificate after
such Distribution Date.
(e) Prior to the Credit Support Depletion Date, distributions in reduction
of the outstanding Class Principal Balances of the Retail Lottery Certificates
will be made in integral multiples of $1,000 at the request of the appropriate
representatives of Deceased Holders of Certificates and at the request of Living
Holders of Certificates or by mandatory distributions, pursuant to Section
4.1(e)(i) and Section 4.1(e)(iv). On and after the Credit Support Depletion
Date, distributions in reduction of the outstanding Class Principal Balances of
the Retail Lottery Certificates will be made on a pro rata basis pursuant to
Section 4.1(e)(v).
(i) On each Distribution Date prior to the Credit Support Depletion
Date on which principal distributions to the Retail Lottery Certificates
are made pursuant to Section 4.1, such distributions shall be made to the
Retail Lottery Certificateholders by the Depository pursuant to the
Depository Agreement in the following priority:
(1) first, to requesting Deceased Holders, in the order in which
such requests are received by the Depository, but not exceeding an
aggregate amount of $100,000 for each requesting Deceased Holder; and
(2) second, to requesting Living Holders, in the order in which
such requests are received by the Depository, but not exceeding an
aggregate amount of $10,000 for each requesting Living Holder.
Thereafter, the Depository shall make distributions with respect to the
Retail Lottery Certificates as provided in clauses (1) and (2) above up to a
second $100,000 and $10,000, respectively. This sequence of priorities shall be
repeated until the Depository has honored all requests for principal
distributions by Deceased Holders and Living Holders to the extent of amounts
available for principal distributions to the Retail Lottery Certificates.
All requests for principal distributions to the Retail Lottery Certificates
will be accepted in accordance with the provisions set forth in Section
4.1(e)(iii). Requests for principal distributions that are received by the
Trustee after the related Record Date and requests for principal distributions
received in a timely manner but not accepted with respect to any Distribution
Date, will be treated as requests for principal distributions by the Beneficial
Holder(s) making such requests on the next
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succeeding Distribution Date, and each succeeding Distribution Date thereafter,
until each such request is accepted or is withdrawn as provided in Section
4.1(e)(iii). Such requests as are not so withdrawn shall retain their order of
priority without the need for any further action on the part of the appropriate
Beneficial Holder of the Retail Lottery Certificates, all in accordance with the
procedures of the Depository and the Trustee. Upon the transfer of beneficial
ownership of the Retail Lottery Certificates, any distribution request
previously submitted shall be deemed to have been withdrawn only upon the
receipt by the Trustee, on or before the Record Date for any applicable
Distribution Date of notification of such withdrawal in the manner set forth in
Section 4.1(e)(iii) using a form required by the Depository.
Distributions in reduction of the outstanding Class Principal Balances of
the Retail Lottery Certificates shall be applied by the Trustee in an amount
equal to the portion of the Certificate Distribution Amount allocable to the
Retail Lottery Certificates, plus any amounts available for distribution from
the Rounding Account established as provided in Section 3.21, provided that the
aggregate distribution of principal to the Retail Lottery Certificateholders on
any Distribution Date shall be made in an integral multiple of $1,000.
To the extent that the portion of the Certificate Distribution Amount
allocable to the Retail Lottery Certificates on any Distribution Date exceeds
the outstanding Class Principal Balances of the Retail Lottery Certificates with
respect to which principal distribution requests, as set forth above, have been
received, principal distributions in reduction of the outstanding Class
Principal Balances of the Retail Lottery Certificates will be made by mandatory
distribution pursuant to Section 4.1(e)(iv).
(ii) The Retail Lottery Certificates shall be deemed to be held by a
Deceased Holder for purposes of this Section 4.1(e) if the death of the
Beneficial Holder thereof is deemed to have occurred by the Trustee. Retail
Lottery Certificates beneficially owned by tenants by the entirety, joint
tenants or tenants in common shall be considered to be beneficially owned
by a single owner. The death of a tenant by the entirety, joint tenant or
tenant in common shall be deemed to be the death of the Beneficial Holder,
and the Retail Lottery Certificates so beneficially owned shall be eligible
for priority with respect to principal distributions, subject to the
limitations stated above. The Retail Lottery Certificates beneficially
owned by a trust shall be considered to be beneficially owned by each
beneficiary of the trust to the extent of such beneficiary's beneficial
interest therein, but in no event will a trust's beneficiaries collectively
be deemed to be Beneficial Holders of a number of Retail Lottery
Certificates greater than the number of Retail Lottery Certificates of
which such trust is the owner.
The death of a beneficiary of a trust shall be deemed to be the death of a
Beneficial Holder of Retail Lottery Certificates beneficially owned by the trust
to the extent of such beneficiary's beneficial interest in such trust. The death
of an individual who was a tenant by the entirety, joint tenant or tenant in
common in a tenancy which is the beneficiary of a trust shall be deemed to be
the death of the beneficiary of such trust. The death of a person who, during
his or her lifetime, was entitled to
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substantially all of the beneficial ownership interests in Retail Lottery
Certificates shall be deemed to be the death of the holder of such Retail
Lottery Certificates regardless of the registration of ownership, if such
beneficial ownership interest can be established to the satisfaction of the
Trustee. Such beneficial interest shall be deemed to exist in typical cases of
street name or nominee ownership, ownership by a trustee, ownership under the
Uniform Gifts to Minors Act and community property or other joint ownership
arrangements between a husband and wife. Beneficial interest shall include the
power to sell, transfer or otherwise dispose of Retail Lottery Certificates and
the right to receive the proceeds therefrom, as well as interest and principal
distributions, as applicable, payable with respect thereto. Neither the Trustee
nor the Paying Agent shall be under any duty to determine independently the
occurrence of the death of any Deceased Holder. The Trustee and the Paying Agent
may rely entirely upon documentation delivered to it pursuant to Section
4.1(e)(iii) in establishing the eligibility of any Holder to receive the
priority accorded Deceased Holders in Section 4.1(e)(i).
(iii) Requests for principal distributions to Retail Lottery
Certificates shall be made by delivering a written request therefor to the
DTC Participant or Indirect DTC Participant that maintains the account
evidencing such Beneficial Holder's interest in such Certificate. In the
case of a request on behalf of a Deceased Holder, appropriate evidence of
death and any tax waivers are required to be forwarded to the Trustee,
under separate cover; provided, however, that the Trustee has no obligation
and will incur no liability for failure to examine the sufficiency of such
tax waiver. The DTC Participant shall in turn make the request of the
Depository (or, in the case of an Indirect DTC Participant, such Indirect
DTC Participant shall notify the related DTC Participant of such request,
which DTC Participant shall make the request of the Depository) on a form
required by the Depository and provided to the DTC Participant. Upon
receipt of such request, the Depository will date and time stamp such
request and forward such request to the Trustee or Paying Agent, as
applicable. The Depository may establish such procedures as it deems fair
and equitable to establish the order of receipt of requests for such
distributions received by it on the same day. None of the Company, the
Servicer, the Paying Agent or the Trustee shall be liable for any delay in
delivery of requests for distributions or withdrawals of such requests by
the Depository, a DTC Participant or any Indirect DTC Participant.
The Trustee shall maintain a list of those DTC Participants representing
the appropriate holders of Retail Lottery Certificates that have submitted
requests for principal distributions, together with the order of receipt and the
amounts of such requests. The Trustee shall notify the Depository as to which
requests should be honored on each Distribution Date at least two Business Days
prior to such Distribution Date and shall notify the Depository as to the
portion of the Certificate Distribution Amount (together with any amounts
available for distribution from the Rounding Account) to be distributed to
Retail Lottery Certificates by mandatory distribution pursuant to Section
4.1(e)(iv). Requests shall be honored by the Depository in accordance with the
procedures, and subject to the priorities and limitations, described in this
Section 4.1(e). The exact procedures to be followed by the Trustee and the
Depository for purposes of determining such priorities and limitations will be
those established from time to time by the Trustee or the Depository, as the
case
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may be. The decisions of the Trustee and the Depository concerning such matters
will be final and binding on all affected persons.
Retail Lottery Certificates that have been accepted for a distribution
shall receive distributions on the applicable Distribution Date. Such
Certificates shall cease to bear interest on the amount of principal to be
distributed on any Distribution Date after the last calendar day of the month
preceding the month in which such Distribution Date occurs.
Any Beneficial Holder of a Retail Lottery Certificate that has requested a
principal distribution may withdraw its request by so notifying in writing the
DTC Participant or Indirect DTC Participant that maintains such Beneficial
Holder's account. In the event that such account is maintained by an Indirect
DTC Participant, such Indirect DTC Participant must notify the related DTC
Participant which in turn must forward the withdrawal of such request, on a form
required by the Depository, to the Depository to be forwarded to the Trustee or
Paying agent, as applicable. If such notice of withdrawal of a request for
distribution has not been received by the Depository and forwarded to the
Trustee or Paying agent, as applicable on or before the Record Date for the next
Distribution Date, the previously made request for a principal distribution
shall be irrevocable with respect to the making of principal distributions on
such Distribution Date.
In the event any requests for principal distributions are rejected by the
Trustee for failure to comply with the requirements of this Section 4.1(e), the
Trustee shall return such request to the appropriate DTC Participant with a copy
to the Depository with an explanation as to the reason for such rejection.
(iv) To the extent, if any, that principal distributions to be made to
the applicable Retail Lottery Certificates on a Distribution Date exceed
the aggregate amount of principal distribution requests which have been
received on or before the applicable Record Date, as provided in Section
4.1(e)(i) above, additional Retail Lottery Certificates will be selected to
receive mandatory principal distributions in lots equal to $1,000 in
accordance with the then-applicable Random Lot procedures of the
Depository, and the then-applicable procedures of the DTC Participants and
Indirect DTC Participants representing the Beneficial Holders (which
procedures may or may not be by random lot). The Trustee shall notify the
Depository of the aggregate amount of the mandatory principal distribution
to be made on the next Distribution Date. The Depository shall then
allocate such aggregate amount among the DTC Participants on a Random Lot
basis. Each DTC Participant and, in turn, each Indirect DTC Participant
shall then select, in accordance with its own procedures, the applicable
Retail Lottery Certificates from among those held in its accounts to
receive mandatory principal distributions, such that the total amount of
principal distributed to the so selected Retail Lottery Certificates is
equal to the aggregate amount of such mandatory distributions allocated to
such DTC Participant by the Depository and to such Indirect DTC Participant
by its related DTC Participant, as the case may be. DTC Participants and
Indirect DTC Participants that hold Retail Lottery Certificates selected
for mandatory principal distributions are required to provide notice of
such mandatory distributions to the affected
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Beneficial Holders.
(v) Notwithstanding any provisions herein to the contrary, on each
Distribution Date on and after the Credit Support Depletion Date,
distributions in reduction of the outstanding Class Principal Balances of
the Retail Lottery Certificates will be made pro rata (based upon their
respective outstanding Class Principal Balances) among the Beneficial
Holders of the Retail Lottery Certificates and shall not be made in
integral multiples of $1,000 nor pursuant to requests for distribution or
by mandatory distributions as provided for by this Section 4.1(e).
Subject to the third paragraph of Section 10.1 hereof, in the event that
Definitive Certificates representing Retail Lottery Certificates are issued, an
amendment to this Agreement, which may be approved without the consent of any
Certificateholders, shall establish procedures relating to the manner in which
distributions in reduction of the outstanding Class Principal Balances of Retail
Lottery Certificates are to be made.
Section 4.2 STATEMENTS TO CERTIFICATEHOLDERS; EXCHANGE ACT REPORTING. (a)
Not later than each Determination Date, the Servicer shall forward to the
Trustee or the Certificate Administrator, if any, the Servicer's Section 3.10
Report setting forth certain information with respect to the Loans. With each
distribution from the Certificate Account on a Distribution Date, the Trustee or
the Certificate Administrator, if any, shall, based on the information set forth
in the Servicer's Section 3.10 Report, prepare and forward or make available
through the Trustee's or the Certificate Administrator's, as the case may be,
internet website (which initially will be the Certificate Administrator's
internet website located at xxx.xxxxxxxx.xxx) to each Certificateholder, a
statement (each a "Certificateholders' Report") setting forth, to the extent
applicable, the amount of the distribution payable to the applicable Class that
represents principal and the amount that represents interest, and the applicable
Class Principal Balances after giving effect to such distribution.
In addition, not later than each Distribution Date, the Certificate
Administrator or Trustee, as applicable, shall forward or make available to such
Certificateholder, the Trustee (if the Trustee has appointed a Certificate
Administrator) and the Depositor an additional report which sets forth with
respect to the Loans:
(i) The number and aggregate Principal Balance of the Loans delinquent
one, two and three months or more;
(ii) The (A) number and aggregate Principal Balance of Loans with
respect to which foreclosure proceedings have been initiated, and (B) the
number and aggregate book value of Mortgaged Properties acquired through
foreclosure, deed in lieu of foreclosure or other exercise of rights
respecting the Trustee's security interest in the Loans;
(iii) The aggregate Principal Balance of the Loans as of the close of
business on the last day of the related Prepayment Period;
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(iv) The amount of the Servicing Fee retained or withdrawn by the
Servicer from the Certificate Account and the amount of any Excess
Liquidation Proceeds received by the Servicer during the related Prepayment
Period;
(v) The amount of Special Hazard Coverage available to the Senior
Certificates remaining as of the close of business on the applicable
Determination Date;
(vi) The amount of Bankruptcy Coverage available to the Senior
Certificates remaining as of the close of business on the applicable
Determination Date;
(vii) The amount of Fraud Coverage available to the Senior
Certificates remaining as of the close of business on the applicable
Determination Date;
(viii) The amount of Realized Losses allocable to the related
Certificates on the related Distribution Date and the cumulative amount of
Realized Losses incurred allocated to such Certificates since the Cut-Off
Date;
(ix) The amount of interest accrued but not paid on the each Class of
Certificates entitled to interest since (a) the prior Distribution Date and
(b) the Closing Date;
(x) The amount of funds advanced by the Servicer on the related
Withdrawal Date; and
(xi) The total amount of Payoffs and Curtailments received during the
related Prepayment Period.
Upon written request by any Certificateholder, the Trustee or the
Certificate Administrator (if so appointed by the Trustee), as soon as
reasonably practicable, shall provide the requesting Certificateholder with such
information as is necessary and appropriate, in Trustee's or the Certificate
Administrator's sole discretion, for purposes of satisfying applicable reporting
requirements under Rule 144A of the Securities Act.
(b) Upon written request to the Trustee or Certificate Administrator (if so
appointed by the Trustee) by any Certificateholder who is a Holder thereof at
the time of making such request (an "Eligible Certificateholder"), the Trustee
or the Certificate Administrator, if applicable, shall provide in electronic
format loan by loan data with respect to the payment experience of the Loans
containing at least the fields of information listed on Exhibit E hereto (based
on information provided by the Servicer). In addition, upon the written request
of any Eligible Certificateholder, the Trustee or the Certificate Administrator
shall provide similar loan by loan data with respect to any prior monthly
remittance report to the Certificateholders pursuant to this Agreement (as and
when such information becomes available). The expense of providing any tape or
disk pursuant to this subsection shall be an expense of the Eligible
Certificateholder.
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(c) The Certificate Administrator or the Trustee, as applicable, shall, on
behalf of the Depositor and in respect of the Trust Fund, prepare, sign and
cause to be filed with the Commission any periodic reports required to be filed
under the provisions of the Exchange Act, and the rules and regulations of the
Commission thereunder; provided, however, that any annual report of the
Depositor on Form 10-K shall be signed by the Servicer on behalf of the
Depositor and in respect of the Trust Fund. In connection with the preparation
and filing of such periodic reports, the Depositor and the Servicer shall timely
provide to the Trustee or the Certificate Administrator, as the case may be, all
material information that is in the possession of the Depositor and the Servicer
and is not, to the best of the Depositor's or the Servicer's knowledge, in the
possession of the Trustee or the Certificate Administrator and which is required
to be included in such reports. Neither the Trustee or the Certificate
Administrator, as applicable, nor the Servicer shall have any liability with
respect to the Trustee's or the Certificate Administrator's failure to properly
prepare or file such periodic reports resulting from or relating to the
Trustee's or the Certificate Administrator's inability or failure to obtain any
information not resulting from the Trustee's or the Certificate Administrator's
own negligence or willful misconduct. Prior to January 30 of the first year in
which the Certificate Administrator or the Trustee, as applicable, is able to do
so under applicable law, the Certificate Administrator or the Trustee shall file
a Form 15 Suspension Notification with respect to the Trust Fund. Any Form 10-K
that is filed with the Commission in connection with this clause (c) shall
include a certification, signed by the senior officer in charge of the servicing
functions of the Servicer, in the form attached as Exhibit S hereto or such
other form as may be required or permitted by the Commission (the "Form 10-K
Certification"), in compliance with Rule 13a-14 and 15d-14 under the Exchange
Act and any additional directives of the Commission. In connection with the Form
10-K Certification, the Certificate Administrator or the Trustee, as applicable,
shall provide the Servicer with a back-up certification substantially in the
form attached hereto as Exhibit T. This Section 4.2(c) may be amended in
accordance with this Agreement without the consent of the Certificateholders.
The Certificate Administrator agrees to indemnify and hold harmless each of
the Depositor, the Trustee and the Servicer and each Person, if any, who
"controls" the Depositor, the Trustee and the Servicer within the meaning of the
1933 Act and their respective officers and directors against any and all losses,
penalties, fines, forfeitures, legal fees and related costs, judgments and any
other costs, fees and expenses that such Person may sustain arising out of third
party claims based on (i) the failure of the Certificate Administrator to
deliver or cause to be delivered when required any related Back-up Certification
required pursuant to this Section 4.2(c) or (ii) any material misstatement or
omission contained in any related Back-up Certification provided pursuant to
this Section 4.2(c). If an event occurs that would otherwise result in an
indemnification obligation under clauses (i) or (ii) above, but the
indemnification provided for in this Section 4.2(c) by the Certificate
Administrator is unavailable or insufficient to hold harmless such Persons, then
the Certificate Administrator shall contribute to the amount paid or payable by
such Persons as a result of the losses, claims, damages or liabilities of such
Persons in such proportion as is appropriate to reflect the relative fault of
the Depositor, Servicer or Trustee on the one hand and the Certificate
Administrator on the other. The Certificate Administrator acknowledges that the
Depositor, the Servicer and the Trustee are relying on the Certificate
Administrator's performance of its obligations under this
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Agreement in order to perform their respective obligations under this Section
4.2(c).
Section 4.3 ADVANCES BY THE SERVICER; DISTRIBUTION REPORTS TO THE TRUSTEE.
To the extent described below, the Servicer is obligated to advance its own
funds to the Certificate Account to cover any shortfall between (i) payments
scheduled to be received in respect of Loans serviced by such Servicer, and (ii)
the amounts actually deposited in the Certificate Account on account of such
payments. The Servicer's obligation to make any Advance or Advances described in
this Section 4.3 is effective only to the extent that such Advance is, in the
good faith judgment of the Servicer, reimbursable from Insurance Proceeds or
Liquidation Proceeds of the related Loans or recoverable as late Monthly
Payments with respect to the related Loans or otherwise.
Prior to the close of business on each Determination Date, the Servicer
shall determine whether or not it will make an Advance on the next Withdrawal
Date and shall furnish a statement to the Certificate Administrator, if any, the
Trustee, the Paying Agent, if any, and to any Certificateholder requesting the
same, setting forth the aggregate amount to be distributed on the next
succeeding Distribution Date on account of principal and interest in respect of
the Loans, stated separately. In the event that full scheduled amounts of
principal and interest in respect of the related Loans shall not have been
received by or on behalf of the Servicer prior to the Withdrawal Date preceding
such Distribution Date and the Servicer shall have determined that an Advance
shall be made in accordance with this Section 4.3, the Servicer shall so specify
and shall specify the aggregate amount of such Advance.
In the event that the Servicer shall be required to make an Advance, it
shall on the Withdrawal Date either (i) deposit in the Certificate Account an
amount equal to such Advance, (ii) direct the Trustee or the Certificate
Administrator (if so appointed by the Trustee) to make an appropriate entry in
the records of the Certificate Account that funds in such account being held for
future distribution or withdrawal have been, as permitted by this Section 4.3,
used by such Servicer to make such Advance, or (iii) make advances in the form
of any combination of (i) and (ii) aggregating the amount of such Advance. Any
funds being held for future distribution to Certificateholders and so used shall
be replaced by the related Servicer by deposit in the Certificate Account on any
future Withdrawal Date to the extent that funds in the Certificate Account on
the related Distribution Date with respect to the related Loans shall be less
than payments to Certificateholders required to be made on such date with
respect to such Loans.
The Servicer shall be entitled to reimbursement for any Advance as provided
in Section 3.3 of this Agreement.
In the event that the Trustee has appointed a Certificate Administrator,
prior to 5:00 P.M. New York City time on the Withdrawal Date, the Certificate
Administrator shall provide the Trustee with a statement regarding the amount of
principal and interest, the Residual Distribution Amount and the Excess
Liquidation Proceeds to be distributed to each Class of Certificates on such
Distribution Date (such amounts to be determined in accordance with the
definition of "Certificate Distribution Amount", Section 4.1 hereof and other
related definitions set forth in Article I hereof).
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Section 4.4 NONRECOVERABLE ADVANCES. Any Advance previously made by the
Servicer with respect to a Loan that the Servicer shall determine in its good
faith judgment not to be ultimately recoverable from Insurance Proceeds or
Liquidation Proceeds or otherwise with respect to such Loan or recoverable as
late Monthly Payments with respect to such Loan shall be a Nonrecoverable
Advance. The determination by the Servicer that it has made a Nonrecoverable
Advance or that any advance would constitute a Nonrecoverable Advance, shall be
evidenced by an Officer's Certificate of the Servicer delivered to the Trustee
on the Determination Date and detailing the reasons for such determination.
Notwithstanding any other provision of this Agreement, any insurance policy
relating to the Loans, or any other agreement relating to the Loans to which the
Depositor or the Servicer is a party, (a) the Servicer shall not be obligated
to, and shall not, make any advance that, after reasonable inquiry and in its
sole discretion, it determines would be a Nonrecoverable Advance, and (b) the
Servicer shall be entitled to reimbursement for any Nonrecoverable Advance as
provided in Section 3.3 of this Agreement.
Section 4.5 FORECLOSURE REPORTS. Each year beginning in 2004 the Servicer
shall make any reports of foreclosures and abandonments of any Mortgaged
Property required by Section 6050J of the Code. In order to facilitate this
reporting process, the Servicer, on or before February 28th of each year,
commencing with 2004, shall provide to the Internal Revenue Service, the Trustee
and the Certificate Administrator, if any, reports relating to each instance
occurring during the previous calendar year in which the Servicer (i) on behalf
of the Trustee acquires an interest in a Mortgaged Property through foreclosure
or other comparable conversion in full or partial satisfaction of a Loan, or
(ii) knows or has reason to know that a Mortgaged Property has been abandoned.
The reports from the Servicer shall be in form and substance sufficient to meet
the reporting requirements imposed by such Section 6050J.
Section 4.6 ADJUSTMENT OF SERVICING FEES WITH RESPECT TO PAYOFFS OR
CURTAILMENTS. The aggregate amount of the Servicing Fee subject to retention
from deposit into or withdrawal from the Custodial Account for P & I by the
Servicer, in any month of distribution shall be decreased by any Compensating
Interest due and owing with respect to any Loan with respect to which a Payoff
or Curtailment has occurred in the related Prepayment Period. The Servicer shall
include the amount of any such Compensating Interest with the deposits into the
Certificate Account on the related Withdrawal Date. Notwithstanding the
foregoing, the amount by which the Servicing Fee may be reduced with respect to
the related Prepayment Period pursuant to this Section 4.6 shall not exceed an
amount greater than the amount described in clause (i) of the definition of
Compensating Interest for all Loans as to which Payoffs or Curtailments have
occurred and the rights of the Certificateholders to such portion of the
Servicing Fee shall not be cumulative.
Section 4.7 PROHIBITED TRANSACTIONS TAXES AND OTHER TAXES.
(a) In the event that any tax (including a tax on "prohibited transactions"
as defined in Section 860F(a)(2) of the Code and including any and all interest,
penalties, fines and additions to tax, as well as any and all reasonable counsel
fees and out-of-pocket expenses incurred in contesting the imposition of such
tax) is imposed on the Trust Fund and is not otherwise paid pursuant to
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Section 4.7(b) hereof, the Servicer shall pay such taxes when and as the same
shall be due and payable (but such obligation shall not prevent the Servicer,
the Trustee, the Certificate Administrator, if any, or any other appropriate
Person from contesting any such tax in appropriate proceedings and shall not
prevent the Servicer from withholding payment of such tax, if permitted by law,
pending the outcome of such proceedings); provided, that the Servicer shall be
entitled to be indemnified for any such taxes (excluding taxes referred to in
Section 4.7(b)) to the extent set forth in Section 6.3 hereof so long as the
Servicer's failure to exercise reasonable care with respect to the performance
of its duties hereunder was not the primary cause of the imposition of such
taxes. If the Servicer is indemnified for such taxes pursuant to this Section
4.7(a), such amount shall be first charged against amounts otherwise
distributable to the Holders of Component R-1 of the Class R Certificate (or, if
the tax relates to REMIC II, Component R-2 of the Class R Certificate) on a pro
rata basis, then against amounts otherwise distributable with respect to the
REMIC I Regular Interests (or, if the tax relates to REMIC II, to the Holders of
the REMIC II Certificates) on a pro rata basis. The Trustee is hereby authorized
to retain from amounts otherwise distributable to the Certificateholders
sufficient funds to reimburse the Servicer for the payment of such tax for which
the Servicer is entitled to indemnification.
(b) The Servicer shall pay on written demand, and shall indemnify and hold
harmless the Trust Fund from and against, any and all taxes imposed on the Trust
Fund (including, for this purpose, any and all interest, penalties, fines and
additions to tax, as well as any and all reasonable counsel fees and
out-of-pocket expenses incurred in contesting the imposition of such tax).
Section 4.8 TAX ADMINISTRATION.
(a) The Trustee is hereby appointed as attorney-in-fact and agent for the
initial Tax Matters Person; provided, that the Trustee may appoint, and hereby
does so appoint, the Certificate Administrator as attorney-in-fact and agent for
the Tax Matters Person. The Trustee may, by written notice delivered to the
Certificate Administrator, revoke the appointment of the Certificate
Administrator as attorney-in-fact and agent for the Tax Matters Person, in which
case the Trustee shall act in such capacity.
(b) In order to enable the Trustee or the Certificate Administrator, as
applicable, to perform its duties as set forth in this Section 4.8 and Section
3.1(b), the Servicer agrees to provide any tax forms, instruments or other
documents related thereto, as the Trustee or the Certificate Administrator, as
applicable, may reasonably request, including, without limitation, any tax
forms, instruments or other documents prepared by the Servicer pursuant to this
Section 4.8. In order to enable the Trustee or the Certificate Administrator, as
applicable, to perform its duties as set forth in this Section 4.8 and Section
3.1(b), the Servicer shall use its best efforts to cause to be delivered to the
Trustee or the Certificate Administrator, as applicable, within ten (10) days
after the Closing Date all information or data that the Trustee or the
Certificate Administrator, as applicable, determines to be relevant for tax
purposes to the valuations and offering prices of the Certificates, including,
without limitation, the price, yield, prepayment assumption and projected cash
flows. Thereafter, the Servicer shall use its best efforts to provide to the
Trustee or the Certificate
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Administrator, as applicable, promptly upon request therefor, any such
additional information or data that the Trustee or the Certificate
Administrator, as applicable, may, from time to time, request in order to enable
the Trustee or the Certificate Administrator, as applicable, to perform its
duties as set forth in this Section 4.8 and Section 3.1(b).
Section 4.9 EQUAL STATUS OF SERVICING FEE. The right of the Servicer to
receive its Servicing Fee will be equal and not subordinate to the right of the
Certificateholders to receive principal and interest payments based on their
interests as provided herein. The Servicer's Servicing Fee may be collected from
Monthly Payments as received pursuant to Section 3.2 without deposit into the
Certificate Account, whereas the Certificateholders' distributions shall be made
on a delayed basis as set forth in the terms of the Certificates.
Section 4.10 APPOINTMENT OF PAYING AGENT AND CERTIFICATE ADMINISTRATOR. The
Trustee may appoint an Eligible Institution to act as a paying agent (the
"Paying Agent") or a certificate administrator (the "Certificate
Administrator"), as the case may be, in order to delegate to such Eligible
Institution any of its duties under this Agreement to administer the issuance,
transfer and exchange of the Certificates, administer payments to
Certificateholders or prepare information related to the Certificates; provided,
that the Trustee shall remain primarily responsible for any duties so delegated;
provided, further, that the Trustee shall receive no additional compensation in
connection with such appointment and delegation.
Initially, LaSalle Bank National Association will be the Certificate
Administrator and Paying Agent. If LaSalle Bank National Association ceases to
serve as Certificate Administrator or Paying Agent, the Trustee shall send
written notice to all Certificateholders (i) indicating that LaSalle Bank
National Association is no longer in such capacity and (ii) setting forth its
replacement, if any, appointed pursuant to this Section 4.10.
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ARTICLE V
THE CERTIFICATES
Section 5.1 THE CERTIFICATES.
(a) The Certificates shall be substantially in the forms set forth in
Exhibits A and B attached hereto, and shall be executed by the Trustee,
authenticated by the Trustee (or any duly appointed Authenticating Agent) and
delivered to or upon the order of the Depositor upon receipt by the Trustee of
the documents specified in Section 2.1. The Certificates shall be issuable in
Authorized Denominations evidencing Percentage Interests. Certificates shall be
executed by manual or facsimile signature on behalf of the Trust Fund by
authorized officers of the Trustee. Certificates bearing the manual or facsimile
signatures of individuals who were at the time of execution the proper officers
of the Trustee shall bind the Trust Fund, notwithstanding that such individuals
or any of them have ceased to hold such offices prior to the authentication and
delivery of such Certificates or did not hold such offices at the date of such
Certificates. No Certificate shall be entitled to any benefit under this
Agreement, or be valid for any purpose, unless there appears on such Certificate
a certificate of authentication substantially in the form provided for herein
executed by the Trustee or any Authenticating Agent by manual signature, and
such certificate upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication.
(b) The following definitions apply for purposes of this Section 5.1:
"Disqualified Organization" means any Person which is not a Permitted
Transferee, but does not include any "Pass-Through Entity" which owns or holds a
Residual Certificate and of which a Disqualified Organization, directly or
indirectly, may be a stockholder, partner or beneficiary; "Pass-Through Entity"
means any regulated investment company, real estate investment trust, common
trust fund, partnership, trust or estate, and any organization to which Section
1381 of the Code applies; "Ownership Interest" means, with respect to any
Residual Certificate, any ownership or security interest in such Residual
Certificate, including any interest in a Residual Certificate as the Holder
thereof and any other interest therein whether direct or indirect, legal or
beneficial, as owner or as pledgee; "Transfer" means any direct or indirect
transfer or sale of, or directly or indirectly transferring or selling, any
Ownership Interest in a Residual Certificate; and "Transferee" means any Person
who is acquiring by Transfer any Ownership Interest in a Residual Certificate.
(c) Restrictions on Transfers of the Residual Certificate to Disqualified
Organizations are set forth in this Section 5.1(c).
(i) Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of
such Ownership Interest to have agreed to be bound by the following
provisions and to have irrevocably authorized the Trustee, the Certificate
Administrator or the Paying Agent under clause (iii)(A) below to
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deliver payments to a Person other than such Person and to negotiate the
terms of any mandatory sale under clause (iii)(B) below and to execute all
instruments of transfer and to do all other things necessary in connection
with any such sale. The rights of each Person acquiring any Ownership
Interest in a Residual Certificate are expressly subject to the following
provisions:
(A) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall be a Permitted Transferee and shall
promptly notify the Trustee or the Certificate Registrar if not the
same Person as the Trustee of any change or impending change in its
status as a Permitted Transferee.
(B) In connection with any proposed Transfer of any Ownership
Interest in a Residual Certificate to a U.S. Person, the Trustee or
the Certificate Registrar if not the same Person as the Trustee shall
require delivery to it, and shall not register the Transfer of any
Residual Certificate until its receipt of (1) an affidavit and
agreement (a "Transferee Affidavit and Agreement") attached hereto as
Exhibit J from the proposed Transferee, in form and substance
satisfactory to the Depositor, representing and warranting, among
other things, that it is not a Non-U.S. Person, that such transferee
is a Permitted Transferee, that it is not acquiring its Ownership
Interest in the Residual Certificate that is the subject of the
proposed Transfer as a nominee, trustee or agent for any Person who is
not a Permitted Transferee, that for so long as it retains its
Ownership Interest in a Residual Certificate, it will endeavor to
remain a Permitted Transferee, and that it has reviewed the provisions
of this Section 5.1(c) and agrees to be bound by them, and (2) a
certificate, attached hereto as Exhibit I, from the Holder wishing to
transfer the Residual Certificate, in form and substance satisfactory
to the Depositor, representing and warranting, among other things,
that no purpose of the proposed Transfer is to allow such Holder to
impede the assessment or collection of tax.
(C) Notwithstanding the delivery of a Transferee Affidavit and
Agreement by a proposed Transferee under clause (B) above, if the
Trustee or the Certificate Registrar if not the same Person as the
Trustee has actual knowledge that the proposed Transferee is not a
Permitted Transferee, no Transfer of an Ownership Interest in a
Residual Certificate to such proposed Transferee shall be effected.
(D) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate agrees by holding or acquiring such Ownership
Interest (i) to require a Transferee Affidavit and Agreement from any
other Person to whom such Person attempts to transfer its Ownership
Interest and to provide a certificate to the Trustee or the
Certificate Registrar if not the same Person as the Trustee in the
form attached hereto as Exhibit J; (ii) to obtain the express written
consent of the Depositor prior to any transfer of such Ownership
Interest, which consent may be withheld in the Depositor's sole
discretion; and (iii) to provide a certificate to the Trustee or the
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Certificate Registrar if not the same Person as the Trustee in the
form attached hereto as Exhibit I.
(ii) The Trustee or the Certificate Registrar if not the same Person
as the Trustee shall register the Transfer of any Residual Certificate only
if it shall have received the Transferee Affidavit and Agreement, a
certificate of the Holder requesting such transfer in the form attached
hereto as Exhibit J and all of such other documents as shall have been
reasonably required by the Trustee or the Certificate Registrar if not the
same Person as the Trustee as a condition to such registration.
(iii) (A) If any Disqualified Organization shall become a Holder of a
Residual Certificate, then the last preceding Permitted Transferee shall be
restored, to the extent permitted by law, to all rights and obligations as
Holder thereof retroactive to the date of registration of such Transfer of
such Residual Certificate. If any Non-U.S. Person shall become a Holder of
a Residual Certificate, then the last preceding Holder which is a U.S.
Person shall be restored, to the extent permitted by law, to all rights and
obligations as Holder thereof retroactive to the date of registration of
the Transfer to such Non-U.S. Person of such Residual Certificate. If a
transfer of a Residual Certificate is disregarded pursuant to the
provisions of Treasury Regulations Section 1.860E-1 or Section 1.860G-3,
then the last preceding Permitted Transferee shall be restored, to the
extent permitted by law, to all rights and obligations as Holder thereof
retroactive to the date of registration of such Transfer of such Residual
Certificate. The Trustee, the Certificate Administrator, the Certificate
Registrar and the Paying Agent shall be under no liability to any Person
for any registration of Transfer of a Residual Certificate that is in fact
not permitted by this Section 5.1(c) or for making any payments due on such
Certificate to the Holder thereof or for taking any other action with
respect to such Holder under the provisions of this Agreement.
(B) If any purported Transferee shall become a Holder of the Residual
Certificate in violation of the restrictions in this Section 5.1(c) and to
the extent that the retroactive restoration of the rights of the Holder of
such Residual Certificate as described in clause (iii)(A) above shall be
invalid, illegal or unenforceable, then the Depositor shall have the right,
without notice to the Holder or any prior Holder of such Residual
Certificate, to sell such Residual Certificate to a purchaser selected by
the Depositor on such terms as the Depositor may choose. Such purported
Transferee shall promptly endorse and deliver the Residual Certificate in
accordance with the instructions of the Depositor. Such purchaser may be
the Depositor itself or any affiliate of the Depositor. The proceeds of
such sale, net of the commissions (which may include commissions payable to
the Depositor or its affiliates), expenses and taxes due, if any, shall be
remitted by the Depositor to such purported Transferee. The terms and
conditions of any sale under this clause (iii)(B) shall be determined in
the sole discretion of the Depositor, and the Depositor shall not be liable
to any Person having an Ownership Interest in the Residual Certificate as a
result of its exercise of such discretion.
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(iv) The Depositor, on behalf of the Trustee, shall make available,
upon written request from the Trustee, or the Certificate Administrator all
information necessary to compute any tax imposed (A) as a result of the
Transfer of an Ownership Interest in the Residual Certificate to any Person
who is not a Permitted Transferee, including the information regarding
"excess inclusions" of such Residual Certificate required to be provided to
the Internal Revenue Service and certain Persons as described in Treasury
Regulation Section 1.860D-1(b)(5), and (B) as a result of any regulated
investment company, real estate investment trust, common trust fund,
partnership, trust, estate or organizations described in Section 1381 of
the Code having as among its record holders at any time any Person who is
not a Permitted Transferee. Reasonable compensation for providing such
information may be required by the Depositor from such Person.
(v) The provisions of this Section 5.1 set forth prior to this Section
5.1(c)(v) may be modified, added to or eliminated, PROVIDED, that there
shall have been delivered to the Trustee and the Certificate Administrator
the following:
(A) written notification from each Rating Agency to the effect
that the modification, addition to or elimination of such provisions
will not cause such Rating Agency to downgrade its then-current
Ratings of the Certificates; and
(B) an Opinion of Counsel, in form and substance satisfactory to
the Depositor (as evidenced by a certificate of the Depositor), to the
effect that such modification, addition to or absence of such
provisions will not cause the Trust Fund to cease to qualify as a
REMIC and will not create a risk that (1) the Trust Fund may be
subject to an entity-level tax caused by the Transfer of any Residual
Certificate to a Person which is not a Permitted Transferee or (2) a
Certificateholder or another Person will be subject to a REMIC-related
tax caused by the Transfer of a Residual Certificate to a Person which
is not a Permitted Transferee.
(vi) The following legend shall appear on all Residual Certificates:
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY
BE MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFEREE
AFFIDAVIT AND AGREEMENT TO THE DEPOSITOR, THE TRUSTEE AND THE
CERTIFICATE REGISTRAR THAT (1) SUCH TRANSFEREE IS NOT EITHER (A)
THE UNITED STATES, ANY STATE OR POLITICAL SUBDIVISION THEREOF,
ANY FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY
AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING, (B) ANY
ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED IN SECTION 521
OF THE CODE) WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF
THE CODE UNLESS SUCH
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ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE
CODE, (C) ANY ORGANIZATION DESCRIBED IN SECTION 1381(a)(2)(C) OF
THE CODE (ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (A),
(B), OR (C) BEING HEREINAFTER REFERRED TO AS A "DISQUALIFIED
ORGANIZATION"), OR (D) AN AGENT OF A DISQUALIFIED ORGANIZATION
AND (2) NO PURPOSE OF SUCH TRANSFER IS TO ENABLE THE TRANSFEROR
TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX. SUCH AFFIDAVIT
SHALL INCLUDE CERTAIN REPRESENTATIONS AS TO THE FINANCIAL
CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE
REGISTRATION IN THE CERTIFICATE REGISTER OF ANY TRANSFER, SALE OR
OTHER DISPOSITION OF THIS CLASS R CERTIFICATE TO A DISQUALIFIED
ORGANIZATION OR AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH
REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT
WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A
CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER INCLUDING, BUT NOT
LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE.
EACH HOLDER OF THE CLASS R CERTIFICATE BY ACCEPTANCE OF THIS
CERTIFICATE SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS
OF THIS PARAGRAPH.
(vii) The Holder of the Class R Certificate issued hereunder, while
not a Disqualified Organization, is the Tax Matters Person.
(d) (i) No purchase or transfer of a Senior Certificate or a Senior
Subordinate Certificate or any interest therein shall be made by or to any
"employee benefit plan" subject to ERISA or any "plan" described by Section
4975(e)(1) of the Code, or any entity deemed to hold plan assets of any of the
foregoing by reason of a plan's investment in such entity (each, a "Plan")
unless (A) in the case of any such Class of Certificates (other than the Class R
Certificate), such Plan qualifies as an accredited investor as defined in Rule
501(a)(1) of Regulation D under the Securities Act and either (1) at the time of
such transfer, the Certificates are rated in one of the top four rating
categories by at least one Rating Agency, or (2) the purchaser is an insurance
company general account that is eligible for, and satisfies all of the
requirements of, Sections I and III of Prohibited Transaction Class Exemption
95-60 ("PTCE 95-60") and (B) in the case of a Class R Certificate, the Trustee
receives an Opinion of Counsel acceptable to and in form and substance
satisfactory to and on which the Trustee, the Depositor, the Certificate
Registrar, the Certificate Administrator, if any, and the Servicer may rely, to
the effect that the purchase or holding of such Class R Certificate is
permissible under applicable law, will not constitute or result in any
non-exempt prohibited transaction under Section 406 of ERISA, or Section 4975 of
the Code (or comparable provisions of any subsequent enactments), and will not
subject the Trustee, the Certificate Registrar, the Certificate Administrator,
if any, the Depositor or the Servicer to any obligation or liability (including
obligations or liabilities under ERISA or Section 4975 of the Code) in addition
to those undertaken in this Agreement, which Opinion of Counsel shall not be an
expense of the Trustee, the Certificate Registrar, the Certificate
Administrator,
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if any, the Depositor or the Servicer. Each Person who acquires a Senior
Certificate or a Senior Subordinate Certificate shall be deemed to certify that
it meets the foregoing conditions, and that it will not transfer such
Certificate in violation of the foregoing.
(ii) No purchase or transfer of a Junior Subordinate Certificate shall
be made by or to a Plan unless such purchaser or transferee is an
"insurance company general account" (within the meaning of PTCE 95-60) and
is eligible for, and satisfies all of the requirements for exemptive relief
under Sections I and III of PTCE 95-60. Each Person who acquires a Junior
Subordinate Certificate or any interest therein shall be deemed to certify
and shall be required by the Certificate Registrar to provide an Officer's
Certificate (substantially in the form set forth in Exhibit L hereto)
signed by a Responsible Officer of such Person, which Officer's Certificate
shall not be an expense of the Trustee, the Certificate Administrator, if
any, the Certificate Registrar or the Depositor) that it meets the
foregoing conditions, and that it will not transfer such Certificate in
violation of the foregoing.
(e) No transfer, sale, pledge or other disposition of a Junior Subordinate
Certificate shall be made unless such transfer, sale, pledge or other
disposition is made in accordance with this Section 5.1(e) or Section 5.1(f).
Each Person who, at any time, acquires any ownership interest in any Junior
Subordinate Certificate shall be deemed by the acceptance or acquisition of such
ownership interest to have agreed to be bound by the following provisions of
this Section 5.1(e) and Section 5.1(f), as applicable. No transfer of a Junior
Subordinate Certificate shall be deemed to be made in accordance with this
Section 5.1(e) unless such transfer is made pursuant to an effective
registration statement under the Securities Act or unless the Trustee or the
Certificate Registrar, if not the same Person as the Trustee, is provided with
the certificates and an Opinion of Counsel, if required, on which the Trustee
and the Certificate Registrar may conclusively rely, which establishes or
establish to the Trustee's or the Certificate Registrar's, as applicable,
satisfaction that such transfer is exempt from the registration requirements
under the Securities Act, as follows: In the event that a transfer is to be made
in reliance upon an exemption from the Securities Act, the Trustee or the
Certificate Registrar, if not the same Person as the Trustee, shall require, in
order to assure compliance with the Securities Act, that the Certificateholder
desiring to effect such transfer certify to the Trustee and the Certificate
Registrar in writing, in substantially the form attached hereto as Exhibit F,
the facts surrounding the transfer, with such modifications to such Exhibit F as
may be appropriate to reflect the actual facts of the proposed transfer, and
that the Certificateholder's proposed transferee certify to the Trustee and the
Certificate Registrar in writing, in substantially the form attached hereto as
Exhibit G, the facts surrounding the transfer, with such modifications to such
Exhibit G as may be appropriate to reflect the actual facts of the proposed
transfer. If such certificate of the proposed transferee does not contain
substantially the substance of Exhibit G, the Trustee or the Certificate
Registrar, if not the same Person as the Trustee, shall require an Opinion of
Counsel satisfactory to it that such transfer may be made without registration,
which Opinion of Counsel shall not be obtained at the expense of the Trustee,
the Certificate Administrator, the Certificate Xxxxxxxxx,
00
the Trust Fund or the Depositor. Such Opinion of Counsel shall allow for the
forwarding, and the Trustee shall forward, a copy thereof to each Rating Agency.
Notwithstanding the foregoing, any Class of Junior Subordinate Certificates may
be transferred, sold, pledged or otherwise disposed of in accordance with the
requirements set forth in Section 5.1(f).
(f) Transfers of the Junior Subordinate Certificates may be made in
accordance with this Section 5.1(f). To effectuate a Certificate transfer in
accordance with this Section 5.1(f), the proposed transferee of such Certificate
must provide the Trustee, the Certificate Registrar and the Depositor with an
investment letter substantially in the form of Exhibit L attached hereto, which
investment letter shall not be an expense of the Trustee, the Certificate
Administrator, the Certificate Registrar or the Depositor, and which investment
letter states that, among other things, such transferee (i) is a "qualified
institutional buyer" as defined under Rule 144A, acting for its own account or
the accounts of other "qualified institutional buyers" as defined under Rule
144A, and (ii) is aware that the proposed transferor intends to rely on the
exemption from registration requirements under the Securities Act provided by
Rule 144A. Notwithstanding the foregoing, the proposed transferee of such
Certificate shall not be required to provide the Trustee, the Certificate
Registrar or the Depositor with Annex 1 or Annex 2 to the form of Exhibit L
attached hereto if the Depositor so consents prior to each such transfer. Such
transfers shall be deemed to have complied with the requirements of this Section
5.1(f). The Holder of a Certificate desiring to effect such transfer does hereby
agree to indemnify the Trustee, the Certificate Administrator, if any, the
Depositor, and the Certificate Registrar against any liability that may result
if transfer is not made in accordance with this Agreement.
(g) None of the Trustee, the Certificate Administrator, the Certificate
Registrar or the Paying Agent shall have any liability to the Trust Fund arising
from a registration or transfer of a Certificate in reliance upon a
certification, Officer's Certificate, affidavit, ruling or Opinion of Counsel
described in this Section 5.1.
Section 5.2 CERTIFICATES ISSUABLE IN CLASSES; DISTRIBUTIONS OF PRINCIPAL
AND INTEREST; AUTHORIZED DENOMINATIONS. The aggregate principal amount of
Certificates that may be authenticated and delivered under this Agreement is
limited to the aggregate Principal Balance of the Loans as of the Cut-Off Date,
as specified in the Preliminary Statement to this Agreement, except for
Certificates authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Certificates pursuant to Section 5.3. Such
aggregate principal amount shall be allocated among one or more Classes having
designations, types of interests, initial per annum Remittance Rates, initial
Class Principal Balances and last scheduled Distribution Dates as specified in
the Preliminary Statement to this Agreement. The aggregate Percentage Interest
of each Class of Certificates of which the Class Principal Balance equals zero
as of the Cut-Off Date that may be authenticated and delivered under this
Agreement is limited to 100%. Certificates shall be issued in Authorized
Denominations.
Section 5.3 REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES. The
Trustee shall cause
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to be maintained at one of its offices or at its designated Certificate
Registrar, a Certificate Register in which there shall be recorded the name and
address of each Certificateholder. Subject to such reasonable rules and
regulations as the Trustee may prescribe, the Certificate Register shall be
amended from time to time by the Trustee or its agent to reflect notice of any
changes received by the Trustee or its agent pursuant to Section 10.5. The
Trustee hereby appoints LaSalle Bank National Association as the initial
Certificate Registrar. The Trustee may appoint an Eligible Institution to act as
its agent in order to delegate to such Eligible Institution its duties as
Certificate Registrar under this Agreement.
Upon surrender for registration of transfer of any Certificate to the
Trustee at the office of First Trust of New York, National Association, 000 Xxxx
Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000, or such other address or agency as
may hereafter be provided to the Certificate Administrator, if any, and the
Servicer in writing by the Trustee, the Trustee shall execute, and the Trustee
(or any Authenticating Agent) shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of Authorized
Denominations of like Percentage Interest. At the option of the
Certificateholders, Certificates may be exchanged for other Certificates in
Authorized Denominations of like Percentage Interest, upon surrender of the
Certificates to be exchanged at any such office or agency. Whenever any
Certificates are so surrendered for exchange, the Trustee shall execute, and the
Trustee, or any Authenticating Agent, shall authenticate and deliver, the
Certificates which the Certificateholder making the exchange is entitled to
receive. Every Certificate presented or surrendered for transfer shall (if so
required by the Trustee or any Authenticating Agent) be duly endorsed by, or be
accompanied by a written instrument of transfer in form satisfactory to the
Trustee or any Authenticating Agent and duly executed by, the Holder thereof or
such Holder's attorney duly authorized in writing.
A reasonable service charge may be made for any such exchange or transfer
of Certificates, and the Trustee or an Authenticating Agent may require payment
of a sum sufficient to cover any tax or governmental charge that may be imposed
in connection with any exchange or transfer of Certificates.
All Certificates surrendered for exchange or transfer shall be canceled by
the Trustee or any Authenticating Agent.
Section 5.4 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES. If (i) any
mutilated Certificate is surrendered to the Trustee or any Authenticating Agent,
or (ii) the Trustee or any Authenticating Agent receives evidence to their
satisfaction of the destruction, loss or theft of any Certificate, and there is
delivered to the Trustee or any Authenticating Agent such security or indemnity
as may be required by them to save each of them harmless, then, in the absence
of notice to the Trustee or any Authenticating Agent that such Certificate has
been acquired by a bona fide purchaser, the Trustee shall execute and the
Trustee or any Authenticating Agent shall authenticate and deliver, in exchange
for or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a
new Certificate of like Percentage Interest. Upon the issuance of any new
Certificate under this Section 5.4, the Trustee or any Authenticating Agent may
require the payment of a sum sufficient
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to cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Trustee
or any Authenticating Agent) connected therewith. Any replacement Certificate
issued pursuant to this Section 5.4 shall constitute complete and indefeasible
evidence of ownership in the Trust Fund, as if originally issued, whether or not
the lost or stolen Certificate shall be found at any time.
Section 5.5 PERSONS DEEMED OWNERS. The Depositor, the Certificate
Administrator, the Servicer, the Trustee, and any agent of any of them may treat
the Person in whose name any Certificate is registered as the owner of such
Certificate for the purpose of receiving distributions pursuant to Section 4.1
and for all other purposes whatsoever, and neither the Depositor, the
Certificate Administrator, if any, the Servicer, the Trustee, the Certificate
Registrar, nor any agent of the Depositor, the Certificate Administrator, if
any, the Servicer or the Trustee shall be affected by notice to the contrary.
Section 5.6 TEMPORARY CERTIFICATES. Upon the initial issuance of the
Certificates, the Trustee may execute, and the Trustee or any Authenticating
Agent shall authenticate and deliver, temporary Certificates which are printed,
lithographed, typewritten or otherwise produced, in any Authorized Denomination,
of the tenor of the definitive Certificates in lieu of which they are issued and
with such variations in form from the forms of the Certificates set forth as
Exhibits A and B hereto as the Trustee's or Authenticating Agent's officers
executing such Certificates may determine, as evidenced by their execution of
the Certificates. Notwithstanding the foregoing, the Certificates may remain in
the form set forth in this Section.
If temporary Certificates are issued, the Trustee shall cause definitive
Certificates to be prepared within ten Business Days of the Closing Date or as
soon as practicable thereafter. After preparation of definitive Certificates,
the temporary Certificates shall be exchangeable for definitive Certificates
upon surrender of the temporary Certificates at the office or agency of the
Trustee to be maintained as provided in Section 5.10 hereof, without charge to
the Holder. Any tax or governmental charge that may be imposed in connection
with any such exchange shall be borne by the Depositor. Upon surrender for
cancellation of any one or more temporary Certificates, the Trustee shall
execute and the Trustee or any Authenticating Agent shall authenticate and
deliver in exchange therefor a like principal amount of definitive Certificates
of Authorized Denominations. Until so exchanged, the temporary Certificates
shall in all respects be entitled to the same benefits under this Agreement as
definitive Certificates.
Section 5.7 BOOK-ENTRY FOR BOOK-ENTRY CERTIFICATES. (a) Notwithstanding the
foregoing, the Book-Entry Certificates, upon original issuance, shall be issued
in the form of one or more typewritten Certificates of Authorized Denomination
representing the Book-Entry Certificates, to be delivered to DTC, the initial
Clearing Agency, by, or on behalf of, the Depositor. The Book-Entry Certificates
shall initially be registered on the Certificate Register in the name of Cede &
Co., the nominee of DTC, as the initial Clearing Agency, and no Beneficial
Holder shall receive a definitive certificate representing such Beneficial
Holder's interest in any Class of Book-Entry Certificate, except as provided
above and in Section 5.9. Each Book-Entry Certificate shall bear the following
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legend:
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee or
its agent for registration of transfer, exchange, or payment, and any
Certificate issued is registered in the name of Cede & Co. or such other
name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
Unless and until definitive, fully registered Book-Entry Certificates (the
"Definitive Certificates") have been issued to the Beneficial Holders pursuant
to Section 5.9:
(a) the provisions of this Section 5.7 shall be in full force and
effect with respect to the Book-Entry Certificates;
(b) the Certificate Administrator, if any, and the Trustee may deal
with the Clearing Agency for all purposes with respect to the Book-Entry
Certificates (including the making of distributions on the Book-Entry
Certificates) as the sole Certificateholder;
(c) to the extent that the provisions of this Section 5.7 conflict
with any other provisions of this Agreement, the provisions of this Section
5.7 shall control; and
(d) the rights of the Beneficial Holders shall be exercised only
through the Clearing Agency and the DTC Participants and shall be limited
to those established by law and agreements between such Beneficial Holders
and the Clearing Agency and/or the DTC Participants. Pursuant to the
Depositary Agreement, unless and until Definitive Certificates are issued
pursuant to Section 5.9, the initial Clearing Agency will make book-entry
transfers among the DTC Participants and receive and transmit distributions
of principal and interest on the related Class of Book-Entry Certificates
to such DTC Participants.
For purposes of any provision of this Agreement requiring or permitting
actions with the consent of, or at the direction of, Holders of Book-Entry
Certificates evidencing a specified Percentage Interest, such direction or
consent may be given by the Clearing Agency at the direction of Beneficial
Holders owning Book-Entry Certificates evidencing the requisite Percentage
Interest represented by the Book-Entry Certificates. The Clearing Agency may
take conflicting actions with respect to the Book-Entry Certificates to the
extent that such actions are taken on behalf of the Beneficial Holders.
Section 5.8 NOTICES TO CLEARING AGENCY. Whenever notice or other
communication to the Certificateholders is required under this Agreement, unless
and until Definitive Certificates shall have been issued to the related
Certificateholders pursuant to Section 5.9, the Trustee shall give all
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such notices and communications specified herein to be given to Holders of the
Book-Entry Certificates to the Clearing Agency which shall give such notices and
communications to the related DTC Participants in accordance with its applicable
rules, regulations and procedures.
Section 5.9 DEFINITIVE CERTIFICATES. If (a) the Clearing Agency notifies
the Certificate Administrator, if any, or the Trustee that it is no longer
willing or able to discharge properly its responsibilities under the Depositary
Agreement with respect to the Book-Entry Certificates and the Trustee or the
Certificate Administrator is unable to locate a qualified successor, (b) the
Depositor, at its option, advises the Certificate Administrator, if any, or the
Trustee in writing that it elects to terminate the book-entry system with
respect to the Book-Entry Certificates through the Clearing Agency or (c) after
the occurrence of an Event of Default, Certificateholders holding Book-Entry
Certificates evidencing Percentage Interests aggregating not less than 66% of
the aggregate Class Principal Balance of such Certificates advise the
Certificate Administrator, if any, or the Trustee and the Clearing Agency
through DTC Participants in writing that the continuation of a book-entry system
with respect to the Book-Entry Certificates through the Clearing Agency is no
longer in the best interests of the Certificateholders with respect to such
Certificates, the Trustee shall notify or cause to be notified all
Certificateholders of Book-Entry Certificates of the occurrence of any such
event and of the availability of Definitive Certificates. Upon surrender to the
Trustee of the Book- Entry Certificates by the Clearing Agency, accompanied by
registration instructions from the Clearing Agency for registration, the Trustee
shall execute and the Trustee or any Authenticating Agent shall authenticate and
deliver the Definitive Certificates. Neither the Depositor, the Certificate
Administrator, if any, the Authenticating Agent nor the Trustee shall be liable
for any delay in delivery of such instructions and may conclusively rely on, and
shall be protected in relying on, such instructions. Upon the issuance of
Definitive Certificates for all of the Certificates all references herein to
obligations imposed upon or to be performed by the Clearing Agency shall be
deemed to be imposed upon and performed by the Trustee, the Certificate
Administrator, if any, and the Trustee, the Certificate Administrator, the
Certificate Registrar and the Paying Agent shall recognize the Holders of
Definitive Certificates as Certificateholders hereunder.
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ARTICLE VI
THE DEPOSITOR AND THE SERVICER
Section 6.1 LIABILITY OF THE DEPOSITOR AND THE SERVICER. The Depositor and
the Servicer shall each be liable in accordance herewith only to the extent of
the obligations specifically imposed by this Agreement and undertaken hereunder
by the Depositor and the Servicer herein.
Section 6.2 MERGER OR CONSOLIDATION OF THE DEPOSITOR OR THE SERVICER.
Subject to the following paragraph, the Depositor and the Servicer each will
keep in full effect its existence, rights and franchises as corporations, each
under the laws of the jurisdiction of its incorporation, and will obtain and
preserve its qualification to do business as a foreign corporation in each
jurisdiction in which such qualification is or shall be necessary to protect the
validity and enforceability of this Agreement, the Certificates or any of the
Loans and to perform its respective duties under this Agreement.
The Depositor or the Servicer may be merged or consolidated with or into
any Person, or transfer all or substantially all of its assets to any Person, in
which case any Person resulting from any merger or consolidation to which the
Depositor or Servicer shall be a party, or any Person succeeding to the business
of the Depositor or Servicer, shall be the successor of the Depositor or
Servicer hereunder, without the execution or filing of any paper or any further
act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 6.3 LIMITATION ON LIABILITY OF THE SERVICER AND OTHERS. Neither the
Servicer nor any of the directors, officers, employees or agents of the Servicer
shall be under any liability to the Trust Fund or the Certificateholders for any
action taken or for refraining from the taking of any action in good faith
pursuant to this Agreement, or for errors in judgment; provided, however, that
this provision shall not protect any director, officer, employee or agent of the
Servicer against any liability which would otherwise be imposed by reason of
willful misfeasance, bad faith or gross negligence in the performance of duties
or by reason of reckless disregard of obligations and duties hereunder, nor
shall this provision protect the Servicer against any liability that would
otherwise be imposed by reason of negligence in the performance of duties
hereunder. The Servicer and any director, officer, employee or agent of the
Servicer may rely in good faith on any document of any kind prima facie properly
executed and submitted by any Person respecting any matters arising hereunder.
The Servicer and any director, officer, employee or agent of the Servicer shall
be indemnified by the Trust Fund and held harmless against any loss, liability
or expense incurred in connection with any legal action relating to this
Agreement or the Certificates, other than any loss, liability or expense, in the
case of the Servicer and any director, officer, employee or agent of the
Servicer, incurred by reason of willful misfeasance, bad faith or gross
negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder or, in the case of the Servicer,
as Servicer, incurred by reason of negligence in the performance of any duties
hereunder. The Servicer shall not be under any obligation to appear in,
prosecute or defend any legal
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action which is not incidental to its duties to service the Loans in accordance
with this Agreement and which in its opinion may involve it in any expense or
liability; provided, however, that the Servicer may in its discretion undertake
any such action which it may deem necessary or desirable in respect of this
Agreement and the rights and duties of the parties hereto and the interests of
the Certificateholders hereunder. In such event, the legal expenses and costs of
such action and any liability resulting therefrom shall be expenses, costs and
liabilities of the Trust Fund, and the Servicer shall be entitled to be
reimbursed therefor out of the Custodial Account for P&I as provided by Section
3.3.
Section 6.4 SERVICER NOT TO RESIGN. The Servicer shall not resign from the
obligations and duties hereby imposed on it, except upon determination that its
duties hereunder are no longer permissible under applicable law or are in
material conflict by reason of applicable law with any other activities carried
on by it, the other activities of the Servicer so causing such a conflict being
of a type and nature carried on by the Servicer at the date of this Agreement.
Any such determination permitting the resignation of the Servicer shall be
evidenced by an Opinion of Counsel to such effect delivered to the Trustee. The
Servicer shall notify each Rating Agency of any such resignation. No such
resignation shall become effective until a successor servicer shall have assumed
the Servicer's responsibilities and obligations in accordance with Section 7.5
hereof.
Notwithstanding the limitations stated above, the Servicer may transfer its
obligations, duties and rights hereunder without the consent of the
Certificateholders, provided, that (i) the Servicer obtains the prior written
consent of each Rating Agency, (ii) the transferee is a FNMA- or FHLMC-approved
servicer having a net worth of not less than $15,000,000, (iii) the successor
servicer assumes all of the Servicer's responsibilities and obligations in
accordance with Section 7.5 hereof, and (iv) the then-current rating of the
Class A Certificates will not be reduced as a result of such transfer, and (v)
the successor servicer has, in the reasonable opinion of the Trustee, the
qualifications, resources and experience to properly carry out, observe and
perform the duties, obligations and responsibilities of Servicer hereunder;
provided, that the foregoing clause (v) is intended solely for the benefit of
(and may be exercised or waived at the sole discretion of) the Trustee, to
enable the Trustee to assure itself that any successor Servicer has such
acceptable qualifications, resources and experience, and such clause (v) is not
intended to be for the benefit of, and shall not be relied upon or enforced by,
any Certificateholder, and provided, further, that any consent to such transfer
will not be unreasonably withheld by the Trustee.
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ARTICLE VII
DEFAULT
Section 7.1 EVENTS OF DEFAULT. In case one or more of the following Events
of Default by the Servicer shall occur and be continuing, that is to say:
(i) any failure by the Servicer to distribute or cause to be
distributed to the Trustee or its delegate on the Withdrawal Date any
payment required to be made to the Trustee under the terms of this
Agreement;
(ii) any failure on the part of the Servicer duly to observe or
perform in any material respect any other of the covenants or agreements on
the part of the Servicer in the Certificates or in this Agreement which
continues unremedied for a period of 60 days after the date on which
written notice of such failure, requiring the same to be remedied, shall
have been given to the Servicer by the Trustee, or to the Servicer and the
Trustee by the Holders of Certificates evidencing, in aggregate, not less
than 25% of the Trust Fund or 51% of the aggregate Percentage Interests of
any Class of Certificates;
(iii) a decree or order of a court or agency or supervisory authority
having jurisdiction in the premises for the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt, marshaling
of assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Servicer
and such decree or order shall have remained in force undischarged or
unstayed for a period of 60 days;
(iv) the Servicer shall consent to the appointment of a conservator or
receiver or liquidator or liquidating committee in any insolvency,
readjustment of debt marshaling of assets and liabilities, voluntary
liquidation or similar proceedings of or relating to the Servicer or of or
relating to all or substantially all of its property;
(v) the Servicer shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors or voluntarily suspend payment of its obligations;
or
(vi) any failure of the Servicer to make any Advance required to be
made from its own funds pursuant to Section 4.3 which continues unremedied
for a period of one Business Day after the date upon which such Advance was
to have been made;
then, if an Event of Default described in clauses (i)-(v) of this Section 7.1
shall occur, and in each and every such case, subject to applicable law, so long
as an Event of Default shall not have been
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remedied, either the Trustee or the Holders of Certificates evidencing, in
aggregate, not less than 25% of the Trust Fund or 51% of the aggregate
Percentage Interests of any Class of Certificates by notice in writing to the
Servicer (and to the Trustee if given by the Certificateholders) may terminate
all of the rights and obligations of the Servicer under this Agreement, but
without prejudice to any rights it may have to reimbursement of expenses,
Advances and other advances of its own funds as Servicer to the extent permitted
by this Agreement, other than the Depositor's (or its successors') obligation to
repurchase any Loans pursuant to Section 2.2 or 2.3 which shall survive any such
termination. If an Event of Default described in clause (vi) hereof shall occur,
the Trustee shall, by notice in writing to the Servicer, which shall be
telecopied to the Servicer, immediately terminate all of the rights and
obligations of the Servicer, under this Agreement and in and to the Loans and
the proceeds thereof. On or after the receipt by the Servicer of such written
notice, all authority and power of the Servicer under this Agreement, whether
with respect to the Certificates or the Loans or otherwise, shall pass to and be
vested in the Trustee pursuant to and under this Section 7.1 (subject to the
provisions of Section 7.5); and, without limitation, the Trustee is hereby
authorized and empowered to execute and deliver, on behalf of the Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments, and
to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the Loans and related documents or otherwise at the
expense of the Servicer. The Servicer agrees to cooperate with the Trustee in
effecting the termination of the Servicer's responsibilities and rights
hereunder and shall promptly provide the Trustee all documents and records
whether in written or electronic form reasonably requested by it to enable it to
assume the Servicer's functions hereunder and shall promptly also transfer to
the Trustee all amounts which then have been or should have been deposited in
the Custodial Account for P&I by the Servicer or which are thereafter received
with respect to the Loans as well as any escrowed funds held by it or in
connection with its servicing activities hereunder. The Servicer and the Trustee
shall give each Rating Agency notice of any Event of Default.
Section 7.2 OTHER REMEDIES OF TRUSTEE. During the continuance of any Event
of Default, so long as such Event of Default shall not have been remedied, the
Trustee, in addition to the rights specified in Section 7.1, shall have the
right, in its own name as trustee of an express trust, to take all actions now
or hereafter existing at law, in equity or by statute to enforce its rights and
remedies, and to protect the interests, and enforce the rights and remedies, of
the Certificateholders (including the institution and prosecution of all
judicial, administrative and other proceedings and the filing of proofs of claim
and debt in connection therewith). Except as otherwise expressly provided in
this Agreement, no remedy provided for by this Agreement shall be exclusive of
any other remedy, and each and every remedy shall be cumulative and in addition
to any other remedy and no delay or omission to exercise any right or remedy
shall impair any such right or remedy or shall be deemed to be a waiver of any
Event of Default.
Section 7.3 DIRECTIONS BY CERTIFICATEHOLDERS AND DUTIES OF TRUSTEE DURING
EVENT OF DEFAULT. During the continuance of any Event of Default, Holders of
Certificates evidencing, in aggregate, not less than 25% of the Trust Fund or
51% of the aggregate Percentage Interests of any Class of Certificates may
direct the time, method and place of conducting any proceeding for any
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remedy available to the Trustee, or exercising any trust or power conferred upon
the Trustee under this Agreement; provided, however, that the Trustee shall be
under no obligation to pursue any such remedy, or to exercise any of the trusts
or powers vested in it by this Agreement (including, without limitation, (i) the
conducting or defending of any administrative action or litigation hereunder or
in relation hereto and (ii) the terminating of the Servicer or any successor
servicer from its rights and duties as servicer hereunder) at the request, order
or direction of any of the Certificateholders, unless such Certificateholders
shall have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which may be incurred therein or thereby; and,
provided, further, that, subject to the provisions of Section 8.1, the Trustee
shall have the right to decline to follow any such direction if the Trustee, in
accordance with an Opinion of Counsel, determines that the action or proceeding
so directed may not lawfully be taken or if the Trustee in good faith determines
that the action or proceeding so directed would involve it in personal liability
or be unjustly prejudicial to the non-assenting Certificateholders or if the
Trustee has received contrary directions pursuant to this Section 7.3.
Section 7.4 ACTION UPON CERTAIN FAILURES OF SERVICER AND UPON EVENT OF
DEFAULT. In the event that the Trustee shall have knowledge of any failure of
the Servicer specified in Section 7.1(i) or (ii) which would become an Event of
Default upon the Servicer's failure to remedy the same after notice, the Trustee
shall give notice thereof to the Servicer. In the event that the Trustee shall
have knowledge of an Event of Default, the Trustee shall give prompt written
notice thereof to the Certificateholders and to each Rating Agency. For all
purposes of this Agreement, in the absence of actual knowledge by a Responsible
Officer of the Trustee, the Trustee shall not be deemed to have knowledge of any
failure of the Servicer as specified in Section 7.1(i) and (ii) or any Event of
Default unless notified thereof in writing by the Servicer or by a
Certificateholder.
Section 7.5 APPOINTMENT OF SUCCESSOR SERVICER.
(1) When the Servicer receives a notice of termination pursuant to Section
7.1 or the Trustee receives the resignation of the Servicer evidenced by an
Opinion of Counsel pursuant to Section 6.4, the Trustee shall become the
successor in all respects to the Servicer in its capacity as Servicer under this
Agreement and the transactions set forth or provided for herein, provided,
however, that the Trustee's obligation to make any Advances shall be no greater
than set forth in Section 4.3 of this Agreement, and the Trustee shall have all
the rights and powers and be subject to all the responsibilities, duties and
liabilities relating thereto placed on the Servicer by the terms and provisions
hereof and in its capacity as such successor shall have the same limitation of
liability herein granted to the Servicer and provided, further, that the Trustee
shall not be required to make an Advance from its own funds if such Advance
would be prohibited by law. As compensation therefor, the Trustee shall be
entitled to receive monthly an amount not to exceed the Servicing Fee as agreed
by the Trustee and the Servicer, together with such other servicing compensation
in the form of assumption fees, late charges, prepayment fees or otherwise
provided in Section 3.9. If the agreed amount is less than the Servicing Fee,
the excess shall be paid to the Class R Certificateholder. If the Trustee and
the Servicer shall not agree on the amount of such compensation, the Trustee
shall solicit bids for a successor servicer as described in Section 7.5(b),
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provided, however, if no successor servicer is obtained through the bidding
process, the Trustee may act as such, or may pursuant to Section 7.5(b) appoint
a successor servicer to act as such, for the Servicing Fee together with such
other servicing compensation as provided in Section 3.9. In no event shall the
Trustee's assumption of or succession to the obligations of the Servicer make
the Trustee liable for any actions or omissions of the Servicer in its capacity
as Servicer.
(2) Notwithstanding the above, the Trustee may and shall, if it is unable
(or unwilling due to disagreement on compensation as provided in Section 7.5
(a)) to act as Servicer, appoint, or petition a court of competent jurisdiction
to appoint, any established housing and home finance institution, bank or
mortgage servicing institution which is an approved FNMA or FHLMC servicer
having a net worth of not less than $15,000,000 and meeting such other standards
as are set forth in Section 6.4 hereof for a successor to the Servicer hereunder
in the assumption of all or any part of the responsibilities, duties or
liabilities of the Servicer hereunder (except the repurchase obligations set
forth in Sections 2.2 and 2.3 hereof, which shall remain obligations of the
Depositor); provided, however, that until such appointment and assumption, the
Trustee will continue to perform the servicing obligations pursuant to this
Agreement (and until such time shall be entitled to receive the Servicing Fees
pursuant to Section 3.9); provided, further, that prior to the appointment of
any successor servicer, the Rating Agencies confirm that the appointment of such
successor servicer would not result in the downgrade of the Rating assigned to
any Class of Certificates. The compensation of any successor servicer so
appointed shall be equal to the Servicing Fees specified in Section 3.9 together
with such other compensation as is provided in said Section 3.9. In the event
the Trustee is required to solicit bids as provided above, the Trustee shall
solicit, by public announcement, bids from housing and home finance
institutions, banks and mortgage servicing institutions acceptable to the
Trustee and meeting the qualifications set forth above in this Section 7.5(b)
for the purchase of the servicing functions. Such public announcement shall
specify that the successor servicer shall be entitled to the full amount of the
Servicing Fee on the aggregate unpaid principal balance of the Loans as
servicing compensation for servicing the Loans, together with the other
servicing compensation in the form of assumption fees, late payment charges,
prepayment fees or otherwise as provided in Section 3.9. Within 45 days after
any such public announcement, the Trustee shall negotiate and effect the sale,
transfer and assignment of the servicing rights and responsibilities hereunder
(except the repurchase obligations set forth in Sections 2.2 and 2.3 hereof,
which shall remain obligations of the Depositor) to the qualified party
submitting the highest qualifying bid. The Trustee shall deduct all costs and
expenses of any public announcement and of any sale, transfer and assignment of
the servicing rights and responsibilities hereunder from any sum received by the
Trustee from the successor to the Servicer in respect of such sale, transfer and
assignment. After such deductions, the remainder of such sum shall be paid by
the Trustee to the Class R Certificateholder at the time of such sale, transfer
and assignment to the Servicer's successor.
(3) The Servicer agrees to cooperate with the Trustee and any successor
servicer in effecting the termination of the Servicer's servicing
responsibilities and rights hereunder and shall promptly provide the Trustee or
such successor servicer, as applicable, all documents and records reasonably
requested by it to enable it to assume the Servicer's functions hereunder and
shall
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promptly also transfer to the Trustee or such successor servicer, as applicable,
all amounts which then have been or should have been deposited in the Custodial
Account for P&I by the Servicer or which are thereafter received with respect to
the Loans. Neither the Trustee nor any other successor servicer shall be deemed
to be in default hereunder by reason of any failure to make, or any delay in
making, any distribution hereunder or any portion thereof caused by the failure
of the Servicer to deliver, or any delay in delivering, cash, documents or
records to it.
Section 7.6 NOTIFICATION TO CERTIFICATEHOLDERS. Upon any termination of the
Servicer or appointment of a successor to the Servicer, in each case as provided
herein, the Trustee shall as soon as practicable give written notice thereof to
Certificateholders at their respective addresses appearing in the Certificate
Register and each Rating Agency.
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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.
Subject to Sections 8.2(i), 8.3 and 8.4, the Trustee, upon receipt of all
resolutions, certificates, statements, opinions, reports, documents, orders or
other instruments furnished to the Trustee which are specifically required to be
furnished pursuant to any provision of this Agreement, shall examine them to
determine whether they are in the form required by this Agreement; provided,
however, that the Trustee shall not be responsible for the accuracy or content
of any resolution, certificate, statement, opinion, report, document, order or
other instrument furnished by any party hereunder. If any such instrument is
found not to conform to the requirements of this Agreement in a material manner,
the Trustee shall take action as it deems appropriate to have the instrument
corrected, and if the instrument is not corrected to the Trustee's reasonable
satisfaction, the Trustee will provide notice thereof to the Certificateholders
and each Rating Agency.
No provision of this Agreement shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act or
its own willful misconduct or in the event the Trustee is acting as successor
servicer pursuant to Section 7.5, to the standard imposed on the Servicer
pursuant to Section 6.3 of this Agreement; provided, however, that:
(i) Prior to the occurrence of an Event of Default and after the
curing of all such Events of Default which may have occurred, the duties
and obligations of the Trustee shall be determined solely by the express
provisions of this Agreement, the Trustee shall not be liable except for
the performance of such duties and obligations as are specifically set
forth in this Agreement, no implied covenants or obligations shall be read
into this Agreement against the Trustee and, in the absence of bad faith on
the part of the Trustee, the Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the Trustee and conforming
to the requirements of this Agreement;
(ii) The Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with this Agreement or at
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the direction of Certificateholders holding Certificates which have an
aggregate Certificate Principal Balance aggregating not less than 25% of
the aggregate Certificate Principal Balance of all Certificates or 51% of
the aggregate Certificate Principal Balance of any Class of Certificates
relating to the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising or omitting to exercise any
trust or power conferred upon the Trustee, under this Agreement;
(iii) The Trustee shall not be liable in its individual capacity for
any error of judgment made in good faith by any Responsible Officer, unless
it shall be proved that the Trustee or such Responsible Officer was
negligent in ascertaining the pertinent facts;
(iv) The Trustee shall not be liable for any act or omission of the
Depositor or the Servicer (except for its own acts or omissions as
successor servicer hereunder) or for any but its own acts or omissions;
(v) The Trustee shall not be deemed to take notice or be deemed to
have knowledge of any matter, including without limitation any default or
Event of Default, unless written notice thereof, referring to the
Certificates, the Depositor, the Trust Fund or this Agreement is received
by a Responsible Officer of the Trustee at its Corporate Trust Office; and
(vi) Subject to the other provisions of this Agreement and without
limiting the generality of this Section 8.1, the Trustee shall have no duty
(A) to see to any recording, filing, or depositing of this Agreement or any
agreement referred to herein or any financing statement or continuation
statement evidencing a security interest, or to see to the maintenance of
any such recording or filing or depositing or to any rerecording, refiling
or redepositing of any thereof, (B) to see any insurance, (C) to see to the
payment or discharge of any tax, assessment, or other governmental charge
or any lien or encumbrance of any kind owing with respect to, assessed or
levied against, any part of the Trust Fund other than from funds available
in the Certificate Account, and (D) to confirm or verify the contents of
any reports or certificates of the Servicer delivered to the Trustee
pursuant to this Agreement believed by the Trustee to be genuine and to
have been signed or presented by the proper party or parties.
None of the provisions contained in this Agreement shall require the
Trustee to expend or risk its own funds or otherwise incur financial liability
in the performance of any of its duties as Trustee hereunder or in the exercise
of any of its rights or powers if there is reasonable ground for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it, and none of the provisions contained in this
Agreement shall in any event require the Trustee to perform, or be responsible
for the manner of performance of, any of the obligations of the Servicer under
this Agreement except during such time, if any, as the Trustee shall be the
successor to, and be vested with the rights, duties, powers and privileges of,
the Servicer in accordance with the terms of this Agreement.
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Section 8.2 CERTAIN MATTERS AFFECTING TRUSTEE. Except as otherwise provided
in Section
(i) Before acting or refraining from acting the Trustee may request or
require an Officer's Certificate; the Trustee may rely and shall be
protected in acting or refraining from acting upon any resolution,
Officer's Certificate, opinion of counsel, certificate of auditors or any
other certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party or
parties;
(ii) The Trustee may consult with counsel, and any advice or Opinion
of Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in good
faith and in accordance with such advice or Opinion of Counsel;
(iii) The Trustee shall not be personally liable for any action taken,
suffered or omitted by it in good faith and believed by it to be authorized
or within the discretion or rights or powers conferred upon it by this
Agreement;
(iv) The right of the Trustee to perform any discretionary act
enumerated in this Agreement shall not be construed as a duty, and the
Trustee shall not be answerable for other than its negligence or willful
misconduct in the performance or non-performance of such act;
(v) The Trustee shall not be required to give any bond or surety in
respect of the execution of the Trust Fund created hereby or the powers
granted hereunder; and
(vi) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents,
attorneys or custodians, and the Trustee shall not be responsible for any
misconduct or negligence on the part of any such agent, attorney or
custodian appointed by the Trustee with care. Any such agents, attorneys or
custodians shall be entitled to all indemnities and protection afforded to
the Trustee. Any designee of the Trustee shall be considered its "agent"
hereunder whether performing it as an independent contractor or otherwise.
Section 8.3 TRUSTEE NOT REQUIRED TO MAKE INVESTIGATION. Prior to the
occurrence of an Event of Default hereunder and after the curing of all Events
of Default which may have occurred, the Trustee shall not be bound to ascertain
or inquire as to the performance or observance of any of the terms, conditions,
covenants or agreements herein or to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, bond, Mortgage, Mortgage Note
or other paper or document, unless requested in writing so to do by Holders of
Certificates having a Percentage Interest not less than 51% of the Trust Fund;
provided, however, that if the payment within a reasonable time to the Trustee
of the costs, expenses or liabilities likely to be incurred by it in the making
of such
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investigation is, in the opinion of the Trustee, not reasonably assured to the
Trustee by the security afforded to it by the terms of this Agreement, the
Trustee may require reasonable indemnity against such expense or liability as a
condition to such proceeding. The reasonable expense of every such examination
shall be paid by the Depositor or, if paid by the Trustee, shall be repaid by
the Depositor upon demand.
Section 8.4 TRUSTEE NOT LIABLE FOR CERTIFICATES OR LOANS. The recitals
contained herein and in the Certificates (other than the certificate of
authentication on the Certificates) shall be taken as the statements of the
Depositor, and the Trustee assumes no responsibility for the correctness of the
same. The Trustee makes no representations or warranties as to the validity or
sufficiency of this Agreement or of the Certificates or of any Loan or related
document. The Trustee shall not be accountable for the use or application by the
Depositor of any of the Certificates or of the proceeds of such Certificates or
for the use or application of any funds paid to the Servicer in respect of the
Loans or deposited in or withdrawn from the Custodial Account for P&I by the
Servicer or for investment of any such amounts. The Trustee shall not be
responsible for the legality or validity of this Agreement or the validity,
priority, perfection or sufficiency of the security for the Certificates issued
or intended to be issued hereunder. The Trustee shall have no responsibility for
filing any financing or continuation statement in any public office at any time
or to otherwise perfect or maintain the perfection of any security interest or
lien granted to it hereunder or to record this Agreement.
Neither the Trustee nor any of the directors, officers, employees or agents
of the Trustee shall be under any liability to the Trust Fund or the
Certificateholders for any action taken or for refraining from the taking of any
action in good faith pursuant to this Agreement, or for errors in judgment while
an Event of Default exists; provided, however, that this provision shall not
protect the Trustee or any such person against any liability which would
otherwise be imposed by reason of willful misfeasance, bad faith or negligence
in the performance of duties. The Trustee and any director, officer, employee or
agent of the Trustee shall be indemnified by the Depositor and held harmless
against any loss, liability or expense, including reasonable attorneys' fees,
incurred in connection with or related to the Trustee's performance of its
powers and duties under this Agreement (including, without limitation,
performance under Section 8.1 hereof), or any action relating to this Agreement
or the Certificates, or the performance of the Trustee's duties hereunder, other
than any loss, liability or expense incurred by any such Person by reason of
willful misfeasance, bad faith or negligence in the performance of duties. Any
such losses, liabilities and expenses resulting therefrom shall be losses,
liabilities and expenses of the Depositor. The indemnification provided
hereunder shall survive termination of this Agreement.
Section 8.5 TRUSTEE MAY OWN CERTIFICATES. The Trustee and any Affiliate or
agent of the Trustee in its individual or any other capacity may become the
owner of or a pledgee of the Certificates with the same rights it would have if
it were not Trustee or such agent, and may otherwise deal with the parties
hereto.
Section 8.6 SERVICER TO PAY TRUSTEE'S FEES AND EXPENSES. The Servicer
covenants and
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agrees to pay to the Trustee monthly (or as otherwise agreed), and the Trustee
shall be entitled to receive, reasonable compensation (which shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust) for all services rendered by it in the execution of the trusts
hereby created and in the exercise and performance of any of the powers and
duties hereunder of the Trustee, and the Servicer shall pay or reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances, including reasonable attorneys' fees, incurred or made by the Trustee
in accordance with any of the provisions of this Agreement (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all persons not regularly in its employ) except any such expense, disbursement
or advance as may arise from its negligence or bad faith. The Tax Matters Person
(or Person acting as its attorney-in-fact or agent) shall indemnify the Trustee
for any liability of or assessment against the Trustee resulting from any error
in any tax or tax information returns prepared or caused to be prepared by such
Person. In the event that (i) the Servicer does not pay to the Trustee any
compensation owed to the Trustee pursuant to this Agreement or (ii) the Trustee
is not reimbursed for any expense, disbursement or advance incurred or made by
the Trustee pursuant to this Agreement, the Trustee shall be entitled to
withdraw and retain such amount from the Certificate Account. In the event the
Trustee incurs expenses or renders services in any proceedings which result from
an Event of Default under Section 7.1, subsections (iii), (iv) or (v) of this
Agreement, or from any default which, with the passage of time, would become an
Event of Default, the expenses so incurred and compensation for services so
rendered are intended to constitute expenses of administration under the United
States Bankruptcy Code or equivalent law.
Section 8.7 ELIGIBILITY REQUIREMENTS FOR TRUSTEE. The Trustee hereunder
shall at all times be a corporation or association organized and doing business
under the laws of any state of the United States of America, authorized under
such laws to exercise corporate trust powers, having a combined capital and
surplus of at least $50,000,000 and subject to supervision or examination by
federal or state authority. The Trustee shall not control the Servicer nor be a
parent of or a subsidiary of the Servicer. If such corporation or association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 8.7 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 8.7, the Trustee shall resign immediately in the
manner and with the effect specified in Section 8.8.
Section 8.8 RESIGNATION AND REMOVAL OF TRUSTEE. The Trustee may at any time
resign and be discharged from the trusts hereby created by giving written notice
of resignation to the Servicer. Such notice shall also be furnished to each
Rating Agency. Upon receiving such notice of resignation, the Servicer shall
promptly appoint a successor trustee by written instrument, in duplicate, one
copy of which instrument shall be delivered to the resigning Trustee and one
copy to the successor trustee. If no successor trustee shall have been so
appointed and have accepted appointment within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee at the expense
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of the Servicer.
If at any time the Trustee shall cease to be eligible in accordance with
the provisions of Section 8.7 and shall fail to resign after written request for
the Trustee's resignation by the Servicer, or if at any time the Trustee shall
become incapable of acting, or shall be adjudged bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then,
with or without cause, the Servicer may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the Trustee so removed and one copy to the
successor trustee.
The Holders of Certificates having a Percentage Interest aggregating not
less than 51% of the aggregate Denomination of all Certificates may at any time
remove the Trustee and appoint a successor trustee by written instrument or
instruments, in triplicate, signed by such holders or their attorneys-in-fact
duly authorized, one complete set of which instrument or instruments shall be
delivered to the Servicer, one complete set to the Trustee so removed and one
complete set to the successor trustee so appointed.
Any resignation or removal of the Trustee and appointment of successor
trustee pursuant to any of the provisions of this Section 8.8 shall become
effective only upon acceptance of appointment by the successor trustee as
provided in Section 8.9.
Section 8.9 SUCCESSOR TRUSTEE. Any successor trustee appointed as provided
in Section 8.8 shall execute, acknowledge and deliver to the Servicer and to its
predecessor trustee an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the predecessor trustee shall become
effective, and such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with like effect as if originally
named as trustee herein. The predecessor trustee shall deliver or cause to be
delivered to the successor trustee all Mortgage Files and related documents and
statements held by it hereunder (other than any Mortgage Files at the time held
by the Custodian, if it shall agree to become the agent of any successor trustee
hereunder), and the Servicer and the predecessor trustee shall execute and
deliver such instruments and do such other things as may reasonably be required
for more fully and certainly vesting and confirming in the successor trustee all
such rights, powers, duties and obligations.
No successor trustee shall accept appointment as provided in this Section
8.9 unless at the time of such acceptance such successor trustee shall be
eligible under the provisions of Section 8.7.
Upon acceptance of appointment by a successor trustee as provided in this
Section 8.9, the Servicer shall mail notice of the succession of such trustee
hereunder to all holders of Certificates at their addresses as shown in the
Certificate Register and to each Rating Agency. If the Servicer fails to mail
such notice within ten days after acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be mailed at the
expense of the Servicer.
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Section 8.10 MERGER OR CONSOLIDATION OF TRUSTEE. Any Person into which the
Trustee may be merged or converted or with which it may be consolidated, or any
Person resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any Person succeeding to all or substantially all
of the corporate trust business of the Trustee, shall be the successor of the
Trustee hereunder, provided, that such Person shall be eligible under the
provisions of Section 8.7, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
Section 8.11 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE. Notwithstanding
any other provisions hereof, at any time, for the purpose of meeting any legal
requirements of any jurisdiction in which any part of the Trust Fund or property
securing the same may at the time be located, the Servicer and the Trustee
acting jointly shall have the power and shall execute and deliver all
instruments to appoint one or more Persons approved by the Trustee to act as
co-trustee or co-trustees, jointly with the Trustee, or separate trustee or
separate trustees, of all or any part of the Trust Fund, and to vest in such
Person or Persons, in such capacity, such title to the Trust Fund, or any part
thereof, and, subject to the other provisions of this Section 8.11, such powers,
duties, obligations, rights and trusts as the Servicer and the Trustee may
consider necessary or desirable. If the Servicer shall not have joined in such
appointment within 15 days after the receipt by it of a request so to do, or in
case an Event of Default shall have occurred and be continuing, the Trustee
alone shall have the power to make such appointment. Each co-trustee and
separate trustee hereunder shall not be required to meet the terms of
eligibility as a successor trustee under Section 8.7 hereunder and no notice to
holders of Certificates of the appointment of co-trustee(s) or separate
trustee(s) shall be required under Section 8.9 hereof.
In the case of any appointment of a co-trustee or separate trustee pursuant
to this Section 8.11, all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co-trustee jointly, except
to the extent that under any law of any jurisdiction in which any particular act
or acts are to be performed (whether as Trustee hereunder or as successor to the
Servicer hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust Fund or a portion thereof in any
such jurisdiction) shall be exercised and performed by such separate trustee or
co-trustee at the direction of the Trustee.
Any notice, request or other writing given to the Trustee shall be deemed
to have been given to each of the then separate trustees and co-trustees, as
effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
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Any separate trustee or co-trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. The Trustee shall not be responsible
for any action or inaction of any such separate trustee or co-trustee. If any
separate trustee or co-trustee shall die, become incapable of acting, resign or
be removed, all of its estates, properties, rights, remedies and trusts shall
vest in and be exercised by the Trustee, to the extent permitted by law, without
the appointment of a new or successor trustee.
The Trustee may appoint one or more Eligible Institutions to act as its
agent or agents to perform any or all of its duties and obligations under this
Agreement. Each such agent shall be subject to all of the provisions of this
Agreement, specifically including every provision of this Agreement relating to
the conduct of, affecting the liability of, or affording protection to, the
Trustee.
Section 8.12 APPOINTMENT OF CUSTODIANS. The Trustee may, with the consent
of the Servicer, appoint one or more Custodians, not affiliated with the
Depositor, to review, pursuant to Section 2.2 hereof, and hold all or a portion
of the Mortgage Files as agent for the Trustee PROVIDED, HOWEVER, that such
appointed Custodian may be LaSalle Bank National Association or Standard Federal
Bank, N.A. Any Custodian appointed shall be (i) LaSalle Bank National
Association or (ii) Standard Federal Bank, N.A., or (iii) (a) an institution
subject to supervision by federal or state authority, (b) shall have combined
capital and surplus of at least $50,000,000 and (c) shall be qualified to do
business in the jurisdiction in which it holds any Mortgage File.
Section 8.13 AUTHENTICATING AGENT.
(a) The Trustee may appoint from time to time an authenticating agent (the
"Authenticating Agent") which shall be authorized to act on behalf of the
Trustee in authenticating Certificates. Wherever reference is made in this
Agreement to the authentication of Certificates by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication on behalf of the Trustee by the Authenticating Agent and a
certificate of authentication executed on behalf of the Trustee by the
Authenticating Agent. Any successor Authenticating Agent must be acceptable to
the Servicer and have a principal office and place of business in New York, New
York or Chicago, Illinois, have a combined capital and surplus of at least
$50,000,000, and be authorized to do a trust business and subject to supervision
or examination by federal or state authorities.
(b) Any corporation into which the Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Authenticating Agent
shall be a party, or any corporation succeeding to all or substantially all of
the corporate agency business of the Authenticating Agent, shall continue to be
the Authenticating Agent without the execution or filing of any paper or any
further act on the part of the Trustee or the Authenticating Agent.
(c) The Authenticating Agent may at any time resign by giving at least 30
days' advance
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written notice of resignation to the Trustee and to the Servicer. The Trustee
may at any time terminate the agency of the Authenticating Agent by giving
written notice of termination to the Authenticating Agent and to the Servicer.
Upon receiving a notice of resignation or upon such a termination, or in case at
any time the Authenticating Agent shall cease to be eligible in accordance with
the provisions of this Section 8.13, the Trustee promptly shall appoint a
successor Authenticating Agent, shall give written notice of such appointment to
the Servicer and shall mail notice of such appointment to all
Certificateholders. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers, duties
and responsibilities of its predecessor hereunder, with like effect as if
originally named as Authenticating Agent herein. No successor Authenticating
Agent shall be appointed unless eligible under the provisions of this Section
8.13.
(d) The Authenticating Agent shall have no responsibility or liability for
any action taken by it as such at the direction of the Trustee. Any reasonable
compensation paid to the Authenticating Agent shall be a reimbursable expense
under Section 8.6.
Section 8.14 BLOOMBERG. As soon as practicable after the Closing Date, the
Trustee or the Certificate Administrator, if any, will arrange with Bloomberg to
have the Depositor set up on Bloomberg to provide the information set forth on
Exhibit Q (the "Data") with respect to the Loans on a monthly basis in a format
acceptable to Bloomberg and acceptable to the Underwriters. During the term of
this Agreement, the Trustee will provide updated Data to Bloomberg on or before
each Distribution Date.
Section 8.15 CALCULATION OF LIBOR.
Until the Certificate Principal Balance of each of the Adjustable Rate
Certificates has been reduced to zero, LIBOR for the initial Interest Accrual
Period shall be 1.31%, and for any Interest Accrual Period thereafter, the
Trustee, if any, shall establish LIBOR on each LIBOR Determination Date as
follows:
(a) If on such LIBOR Determination Date a rate for United States dollar
deposits for one month appears on the Dow Xxxxx Telerate System, page 3750,
LIBOR for the next Interest Accrual Period shall be equal to such rate as of
11:00 a.m., London time;
(b) If such rate does not appear on such page (or such other page as may
replace that page on that service, or if such service is no longer offered, such
other service for displaying LIBOR or comparable rates as may be selected by the
Servicer), the rate shall be determined as follows:
(i) The Servicer on the LIBOR Determination Date will request the
principal London offices of each of four major reference banks in the
London interbank market, as selected by the Servicer, to provide the
Servicer with its offered quotation for deposits in United States dollars
for the upcoming one-month period, commencing on the second LIBOR Business
Day immediately following such LIBOR Determination Date, to prime
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banks in the London interbank market at approximately 11:00 a.m. London
time on such LIBOR Determination Date and in a principal amount that is
representative for a single transaction in United States dollars in such
market at such time. If at least two such quotations are provided, LIBOR
determined on such LIBOR Determination Date will be the arithmetic mean of
such quotations.
(ii) If fewer than two quotations are provided, LIBOR determined on
such LIBOR Determination Date will be the arithmetic mean of the rates
quoted at approximately 11:00 a.m. in New York City on such LIBOR
Determination Date by three major banks in New York City selected by the
Trustee for one-month United States dollar loans to leading European banks,
in a principal amount that is representative for a single transaction in
United States dollars in such market at such time; PROVIDED, HOWEVER, that
if the banks so selected by the Servicer are not quoting as mentioned in
this sentence, LIBOR determined on such LIBOR Determination Date will
continue to be LIBOR as then currently in effect on such LIBOR
Determination Date.
(c) The establishment of LIBOR on each LIBOR Determination Date by the
Servicer, if any, and the Servicer's calculation of the rate of interest
applicable to the Adjustable Rate Certificates for the related Interest Accrual
Period shall (in the absence of manifest error) be final and binding.
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ARTICLE IX
TERMINATION
Section 9.1 TERMINATION UPON PURCHASE BY THE SERVICER OR LIQUIDATION OF
ALL LOANS. The respective obligations and responsibilities of the Servicer and
the Trustee created hereby (other than the obligation to make payments to
Certificateholders as hereafter set forth in this Section 9.1 and obligations to
the Trustee in Sections 8.4 and 8.6) shall terminate upon the earlier of (i) the
later of the final payment or other liquidation (or any Advance with respect
thereto) of the last Loan remaining in the Trust Fund and the disposition of all
property acquired in respect of any Loan or (ii) the purchase by the Servicer of
all Loans at a price equal to the sum of (a) the principal balance of each Loan
plus accrued interest thereon at the applicable Mortgage Interest Rate to, but
not including, the next scheduled Due Date and (b) the fair market value of all
acquired property in respect of Loans, such fair market value to be determined
by an appraiser selected by the Trustee; PROVIDED, HOWEVER, that in no event
shall the trust created hereby continue beyond the expiration of 21 years from
the death of the last survivor of the descendants of Xxxxxx X. Xxxxxxx, the late
ambassador of the United States to the Court of St. Xxxxx, living on the date
hereof; and PROVIDED, FURTHER, that a "plan of liquidation" of either of REMIC I
or REMIC II in accordance with Section 860F of the Code must be adopted in
conjunction with any termination effected pursuant to subclauses (i) or (ii) of
this Section 9.1.
The Servicer is hereby granted the right to purchase the Loans pursuant to
clause (ii) above, PROVIDED, HOWEVER, that such right shall be conditioned upon
(a) the Principal Balances of such Loans, at the time of any such purchase,
aggregating an amount less than 10% of the aggregate Principal Balance of the
Loans on the Cut-Off Date, after deduction of payments due on or before such
date, and (b) the aggregate price in clause (ii) above must not be greater than
the aggregate fair market value of the Loans and all such acquired property.
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 or its agent for payment and cancellation, shall be
given promptly by the Trustee or its agent (upon direction by the Servicer no
less than 10 days prior to the date such notice is to be mailed) by letter to
Certificateholders and each Rating Agency mailed by first class mail no later
than the 25th day of the month preceding the month of such final distribution
specifying (i) the Distribution Date upon which final payment on the
Certificates will be made upon presentation and surrender of Certificates at the
office or agency of the Trustee or the Certificate Registrar therein designated,
(ii) the amount of any such final payment and (iii) that the Record Date
otherwise applicable to such Distribution Date is not applicable, payments being
made only upon presentation and surrender of the Certificates at the office or
agency of the Trustee or the Certificate Registrar therein specified. The
Trustee or its agent shall give such notice to the Certificate Registrar and
each Rating Agency at the time such notice is given to the Certificateholders.
Upon any such termination, the duties of the Certificate Registrar shall also
terminate. In the event such notice is given in connection with Depositor's
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election to purchase, the Depositor shall deposit in the Certificate Account on
the related Withdrawal Date an amount equal to the above-described purchase
price and upon such deposit Certificateholders will be entitled to the amount of
such purchase price but not amounts in excess thereof, all as provided herein.
With respect to the Certificates, upon presentation and surrender of the
Certificates pursuant to any termination under this Section 9.1, the Trustee or
Paying Agent shall cause to be distributed to Certificateholders an amount equal
to (a) the amount otherwise distributable on such Distribution Date, if not in
connection with a purchase; or (b) if the Depositor elected to so purchase, the
purchase price calculated as above provided. Upon any termination pursuant to
clause (iii) above, or upon certification to the Trustee by a Servicing Officer
following such final deposit, the Trustee and any Custodian shall promptly
release to the Servicer the Mortgage Files for the remaining Loans, and the
Trustee shall execute all assignments, endorsements and other instruments
necessary to effectuate such transfer.
In the event that all of the Certificateholders shall not surrender their
Certificates for cancellation within three months after the time specified in
the above-mentioned written notice, the Trustee or its agent shall give a second
written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within three months after the second notice all the Certificates
shall not have been surrendered for cancellation, the Trustee or its agent shall
take appropriate and reasonable steps as directed by the Servicer, to contact
the remaining Certificateholders concerning surrender of their Certificates, and
the cost thereof shall be paid out of the funds and other assets which remain in
trust hereunder.
Section 9.2 TRUSTS IRREVOCABLE. Except as expressly provided herein, all
trusts created hereby are irrevocable.
Section 9.3 ADDITIONAL TERMINATION REQUIREMENTS.
(a) In the event the Servicer 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 REMIC I or REMIC II of the Trust Fund as described
in Section 860F(a)(2) of the Code, or (ii) cause either REMIC I or REMIC II of
the Trust Fund to fail to qualify as a REMIC at any time that any Certificates
are outstanding:
(A) Within 90 days prior to the final Distribution Date set forth in
the notice given by the Depositor under Section 9.1, the Tax Matters Person
shall prepare the documents associated with and shall adopt a plan of
complete liquidation of each of REMIC I and REMIC II of the Trust Fund; and
(B) At or after the time of adoption of such a plan of complete
liquidation and at or prior to the final Distribution Date, the Servicer as
agent of the Trustee shall sell all of the assets of the Trust Fund to the
Depositor for cash in accordance with such plan of
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liquidation; provided, however, that in the event that a calendar quarter
ends after the time of adoption of such a plan of complete liquidation but
prior to the final Distribution Date, the Servicer shall not sell any of
the assets of the Trust Fund prior to the close of that calendar quarter.
(b) The Tax Matters Person hereby agrees to adopt such a plan of complete
liquidation and to take such other action in connection therewith as may be
reasonably requested by the Servicer.
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ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.1 AMENDMENT. This Agreement may be amended from time to time by
the Depositor and the Trustee, without the consent of any of the
Certificateholders, (a) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision herein, or
to make any other provisions with respect to matters or questions arising under
this Agreement, (b) to modify, eliminate or add to any provisions to such extent
as shall be necessary to maintain the qualification of the Trust Fund as two
REMICs at all times that any Class A or Subordinate Certificates are
outstanding, provided, that the Trustee has received an Opinion of Counsel to
the effect that such action is necessary or desirable to maintain such
qualification, provided, that such action under clauses (a) and (b) above shall
not adversely affect in any material respect the interests of any
Certificateholder or (c) such amendment is made to conform the terms of this
Agreement to the terms described in the Prospectus dated January 23, 2003,
together with the Prospectus Supplement dated June 24, 2003.
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 66-2/3% of each Class of Certificates affected thereby
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 of such Class; provided,
however, that no such amendment shall (a) reduce in any manner the amount of, or
delay the timing of, payments received on Loans which are required to be
distributed in respect of any Certificate without the consent of the Holder of
such Certificate; (b) adversely affect in any material respect the interest of
the Holders of the Class A Certificates in a manner other than as described in
(a) above without the consent of the Holders of Class A Certificates aggregating
not less than 66-2/3% of the aggregate Percentage Interest evidenced by all
Class A Certificates; (c) adversely affect in any material respect the interest
of the Holders of the Subordinate Certificates in a manner other than as
described in clause (a) above without the consent of the Holders of Subordinate
Certificates aggregating not less than 66-2/3% of the aggregate Percentage
Interest evidenced by all Subordinate Certificates; (d) adversely affect in any
material respect the interest of the Class R Certificateholder without the
consent of the Holder of the Class R Certificate; (e) change in any material
respect the rights and obligations of the Servicer or successor Servicer under
this 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, which consent shall not be unreasonably withheld;
PROVIDED, that for the purposes of this Agreement, the Holder of the Class R
Certificate shall have no right to vote at all times that any Class A
Certificates or Subordinate Certificates are outstanding if such amendment
relates to the modification, elimination or addition of any provision necessary
to maintain the qualification of each of REMIC I and REMIC II as a REMIC.
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Notwithstanding any contrary provision of this Agreement, the Trustee shall
not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel to the effect that such amendment will not cause
either REMIC I or REMIC II of the Trust Fund to fail to qualify as a REMIC at
any time that any REMIC I Regular Interests or REMIC II Certificates are
outstanding.
As soon as practicable after the execution of any such amendment, the
Trustee shall furnish written notification of the substance of such amendment to
each Certificateholder and each Rating Agency.
It shall not be necessary for the consent of the Certificateholders under
this Section 10.1 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
Prior to the execution of any amendment to this Agreement, the Trustee
shall be entitled to receive and rely upon an Opinion of Counsel stating that
the execution of such amendment is authorized or permitted by this Agreement.
The Trustee may, but shall not be obligated to, enter into any such amendment
which affects the Trustee's own rights, duties or immunities under this
Agreement.
Section 10.2 RECORDATION OF AGREEMENT. This Agreement (or an abstract
hereof, if acceptable by the applicable recording office) is subject to
recordation in all appropriate public offices for real property records in all
the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Servicer at its expense, but only after the Depositor has delivered to the
Trustee an Opinion of Counsel to the effect that such recordation materially and
beneficially affects the interests of the Certificateholders.
For the purpose of facilitating the recordation of this Agreement as herein
provided and for other purposes, this Agreement may be executed simultaneously
in any number of counterparts, each of which counterparts shall be deemed to be
an original, and such counterparts shall constitute but one and the same
instrument.
Section 10.3 LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS. The death or
incapacity of any Certificateholder shall not operate to terminate this
Agreement or the Trust Fund, nor entitle such Certificateholder's legal
representatives or heirs to claim an accounting or take any action or proceeding
in any court for a partition or winding up of the Trust Fund, nor otherwise
affect the rights, obligations and liabilities of the parties hereto or any of
them.
Except as otherwise expressly provided herein no Certificateholder, solely
by virtue of its status as Certificateholder, shall have any right to vote or in
any manner otherwise control the
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operation and management of the Trust Fund, or the obligations of the parties
hereto, nor shall anything herein set forth, or contained in the terms of the
Certificates, be construed so as to constitute the Certificateholders from time
to time as partners or members of an association, nor shall any
Certificateholder be under any liability to any third person by reason of any
action taken by the parties to this Agreement pursuant to any provision hereof.
No Certificateholder, solely by virtue of its status as Certificateholder,
shall have any right by virtue or by availing of any provision of this Agreement
to institute any suit, action or proceeding in equity or at law upon or under or
with respect to this Agreement, unless such holder previously shall have given
to the Trustee a written notice of default and of the continuance thereof, as
hereinbefore provided, and unless all of the Holders of Certificates evidencing,
in aggregate, not less than 25% of the Trust Fund shall have made written
request upon the Trustee to institute such action, suit or proceeding in its own
name as Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Trustee, for 60 days after its receipt of
such notice, request and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding; it being understood and intended,
and being expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more holders of Certificates
shall have any right in any manner whatever by virtue or by availing of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, or to enforce any right
under this Agreement, except in the manner herein provided and for the benefit
of all Certificateholders. For the protection and enforcement of the provisions
of this Section 10.3, each and every Certificateholder and the Trustee shall be
entitled to such relief as can be given either at law or in equity.
Section 10.4 GOVERNING LAW; JURISDICTION. THIS AGREEMENT SHALL BE CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 10.5 NOTICES. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered at or mailed by certified or registered mail, return receipt requested
(a) in the case of the Depositor, to ABN AMRO Mortgage Corporation, 000 Xxxxx
XxXxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000, Attention: Xxxxx Xxxxxxx -
Director - ABN AMRO Mortgage Operations, or such other address as may hereafter
be furnished to the Servicer and the Trustee in writing by the Depositor, (b) in
the case of the Servicer, to InterFirst, 000 Xxxx Xxxxxxxxxx Xxxxxxx, Xxx Xxxxx,
Xxxxxxxx 00000, Attention: Xxxxx Xxxx - Vice President with a copy to ABN AMRO
Mortgage Group, Inc., 0000 Xxxx Xxx Xxxxxx Xxxx, Xxxx, Xxxxxxxx 00000,
Attention: Xxxxxx X. Xxxxx, or such other address as may hereafter be furnished
to the Depositor and the Trustee in writing by the Servicer, (c) in the case of
the Trustee, to the Corporate Trust Office, or such other address as may
hereafter be furnished to the Depositor and the Servicer in writing by the
Trustee, in each case Attention: Corporate Trust Department, (d) in the
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case of S&P, to Standard & Poor's, a division of the XxXxxx-Xxxx Companies,
Inc., 00 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention:
Residential Mortgage Surveillance Department, or such other address as may
hereinafter be furnished to the Depositor in writing by S&P and (e) in the case
of Fitch, to Fitch Ratings, Xxx Xxxxx Xxxxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Xxxx Xxxxxxx, Residential Mortgage, or such other address
as may hereinafter be furnished to the Depositor in writing by Fitch. Any notice
required or permitted to be mailed to a Certificateholder shall be given by
first class mail, postage prepaid, at the address of such Holder as shown in the
Certificate Register. Any notice mailed or transmitted within the time
prescribed in this Agreement shall be conclusively presumed to have been duly
given, whether or not the addressee receives such notice; provided, that any
demand, notice or communication to or upon the Depositor, the Servicer or the
Trustee shall not be effective until received.
Section 10.6 SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the holders thereof.
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IN WITNESS WHEREOF, the Depositor, the Servicer and the Trustee have caused
their names to be signed hereto by their respective officers thereunto duly
authorized, all as of the day and year first above written.
ABN AMRO MORTGAGE CORPORATION, as
Depositor
By: /S/ XXXXXX X. XXXXXXX
-------------------------------
Name: Xxxxxx X. Xxxxxxx
Its: Vice President
JPMORGAN CHASE BANK, as Trustee
By: /S/ XXXXX XXXXXXX
-------------------------------
Name: Xxxxx Xxxxxxx
Its: Trust Officer
ABN AMRO MORTGAGE GROUP, INC., as
Servicer
By: /S/ XXXXXXX XXXXX
-------------------------------
Name: Xxxxxxx Xxxxx
Its: Group Senior Vice President
STATE OF FLORIDA )
) ss.:
COUNTY OF _______ )
On the ____day of__________, 2003, before me, _______________,
personally appeared Xxxxxx X. Xxxxxxx, a Vice President of ABN AMRO Mortgage
Corporation, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to the within
instrument, and acknowledged to me that he executed the same in his authorized
capacity, and that by his signature on the instrument the person, or the entity
upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal:
Signature__________________________
(SEAL)
STATE OF TEXAS )
) ss.:
COUNTY OF XXXXXX )
On the __ day of __________, 2003, before me,
__________________________, personally appeared Xxxxx Xxxxxxx, known to me to be
a Trust Officer of JPMorgan Chase Bank, one of the institutions that executed
the within instrument and also known to me to be the person who executed it on
behalf of said institution, and acknowledged to me that such institution
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
__________________________
Notary Public
[NOTARIAL SEAL]
STATE OF MICHIGAN )
) ss.:
COUNTY OF OAKLAND )
On the ___ day of___________, 2003, before me,________________,
personally appeared Xxxxxxx Xxxxx, known to me to be a Group Senior Vice
President of ABN AMRO Mortgage Group, Inc., one of the corporations that
executed the within instrument and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
__________________________
Notary Public
[NOTARIAL SEAL]
EXHIBIT A
---------
FORMS OF CERTIFICATES
EXHIBIT A-1
-----------
CUSIP ________
FORM OF SENIOR AND SENIOR SUBORDINATE CERTIFICATE
MORTGAGE PASS-THROUGH CERTIFICATE
Class [[__]A-[__], M, B-[__]]
Evidencing a Percentage Interest in certain distributions with respect to a pool
of conventional one- to four-family mortgage loans formed and administered by
ABN AMRO MORTGAGE CORPORATION
This Certificate represents ownership of a "regular interest" in a "real estate
mortgage investment conduit," as those terms are defined in Sections 860G and
860D, respectively, of the Internal Revenue Code of 1986, as amended. The issue
date (the "Issue Date") of this Certificate is June __, 2003. [The rate at which
interest is payable as of the Issue Date with respect to this Certificate is
[___]% per annum.][Interest is not payable with respect to this Certificate.]
[Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee or its
agent for registration of transfer, exchange, or payment, and any Certificate
issued is registered in the name of Cede & Co. or such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.]
[The Class [M, B-[__]] Certificates will be subordinate in right of payment to
and provide credit support to certain Classes of Certificates, as described in
the Pooling Agreement.
Series 20[__-__] Portion of the Class [__]A-[__], M, B-[__]]
[Principal Balance][Notional Amount] as of
the Cut-Off Date evidenced by this
Certificate: $________________
Class [__]A-[__], M, B-[__]] Remittance Rate: [___]%
Cut-Off Date: [__________]
First Distribution Date: [__________]
Last Scheduled Distribution Date: [__________]
Class [__]A-[__], M, B-[__]] [Principal Balance][Notional Amount] as of the
Cut-Off Date:
$______________
--------------------
Registered Owner Certificate No.___
X-0-0
XXXXXXX X-0
-----------
CUSIP_______
FORM OF JUNIOR SUBORDINATE CERTIFICATE
MORTGAGE PASS-THROUGH CERTIFICATE
Class B-[__]
Evidencing a Percentage Interest in certain distributions with respect to a pool
of conventional one- to four-family mortgage loans formed and administered by
ABN AMRO MORTGAGE CORPORATION
This Certificate represents ownership of a "regular interest" in a "real estate
mortgage investment conduit," as those terms are defined in Sections 860G and
860D, respectively, of the Internal Revenue Code of 1986, as amended (the
"Code"). The issue date (the "Issue Date") of this Certificate is June [__],
2003. The rate at which interest is payable as of the Issue Date with respect to
this Certificate is [___]% per annum.
IN THE CASE OF ANY CLASS B-[__] CERTIFICATE PRESENTED FOR REGISTRATION IN THE
NAME OF AN EMPLOYEE BENEFIT OR OTHER PLAN SUBJECT TO THE PROHIBITED TRANSACTION
PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), OR SECTION 4975 OF THE CODE (OR COMPARABLE PROVISIONS OF ANY
SUBSEQUENT ENACTMENTS) (A "PLAN"), A TRUSTEE OF ANY SUCH PLAN, OR ANY OTHER
PERSON WHO IS USING "PLAN ASSETS" OF ANY SUCH PLAN TO EFFECT SUCH ACQUISITION,
THE TRUSTEE OR CERTIFICATE REGISTRAR SHALL REQUIRE SUCH TRANSFEREE TO PROVIDE AN
OFFICER'S CERTIFICATE SIGNED BY A RESPONSIBLE OFFICER OF SUCH TRANSFEREE STATING
THAT THE TRANSFEREE IS AN INSURANCE COMPANY USING ASSETS OF AN "INSURANCE
COMPANY GENERAL ACCOUNT" (WITHIN THE MEANING OF DEPARTMENT OF LABOR PROHIBITED
TRANSACTION CLASS EXEMPTION ("PTCE") 95-60) TO EFFECT SUCH PURCHASE AND
SATISFIES ALL OF THE REQUIREMENTS FOR EXEMPTIVE RELIEF UNDER SECTIONS I AND III
OF PTCE 95-60, WHICH OFFICER'S CERTIFICATE SHALL NOT BE AN EXPENSE OF THE
TRUSTEE OR THE DEPOSITOR.
The Class B-[__] Certificates will be subordinate in right of payment to and
provide credit support to certain Classes of Certificates, as described in the
Pooling Agreement.
Series 20[__-__] Portion of the
Class B-[__] Principal
Balance as of the Cut-Off
Date evidenced by this
Certificate:
$_________________
Class B-[__] Remittance Rate: [____]%
Cut-Off Date: [___________]
First Distribution Date: [____________]
Last Scheduled Distribution Date: [____________]
Class B-[__] Principal Balance as of the Cut-Off Date: $________________
--------------------
Registered Owner Certificate No.___
A-1-2
EXHIBIT B
---------
FORM OF RESIDUAL CERTIFICATE CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class R
Evidencing a Percentage Interest in certain distributions with respect to a pool
of conventional one- to-four family mortgage loans formed and administered by
ABN AMRO MORTGAGE CORPORATION
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE MADE ONLY
IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE DEPOSITOR, THE
TRUSTEE AND THE CERTIFICATE REGISTRAR THAT (1) SUCH TRANSFEREE IS NOT EITHER (A)
THE UNITED STATES, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY FOREIGN
GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF
ANY OF THE FOREGOING, (B) ANY ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED
IN SECTION 521 OF THE CODE) WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF
THE CODE UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511
OF THE CODE, (C) ANY ORGANIZATION DESCRIBED IN SECTION 1381(a)(2)(C) OF THE CODE
(ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (A), (B), OR (C) BEING
HEREINAFTER REFERRED TO AS A "DISQUALIFIED ORGANIZATION"), OR (D) AN AGENT OF A
DISQUALIFIED ORGANIZATION AND (2) NO PURPOSE OF SUCH TRANSFER IS TO ENABLE THE
TRANSFER OR TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX. SUCH AFFIDAVIT SHALL
INCLUDE CERTAIN REPRESENTATIONS AS TO THE FINANCIAL CONDITION OF THE PROPOSED
TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE REGISTER OF ANY
TRANSFER, SALE OR OTHER DISPOSITION OF THIS CLASS R CERTIFICATE TO A
DISQUALIFIED ORGANIZATION OR AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH
REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND
SUCH PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE
HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS
CERTIFICATE. EACH HOLDER OF A CLASS R CERTIFICATE BY ACCEPTANCE OF THIS
CERTIFICATE SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS
PARAGRAPH.
IN THE CASE OF ANY CLASS R CERTIFICATE PRESENTED FOR REGISTRATION IN THE NAME OF
AN EMPLOYEE BENEFIT OR OTHER PLAN SUBJECT TO THE PROHIBITED TRANSACTION
PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), OR SECTION 4975 OF THE CODE (OR COMPARABLE PROVISIONS OF ANY
SUBSEQUENT ENACTMENTS) (A "PLAN"), OR A TRUSTEE OF ANY SUCH PLAN, OR ANY OTHER
PERSON WHO IS USING "PLAN ASSETS" OF ANY SUCH PLAN TO EFFECT SUCH ACQUISITION,
THE TRUSTEE OR CERTIFICATE REGISTRAR SHALL REQUIRE SUCH TRANSFEREE TO PROVIDE AN
OPINION OF COUNSEL AS SPECIFIED IN SECTION 5.1(d)(i) OF THE AGREEMENT.
Solely for U.S. federal income tax purposes, this Certificate represents
"residual interests" in "real estate mortgage investment conduits," as those
terms are defined in Sections 860G and 860D, respectively, of the Internal
Revenue Code of 1986, as amended.
Series 2003-8 Percentage Interest evidenced by this Class R Certificate fff
in the distributions to be made with respect to the
Class R Certificate: 100%
[Additionally, the Class R
Certificates are entitled to Excess
Liquidation Proceeds and the
Residual Distribution Amount as
defined in the Pooling and
Servicing Agreement.]
Class R Remittance Rate: 5.50%
Cut-Off Date: June 1, 2003
First Distribution Date: July 25, 2003
Last Scheduled Distribution Date: June 25, 2033
Class R Principal Balance as of the Cut-Off Date: $100
--------------------------
Registered Owner Certificate No.__
A-1-3
EXHIBIT C-1
-----------
FORM OF INTERIM CERTIFICATION
[Date]
JPMorgan Chase Bank ABN AMRO Mortgage Corporation
000 Xxxxxx Xxxxxx, 10th Floor 000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000 Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
LaSalle Bank National Association, as
Certificate Registrar
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: ABN AMRO Mortgage Corporation, Multi-Class Mortgage Pass-Through
Certificates, Series 2003-5
Re: Pooling and Servicing Agreement, dated as of June 1, 2003, by
and among ABN AMRO Mortgage Corporation, ABN AMRO Mortgage Group,
Inc. and JPMorgan Chase Bank relating to ABN AMRO Mortgage
Corporation, Multi-Class Mortgage PASS- THROUGH CERTIFICATES,
SERIES 2003-5
----------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.2(b) of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Custodian, hereby certifies that it has
received a Mortgage File to the extent required pursuant to Section 2.1 of the
Pooling and Servicing Agreement with respect to each Loan listed in the Mortgage
Loan Schedule, and it has reviewed the Mortgage File and the Mortgage Loan
Schedule and has determined that: all required documents have been executed and
received and that such documents related to the Mortgage Loans identified on the
Mortgage Loan Schedule, with any exceptions listed on Schedule A attached
hereto.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
LASALLE BANK NATIONAL ASSOCIATION
C-1
By:______________________________
Name:____________________________
Title:___________________________
C-2
EXHIBIT C-2
-----------
FORM OF FINAL CERTIFICATION
[Date]
JPMorgan Chase Bank ABN AMRO Mortgage Corporation
000 Xxxxxx Xxxxxx, 10th Floor 000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000 Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
LaSalle Bank National Association, as
Certificate Registrar
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: ABN AMRO Mortgage Corporation, Multi-Class Mortgage Pass-Through
Certificates, Series 2003-5
Re: Pooling and Servicing Agreement, dated as of June 1, 2003, by
and among ABN AMRO Mortgage Corporation, ABN AMRO Mortgage Group,
Inc. and JPMorgan Chase Bank relating to ABN AMRO Mortgage
Corporation, Multi-Class MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 2003-5
-----------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.2(c) of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Custodian, hereby certifies that it has
received a Mortgage File with respect to each Loan listed in the Mortgage Loan
Schedule containing with respect to each such Loan:
(1) The original Mortgage Note, endorsed without recourse to the order
of the Trustee and showing an unbroken chain of endorsements from the
originator thereof to the Person endorsing it to the Trustee or an original
lost note affidavit from the related Depositor stating that the original
Mortgage Note was lost, misplaced or destroyed, together with a copy of the
related Mortgage Note;
(2) The original Mortgage with evidence of recording indicated thereon
or a copy of the Mortgage certified by the public recording office in which
such mortgage has been recorded;
C-3
(3) An original Assignment of the Mortgage to the Trustee with
evidence of recording indicated thereon or a copy of such assignment
certified by the public recording office in which such assignment has been
recorded;
(4) With respect to each Mortgage Loan, to the extent available, the
original recorded assignment or assignments of the Mortgage showing an
unbroken chain of title from the originator thereof to the Person assigning
it to the Trustee or a copy of such assignment or assignments of the
Mortgage certified by the public recording office in which such assignment
or assignments have been recorded; and
(5) The original of each modification, assumption, extension or
guaranty agreement, if any, relating to such Loan or a copy of each
modification, assumption, extension or guaranty agreement certified by the
public recording office in which such document has been recorded.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
LASALLE BANK NATIONAL ASSOCIATION
By:_______________________________
Name:_____________________________
Title:____________________________
C-4
EXHIBIT D
---------
SCHEDULE OF LOANS
See Schedule I to the Mortgage Loan Purchase Agreement, dated as of June 26,
2003, between the Seller and the Purchaser
[provided upon request]
D-1
EXHIBIT E
---------
FIELDS OF LOAN INFORMATION
Deal Name
Distribution Date
Loan Number
Loan Group
City
State
Zip Code
Property Type (SFR, CONDO, etc.)
Occupancy Status (Owner, Investor, etc.)
Loan Purpose (Purchase, Refi, etc.)
Loan Type Loan Status (Current, Foreclosure, REO, Bankruptcy)
Original Term of Loan
Amortization Term
First Payment of Loan
Maturity Date
Appraisal Value
Original LTV
Original Principal Balance
Previous Month's Balance
Current Principal Balance
Prepay Date
Prepay Status (Loan has been prepaid, liquidated or repurchased by the Servicer)
Original Scheduled P&I
Current Scheduled P&I
Scheduled Interest Amount
Scheduled Principal Amount
Curtailment
Note Rate
Paid to Date
Payment Date
E-1
EXHIBIT F
---------
FORM OF TRANSFEROR CERTIFICATE FOR
PRIVATELY OFFERED CERTIFICATES
[Date]
JPMorgan Chase Bank, as Trustee
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attn: Institutional Trust Services
[LaSalle Bank National Association, as Certificate Registrar
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Asset Backed Securities Trust Services - ABN AMRO Series 2003-8]
Re: Purchase of ABN AMRO Mortgage Corporation Mortgage Pass-Through
Certificates Series 2003-8, Class [B-3] [B-4] [B-5] (the
"Certificates")
Ladies and Gentlemen:
In connection with our disposition of the above Certificates we certify
that (a) we understand the Certificates have not been registered under the
Securities Act of 1933, as amended (the "Act") and are being disposed by us in a
transaction that is exempt from the registration requirements of the Act, and
(b) we have not offered or sold any certificates to, or solicited offers to buy
any Certificates from, any person, or otherwise approached or negotiated with
any person with respect thereto, or taken any other action which would result in
a violation of Section 5 of the Act.
Very truly yours,
[Name of Transferor]
By: ______________________
Authorized Officer
F-1
EXHIBIT G
---------
FORM OF TRANSFEREE'S CERTIFICATE FOR
PRIVATELY OFFERED CERTIFICATES
[Date]
JPMorgan Chase Bank
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attn: Institutional Trust Services
ABN AMRO Mortgage Corporation
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
[LaSalle Bank National Association, as Certificate Registrar
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Asset Backed Securities Trust Services - ABN AMRO Series 2003-8]
The undersigned (the "Purchaser") proposes to purchase [Class B-3] [Class
B-4] [Class B-5] Certificates evidencing an undivided interest in ABN AMRO
Mortgage Corporation Mortgage Pass- Through Certificates, Series 2003-8 (the
"Purchased Certificates") in the principal amount of $__________. In doing so,
the Purchaser hereby acknowledges and agrees as follows:
Section 1. Definitions. Each capitalized term used herein and not otherwise
defined herein shall have the meaning ascribed to it in the Pooling and
Servicing Agreement, dated as of June 1, 2003, between ABN AMRO Mortgage
Corporation ("AAMC"), ABN AMRO Mortgage Group, Inc., as servicer (the
"Servicer") and JPMorgan Chase Bank, as trustee (the "Trustee"), of the ABN AMRO
Mortgage Corporation Mortgage Pass-Through Certificates, Series 2003-8.
Section 2. Representations and Warranties of the Purchaser. In connection
with the proposed transfer, the Purchaser represents and warrants to AAMC, the
Servicer, the Certificate Registrar and the Trustee that:
(a) The Purchaser is duly organized, validly existing and in good standing
under the laws of the jurisdiction in which the Purchaser is organized, is
authorized to invest in the Purchased Certificates, and to enter into this
Agreement, and duly executed and delivered this Agreement;
(b) The Purchaser is acquiring the Purchased Certificates for its own
account as principal and not with a view the distribution thereof, in whole or
in part;
G-1
(c) The Purchaser is an "accredited investor" as such term is defined in
paragraph (a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) of Section 501 of Regulation
D under the Securities Act of 1933, as amended (the "Act"), has knowledge of
financial and business matters and is capable of evaluating the merits and risks
of an investment in the Purchased Certificates; the Purchaser has sought such
accounting, legal and tax advice as it has considered necessary to make an
informed investment decision; and the Purchaser is able to bear the economic
risk of an investment in the Purchased Certificates and can afford a complete
loss of such investment;
(d) The Purchaser is not affiliated with the Trustee;
(e) The Purchaser confirms that AAMC has made available to the Purchaser
the opportunity to ask questions of, and receive answers from AAMC concerning
the Trust, the purchase by the Purchaser of the Purchased Certificates and all
matters relating thereto that AAMC possesses or can acquire without unreasonable
effort or expense;
(f) If applicable, the Purchaser has complied, and will continue to comply,
with the guidelines established by Thrift Bulletin 12 issued December 13, 1988,
by the Office of Regulatory Activities of the Federal Home Loan Bank System; and
(g) The Purchaser will provide the Trustee and the Servicer with affidavits
substantially in the form of Exhibit A attached hereto.
Section 3. Transfer of Purchased Certificates.
(a) The Purchaser understands that the Purchased Certificates have not been
registered under the Act, or any state securities laws and that no transfer may
be made unless the Purchased Certificates are registered under the Act and under
applicable state law or unless an exemption from registration is available. The
Purchaser further understands that neither AAMC nor the Trust is under any
obligation to register the Purchased Certificates or make an exemption
available. In the event that such a transfer is to be made within two years from
the Closing Date without registration under the Act or applicable state
securities laws, (i) the Trustee or the Certificate Registrar shall require, in
order to assure compliance with such laws, that the Certificateholder's
prospective transferees each certify to AAMC, the Certificate Registrar and the
Trustee as to the factual basis for the registration or qualification exemption
relied upon, and (ii) the Trustee, the Certificate Registrar or AAMC may require
an Opinion of Counsel that such transfer may be made pursuant to an exemption
from the Act and state securities laws, which Opinion of Counsel shall not be an
expense of the Trustee, the Certificate Registrar or AAMC. Any such
Certificateholder desiring to effect such transfer shall, and does hereby agree
to, indemnify the Trustee and AAMC against any liability that may result if the
Transfer is not so exempt or is not made in accordance with such federal and
state laws.
(b) No transfer of a Purchased Certificate shall be made unless the
transferee provides AAMC, the Certificate Registrar and the Trustee with (i) a
Transferee's Agreement, substantially in the form of this Agreement, and (ii) an
affidavit substantially in the form of Exhibit A hereto that the
G-2
proposed transferee (x) is not an employee benefit plan or other plan or
arrangement subject to the prohibited transaction provisions of ERISA or Section
4975 of the Internal Revenue Code of 1986, as amended, or comparable provisions
of any subsequent enactments (a "Plan"), a trustee of any Plan, or any other
Person who is using the "plan assets" of any Plan to effect such acquisition or
(y) is an insurance company, the source of funds to be used by it to purchase
the Purchased Certificates is an "insurance company general account" (within the
meaning of Department of Labor Prohibited Transaction Class Exemption ("PTCE")
95-60), and is eligible for, and satisfies all the requirements for, exemptive
relief under Sections I and III of PTCE 95-60.
(c) The Purchaser acknowledges that its Purchased Certificates bear a
legend setting forth the applicable restrictions on transfer.
IN WITNESS WHEREOF, the undersigned has caused this Agreement to be validly
executed by its duly authorized representative as of the day and the year first
above written.
[Purchaser]
By:_______________________________
Its:
G-3
Exhibit A to Form of Transferee Agreement (Exhibit G)
BENEFIT PLAN AFFIDAVIT
----------------------
RE: ABN AMRO MORTGAGE CORPORATION MORTGAGE PASS-THROUGH CERTIFICATES, SERIES
2003-8 (THE "TRUST") [CLASS B-3] [CLASS B-4] [CLASS B-5] CERTIFICATES (THE
"PURCHASED CERTIFICATES")
Under penalties of perjury, I, ___________________, declare that, to the
best of my knowledge and belief, the following representations are true, correct
and complete; and
1. That I am the _________ of _________________ (the "Purchaser"), whose
taxpayer identification number is ___________, and on behalf of which I have the
authority to make this affidavit.
2. That the Purchaser is acquiring a Purchased Certificate representing an
interest in Trust.
3. That the Purchaser (i) is not an employee benefit plan or other plan or
arrangement subject to the prohibited transaction provisions of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") or Section 4975 of
the Internal Revenue Code of 1986, as amended (the "Code"), or comparable
provisions of any subsequent enactments (a "Plan"), a trustee of any Plan, or
any other Person who is using the "plan assets" of any Plan to effect such
acquisition, or (ii) has provided an Officer's Certificate signed by a
Responsible Officer of the Purchaser satisfactory to ABN AMRO Mortgage
Corporation (the "Depositor"), the Certificate Registrar, and the Trustee of the
Trust stating that the Purchaser is an insurance company using assets of an
"insurance company general account" (within the meaning of Department of Labor
Prohibited Transaction Class Exemption ("PTCE") 95-60) to effect such purchase
and is eligible for, and satisfies all of the requirements for exemptive relief
under Sections I and III of PTCE 95-60, which Officer's Certificate shall not be
an expense of the Depositor, the Certificate Administrator, Certificate
Registrar, the Serviver or the Trustee.
IN WITNESS WHEREOF, the Purchaser has caused this instrument to be duly
executed on its behalf, by its duly authorized officer this day of
_____________, 20 .
[Purchaser]
By:__________________
Its:
G-4
Personally appeared before me ________________, known or proved to me
to be the same person who executed the foregoing instrument and to be a
_______________ of the Purchaser, and acknowledged to me that (s)he executed the
same as his/her free act and deed and as the free act and deed of the Purchaser.
SUBSCRIBED and SWORN to before me this __day of __________, 20 .
_____________________
Notary Public
G-5
EXHIBIT H
---------
[RESERVED]
H-1
EXHIBIT I
FORM OF TRANSFEROR CERTIFICATE
[Date]
JPMorgan Chase Bank, as Trustee
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attn: Institutional Trust Services
[LaSalle Bank National Association, as Certificate Registrar
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Asset Backed Securities Trust Services -
ABN AMRO Series 2003-8_________________________]
Re: ABN AMRO Mortgage Corporation Mortgage Pass-Through Certificates,
Series 2003-8 Class R
This letter is delivered to you in connection with the sale by
______________ (the "Seller") to _____________ (the "Purchaser") of
$____________ initial Certificate Principal Balance of Mortgage Pass-Through
Certificates, Series 2003-8, Class R (the "Certificate"), pursuant to Section
5.1 of the Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of June 1, 2003 among ABN AMRO Mortgage Corporation, as
depositor (the "Company"), ABN AMRO Mortgage Group, Inc., as servicer (the
"Servicer"), and JPMorgan Chase Bank, as trustee (the "Trustee"). All terms used
herein and not otherwise defined shall have the meanings set forth in the
Pooling and Servicing Agreement. The Seller hereby certifies, represents and
warrants to, and covenants with the Depositor, the Servicer, the Certificate
Registrar and the Trustee that:
1. No purpose of the Seller relating to the sale of the Certificate by
the Seller to the Purchaser is or will be to enable the Seller to impede the
assessment or collection of tax.
2. The Seller understands that the Purchaser has delivered to the
Trustee, the Servicer, the Certificate Registrar and the Depositor a transferee
affidavit and agreement in the form attached to the Pooling and Servicing
Agreement as Exhibit J. The Seller does not know or believe that any
representation contained therein is false.
3. The Seller has no actual knowledge that the Proposed Transferee is
not a Permitted Transferee.
I-1
4. The Seller has no actual knowledge that the Purchaser would be
unwilling or unable to pay taxes due on its share of the taxable income
attributable to the Certificates.
5. At the time of this transfer (i) the Seller has conducted a
reasonable investigation of the financial condition of the Purchaser and, as a
result of the investigation, found that the Purchaser has historically paid its
debts as they came due, and found no significant evidence to indicate that the
Purchaser will not continue to pay its debts as they come due in the future and
(ii) either (A) the Seller both (1) has determined all of the following (I) at
the time of the transfer, and at the close of each of the Purchaser's two fiscal
years preceding the year of transfer, the Purchaser's gross assets for financial
reporting purposes exceed $100 million and its net assets for such purposes
exceed $10 million (disregarding, for purposes of determining gross or net
assets, the obligation of any person related to the Purchaser within the meaning
of section 860L(g) of the Code or any other asset if a principal purpose for
holding or acquiring that asset is to permit the Purchaser to satisfy this
minimum gross asset or net asset requirement), (II) the Purchaser is a domestic
C corporation for United States federal income tax purposes that is not for such
purposes an exempt corporation, a regulated investment company, a real estate
investment trust, a REMIC, or a cooperative organization to which part I of
subchapter T of the Code applies, (III) there are no facts or circumstances on
or before the date of transfer (or anticipated) which would reasonably indicate
that the taxes associated with the Certificates will not be paid, (IV) the
Purchaser is not a foreign branch of a domestic corporation, and (V) the
transfer does not involve a transfer or assignment to a foreign branch of a
domestic corporation (or any other arrangement by which any Certificate is at
any time subject to net tax by a foreign country or U.S. possession) and the
Purchaser will not hereafter engage in any such transfer or assignment (or any
such arrangement), and (2) does not know or have reason to know that the
Purchaser will not honor the restrictions on subsequent transfers of any Class R
Certificate described in paragraph 12 and 13 of the Transferee's Transfer
Affidavit, or (B) the Seller has determined that the present value of the
anticipated tax liabilities associated with the holding of the Certificates do
not exceed the sum of (1) the present value of any consideration given to the
Purchaser to acquire the Certificates, (2) the present value of the expected
future distributions on the Certificates, and (3) the present value of the
anticipated tax savings associated with holding the Certificates as the REMIC
generates losses (having made such determination by (I) assuming that the
Purchaser pays tax at a rate equal to the highest rate of tax specified in
Section 11(b)(1) of the Code, and (II) utilizing a discount rate for present
valuation purposes equal to the applicable Federal rate prescribed by Section
1274(d) of the Code compounded semi-annually (or a lower discount rate based on
the Purchaser having demonstrated that it regularly borrows, in the course of
its trade or business, substantial funds at such lower rate from unrelated third
parties)).
I-2
6. The Purchaser has represented to the Seller that, if the
Certificates constitute a noneconomic residual interest, it (i) understands that
as holder of a noneconomic residual interest it may incur tax liabilities in
excess of any cash flows generated by the interest, and (ii) intends to pay
taxes associated with its holding of the Certificates as they become due.
7. The Seller understands that the transfer of the Certificates may
not be respected for United States income tax purposes (and the Seller may
continue to be liable for United States income taxes associated therewith)
unless there is compliance with the standards of paragraph 5. above as to any
transfer.
Very truly yours,
[Seller]
By:___________________________
Name:_________________________
Title:________________________
I-3
EXHIBIT J
---------
FORM OF TRANSFEREE AFFIDAVIT AND AGREEMENT
STATE OF )
) ss:
COUNTY OF )
[NAME OF OFFICER], being first duly sworn, deposes and says:
1. That he is [Title of Officer] of [Name of Owner] (record or
beneficial owner of the Class R Certificate (the "Owner")), a [savings
institution] [corporation] duly organized and existing under the laws of [the
State of ________________] [the United States], on behalf of which he makes this
affidavit and agreement.
2. That the Owner (i) is not and will not be a "disqualified
organization" as of the [date of transfer] within the meaning of Section
860E(e)(5) of the Internal Revenue Code of 1986, as amended (the "Code") and
will endeavor to remain other than a disqualified organization for so long as it
retains its ownership interest in the Class R Certificate, and (ii) is acquiring
the Class R Certificate for its own account or for the account of another Owner
from which it has received an affidavit and agreement in substantially the same
form as this affidavit and agreement. (For this purpose, a "disqualified
organization" means the United States, any state or political subdivision
thereof, or any agency or instrumentality of any of the foregoing (other than an
instrumentality all of the activities of which are subject to tax and, except
for the Federal Home Loan Mortgage Corporation, a majority of whose board of
directors is not selected by any such governmental entity, or any foreign
government or international organization, or any agency or instrumentality of
such foreign government or organization, any rural electric or telephone
cooperative, or any organization (other than certain farmers' cooperatives) that
is generally exempt from federal income tax unless such organization is subject
to the tax on unrelated business taxable income).
3. That the Owner is aware (i) of the tax that would be imposed on
transfers of the Class R Certificate; (ii) that such tax would be on the
transferor, or, if such transfer is through an agent (which person includes a
broker, nominee or middleman) for a disqualified organization, on the agent;
(iii) that the person otherwise liable for the tax shall be relieved of
liability for the tax if the transferee furnished to such person an affidavit
that the transferee is not a disqualified organization and, at the time of
transfer, such person does not have actual knowledge that the affidavit is
false; and (iv) that the Class R Certificate may represent "noneconomic residual
interests" within the meaning of Treasury regulations promulgated pursuant to
the Code and that the transferor of a noneconomic residual interest will remain
liable for any taxes due with respect to the income on such residual interest,
if a significant purpose of the transfer was to enable the transferor to impede
the assessment or collection of tax.
4. That the Owner is aware of the tax imposed on a "pass-through
entity" holding the
J-1
Class R Certificate if at any time during the taxable year of the pass-through
entity a disqualified organization is the record holder of an interest in such
entity. (For this purpose, a "pass-through entity" includes a regulated
investment company, a real estate investment trust or common trust fund, a
partnership, trust or estate, and certain cooperatives.)
5. That the Owner is aware that the Trustee and the Certificate
Registrar will not register the transfer of the Class R Certificate unless the
transferee, or other transferee's agent, delivers to each of them an affidavit
and agreement, among other things, in substantially the same form as this
affidavit and agreement. The Owner expressly agrees that it will not consummate
any such transfer if it knows or believes that any of the representations
contained in such affidavit and agreement are false.
6. That the Owner has reviewed the restrictions set forth on the face
of the Class R Certificate and the provisions of Section 5.1 of the Pooling and
Servicing Agreement under which the Class R Certificate was issued. The Owner
expressly agrees to be bound by and to comply with such restrictions and
provisions.
7. That the Owner consents to any additional restrictions or
arrangements that shall be deemed necessary upon advice of counsel to constitute
a reasonable arrangement to ensure that the Class R Certificate will only be
owned, directly or indirectly, by an Owner that is not a disqualified
organization.
8. The Owner's Taxpayer Identification Number is
_____________________.
9. That no purpose of the Owner relating to the purchase of the Class
R Certificate by the Owner is or will be to enable the transferor to impede the
assessment or collection of tax.
10. That the Owner has no present knowledge or expectation that it
will be unable to pay any United States taxes owed by it so long as any of the
Certificates remain outstanding.
11. That the Owner has no present knowledge or expectation that it
will become insolvent or subject to a bankruptcy proceeding for so long as any
of the Certificates remain outstanding.
12. The Owner will, in connection with any transfer that it makes of
the Class R Certificate deliver to the Certificate Registrar a representation
letter substantially in the form of Exhibit I to the Pooling and Servicing
Agreement. [The Owner hereby agrees that it will not make any transfer of any
Class R Certificate unless (i) the transfer is to an entity which is a domestic
C corporation (other than an exempt corporation, a regulated investment company,
a real estate investment trust, a REMIC, or a cooperative organization to which
part I of Subchapter T of the Code applies) for federal income tax purposes, and
(ii) the transfer is in compliance with the conditions set
J-2
forth in paragraph 5 of Exhibit I of the Pooling and Servicing Agreement.]1/.
13. The Owner (i) is a citizen or resident of the United States, a
corporation or partnership (including an entity treated as a corporation or
partnership for federal income tax purposes) created or organized in, or under
the laws of, the United States or any state thereof or the District of Columbia
(except, in the case of a partnership, to the extent provided in regulations) or
an estate whose income is subject to United States federal income tax regardless
of its source, or a trust if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more such U.S. Persons have the authority to control all substantial decisions
of the trust and (ii) if the Owner is a partnership for U.S. federal income tax
purposes, each person or entity which holds an interest (directly or indirectly,
through a pass-through entity) is a person or entity described in (i). To the
extent prescribed in regulations by the Secretary of the Treasury, which have
not yet been issued, a trust which was in existence on August 20, 1996 (other
than a trust treated as owned by the grantor under subpart E of part 1 of
subchapter J of chapter 1 of the Code), and which was treated as a U.S. Person
on August 20, 1996 may elect to continue to be treated as a U.S. Person
notwithstanding the previous sentence.
14. The Owner hereby agrees to cooperate with the Depositor and to
take any action required of it by the Code or Treasury regulations thereunder
(whether now or hereafter promulgated) in order to create or maintain the REMIC
status of any REMIC.
15. The Owner hereby agrees that it will not take any action that
could endanger the REMIC status of REMIC I or REMIC II or result in the
imposition of tax on REMIC I or REMIC II unless counsel for, or acceptable to,
the Depositor has provided an opinion that such action will not result in the
loss of such REMIC status or the imposition of such tax, as applicable.
16. The Owner as transferee of the Class R Certificate has represented
to their transferor that, if the Class R Certificate represents noneconomic
residual interests, the Owner (i) understands that as holder of a noneconomic
residual interest it may incur tax liabilities in excess of any cash flows
generated by the interest, and (ii) intends to pay taxes associated with its
holding of the Class R Certificate as they become due.
[17. The Owner hereby represents to and for the benefit of the
transferor that (i) at the time of the transfer, and at the close of each of the
Owners's two fiscal years preceding the year of transfer, the Owners's gross
assets for financial reporting purposes exceed $100 million and its net assets
for such purposes exceed $10 million (disregarding, for purposes of determining
gross or net assets, the obligation of any person related to the Owner within
the meaning of section 860L(g) of the Code or any other asset if a principal
purpose for holding or acquiring that asset is to permit the Owner to satisfy
this minimum gross asset or net asset requirement), (ii) the Owner is a domestic
C
----------
1/. Bracketed text to be included if the Owner is relying on the transferee's
compliance with the "Safe Harbor" (which is generally described as the "safe
harbor" in the Prospectus). See "Federal Income Tax Consequences--Disregard of
Some Types of Transfers" in the Prospectus.
J-3
corporation for United States federal income tax purposes that is not for such
purposes an exempt corporation, a regulated investment company, a real estate
investment trust, a REMIC, or a cooperative organization to which part I of
subchapter T of the Code applies, (iii) there are no facts or circumstances on
or before the date of transfer (or anticipated) which would reasonably indicate
that the taxes associated with the Class R Certificate will not be paid, and
(iv) the Owner is not a foreign branch of a domestic corporation, the transfer
does not involve a transfer or assignment to a foreign branch of a domestic
corporation (or any other arrangement by which any Class R Certificate is at any
time subject to net tax by a foreign country or U.S. possession), and the Owner
will not hereafter engage in any such transfer or assignment (or any such
arrangement).]1/
--------
1/Bracketed text to be included if the Owner is relying on the transferee's
compliance with the "Asset Test Safe Harbor" (which is generally described as
the second "safe harbor" in the Prospectus Supplement) rather then the "Formula
Test Safe Harbor" (which is generally described as the first "safe harbor" in
the Prospectus Supplement). See "Federal Income Tax Consequences--Special Tax
Considerations Applicable to the Residual Certificate" in the Prospectus
Supplement.
J-4
IN WITNESS WHEREOF, the Owner has caused this instrument to be executed on
its behalf, pursuant to the authority of its Board of Directors, by its [Title
of Officer] and its corporate seal to be hereunto attached, attested by its
[Assistant] Secretary, this day of , 20 .
[Name of Owner]
By:__________________________
[Name of Officer]
[Title of Officer]
[Corporate Seal]
ATTEST:
[Assistant] Secretary
J-5
Personally appeared before me the above-named [Name of Officer], known or
proved to me to be the same person who executed the foregoing instrument and to
be the [Title of Officer] of the Owner, and Acknowledged to me that he executed
the same as his free act and deed and free act and deed of the Owner.
Subscribed and sworn before me this day of ___________, 20__.
NOTARY PUBLIC
COUNTY OF
STATE OF
My Commission expires the___day
of __________, 20__
J-6
EXHIBIT K
---------
FORM OF ADDITIONAL MATTER INCORPORATED
INTO THE FORM OF THE CERTIFICATES
This Certificate does not represent an obligation of or interest in ABN
AMRO Mortgage Corporation or any of its affiliates. Neither this Certificate nor
the underlying Loans are guaranteed by any agency or instrumentality of the
United States.
This certifies that the above-mentioned Registered Owner is the registered
owner of certain interests in a trust fund (the "Certificate Trust Fund") whose
assets consist of, among other things, a pool (the "Mortgage Pool") of
conventional one- to four-family mortgage loans (the "Loans"), formed by ABN
AMRO Mortgage Corporation (the "Depositor"). The Loans were originated or
acquired by various financial institutions and subsequently acquired by the
Depositor. The Mortgage Pool was created pursuant to a Pooling and Servicing
Agreement, dated as of the Cut-Off Date stated above (the "Pooling Agreement"),
between the Depositor, ABN AMRO Mortgage Group, Inc., as Servicer (the
"Servicer"), and JPMorgan Chase Bank, as Trustee (the "Trustee"), a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Pooling Agreement. Nothing herein shall be deemed inconsistent
with such meanings, and in the event of any conflict between the Pooling
Agreement and the terms of this Certificate, the Pooling Agreement shall
control. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Pooling Agreement, to which Pooling Agreement
the Holder of this Certificate, by virtue of the acceptance hereof, assents and
by which such Holder is bound.
Distributions will be made, pursuant to the Pooling Agreement, on the 25th
day of each month or, if such 25th day is not a Business Day, the Business Day
immediately following (the "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), to the
extent of such Certificateholder's Percentage Interest represented by this
Certificate in the portion of the Certificate Distribution Amount for such
Distribution Date then distributable on the Certificates of this Class, as
specified in Section 4.1 of the Pooling Agreement.
Distributions on this Certificate will be made by the Trustee or its Paying
Agent by wire transfer or by other means of payment acceptable to each
Certificateholder of record on the immediately preceding Record Date.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee or its Paying Agent of the pendency of such
distribution and only upon presentation and surrender of this Certificate to the
Certificate Registrar.
Reference is hereby made to the further provisions of this Certificate set
forth below, which further provisions shall for all purposes have the same
effect as if set forth at this place.
K-1
Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Pooling Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
JPMORGAN CHASE BANK, as Trustee
By:___________________________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned Pooling
Agreement.
JPMORGAN CHASE BANK,
as Trustee
By:________________________
Dated:_____________________
K-2
ABN AMRO MORTGAGE CORPORATION
MORTGAGE PASS-THROUGH CERTIFICATE
This Certificate is one of a duly authorized issue of Certificates
designated as Mortgage Pass- Through Certificates of the Series and Class
specified hereon (herein called the "Certificates") and representing certain
interests in the Certificate Trust Fund.
The Certificates do not represent an obligation of, or an interest in, the
Depositor or any of its affiliates and are not insured or guaranteed by any
governmental agency. The Certificates are limited in right of payment to certain
collections and recoveries respecting the Loans, all as more specifically set
forth herein and in the Pooling Agreement. To the extent described in the
Pooling Agreement, the Servicer is obligated to advance its own funds to cover
certain shortfalls with respect to payments on the Loans. In the event Servicer
funds are advanced with respect to any Loan, such advance is reimbursable to the
Servicer from the related recoveries on such Loan or from other cash deposited
in the Custodial Account for P&I to the extent that such advance is not
otherwise recoverable.
As provided in the Pooling Agreement, withdrawals from the Custodial
Account for P&I may be made by the Servicer from time to time for purposes other
than distributions to Certificateholders, such purposes including reimbursement
to the Servicer of advances made, or certain expenses incurred, by it.
The Pooling Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Depositor and the Servicer, and the rights of the Certificateholders under the
Pooling Agreement at any time by the Depositor and the Trustee, with the consent
of the Holders of the Certificates aggregating not less than 66-2/3% of the
aggregate Percentage Interest evidenced by all of the Certificates of the Trust
Fund. For the purposes of such provision and except as provided below, voting
rights related to 100% of the Aggregate Certificate Principal Balance of any
Class will be allocated pro rata (by Certificate Principal Balance) among the
Certificates of such Class. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Pooling Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates.
As provided in the Pooling Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices of the Certificate Registrar or the office maintained by
the Trustee in the City and State of New York, duly endorsed by, or accompanied
by an assignment in the form below or other written instrument of transfer in
form satisfactory to the Trustee or any Authenticating Agent duly executed by,
the Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of Authorized Denominations evidencing
the same Percentage Interest set forth hereinabove will be issued to the
designated transferee or
K-3
transferees.
No transfer of a Certificate will be made unless such transfer is exempt
from or is made in accordance with the registration requirements of the
Securities Act of 1933, as amended (the "Securities Act") and any applicable
state securities laws. No transfer, sale, pledge or other disposition of a Class
R Certificate shall be made unless such transfer, sale, pledge or other
disposition is made in accordance with Section 5.1(c) or Section 5.1(d) of the
Pooling Agreement. Each Person who, at the time, acquires any ownership interest
in any Junior Subordinate Certificate shall be deemed by the acceptance or
acquisition of such ownership interest to have agreed to be bound by the
provisions of such Section 5.1(e) or Section 5.1(f) of the Pooling Agreement.
Each Person who, at any time, acquires any ownership interest in any Junior
Subordinate Certificate shall be deemed by the acceptance or acquisition of such
ownership interest to have agreed to be bound by the provisions of such Section
5.1(e) and Section 5.1(f), as applicable. No transfer of a Junior Subordinate
Certificate shall be deemed to be made in accordance with such Section 5.1(e)
unless such transfer is made pursuant to an effective registration statement
under the Securities Act or unless the Trustee and the Certificate Registrar are
provided with the certificates and an Opinion of Counsel, if required, on which
the Trustee and the Certificate Registrar may conclusively rely, which
establishes or establish to the Trustee's and the Certificate Registrar's
satisfaction that such transfer is exempt from the registration requirements
under the Securities Act, as follows: In the event that a transfer is to be made
in reliance upon an exemption from the Securities Act, the Trustee and the
Certificate Registrar shall require, in order to assure compliance with the
Securities Act, that the Certificateholder desiring to effect such transfer
certify to the Trustee and the Certificate Registrar in writing, in
substantially the form attached as Exhibit F to the Pooling Agreement, the facts
surrounding the transfer, with such modifications to such Exhibit F as may be
appropriate to reflect the actual facts of the proposed transfer, and that the
Certificateholder's proposed transferee certify to the Trustee and the
Certificate Registrar in writing, in substantially the form attached as Exhibit
G to the Pooling Agreement, the facts surrounding the transfer, with such
modifications to such Exhibit G as may be appropriate to reflect the actual
facts of the proposed transfer. If such certificate of the proposed transferee
does not contain substantially the substance of Exhibit G, the Trustee and the
Certificate Registrar shall require an Opinion of Counsel satisfactory to it
that such transfer may be made without registration, which Opinion of Counsel
shall not be obtained at the expense of the Trustee, the Certificate Registrar,
the Trust Fund or the Depositor.
Transfers of the Junior Subordinate Certificates may also be made in
accordance with Section 5.1(f) of the Pooling Agreement. To effectuate a
Certificate transfer in accordance with such Section 5.1(f), the proposed
transferee of such Certificate must provide the Trustee, the Certificate
Registrar and the Depositor with an investment letter substantially in the form
of Exhibit L attached to the Pooling Agreement, which investment letter shall
not be an expense of the Trustee, the Certificate Registrar or the Depositor,
and which investment letter states that, among other things, such transferee (i)
is a "qualified institutional buyer" as defined under Rule 144A, acting for its
own account or the accounts of other "qualified institutional buyers" as defined
under Rule 144A, and (ii) is aware that the proposed transferor intends to rely
on the exemption from registration requirements under the Securities Act
provided by Rule 144A. Notwithstanding the foregoing, the proposed transferee of
K-4
such Certificate shall not be required to provide the Trustee, the Certificate
Registrar or the Depositor with Annex 1 or Annex 2 to the form of such Exhibit L
if the Depositor so consents prior to each such transfer. Such transfers shall
be deemed to have complied with the requirements of Section 5.1(f) of the
Pooling Agreement. The Holder of a Certificate desiring to effect such transfer
does hereby agree to indemnify the Trustee, and the Certificate Registrar, the
Depositor, and the Certificate Registrar against any liability that may result
if transfer is not made in accordance with the Pooling Agreement.
The Certificates are issuable only as registered Certificates without
coupons in Authorized Denominations specified in the Pooling Agreement. As
provided in the Pooling Agreement and subject to certain limitations therein set
forth, Certificates are exchangeable for new Certificates of Authorized
Denominations evidencing the same aggregate interest in the portion of the
Available Distribution Amount distributable on this Class of Certificate, as
requested by the Holder surrendering the same.
A reasonable service charge may be made for any such registration of
transfer or exchange, and the Trustee or the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
The Depositor, the Certificate Registrar, the Certificate Administrator,
the Servicer, the Trustee and any agent of any of them may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and neither the Depositor, the Certificate Registrar, the Certificate
Administrator, the Servicer, the Trustee nor any such agent shall be affected by
notice to the contrary.
The respective obligations and responsibilities of the Servicer and the
Trustee created under the Pooling Agreement (other than the obligation to make
payments to Certificateholders as set forth therein) shall terminate upon the
earlier of (i) the later of the final payment or other liquidation (or any
Advance with respect thereto) of the last Loan remaining in the Trust Fund and
the disposition of all property acquired in respect of any Loan or (ii) the
purchase by the Class R Certificateholder of all Loans at a price established
pursuant to the Pooling Agreement; PROVIDED, HOWEVER, that in no event shall the
trust created hereby continue beyond 21 years from the death of the survivor of
certain persons identified in the Pooling Agreement.
K-5
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sell(s) and assign(s) and
transfer(s) unto______________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address, including postal zip code of
assignee. Please insert social security or other identifying number of
assignee.)
the within Mortgage Pass-Through Certificate and hereby irrevocably constitutes
and appoints ____________________________Attorney to transfer said Certificate
on the Certificate Register, with full power of substitution in the premises.
Dated:________________ ______________________________
Signature Guaranteed
______________________________
NOTICE:
The signature to this assignment must
correspond with the name as written upon
the face of the within instrument in
every particular, without alteration or
enlargement or any change whatever.
K-6
EXHIBIT L
---------
FORM OF RULE 144A INVESTMENT REPRESENTATION
Description of Rule 144A Securities, including numbers:
___________________________
___________________________
___________________________
___________________________
The undersigned seller, as registered holder (the "Seller"), intends to transfer
the Rule 144A Securities described above to the undersigned buyer (the "Buyer").
1. In connection with such transfer and in accordance with the
agreements pursuant to which the Rule 144A Securities were issued, the Seller
hereby certifies the following facts: Neither the Seller nor anyone acting on
its behalf has offered, transferred, pledged, sold or otherwise disposed of the
Rule 144A Securities, any interest in the Rule 144A Securities or any other
similar security to, or solicited any offer to buy or accept a transfer, pledge
or any disposition of the Rule 144A Securities, any interest in the Rule 144A
Securities or any other similar security from, or otherwise approached or
negotiated with respect to the Rule 144A Securities, any interest in the Rule
144A Securities or any other similar security with, any person in any manner, or
made any general solicitation by means of general advertising or in any other
manner, or taken any other action, that would constitute a distribution of the
Rule 144A Securities under the Securities Act of 1933, as amended (the "1933
Act"), or that would render the disposition of the Rule 144A Securities in
violation of Section 5 of the 1933 Act or require registration pursuant thereto,
and that the Seller has not offered the Rule 144A Securities to any person other
than the Buyer or another "qualified institutional buyer" as defined in Rule
144A under the 0000 Xxx.
2. The Buyer warrants and represents to, and covenants with, the
Seller, the Trustee, the Certificate Registrar and the Servicer (as defined in
the Pooling and Servicing Agreement (the "Agreement") dated as of June 1, 2003
between ABN AMRO Mortgage Corporation, as Depositor, ABN AMRO Mortgage Group,
Inc., as Servicer, and JPMorgan Chase Bank, as Trustee) pursuant to Section
5.1(f) of the Agreement, as follows:
(a) The Buyer understands that the Rule 144A Securities have not
been registered under the 1933 Act or the securities laws of any state.
(b) The Buyer considers itself a substantial, sophisticated
institutional investor having such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of
investment in the Rule 144A Securities.
(c) The Buyer has received and reviewed the Private Placement
Memorandum
L-1
dated as of June 26, 2003 relating to the Rule 144A Securities and has been
furnished with all information regarding the Rule 144A Securities that it has
requested from the Seller, the Trustee, the Depositor or the Servicer.
(d) Neither the Buyer nor anyone acting on its behalf has
offered, transferred, pledged, sold or otherwise disposed of the Rule 144A
Securities, any interest in the Rule 144A Securities or any other similar
security to, or solicited any offer to buy or accept a transfer, pledge or other
disposition of the Rule 144A Securities, any interest in the Rule 144A
Securities or any other similar security from, or otherwise approached or
negotiated with respect to the Rule 144A Securities, any interest in the Rule
144A Securities or any other similar security with, any person in any manner, or
made any general solicitation by means of general advertising or in any other
manner, or taken any other action, that would constitute a distribution of the
Rule 144A Securities under the 1933 Act or that would render the disposition of
the Rule 144A Securities a violation of Section 5 of the 1933 Act or require
registration pursuant thereto, nor will it act, nor has it authorized or will it
authorize any person to act, in such manner with respect to the Rule 144A
Securities.
(e) The Buyer is a "qualified institutional buyer" as that term
is defined in Rule 144A under the 1933 Act and has (1) completed either of the
forms of certification to that effect attached hereto as Annex 1 or Annex 2, or
(2) obtained the waiver of the Depositor with respect to Annex 1 and Annex 2
pursuant to Section 5.1(f) of the Agreement. The Buyer is aware that the sale to
it is being made in reliance on Rule 144A. The Buyer is acquiring the Rule 144A
Securities for its own account or the accounts of other qualified institutional
buyers, understands that such Rule 144A Securities may be resold, pledged or
transferred only (i) to a person reasonably believed to be a qualified
institutional buyer that purchases for its own account or for the account of a
qualified institutional buyer to whom notice is given that the resale, pledge or
transfer is being made in reliance on Rule 144A, or (ii) pursuant to another
exemption from registration under the 1933 Act.
(f) The Buyer is not affiliated with (i) the Trustee or (ii) any
Rating Agency that rated the Rule 144A Securities.
(g) If applicable, the Buyer has complied, and will continue to
comply, with the guidelines established by Thrift Bulletin 12 issued December
13, 1988, by the Office of Regulatory Activities of the Federal Home Loan Bank
System.
[Required only in the case of a transfer of a Class B-3, Class B-4 and
Class B-5 Certificate][3. The Buyer warrants and represents to, and covenants
with, the Seller, the Servicer, the Certificate Registrar and the Depositor that
(1) the Buyer is not an employee benefit plan (within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")), subject to the prohibited transaction provisions of ERISA ("Plan"),
or a plan (within the meaning of Section 4975(e)(1) of the Internal Revenue Code
of 1986 ("Code")) subject to Section 4975 of the Code (also a "Plan"), and the
Buyer is not directly or indirectly purchasing the Rule 144A Securities on
behalf of, as investment manager of, as named fiduciary of, as trustee of, or
with "plan assets" of any Plan, or (2) the Buyer has provided the Seller, the
Servicer, the Certificate Registrar and the
L-2
Depositor with an Officer's Certificate signed by a Responsible Officer of the
Buyer stating that the Buyer is an insurance company using assets of an
"insurance company general account" (within the meaning of Department of Labor
Prohibited Transaction Class Exemption ("PTCE") 95-60) to effect such purchase
and is eligible for, and satisfies all of the requirements for exemptive relief
under Sections I and III of PTCE 95-60, which Officer's Certificate shall not be
an expense of the Trustee, the Certificate Registrar, the Certificate
Administrator, the Servicer or the Depositor.]
3. This document may be executed in one or more counterparts and by
the different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same document.
L-3
IN WITNESS WHEREOF, each of the parties has executed this document as of
the date set forth below.
_____________________________ __________________________ ___
Print Name of Seller Print Name of Buyer
By:__________________________ By:___________________________
Name: Name:
Title: Title:
Taxpayer Identification Taxpayer Identification
No.:_________________________ No.:__________________________
Date:________________________ Date:_________________________
L-4
Annex 1 to Exhibit L
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Buyers Other Than Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the Rule
144A Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice-President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933 ("Rule 144A") because (i) the Buyer owned and/or invested
on a discretionary basis $__________2/ in securities (except for the excluded
securities referred to below) as of the end of the Buyer's most recent fiscal
year (such amount being calculated in accordance with Rule 144A) and (ii) the
Buyer satisfies the criteria in the category marked below.
_______ CORPORATION, ETC. The Buyer is a corporation (other than a bank,
savings and loan association or similar institution), Massachusetts or
similar business trust, partnership, or charitable organization
described in Section 501(c)(3) of the Internal Revenue Code.
_______ BANK. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the District of
Columbia, the business of which is substantially confined to banking
and is supervised by the State or territorial banking commission or
similar official or is a foreign bank or equivalent institution, and
(b) has an audited net worth of at least $25,000,000 as demonstrated
in its latest annual financial statements, A COPY OF WHICH IS ATTACHED
HERETO.
_______ SAVINGS AND LOAN. The Buyer (a) is a savings and loan association,
building and loan association, cooperative bank, homestead association
or similar institution, which is supervised and examined by a State or
Federal authority having supervision over any such institutions or is
a foreign savings and loan association or equivalent institution and
(b) has an audited net worth of at least $25,000,000 as demonstrated
in its latest annual financial statements.
--------
2/ Buyer must own and/or invest on a discretionary basis at least $100,000,000
in securities unless Buyer is a dealer, and, in that case, Buyer must own and/or
invest on a discretionary basis at least $10,000,000 in securities.
L-1-1
_______ BROKER-DEALER. The Buyer is a dealer registered pursuant to Section 15
of the Securities Exchange Act of 1934.
_______ INSURANCE COMPANY. The Buyer is an insurance company whose primary and
predominant business activity is the writing of insurance or the
reinsuring of risks underwritten by insurance companies and which is
subject to supervision by the insurance commissioner or a similar
official or agency of a State or territory or the District of
Columbia.
_______ STATE OR LOCAL PLAN. The Buyer is a plan established and maintained by
a State, its political subdivisions, or any agency or instrumentality
of the State or its political subdivisions, for the benefit of its
employees.
_______ ERISA PLAN. The Buyer is an employee benefit plan within the meaning
of Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA") and is subject to the fiduciary
responsibility provisions of ERISA.
_______ INVESTMENT ADVISER. The Buyer is an investment adviser registered
under the Investment Advisers Act of 1940.
_______ SBIC. The Buyer is a Small Business Investment Company licensed by the
U.S. Small Business Administration under Section 301(c) or (d) of the
Small Business Investment Act of 1958.
_______ BUSINESS DEVELOPMENT COMPANY. The Buyer is a business development
company as defined in Section 202(a)(22) of the Investment Advisers
Act of 1940.
_______ TRUST FUND. The Buyer is a trust fund whose trustee is a bank or trust
company and whose participants are exclusively (a) plans established
and maintained by a State, its political subdivision, or any agency or
instrumentality of the State or its political subdivision, for the
benefit of its employees, or (b) employee benefit plans within the
meaning of Title I of the Employee Retirement Income Security Act of
1974, but is not a trust fund that includes as participants individual
retirement accounts or H.R. 10 plans.
3. The term "SECURITIES" as used herein DOES NOT INCLUDE (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer is
a dealer, (iii) bank deposit notes and certificates of deposit, (iv) loan
participations, (v) repurchase agreements, (vi) securities owned but subject to
a repurchase agreement and (vii) currency, interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of securities
owned and/or
L-1-2
invested on a discretionary basis by the Buyer, the Buyer used the cost of such
securities to the Buyer and did not include any of the securities referred to in
the preceding paragraph. Further, in determining such aggregate amount, the
Buyer may have included securities owned by subsidiaries of the Buyer, but only
if such subsidiaries are consolidated with the Buyer in its financial statements
prepared in accordance with generally accepted accounting principles and if the
investments of such subsidiaries are managed under the Buyer's direction.
However, such securities were not included if the Buyer is a majority-owned,
consolidated subsidiary of another enterprise and the Buyer is not itself a
reporting company under the Securities Exchange Act of 1934.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
_______________ Will the Buyer be purchasing the Rule 144A
Yes No Securities only for the Buyer's own account?
6. If the answer to the foregoing question is "no", the Buyer agrees
that, in connection with any purchase of securities sold to the Buyer for the
account of a third party (including any separate account) in reliance on Rule
144A, the Buyer will only purchase for the account of a third party that at the
time is a "qualified institutional buyer" within the meaning of Rule 144A. In
addition, the Buyer agrees that the Buyer will not purchase securities for a
third party unless the Buyer has obtained a current representation letter from
such third party or taken other appropriate steps contemplated by Rule 144A to
conclude that such third party independently meets the definition of "qualified
institutional buyer" set forth in Rule 144A.
7. The Buyer will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice is given, the Buyer's purchase of Rule 144A Securities will
constitute a reaffirmation of this certification as of the date of such
purchase.
__________________________________________
Print Name of Buyer
By:_______________________________________
Name:
Title:
Date:_____________________________________
L-1-3
Annex 2 to Exhibit L
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Buyers That Are Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the Rule
144A Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice-President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933 ("Rule 144A") because Buyer is a part of a Family of
Investment Companies (as defined below), is such an officer the Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, and (ii)
as marked below, the Buyer alone, or the Buyer's Family of Investment Companies,
owned at least $100,000,000 in securities (other than the excluded securities
referred to below) as of the end of the Buyer's most recent fiscal year. For
purposes of determining the amount of securities owned by the Buyer or the
Buyer's Family of Investment Companies, the cost of such securities was used.
____ The Buyer owned $__________ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule
144A).
____ The Buyer is part of a Family of Investment Companies which owned in
the aggregate $__________ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule
144A).
3. The term "FAMILY OF INVESTMENT COMPANIES" as used herein means two
or more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser in a majority owned subsidiary of the other).
4. The term "SECURITIES" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) bank deposit notes and certificates
of deposit, (iii) loan participations, (iv) repurchase agreements, (v)
securities owned but subject to a repurchase agreement and (vi) currency,
interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that each of
the parties
L-2-1
to which this certification is made are relying and will continue to rely on the
statements made herein because one or more sales to the Buyer will be reliance
on Rule 144A. In addition, the Buyer will only purchase for the Buyer's own
account.
6. The undersigned will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice, the Buyer's purchase of Rule 144A Securities will constitute
a reaffirmation of this certification by the undersigned as of the date of such
purchase.
____________________________________________
Print Name of Buyer
By: ________________________________________
Name:
Title:
Date: ______________________________________
IF AN ADVISER
____________________________________________
Print Name of Buyer
By: ________________________________________
Name:
Title:
Date: ______________________________________
(SEAL)
L-2-2
EXHIBIT M
---------
AGGREGATE PLANNED PRINCIPAL BALANCES
Aggregate Class A-1, Class A-3, Class
A18, Class A-19, Class A-22, Class
Distribution Date A-23 and Class A-24 Certificates
Initial Balance............................. $276,385,000.00
July25,2003................................. 275,668,526.97
August25,2003............................... 274,844,558.01
September25,2003............................ 273,913,446.23
October25,2003.............................. 272,875,513.86
November25,2003............................. 271,731,152.08
December25,2003............................. 270,480,821.01
January25,2004.............................. 269,125,049.47
February25,2004............................. 267,664,434.71
March25,2004................................ 266,099,642.12
April25,2004................................ 264,431,404.78
May25,2004.................................. 262,660,522.99
June25,2004................................. 260,787,863.71
July25,2004................................. 258,814,359.95
August25,2004............................... 256,741,010.03
September25,2004............................ 254,568,876.84
October25,2004.............................. 252,299,086.97
November25,2004............................. 249,932,829.81
December25,2004............................. 247,471,356.55
January25,2005.............................. 244,915,979.15
February25,2005............................. 242,268,069.19
March25,2005................................ 239,529,056.69
April25,2005................................ 236,700,428.86
May25,2005.................................. 233,783,728.80
June25,2005................................. 230,780,554.09
July25,2005................................. 227,692,555.38
August25,2005............................... 224,521,434.87
September25,2005............................ 221,268,944.79
October25,2005.............................. 217,936,885.77
November25,2005............................. 214,527,105.16
December25,2005............................. 211,140,456.87
January25,2006.............................. 207,776,790.49
February25,2006............................. 204,435,956.63
March25,2006................................ 201,117,806.83
April25,2006................................ 197,822,193.62
May25,2006.................................. 194,548,970.49
M-1
Aggregate Class A-1, Class A-3, Class
A18, Class A-19, Class A-22, Class
Distribution Date A-23 and Class A-24 Certificates
June25,2006................................. $191,297,991.90
July25,2006................................. 188,069,113.22
August25,2006............................... 184,862,190.80
September25,2006............................ 181,677,081.91
October25,2006.............................. 178,513,644.76
November25,2006............................. 175,371,738.47
December25,2006............................. 172,251,223.09
January25,2007.............................. 169,151,959.59
February25,2007............................. 166,073,809.84
March25,2007................................ 163,016,636.59
April25,2007................................ 159,980,303.52
May25,2007.................................. 156,964,675.19
June25,2007................................. 153,969,617.02
July25,2007................................. 150,994,995.34
August25,2007............................... 148,040,677.34
September25,2007............................ 145,106,531.07
October25,2007.............................. 142,192,425.44
November25,2007............................. 139,298,230.24
December25,2007............................. 136,423,816.09
January25,2008.............................. 133,569,054.45
February25,2008............................. 130,733,817.63
March25,2008................................ 127,917,978.77
April25,2008................................ 125,121,411.84
May25,2008.................................. 122,343,991.64
June25,2008................................. 119,585,593.77
July25,2008................................. 117,038,495.91
August25,2008............................... 114,509,944.92
September25,2008............................ 111,999,819.46
October25,2008.............................. 109,507,998.98
November25,2008............................. 107,034,363.73
December25,2008............................. 104,578,794.76
January25,2009.............................. 102,141,173.88
February25,2009............................. 99,721,383.66
March25,2009................................ 97,319,307.48
April25,2009................................ 94,934,829.46
May25,2009.................................. 92,567,834.48
June25,2009................................. 90,218,208.17
July25,2009................................. 87,923,898.28
August25,2009............................... 85,646,435.48
September25,2009............................ 83,385,708.19
M-2
Aggregate Class A-1, Class A-3, Class
A18, Class A-19, Class A-22, Class
Distribution Date A-23 and Class A-24 Certificates
October25,2009.............................. $81,141,605.53
November25,2009............................. 78,914,017.37
December25,2009............................. 76,702,834.29
January25,2010.............................. 74,507,947.59
February25,2010............................. 72,329,249.29
March25,2010................................ 70,195,680.05
April25,2010................................ 68,112,126.67
May25,2010.................................. 66,077,524.96
June25,2010................................. 64,090,832.44
July25,2010................................. 62,345,736.14
August25,2010............................... 60,642,066.95
September25,2010............................ 58,978,915.79
October25,2010.............................. 57,355,392.59
November25,2010............................. 55,770,625.99
December25,2010............................. 54,223,762.92
January25,2011.............................. 52,713,968.21
February25,2011............................. 51,240,424.27
March25,2011................................ 49,802,330.69
April25,2011................................ 48,398,903.92
May25,2011.................................. 47,029,376.89
June25,2011................................. 45,692,998.71
July25,2011................................. 44,554,517.94
August25,2011............................... 43,442,607.44
September25,2011............................ 42,356,676.27
October25,2011.............................. 41,296,146.19
November25,2011............................. 40,260,451.40
December25,2011............................. 39,249,038.24
January25,2012.............................. 38,261,365.00
February25,2012............................. 37,296,901.61
March25,2012................................ 36,355,129.42
April25,2012................................ 35,435,540.97
May25,2012.................................. 34,537,639.75
June25,2012................................. 33,660,939.94
July25,2012................................. 32,938,864.01
August25,2012............................... 32,231,820.81
September25,2012............................ 31,539,503.45
October25,2012.............................. 30,861,611.23
November25,2012............................. 30,197,849.49
December25,2012............................. 29,547,929.52
January25,2013.............................. 28,911,568.41
M-3
Aggregate Class A-1, Class A-3, Class
A18, Class A-19, Class A-22, Class
Distribution Date A-23 and Class A-24 Certificates
February25,2013............................. $28,288,488.98
March25,2013................................ 27,678,419.63
April25,2013................................ 27,081,094.22
May25,2013.................................. 26,496,252.01
June25,2013................................. 25,923,637.49
July25,2013................................. 25,363,000.32
August25,2013............................... 24,814,095.22
September25,2013............................ 24,276,681.85
October25,2013.............................. 23,750,524.72
November25,2013............................. 23,235,393.12
December25,2013............................. 22,731,060.96
January25,2014.............................. 22,237,306.76
February25,2014............................. 21,753,913.49
March25,2014................................ 21,280,668.51
April25,2014................................ 20,817,363.49
May25,2014.................................. 20,363,794.30
June25,2014................................. 19,919,760.94
July25,2014................................. 19,485,067.48
August25,2014............................... 19,059,521.92
September25,2014............................ 18,642,936.16
October25,2014.............................. 18,235,125.91
November25,2014............................. 17,835,910.62
December25,2014............................. 17,445,113.38
January25,2015.............................. 17,062,560.87
February25,2015............................. 16,688,083.28
March25,2015................................ 16,321,514.25
April25,2015................................ 15,962,690.79
May25,2015.................................. 15,611,453.21
June25,2015................................. 15,267,645.05
July25,2015................................. 14,931,113.04
August25,2015............................... 14,601,707.02
September25,2015............................ 14,279,279.86
October25,2015.............................. 13,963,687.44
November25,2015............................. 13,654,788.55
December25,2015............................. 13,352,444.84
January25,2016.............................. 13,056,520.80
February25,2016............................. 12,766,883.65
March25,2016................................ 12,483,403.32
April25,2016................................ 12,205,952.37
May25,2016.................................. 11,934,405.96
M-4
Aggregate Class A-1, Class A-3, Class
A18, Class A-19, Class A-22, Class
Distribution Date A-23 and Class A-24 Certificates
June25,2016................................. $11,668,641.80
July25,2016................................. 11,408,540.07
August25,2016............................... 11,153,983.40
September25,2016............................ 10,904,856.80
October25,2016.............................. 10,661,047.64
November25,2016............................. 10,422,445.56
December25,2016............................. 10,188,942.45
January25,2017.............................. 9,960,432.43
February25,2017............................. 9,736,811.75
March25,2017................................ 9,517,978.79
April25,2017................................ 9,303,833.99
May25,2017.................................. 9,094,279.83
June25,2017................................. 8,889,220.78
July25,2017................................. 8,688,563.26
August25,2017............................... 8,492,215.59
September25,2017............................ 8,300,087.98
October25,2017.............................. 8,112,092.45
November25,2017............................. 7,928,142.85
December25,2017............................. 7,748,154.75
January25,2018.............................. 7,572,045.49
February25,2018............................. 7,399,734.06
March25,2018................................ 7,231,141.15
April25,2018................................ 7,066,189.02
May25,2018.................................. 6,904,801.57
June25,2018................................. 6,746,904.24
July25,2018................................. 6,592,423.98
August25,2018............................... 6,441,289.26
September25,2018............................ 6,293,430.00
October25,2018.............................. 6,148,777.57
November25,2018............................. 6,007,264.74
December25,2018............................. 5,868,825.66
January25,2019.............................. 5,733,395.83
February25,2019............................. 5,600,912.07
March25,2019................................ 5,471,312.51
April25,2019................................ 5,344,536.53
May25,2019.................................. 5,220,524.78
June25,2019................................. 5,099,219.11
July25,2019................................. 4,980,562.57
August25,2019............................... 4,864,499.39
September25,2019............................ 4,750,974.93
M-5
Aggregate Class A-1, Class A-3, Class
A18, Class A-19, Class A-22, Class
Distribution Date A-23 and Class A-24 Certificates
October25,2019.............................. $4,639,935.70
November25,2019............................. 4,531,329.28
December25,2019............................. 4,425,104.35
January25,2020.............................. 4,321,210.64
February25,2020............................. 4,219,598.92
March25,2020................................ 4,120,220.97
April25,2020................................ 4,023,029.57
May25,2020.................................. 3,927,978.46
June25,2020................................. 3,835,022.36
July25,2020................................. 3,744,116.89
August25,2020............................... 3,655,218.62
September25,2020............................ 3,568,285.00
October25,2020.............................. 3,483,274.35
November25,2020............................. 3,400,145.88
December25,2020............................. 3,318,859.61
January25,2021.............................. 3,239,376.41
February25,2021............................. 3,161,657.95
March25,2021................................ 3,085,666.70
April25,2021................................ 3,011,365.89
May25,2021.................................. 2,938,719.54
June25,2021................................. 2,867,692.39
July25,2021................................. 2,798,249.93
August25,2021............................... 2,730,358.35
September25,2021............................ 2,663,984.54
October25,2021.............................. 2,599,096.09
November25,2021............................. 2,535,661.27
December25,2021............................. 2,473,648.98
January25,2022.............................. 2,413,028.79
February25,2022............................. 2,353,770.90
March25,2022................................ 2,295,846.12
April25,2022................................ 2,239,225.86
May25,2022.................................. 2,183,882.16
June25,2022................................. 2,129,787.60
July25,2022................................. 2,076,915.36
August25,2022............................... 2,025,239.17
September25,2022............................ 1,974,733.30
October25,2022.............................. 1,925,372.57
November25,2022............................. 1,877,132.31
December25,2022............................. 1,829,988.38
January25,2023.............................. 1,783,917.14
M-6
Aggregate Class A-1, Class A-3, Class
A18, Class A-19, Class A-22, Class
Distribution Date A-23 and Class A-24 Certificates
February25,2023............................. $1,738,895.44
March25,2023................................ 1,694,900.60
April25,2023................................ 1,651,910.45
May25,2023.................................. 1,609,903.26
June25,2023................................. 1,568,857.74
July25,2023................................. 1,528,753.08
August25,2023............................... 1,489,568.89
September25,2023............................ 1,451,285.20
October25,2023.............................. 1,413,882.46
November25,2023............................. 1,377,341.55
December25,2023............................. 1,341,643.73
January25,2024.............................. 1,306,770.65
February25,2024............................. 1,272,704.37
March25,2024................................ 1,239,427.30
April25,2024................................ 1,206,922.24
May25,2024.................................. 1,175,172.35
June25,2024................................. 1,144,161.12
July25,2024................................. 1,113,872.42
August25,2024............................... 1,084,290.44
September25,2024............................ 1,055,399.72
October25,2024.............................. 1,027,185.10
November25,2024............................. 999,631.76
December25,2024............................. 972,725.18
January25,2025.............................. 946,451.17
February25,2025............................. 920,795.82
March25,2025................................ 895,745.51
April25,2025................................ 871,286.92
May25,2025.................................. 847,407.01
June25,2025................................. 824,093.01
July25,2025................................. 801,332.43
August25,2025............................... 779,113.04
September25,2025............................ 757,422.86
October25,2025.............................. 736,250.18
November25,2025............................. 715,583.54
December25,2025............................. 695,411.69
January25,2026.............................. 675,723.67
February25,2026............................. 656,508.72
March25,2026................................ 637,756.31
April25,2026................................ 619,456.15
May25,2026.................................. 601,598.15
M-7
Aggregate Class A-1, Class A-3, Class
A18, Class A-19, Class A-22, Class
Distribution Date A-23 and Class A-24 Certificates
June25,2026................................. $584,172.45
July25,2026................................. 567,169.40
August25,2026............................... 550,579.54
September25,2026............................ 534,393.63
October25,2026.............................. 518,602.63
November25,2026............................. 503,197.67
December25,2026............................. 488,170.09
January25,2027.............................. 473,511.40
February25,2027............................. 459,213.32
March25,2027................................ 445,267.71
April25,2027................................ 431,666.64
May25,2027.................................. 418,402.32
June25,2027................................. 405,467.15
July25,2027................................. 392,853.67
August25,2027............................... 380,554.61
September25,2027............................ 368,562.84
October25,2027.............................. 356,871.38
November25,2027............................. 345,473.40
December25,2027............................. 334,362.23
January25,2028.............................. 323,531.34
February25,2028............................. 312,974.33
March25,2028................................ 302,684.94
April25,2028................................ 292,657.06
May25,2028.................................. 282,884.71
June25,2028................................. 273,362.01
July25,2028................................. 264,083.26
August25,2028............................... 255,042.83
September25,2028............................ 246,235.24
October25,2028.............................. 237,655.13
November25,2028............................. 229,297.26
December25,2028............................. 221,156.48
January25,2029.............................. 213,227.77
February25,2029............................. 205,506.22
March25,2029................................ 197,987.03
April25,2029................................ 190,665.50
May25,2029.................................. 183,537.01
June25,2029................................. 176,597.09
July25,2029................................. 169,841.32
August25,2029............................... 163,265.41
September25,2029............................ 156,865.14
M-8
Aggregate Class A-1, Class A-3, Class
A18, Class A-19, Class A-22, Class
Distribution Date A-23 and Class A-24 Certificates
October25,2029.............................. $150,636.40
November25,2029............................. 144,575.16
December25,2029............................. 138,677.49
January25,2030.............................. 132,939.53
February25,2030............................. 127,357.52
March25,2030................................ 121,927.77
April25,2030................................ 116,646.68
May25,2030.................................. 111,510.73
June25,2030................................. 106,516.47
July25,2030................................. 101,660.54
August25,2030............................... 96,939.63
September25,2030............................ 92,350.53
October25,2030.............................. 87,890.09
November25,2030............................. 83,555.23
December25,2030............................. 79,342.93
January25,2031.............................. 75,250.25
February25,2031............................. 71,274.31
March25,2031................................ 67,412.29
April25,2031................................ 63,661.45
May25,2031.................................. 60,019.09
June25,2031................................. 56,482.58
July25,2031................................. 53,049.35
August25,2031............................... 49,716.88
September25,2031............................ 46,482.72
October25,2031.............................. 43,344.46
November25,2031............................. 40,299.75
December25,2031............................. 37,346.29
January25,2032.............................. 34,481.85
February25,2032............................. 31,704.22
March25,2032................................ 29,011.27
April25,2032................................ 26,400.89
May25,2032.................................. 23,871.04
June25,2032................................. 21,419.71
July25,2032................................. 19,044.95
August25,2032............................... 16,744.84
September25,2032............................ 14,517.51
October25,2032.............................. 12,361.15
November25,2032............................. 10,273.95
December25,2032............................. 8,254.18
January25,2033.............................. 6,300.13
M-9
Aggregate Class A-1, Class A-3, Class
A18, Class A-19, Class A-22, Class
Distribution Date A-23 and Class A-24 Certificates
February25,2033............................. $4,410.14
March25,2033................................ 2,582.58
April25,2033................................ 815.85
May25,2033 and thereafter 0.00
M-10
EXHIBIT N
---------
[RESERVED]
N-1
EXHIBIT O
---------
[RESERVED]
O-1
EXHIBIT P
---------
[RESERVED]
P-1
EXHIBIT Q
---------
BLOOMBERG DATA
Loan Number
Property Type
Owner Occupied
Loan Purpose
Loan Type
Loan Group
Current Interest Rate
Original Balance
Current Balance
First Payment Date
Maturity Date
Current PNI
Servicing Fee
Loan Term
Foreclosure/REO
Loan to Value Ratio
State Code
Interest Paid to Date
Zip Code
PIF Data
Amortized Remaining Term
Q-1
EXHIBIT R
---------
FORM OF SPECIAL SERVICING AGREEMENT
-----------------------------------
This SPECIAL SERVICING AGREEMENT (the "AGREEMENT") is made and entered
into as of ____________ 1, 20__, between _______________, as seller and master
servicer (the "COMPANY"), _______________, as holder of the Class B Certificates
identified on Schedule I (the "CLASS B HOLDER") and _______________, [an
affiliate of the Class B Holder,] as special servicer (the "SPECIAL SERVICER").
PRELIMINARY STATEMENT
---------------------
WHEREAS, the Class B Holder is the holder of at least 75% of each the
classes of Mortgage Pass- Through Certificates (each a "CLASS B CERTIFICATE") of
the series of issuances (each a "SERIES") issued by the Company identified on
Schedule I attached hereto (such Schedule I, as may be modified or amended to
reflect (i) the purchase from time to time by the Class B Holder of interests in
any class of Class B Certificates of a Series such that the Class B Holder owns
not less than 75% of the then outstanding Certificate Principal Balance of such
Class B Certificates and (ii) the sale from time to time of the Class B Holder
of interests in any class of Class B Certificates of a Series such that the
Class B Holder owns less than 75% of the then outstanding Certificate Principal
Balance of such Class B Certificates, the "SCHEDULE I").
WHEREAS, each of the Class B Certificates was issued by the Company
pursuant to the Pooling and Servicing Agreement or Agreements (each a "POOLING
AND SERVICING AGREEMENT") identified on Schedule I and evidences an ownership
interest in a pool of Mortgage Loans.
WHEREAS, the Company is the Master Servicer of the Mortgage Loans related
to each Series and the Mortgage Loans are serviced in accordance with the
applicable Pooling and Servicing Agreement [and the Company's [Servicer Guide]
(the "SERVICER GUIDE")].
WHEREAS, in connection with the purchase by Class B Holder of a Series of
Class B Certificates (whether owned by the Class B Holder on the date hereof or
purchased by the Class B Holder at any time in the future), the Class B Holder
and the Company have agreed that (i) the Class B Holder, if it owns 75% of the
most subordinate outstanding class of Class B Certificates of a Series
(calculated by dividing the then outstanding Certificate Principal Balance of
such Class B Certificates by the then outstanding Certificate Principal Balance
of all certificates of the same class) may elect to have certain Mortgage Loans
with respect to the related Series that become 90 or more days delinquent (each
such Mortgage Loan, a "DELINQUENT MORTGAGE LOAN") serviced by the Special
Servicer (each such Delinquent Mortgage Loan, a "SPECIALLY SERVICED MORTGAGE
LOAN"), and (ii) with respect to Delinquent Mortgage Loans other than Specially
Serviced Mortgage Loans, the Company will provide to the Class B Holder such
information as is generated [pursuant to the terms of the Servicer Guide] by the
Company or a subservicer with respect to such Delinquent Loan.
NOW THEREFORE, in consideration of the premises and mutual agreements
hereinafter set forth, the Company, the Class B Holder and the Special Servicer
hereby agree as follows:
ARTICLE I
---------
DEFINITIONS
-----------
Section 1.01 DEFINITIONS INCORPORATED BY REFERENCE.
Capitalized terms used but not otherwise defined in this Agreement shall
have the respective meaning
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ascribed thereto as set forth in the related Pooling and Servicing Agreement [or
the Servicer Guide, as the context may require].
ARTICLE II
----------
DESIGNATION OF SPECIALLY SERVICED MORTGAGE LOANS AND SPECIAL
------------------------------------------------------------
SERVICING PROCEDURES
--------------------
Section 2.01 [Approval of _______________ as an Approved Servicer under the
Servicer Guide.
The Company hereby approves _______________ as an approved servicer for all
purposes under the terms of the Servicer Guide.]
Section 2.02 SPECIALLY SERVICED MORTGAGE LOANS.
To the extent and for so long as the Class B Certificates of a Series are
outstanding and the Class B Holder owns at least 75% of the most subordinate
outstanding class of the Class B Certificates of such Series (calculated by
dividing the then outstanding Certificate Principal Balance of such Class B
Certificates by the then outstanding Certificate Principal Balance of all
certificates of the same class), Delinquent Mortgage Loans of the related Series
may, at the option of the Class B Holder, be designated in writing by the Class
B Holder as Specially Serviced Mortgage Loans and transferred to the Special
Servicer for servicing. The Special Servicer shall service the Specially
Serviced Mortgage Loans in accordance with the terms of the related Pooling and
Servicing Agreement [and the Servicer Guide].
Following the designation of a Delinquent Mortgage Loan as a Specially
Serviced Loan, the Company shall transfer servicing of such Delinquent Mortgage
Loan to the Special Servicer substantially in the manner set forth herein and in
Schedule II hereto. [The parties hereto agree that any fees resulting from the
transfer of the servicing of a Delinquent Mortgage Loan from the Company or a
subservicer to the Special Servicer (or any successor thereto) shall be the
obligation of the Company.]
As of the Effective Date (as defined below) of each Specially Serviced
Mortgage Loan, the Special Servicer shall succeed to and undertake all rights,
duties and obligations of the prior servicer (including, without limitation, the
making of advances, any right to purchase such Specially Serviced Mortgage Loan
at the purchase price set forth in the related Pooling and Servicing Agreement
and the right to receive the servicing fee with respect to such Specially
Serviced Mortgage Loan) pursuant to and in accordance with the terms of the
related Pooling and Servicing Agreement [and the terms and conditions of the
Servicer Guide].
With respect to each Specially Serviced Mortgage Loan, the effective date
(the "EFFECTIVE DATE") shall be the first day of the month immediately following
the month of designation of such Specially Serviced Mortgage Loan as such,
provided that such written designation is received by the Company on or prior to
the 15th calendar day of such month.
Once a Delinquent Mortgage Loan becomes a Specially Serviced Mortgage Loan,
such Delinquent Mortgage Loan shall remain a Specially Serviced Mortgage Loan,
and shall continue to be serviced by the Special Servicer, until the earlier of
the liquidation or other disposition of such Specially Serviced Mortgage Loan or
the termination of this Agreement, regardless of delinquency status, whether the
related Mortgaged Property becomes an REO Property or otherwise; provided,
however, that if the Company exercises its right as Master Servicer to purchase
all of the Mortgage Loans in a Trust Fund pursuant to an optional termination
provision under the related Pooling and Servicing Agreement, the servicing of
any related Specially Serviced Mortgage Loans with respect to which foreclosure
proceedings have not been commenced shall be transferred
R-2
promptly by the Special Servicer in accordance with written instructions from
the Company.
If the Class B Holder (i) transfers such percentage interest in any Class B
Certificates of a Series such that the Class B Holder owns less than 75% of the
then outstanding Certificate Principal Balance of such class, or (ii) purchases
such percentage interest in any Class B Certificates of a Series such that the
Class B Holder owns 75% or more of the then outstanding Certificate Principal
Balance of such class, the Class B Holder shall promptly notify the Company and
the Special Servicer in writing of any such transfer or acquisition. Upon
receipt of written notice from the Class B Holder, the Company or the Class B
Holder shall revise Schedule I hereto to reflect any such transfer or
acquisition and shall forward promptly a copy of such revised schedule to the
Company or the Class B Holder, as applicable, and the Special Servicer. With
respect to the purchase of at least 75% of the Class B Certificates of any
Series by the Class B Holder after the date hereof, this Agreement shall be
effective as of the date such written notice of acquisition is received by the
Company.
If and to the extent the Company is permitted to purchase Delinquent
Mortgage Loans under the related Pooling and Servicing Agreement, the Class B
Holder may direct the Company to purchase any Specially Serviced Mortgage Loan
and to promptly resell such Mortgage Loan to the Class B Holder at the price and
on the terms set forth in such Pooling and Servicing Agreement. In the event the
Class B Holder directs the Company to purchase a Specially Serviced Mortgage
Loan as permitted under this Section, the Company shall promptly take all action
necessary under the terms of the related Pooling and Servicing Agreement in
order to accomplish such purchase (i.e. provide notification to the Trustee
and/or Custodian) and to resell such Specially Serviced Mortgage Loan to the
Class B Holder. The Class B Holder, and not the Company, shall be required to
remit the purchase price for such Specially Serviced Mortgage Loan to the
related Trustee. The Company will inform the Trustee in writing of the purchase
of such Specially Serviced Mortgage Loan by the Class B Holder and further shall
promptly take all actions necessary or desirable to effect the conveyance of
such Mortgage Loan and the related servicing rights to the Class B Holder or its
designee, time being of the essence.
Notwithstanding any provision herein to the contrary, the Special Servicer
shall (i) in no event be obligated to effect any cure or remedy in connection
with a deficiency in the documentation for any Specially Serviced Mortgage Loan
to the extent such deficiency existed at the time such Mortgage Loan became a
Specially Serviced Mortgage Loan or (ii) have any responsibility for any
obligations, duties, or liabilities of the Company with respect to the servicing
of a Specially Serviced Mortgage Loan that arose prior to the related Effective
Date for such Specially Serviced Mortgage Loan, other than those which would
customarily be assumed after the Effective Date.
Section 2.03 TERMINATION OF SPECIAL SERVICER FOR DEFAULT.
The Company shall have the right, immediately upon written notice, to
terminate the Special Servicer's right and obligation to subservice all of the
Specially Serviced Mortgage Loans hereunder in the event (each such event, an
"EVENT OF DEFAULT") of:
(i) any failure by the Special Servicer to remit to the Company for
distribution to the Certificateholders of a Series any payment (including
without limitation, any failure to make any required Advance) required to be
made under the terms of this Agreement or the related Pooling and Servicing
Agreement which continues unremedied for a period of one day after the date upon
which written notice of such failure, requiring the same to be remedied, shall
have been given to the Special Servicer by the Company; or
(ii) any failure on the part of the Special Servicer duly to observe or
perform in any material respect
R-3
any other of the covenants or agreements on the part of the Special Sub-Servicer
contained in this Agreement (including any breach of the Special Servicer's
representations and warranties contained in Section 4.03 hereof, which
materially and adversely affects the interests of the Certificateholders of a
Series) which continues unremedied for a period of 30 days after the date on
which written notice of such failure, requiring the same to be remedied, shall
have been given to the Special Servicer by the Company; or
(iii) a decree or order of a court or agency or supervisory authority
having jurisdiction in an involuntary case under any present or future federal
or state bankruptcy, insolvency or similar law or the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against the
Special Servicer and such decree or order shall have remained in force
undischarged or unstayed for a period of 60 consecutive days; or
(iv) the Special Servicer shall consent to the appointment of a conservator
or receiver or liquidator in any insolvency, readjustment of debt, marshaling of
assets and liabilities or similar proceedings of or relating to the Special
Servicer or of or relating to all or substantially all of its property; or
(v) the Special Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of or
otherwise voluntarily commence a case or proceeding under any applicable
bankruptcy, insolvency, reorganization or other similar statute, make an
assignment for the benefit of its creditors, or voluntarily suspend payment of
its obligations.
If an Event of Default shall occur, then, and in each and every such case,
upon receipt of written notice from the Company, the Special Servicer shall
immediately remit to the Company all amounts in the Collection Accounts and the
Escrow Accounts and all rights of the Special Servicer to service the Specially
Serviced Mortgage Loans shall terminate. Following the receipt of written notice
from the Company as provided above, all authority and power of the Special
Sub-Servicer to subservice all the Specially Serviced Mortgage Loans shall pass
to and be vested in the Company pursuant to and under this Section 2.03, and the
Special Servicer shall do all things necessary to effect a transfer of the
servicing rights back to the Company. In this regard, the Company is hereby
authorized and empowered to execute and deliver, on behalf of the Special
Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the affected Specially
Serviced Mortgage Loans and related documents, or otherwise. The Special
Servicer agrees to cooperate with the Company in implementing the termination of
the Special Servicer's responsibilities and rights hereunder, including, without
limitation, the transfer to the Company or its appointed agent for
administration by it of all amounts in the possession of the Special Servicer or
thereafter be received with respect to the Specially Serviced Mortgage Loans and
the transfer of the] servicing rights back to the Company.
Section 2.04 APPOINTMENT OF SUCCESSOR SPECIAL SERVICER.
The Class B Holder shall have the right, upon 90 days prior written notice
to the Company and the Special Servicer appoint a successor special servicer
having the characteristics set forth in clauses (i), (ii) and (iii) below, and
which shall succeed to all rights and assume all of the responsibilities, duties
and liabilities of the Special Servicer under this Agreement simultaneously with
the termination of the Special Servicer's responsibilities, duties and
liabilities under this Agreement. In the event that the Special Servicer's
duties, responsibilities and liabilities under this Agreement should be
terminated pursuant to the foregoing, the Special Servicer shall discharge such
duties and responsibilities during the period from the date it acquires
knowledge of such termination until the effective date thereof with the same
degree of diligence and prudence which it is obligated to exercise under this
Agreement, and shall take no action whatsoever that might impair
R-4
or prejudice the rights or financial condition of its successor. The removal of
the Special Servicer shall not become effective until a successor shall be
appointed pursuant to this Section and shall in no event relieve the Special
Servicer of the representations and warranties made pursuant to Section 4.03 and
the remedies available to the Class B Holder and/or the Company under Sections
4.04 and 5.01, it being understood and agreed that the provisions of such
Sections 4.04 and 5.01 shall be applicable to the Special Servicer
notwithstanding any such termination of it, or the termination of this
Agreement.
Any successor special servicer shall (i) [be an institution having a net
worth of not less than $1,000,000][meet the eligibility requirements of an
approved servicer under the Company's Servicer Guide], (ii) the appointment of
such successor servicer will not result in the downgrading in any rating by any
applicable rating agency of any security issued in connection with the
applicable Pooling and Servicing Agreements, and (iii) have and keep in full
effect its existence, rights and franchises as a corporation (or such other
corporate form), and shall obtain its qualification to do business as a foreign
corporation (or such other corporate form) in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement or any of the Specially Serviced Mortgage Loans
and to perform its duties under this Agreement. Any successor appointed as
provided herein shall execute, acknowledge and deliver to the Class B Holder and
the Company an instrument accepting such appointment, wherein the successor
shall make the representations and warranties set forth in Section 4.03,
whereupon such successor shall become fully vested with all the rights, powers,
duties, responsibilities, obligations and liabilities of the Special Servicer,
with like effect as if originally named as a party to this Agreement.
Within 30 days of the appointment of a successor special servicer by the
Class B Holder, the Special Servicer shall prepare, execute and deliver to the
successor entity any and all documents and other instruments, place in such
successor's possession all servicing files related to the Specially Serviced
Mortgage Loans, and do or cause to be done all other acts or things necessary or
appropriate to effect the purposes of such notice of termination [, including
but not limited to the transfer and endorsement of the related Mortgage Notes
and other documents, and the Class B Holder shall do or cause to be done the
preparation and recordation of Assignments of Mortgage and Deeds at the Class B
Holder's sole expense].
The Special Servicer shall cooperate with the Class B Holder and such
successor in effecting the termination of the Special Servicer's
responsibilities and rights hereunder and the transfer of servicing
responsibilities to the successor special servicer, including without
limitation, the transfer to such successor of all amounts received by it with
respect to the Specially Serviced Mortgage Loans. Further, the Special Servicer
shall execute and deliver such instruments and do such other things as may
reasonably be required to more fully and definitively vest in the successor all
such rights, powers, duties, responsibilities, obligations and liabilities of
the Special Servicer.
ARTICLE III
-----------
DELINQUENT MORTGAGE LOANS OTHER THAN SPECIALLY SERVICED
-------------------------------------------------------
MORTGAGE LOANS
--------------
Section 3.01 REPORTING OF DELINQUENT MORTGAGE LOANS.
(a) To the extent and for so long as the Class B Certificates of a Series are
outstanding and any interest in such Class B Certificates is held by the Class B
Holder, the Company, as Master Servicer of the Mortgage Loans related to each
Series, hereby agrees to provide to the Class B Holder the following notices and
reports:
Within three (3) Business Days after each Distribution Date (or included in
or with the monthly statements to Certificateholders pursuant to the related
Pooling and Servicing Agreement), the Company shall
R-5
provide to the Class B Holder a report, in tape format, containing the following
information:
(1) With respect to each Series, the number and aggregate Principal Balance of
the Mortgage Loans delinquent one, two and three months or more, together
with the Principal Balance of each Mortgage Loan delinquent, one, two and
three months or more;
(2) With respect to each Series, the (i) number and aggregate Principal Balance
of Mortgage Loans with respect to which foreclosure proceedings have been
initiated, and (ii) the number and aggregate book value of Mortgaged
Properties acquired through foreclosure, deed in lieu of foreclosure or
other exercise of rights respecting the Trustee's security interest in the
Mortgage Loans, and with respect to each Mortgage Loan, the (i) Principal
Balance of each such Mortgage Loan with respect to which foreclosure
proceedings have been initiated, and (ii) the book value of each Mortgaged
Property acquired through foreclosure, deed in lieu of foreclosure or other
exercise of rights respecting the Trustee's security interest in the
related Mortgage Loan; and
(3) With respect to each Series, the amount of Realized Losses allocable to the
Certificates on the related Distribution Date and the cumulative amount of
Realized Losses allocated to such Certificates since the Cut-Off Date, and
with respect to each Mortgage Loan, the amount of Realized Losses
attributable to such Mortgage Loan on the related Distribution Date and the
cumulative amount of Realized Losses attributable to such Mortgage Loan
since the Cut-Off Date.
In addition, the Company, as Master Servicer of the Mortgage Loans, shall send,
or shall cause the related servicer to send, to the Class B Holder all other
written reports, documentation, instruments, certificates and correspondences
provided by a servicer under the terms of the Servicer Guide with respect to any
Mortgage Loan that becomes sixty (60) days or more delinquent.
(b) If requested by the Class B Holder, the Company shall make its
servicing personnel available to respond to reasonable inquiries, by phone or in
writing by facsimile, electronic, or overnight mail transmission, in connection
with any Mortgage Loan identified in any report or document provided pursuant to
clause (a) above; provided, that the Company shall only be required to provide
information that is reasonably accessible to its servicing personnel (or its
subservicers).
(c) In addition to the information described above, the Company shall
provide to the Class B Holder such information as the Class B Holder may
reasonably request; provided, however, that the Mortgage Loans are Delinquent
Mortgage Loans or the Mortgaged Property has been foreclosed upon. The Class B
Holder will reimburse the Company for any reasonable out-of-pocket expenses
incurred by it in providing such information.
Section 3.02 SERVICING OF DELINQUENT MORTGAGE LOANS.
(a) Prior to the Commencement of Foreclosure of any Mortgage Loan, the
Company shall provide, or cause the related servicer to provide, the Class B
Holder with a notice (sent by telecopier) of such proposed and imminent
foreclosure, stating the loan number and the aggregate amount due under the
Mortgage Note.
For purposes of this Agreement, "COMMENCEMENT OF FORECLOSURE" shall mean
the first official action required under local law in order to commence
foreclosure proceedings or to schedule a trustee's sale under a deed of trust,
including (i) in the case of a mortgage, any filing or service of process
necessary to commence an action to foreclosure, or (ii) in the case of a deed of
trust, posting, the publishing, filing or delivery of a notice of sale, but not
including in either case (x) any notice of default, notice of intent to
foreclose or sell or any other action prerequisite to the actions specified in
(i) or (ii) above, (y) the acceptance of a deed-in-lieu
R-6
of foreclosure (whether in connection with a sale of the related property or
otherwise) or (z) initiation and completion of a short pay-off.
(b) In connection with any Delinquent Mortgage Loan with respect to which a
notice under clause (a) above has been delivered to the Class B Holder, the
Class B Holder shall provide the Company with written direction as to the action
to be taken with respect to such Delinquent Mortgage Loan, including, without
limitation, to proceed with foreclosure, to accept a deed-in-lieu of
foreclosure, to consent to a pre-foreclosure sale of Mortgaged Property at a
loss, or, if permitted under the terms of the related Pooling and Servicing
Agreement, to purchase Delinquent Mortgage Loans. Such written direction must be
received by the Company within two (2) Business Days of transmission of the
notice provided by the Company under clause (a) above. Such two (2) Business Day
period shall be extended for no longer than an additional three (3) Business
Days after the receipt of additional information requested if the Class B Holder
requests additional information related to such Delinquent Mortgage Loan;
provided, however that the Class B Holder will have at least one Business Day to
provide written direction after receipt of any requested additional information.
Any such additional information shall be provided only to the extent it is
obtainable by the Company from existing reports, certificates or statements or
otherwise be reasonably accessible to its servicing personnel (or subservicing
personnel). The Company shall as promptly as practicable carry out, or cause the
relevant servicer to carry out, the instruction of the Class B Holder in the
manner prescribed in such written direction. The Class B Holder agrees that it
has no right to negotiate directly with the Mortgagor during such period.
In the event the Class B Holder fails to provide any written direction as
provided above, the Company may take any such action as would be consistent with
customary servicing practices of prudent mortgage loan servicers and the
Company's normal policies and practice.
(c) With respect to any Delinquent Mortgage Loan for which the Company has
not provided a notice as contemplated in clause (a) above, the Class B Holder
may, at any time, provide the Company with written direction as to the action to
be taken with respect to such Delinquent Mortgage Loan, including, without
limitation, to commence foreclosure proceedings, to accept a deed-in-lieu of
foreclosure, to consent to a sale of Mortgaged Property at a loss, or, if
permitted under the terms of the related Pooling and Servicing Agreement, to
purchase Delinquent Mortgage Loans. To the extent such action is not
inconsistent with the terms of the related Pooling and Servicing Agreement or
the Company's duties thereunder as master servicer, the Company shall as
promptly as practicable carry out, or cause the relevant servicer to carry out,
the instruction of the Class B Holder in the manner prescribed in such written
direction.
(d) Any foreclosure of a Delinquent Mortgage Loan that has been initiated
in accordance with clauses (b) or (c) above may be discontinued if (i) the
Mortgage Loan has been brought current or if a refinancing or prepayment occurs
with respect to the Mortgage Loan (including by means of a short payoff approved
by the Class B Holder), (ii) the Company has agreed to the terms of a
forbearance agreement with the Mortgagor and such forbearance agreement has been
approved by the Class B Holder, or (iii) if and to the extent permitted under
the related Pooling and Servicing Agreement, Class B Holder directs the Company
to purchase such Delinquent Mortgage Loan at the price and on the terms set
forth in the related Pooling and Servicing Agreement.
(e) In the event the Class B Holder directs the Company to purchase a
Delinquent Mortgage Loan as permitted under Sections 2.02 and 3.02 (b), (c) and
(d), the Class B Holder may direct the Company to purchase any Delinquent
Mortgage Loan and to promptly resell such Mortgage Loan to the Class B Holder at
the price and on the terms set forth in the applicable Pooling and Servicing
Agreement. In the event the Class B Holder directs the Company to purchase a
Delinquent Mortgage Loan as permitted under this Section, the Company shall
promptly take all action necessary under the terms of the related Pooling and
Servicing
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Agreement in order to accomplish such purchase (i.e. provide notification to the
Trustee and/or Custodian) and to resell such Delinquent Mortgage Loan to the
Class B Holder. The Class B Holder, and not the Company, shall be required to
remit the purchase price for such Delinquent Mortgage Loan to the related
Trustee. The Company will inform the Trustee in writing of the purchase of such
Delinquent Mortgage Loan by the Class B Holder and further shall promptly take
all actions necessary or desirable to effect the conveyance of such Mortgage
Loan and the related servicing rights to the Class B Holder or its designee,
time being of the essence. [The parties hereto agree that, in connection with a
purchase of a Delinquent Mortgage Loan as provided above, any fees resulting
from the transfer of the servicing of such purchased Delinquent Mortgage Loan
from the Company or a subservicer to a servicer designated by the Class B Holder
shall be the obligation of the Company.]
Section 3.03 REVIEW OF THE COMPANY'S PROCEDURES.
The Company and the Class B Holder hereby agree that the Class B Holder
shall have the right, at its own expense and during normal business hours, to
review any and all of the books, records, or other information of the Company
which may be relevant to the Company's direct collection, loss mitigation
foreclosure and REO management procedures currently in place in order to confirm
that the procedures used by the Company and its subservicers are in accordance
with the customary servicing practices of prudent mortgage loan servicers. In
order to discuss such books, records or other information, the Company shall
make personnel available who are knowledgeable about such matters.
ARTICLE IV
----------
REPRESENTATIONS AND WARRANTIES
------------------------------
Section 4.01 ORGANIZATIONAL AND OTHER RELATED WARRANTIES OF THE CLASS B
HOLDER. The Class B Holder hereby makes the following representations and
warranties to the Company and the Special Servicer:
(i) ORGANIZATION AND GOOD STANDING. The Class B Holder is an entity
duly organized, validly existing, and in good standing under the laws of its
state of incorporation or formation or the laws of the United States.
(ii) NO VIOLATION. Neither the execution and delivery by the Class B
Holder of this Agreement, nor the consummation by the Class B Holder of the
transactions contemplated hereby, nor the performance of and compliance by the
Class B Holder with the provisions of this Agreement, will conflict with or
result in a breach or violation of, or constitute a default (or an event which,
with notice or the lapse of time, or both, would constitute a default) under,
the organizational documents (its articles of incorporation or charter or
by-laws) of the Class B Holder, or any of the provisions of any law, rule,
regulation, judgment, decree, demand, or order (of any federal, state, or local
governmental or regulatory authority or court) binding on the Class B Holder, or
any of its respective properties, or any of the provisions of any indenture,
mortgage, contract, instrument, or other document to which the Class B Holder is
a party or by which it is bound, or result in the creation or imposition of any
lien, charge, or encumbrance upon any of their respective properties pursuant to
the terms of any indenture, mortgage, contract, instrument, or other document.
The Class B Holder is not otherwise in violation of any law, rule, regulation,
judgment, decree, demand, or order (of any federal, state or local governmental
or regulatory authority or court), which violation, in the Class B Holder's,
good faith and reasonable judgment, is likely to affect materially and adversely
its ability to perform its obligations hereunder.
(iii) AUTHORIZATION AND ENFORCEABILITY. The execution and delivery by
the Class B Holder of this Agreement, the consummation of the transactions
contemplated hereby, and the performance and
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compliance by the Class B Holder with the terms hereof are within the powers of
the Class B Holder, and have been duly authorized by all necessary action on the
part of the Class B Holder. All organizational resolutions and consents
necessary for the Class B Holder to enter into and consummate all transactions
contemplated hereby have been obtained. This Agreement has been duly executed
and delivered by the Class B Holder and constitutes the legal, valid and binding
obligation of the Class B Holder, enforceable against it in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium,
and other similar laws affecting creditors' rights generally, and to general
principles of equity, regardless of whether such enforcement is considered in a
proceeding in equity or at law. The Class B Holder has not failed to obtain any
consent, approval, authorization, or order of, or failed to cause any
registration or qualification with, any court or regulatory authority or other
governmental body having jurisdiction over it, which consent, approval,
authorization, order, registration, or qualification is required for, and the
absence of which would materially adversely affect, the legal and valid
execution, delivery, and performance of this Agreement by the Class B Holder.
(iv) NO LITIGATION OR ADVERSE CONDITIONS. No litigation is pending or,
to the best of the Class B Holder's knowledge, threatened against it, which, if
determined adversely to the Class B Holder would prohibit the Class B Holder
from entering into this Agreement or, in the good faith and reasonable judgment
of the Class B Holder, is likely to materially and adversely affect either the
ability of the Class B Holder to perform its obligations hereunder.
Section 4.02 ORGANIZATIONAL AND OTHER RELATED WARRANTIES OF THE COMPANY.
The Company hereby makes the following representations and warranties to the
Class B Holder and the Special Servicer:
(i) ORGANIZATION AND GOOD STANDING. The Company is an entity duly
organized, validly existing, and in good standing under the laws of its state of
incorporation or formation or the laws of the United States, and is in
compliance with the laws of each state in which any property is located to the
extent necessary to ensure the enforceability of each Mortgage Loan and to
perform its obligations hereunder and the Pooling and Servicing Agreement.
(ii) NO VIOLATION. Neither the execution and delivery by Company of
this Agreement, nor the consummation by it of the transactions contemplated
hereby, nor the performance of and compliance by the Company with the provisions
hereof or of the Pooling and Servicing Agreement, will conflict with or result
in a breach or violation of, or constitute a default (or an event which, with
notice or the lapse of time, or both, would constitute a default) under, the
organizational documents (its articles of incorporation or charter or by- laws)
of the Company, or any of the provisions of any law, rule, regulation, judgment,
decree, demand, or order (of any federal, state, or local governmental or
regulatory authority or court) binding on the Company, or any of its properties,
or any of the provisions of any indenture, mortgage, contract, instrument, or
other document (including, without limitation, any Pooling and Servicing
Agreement) to which the Company is a party or by which it is bound, or result in
the creation or imposition of any lien, charge, or encumbrance upon any of their
respective properties pursuant to the terms of any indenture, mortgage,
contract, instrument, or other document. The Company is not otherwise in
violation of any law, rule, regulation, judgment, decree, demand, or order (of
any federal, state or local governmental or regulatory authority or court),
which violation, in the Company's good faith and reasonable judgment, is likely
to affect materially and adversely either its ability to perform its obligations
hereunder or under the Pooling and Servicing Agreements, or the financial
condition of the Company.
(iii) AUTHORIZATION AND ENFORCEABILITY. The execution and delivery by
the Company of this Agreement, the consummation of the transactions contemplated
hereby, and the performance and compliance by the Company with the terms hereof
and of the Pooling and Servicing Agreements are within the powers of the
Company, and have been duly authorized by all necessary action on the part of
the Company. All
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organizational resolutions and consents necessary for the Company to enter into
and consummate all transactions contemplated hereby have been obtained. This
Agreement has been duly executed and delivered by the Company and constitutes
the legal, valid and binding obligation of the Company, enforceable against it
in accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium, and other similar laws affecting creditors' rights
generally, and to general principles of equity, regardless of whether such
enforcement is considered in a proceeding in equity or at law. The Company has
not failed to obtain any consent, approval, authorization, or order of, or
failed to cause any registration or qualification with, any court or regulatory
authority or other governmental body having jurisdiction over the Company, which
consent, approval, authorization, order, registration, or qualification is
required for, and the absence of which would materially adversely affect, the
legal and valid execution, delivery, and performance of this Agreement by the
Company.
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(iv) APPROVALS AND PERMITS. The Company possesses such certificates,
authorizations, licenses, and permits issued by the appropriate state, federal,
and foreign regulatory agencies or bodies necessary to conduct the business now
operated by it, and the Company has not received any notice of proceedings
relating to the revocation or modification of any such certificate,
authorization, or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling, or finding, would materially and adversely affect
the conduct of the business, operations, financial condition, or income of the
Company.
(v) NO LITIGATION OR ADVERSE CONDITIONS. No litigation is pending or,
to the best of the Company's knowledge, threatened against it, which, if
determined adversely to the Company would prohibit the Company from entering
into this Agreement or, in the good faith and reasonable judgment of the
Company, is likely to materially and adversely affect either its ability to
perform its obligations hereunder or under the Pooling and Servicing Agreements
or the financial condition of the Company. The Company has no knowledge of any
recent adverse financial condition or event with respect to itself that, in its
good faith and reasonable judgment, is likely to materially and adversely affect
its ability to perform its obligations hereunder or under the Pooling and
Servicing Agreements.
(vi) FIDELITY BOND: ERRORS AND OMISSION INSURANCE. Each officer,
director, employee, consultant and advisor of the Company with responsibilities
concerning the servicing and administration of the Mortgage Loans is covered by
errors and omissions insurance and fidelity bond insurance in the amounts and
with the coverage required under the related Pooling and Servicing Agreement for
it to maintain. Neither the Company nor any of its officers, directors,
employees, consultants, or advisors involved in the servicing or administration
of the Mortgage Loans has been refused such coverage or insurance.
Section 4.03 ORGANIZATIONAL AND OTHER RELATED WARRANTIES OF THE SPECIAL
SERVICER. The Special Servicer hereby makes the following representations and
warranties to the Company and the Class B Holder:
(i) ORGANIZATION AND GOOD STANDING. The Special Servicer is an entity
duly organized, validly existing, and in good standing under the laws of its
state of incorporation or formation or the laws of the United States, and is in
compliance with the laws of each state in which any property is located to the
extent necessary to ensure the enforceability of each Mortgage Loan and to
perform its obligations hereunder.
(ii) NO VIOLATION. Neither the execution and delivery by Special
Servicer of this Agreement, nor the consummation by it of the transactions
contemplated hereby, nor the performance of and compliance by the Special
Servicer with the provisions hereof , will conflict with or result in a breach
or violation of, or constitute a default (or an event which, with notice or the
lapse of time, or both, would constitute a default) under, the organizational
documents (its articles of incorporation or charter or by-laws) of the Special
Servicer, or any of the provisions of any law, rule, regulation, judgment,
decree, demand, or order (of any federal, state, or local governmental or
regulatory authority or court) binding on the Special
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Servicer, or any of its properties, or any of the provisions of any indenture,
mortgage, contract, instrument, or other document to which the Special Servicer
is a party or by which it is bound, or result in the creation or imposition of
any lien, charge, or encumbrance upon any of their respective properties
pursuant to the terms of any indenture, mortgage, contract, instrument, or other
document. The Special Servicer is not otherwise in violation of any law, rule,
regulation, judgment, decree, demand, or order (of any federal, state or local
governmental or regulatory authority or court), which violation, in the Special
Servicer's good faith and reasonable judgment, is likely to affect materially
and adversely either its ability to perform its obligations hereunder, or the
financial condition of the Special Servicer.
(iii) AUTHORIZATION AND ENFORCEABILITY. The execution and delivery by
the Special Servicer of this Agreement, the consummation of the transactions
contemplated hereby, and the performance and compliance by the Special Servicer
with the terms hereof are within the powers of the Special Servicer, and have
been duly authorized by all necessary action on the part of the Special
Servicer. All organizational resolutions and consents necessary for the Special
Servicer to enter into and consummate all transactions contemplated hereby have
been obtained. This Agreement has been duly executed and delivered by the
Special Servicer and constitutes the legal, valid and binding obligation of the
Special Servicer, enforceable against it in accordance with its terms, subject
to applicable bankruptcy, insolvency, reorganization, moratorium, and other
similar laws affecting creditors' rights generally, and to general principles of
equity, regardless of whether such enforcement is considered in a proceeding in
equity or at law. The Special Servicer has not failed to obtain any consent,
approval, authorization, or order of, or failed to cause any registration or
qualification with, any court or regulatory authority or other governmental body
having jurisdiction over the Special Servicer, which consent, approval,
authorization, order, registration, or qualification is required for, and the
absence of which would materially adversely affect, the legal and valid
execution, delivery, and performance of this Agreement by the Special Servicer.
(iv) APPROVALS AND PERMITS. The Special Servicer possesses such
certificates, authorizations, licenses, and permits issued by the appropriate
state, federal, and foreign regulatory agencies or bodies necessary to conduct
the business now operated by it, and its has not received any notice of
proceedings relating to the revocation or modification of any such certificate,
authorization, or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling, or finding, would materially and adversely affect
the conduct of the business, operations, financial condition, or income of the
Special Servicer.
(v) NO LITIGATION OR ADVERSE CONDITIONS. No litigation is pending or,
to the best of the Special Servicer's knowledge, threatened against it, which,
if determined adversely to the Special Servicer would prohibit the Special
Servicer from entering into this Agreement or, in the good faith and reasonable
judgment of the Special Servicer, is likely to materially and adversely affect
either its ability to perform its obligations hereunder or the financial
condition of the Special Servicer. The Special Servicer has no knowledge of any
recent adverse financial condition or event with respect to itself that, in its
good faith and reasonable judgment, is likely to materially and adversely affect
its ability to perform its obligations hereunder.
(vi) FIDELITY BOND, ERRORS AND OMISSION INSURANCE. Each officer,
director, employee, consultant and advisor of the Special Servicer with
responsibilities concerning the servicing and administration of the Mortgage
Loans is covered by errors and omissions insurance and fidelity bond insurance
in the amounts and with the coverage required under the related Pooling and
Servicing Agreement to be maintained by the Company as master servicer. Neither
the Special Servicer nor any of its officers, directors, employees, consultants,
or advisors involved in the servicing or administration of the Mortgage Loans
has been refused such coverage or insurance.
(vii) APPROVED SELLER/SERVICER. The Special Servicer is approved as a
seller/servicer of
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single-family mortgage loans by the Department of Housing and Urban Development.
Section 4.04 REMEDIES FOR BREACH OF REPRESENTATION AND WARRANTY.
Upon discovery by any of the Company, the Class B Holder or the Special
Servicer of a breach of any of the representations and warranties contained in
Article IV which materially and adversely affects the value of the Specially
Serviced Mortgage Loans or Delinquent Mortgage Loans, the party discovering such
breach shall give prompt written notice to the others.
Each of the parties hereto shall indemnify the others and hold each of them
harmless against any losses, damages, penalties, fines, forfeitures, reasonable
and necessary legal fees and related costs, judgments, and other costs and
expenses resulting from any claim, demand, defense or assertion based on or
grounded upon, or resulting from, a breach of such party's representations and
warranties contained in Article IV. It is understood and agreed that the
obligations to indemnify as provided in this Section 4.04 constitute the sole
remedies of each of the Company, Class B Holder and Special Servicer respecting
a breach of any other party's representations and warranties.
ARTICLE V
---------
MISCELLANEOUS PROVISIONS
------------------------
Section 5.01 INDEMNIFICATION.
Each of the Company, the Class B Holder and the Special Servicer (each as
such, an "INDEMNIFYING PARTY") shall indemnify the other parties hereto (each as
such, an "INDEMNIFIED PARTY") and hold them harmless against any and all claims,
losses, damages, penalties, fines, forfeitures, reasonable and necessary legal
fees and related costs, judgments, and any other costs, fees and expenses
(individually and collectively, the "CLAIMS") that such Indemnified Party may
sustain in any way related to the failure of the Indemnifying Party to perform
its duties in compliance with the terms of this Agreement; PROVIDED, that none
of the Company, the Class B Holder or the Special Servicer or any of the
directors, officers, employees or agents of the Depositor or the Servicer shall
be liable for any action taken or for refraining from the taking of any action
in good faith pursuant to this Agreement, or for errors in judgment; PROVIDED,
HOWEVER, that this provision shall not protect the Company, the Class B Holder
or the Special Servicer against any material breach of warranties,
representations or covenants made herein, or against any specific liability
imposed on such party pursuant hereto, or against any liability which would
otherwise be imposed by reason of willful misfeasance, bad faith or gross
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder.
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Section 5.02 AMENDMENT.
This Agreement may be amended from time to time by written agreement signed
by each of the parties hereto.
Section 5.03 COUNTERPARTS.
This Agreement may be executed simultaneously in any number of
counterparts, each of which counterparts shall be deemed to be an original and
such counterparts shall constitute but one and the same instrument.
Section 5.04 GOVERNING LAW.
This Agreement shall be construed in accordance with the laws of the State
of New York and the obligations, rights and remedies of the parties hereunder
shall be determined in accordance with such laws.
Section 5.05 NOTICES.
All demands, notices and direction hereunder shall be in writing or by
telecopy and shall be deemed effective upon receipt to:
(ii) in the case of the Company,
Company
Address: ___________________
Attention: ___________________
Telephone: ___________________
Facsimile: ___________________
or such other address as may hereafter be furnished to the Class
B Holder and the Special Servicer in writing.
(iii) in the case of the Class B Holder,
Address: ___________________
Attention: ___________________
Telephone: ___________________
Facsimile: ___________________
or such other address as may hereafter be furnished to the Company in
writing.
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(iv) in the case of the Special Servicer,
Address: ___________________
Attention: ___________________
Telephone: ___________________
Facsimile: ___________________
or such other address as may hereafter be furnished to the Company in
writing.
Section 5.06 TERMINATION.
This Agreement shall terminate (i) at such time as the Principal Balance of
the Class B Certificates has been reduced to zero or (ii) if mutually agreed to
by the parties hereto.
Section 5.07 SEVERABILITY OF PROVISIONS.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be held invalid for any reason whatsoever, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement. If the invalidity of any part, provision, representation or warranty
of this Agreement shall deprive any party of the economic benefit intended to be
conferred by this Agreement, the parties shall negotiate in good faith to
develop a structure the economic effect of which is nearly as possible the same
as the economic effect of this Agreement without regard to such invalidity.
Section 5.08 SUCCESSORS AND ASSIGNS.
This Agreement may not be assigned by any party hereto without the prior
written consent of each of the other parties hereto. The provisions of this
Agreement shall be binding upon and inure to the benefit of the respective
successors and assigns of the parties hereto.
Section 5.09 ARTICLE AND SECTION HEADINGS.
The article and section headings herein are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.
Section 5.10 CONFIDENTIALITY.
The Class B Holder agrees that all information supplied by or on behalf of
the Company pursuant to Sections 2.02 or 3.01, including individual account
information, is the property of the Company and the Class B Holder agrees to use
such information only for the purposes contemplated by this Agreement and
otherwise hold such information confidential and not to disclose such
information, except to the extent such information is made publicly available by
or on behalf of the Company or the relevant Trustee.
Section 5.11 PUBLICLY REGISTERED CERTIFICATES.
The Class B Holder agrees, that without the prior written consent of the
Company, so long as Class B Holder is a party to this Agreement and a holder of
any Class B Certificates of a Series, it will not purchase, sell or trade any
publicly registered Certificates of the same Series.
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Section 5.12 NO PARTNERSHIP.
Nothing herein shall be deemed or construed to create a partnership or
joint venture between the parties hereto and the services of the Company shall
be rendered as an independent contractor and not as an agent for the Company.
Section 5.13 RIGHTS OF THE CLASS B HOLDER. Notwithstanding anything herein
to the contrary, it is agreed by the parties hereto that the rights of the Class
B Holder set forth under Article II and Section 3.02(e) of this Agreement shall
relate to, and be exercisable with respect to, the related Mortgage Loans of any
Series to the extent that and for so long as, the Class B Holder owns at least
75% of the most subordinate outstanding class of Class B Certificates of the
related Series (calculated by dividing the then outstanding Certificate
Principal Balance of such Class B Certificates by the then outstanding
Certificate Principal Balance of all certificates of the same class).
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IN WITNESS WHEREOF, each of the parties hereto have caused its name to be
signed hereto by its respective officer thereunto duly authorized, all as of the
day and year first above written.
COMPANY
By: _____________________________
Name: ___________________________
Title: __________________________
By: _____________________________
Name: ___________________________
Title: __________________________
By: _____________________________
Name: ___________________________
Title: __________________________
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SCHEDULE I
Describe each Series of Class B Certificates and the related Pooling and
Servicing Agreement
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SCHEDULE II
SPECIAL SERVICING TRANSFER PROCEDURES
Any transfer of servicing with respect to a Specially Serviced
Mortgage Loan shall be effected substantially in accordance with the following
example. All dates set forth below are for illustrative purposes only.
Capitalized terms used in this Exhibit shall have the meanings ascribed thereto
in the Agreement.
TIMELINE
--------
Last Business Day of Month One
Mortgagor is 89 Days Delinquent.
3rd Business Day of Month Two
The Company receives an electronic file from its Collections Department on
all 90+delinquent loans.
4th Business Day of Month Two
The Company sends the electronic file to Class B Holder/Special Servicer of
all 90+ delinquent loans with information designating those loans where a
forbearance plan or workout is in progress and those loans where there is
no plan in place. The Company and the Special Servicer have a discussion.
The loans to be transferred are determined by the Class B Holder/Special
Servicer.
6th Business Day of Month Two
The Special Servicer informs the Company of the loans designated as
Specially Serviced Mortgage Loans. The Company and the Special Servicer
coordinate the transfer of servicing of the Specially Serviced Mortgage
Loans. The Company prepares and mails the mortgagor notification no later
than the 13th calendar day of the month. If a loan reinstates to a current
or less than 90 days delinquent status before the mortgagor notification
(i.e., the "goodbye letter") is sent, such loan will be removed from the
transfer, and the Company will notify the Special Servicer thereof. The
borrower will be instructed to send the payment due on the effective date
of transfer and any past due payments to the Special Servicer.
7th Business Day of Month Two
Relevant Trustee receives monthly electronic data file from the Company.
The subject loan is included in the Company's report as an active loan
serviced by the Company. The Company reports scheduled P&I on the subject
loan.
On or prior to 15th Calendar Day of Month Two
The Company sends a foreclosure referral letter to the Special Servicer's
foreclosure counsel with a corresponding foreclosure package.
18th Calendar Day (or Business day immediately preceding the 18th) of Month Two
The Company makes its monthly remittance, including advancing scheduled P&I
payment due for current month for the subject loan.
Last business Day of Month Two
Month-end cut-off.
1st Business Day of Month Three
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Effective Date.
On or Before 3rd Business Day of Month Three
In accordance with the Servicing Transfer Instructions:
Company sends Special Servicer final transfer data (e.g., trial balance,
loan files, current and previous 2 years' history records (if applicable),
all default-related correspondence, and all collection, foreclosure and
bankruptcy files);
Company provides Special Servicer with detailed reimbursement request
relating to advances; and
Company sends Special Servicer a check or wire for the net escrow and
unapplied funds.
On or before the 6th Business Day of Month Three
In accordance with the Servicing Transfer Instructions, Special Service
reimburses Company for all outstanding advances, and the scheduled mortgage
payment due on the Effective Date.
___________________
Note:
1. If the loan has been transferred to Special Servicer and it cures, Special
Servicer continues to service the loan and report it to Company as herein
provided.
2. If the Class B Certificates of the related Series are reduced to zero,
Special Servicer will continue to service the mortgage loans until they
payoff or are liquidated. No other Delinquent Mortgage Loans of a Series
will be transferred to Special Servicer after the Class B Certificates of
such Series are reduced to zero.
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SERVICING TRANSFER INSTRUCTIONS
-------------------------------
I. NOTIFICATION OF LOANS TO TRANSFER
A. Company will coordinate and provide a listing of all loans past 90 days
delinquent. The list will be provided to Special Servicer for review and
discussion on the 4th Business day of each month.
B. Class B Holder and Special Servicer to agree upon the loans to be transferred
at month-end. The list must be provided via Facsimile or E-mail by the 6th
business day of the month to:
[COMPANY]
[Address and contact]
II. CONVERSION DATA
Dependent upon the volume of loans transferring each month, the loans will be
transferred effective the first of each month based on the prior month-end cut
off by one of the following mutually agreed upon conversion methods.
A. Manual conversion
1. Company to provide a "master file data record" (COMPANY reference for
master file data record?) for each loan (accompanied by a listing of
all code definitions).
2. Company to provide a trial balance containing all the loans.
B. Electronic conversion
1. Information will be provided in a Microsoft Excel spreadsheet (or such
other mutually agreeable format) containing mutually agreed upon
fields.
2. Company to provide a trial balance containing all the loans.
Preliminary information for either a manual or electronic conversion will be
provided within 3 business days of receipt of the List of Loans to Transfer to
provide time for Special Servicer to verify and load the information, with the
exception of the specific data that is determined at the transfer date.
III. HOMEOWNER NOTIFICATION
A. Company will mail the mortgagor notification (good-bye letter) fifteen days
prior to the transfer date. Company will forward a copy of its good-bye letter
to Special Servicer c/o [Dept.] (fax number ___-___-____) for approval prior to
mailing.
B. Copies of Company's mortgagor notification letters will be provided to
Special Servicer.
C. Company to receive a sample of Special Servicer's mortgagor notification
(welcome letter) for approval prior to mailing.
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IV. HAZARD/FLOOD INSURANCE
A. Company to prepare a change to the mortgagee clause as follows:
Address: _____________________
Attention: ___________________
Telephone: ___________________
Facsimile: ___________________
B. Copies of the mortgagee clause change requests will be provided to Special
Servicer.
C. Any unpaid policies, expiration notices, cancellation notices, loans with
expired policies will be properly identified, sorted and marked for special
handling.
D. Company to provide a list of loans under "force place coverage" program.
Force place hazard insurance policies with ASG will be canceled upon transfer of
the loans. WNC force place flood policy coverage will stay in place after
transfer until the expiration date.
V. FHA LOANS
A. Company to provide screen prints to include the following items on FHA Loans
with a monthly premium.
1. Loan number
2. FHA case number
3. Anniversary date
4. Annual premium
5. Monthly amount
6. Total MIP paid to date
7. Next month the premium is due
B. Company to provide screen prints to include the following items on FHA loans
that the full premium was paid up front.
1. Loan number
2. FHA case number
3. Insuring date
4. Amount of prepaid premium
C. Company to prepare HUD Form 92080 with Special Servicer's HUD mortgagee
number (72313) and forward to HUD electronically. Proof of submission will be
forwarded to Special Servicer.
VI. CONVENTIONAL LOANS
A. Individual loan PMI certificates will be retained in the Servicing File
B. Company to prepare notifications to the PMI companies requesting a change of
servicer to Special Servicer. Copies will be forwarded to Special Servicer.
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C. Company to provide screen prints of all loans with PMI to include:
1. Loan number
2. PMI company
3. PMI certificate number
4. Next due date 5. Last amount paid
VII. REAL ESTATE TAXES
A. Company to forward individual loan tax records showing payee, due dates,
frequency of payment, next due date, last paid date and last paid amount.
B Company to provide copies of the notifications to the individual tax
authorities and the Tax Service requests for a change of servicer to Special
Servicer under the following contract numbers (Transamerica-2489 Pinnacle - 119)
C. All property taxes due and payable will be paid prior to the transfer date.
D. All tax bills received after the transfer date will be forwarded to Special
Servicer for payment.
E. Company to provide a listing of any loans with delinquent taxes containing
the pertinent information as of the transfer date.
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VIII. OPTIONAL INSURANCE
A. Company to provide a list of loans with A&H, life insurance, accidental death
insurance, etc., which will include the following information.
1. Loan number
2. Insurance company
3. Type of coverage
4. Amount of monthly premium
5. Last monthly premium paid
B. Company to provide copies of the master and/or individual policies for the
insurance coverage.
C. Company to provide copies of the notification sent to the insurance
companies.
IX. INVESTOR REPORTS
A. Company to provide a copy of the final remittance report to the investor
including a trial balance as of cutoff date.
B. Company to provide ending loan scheduled balance at transfer date.
C. Company to provide a report detailing advanced delinquent net interest
monthly by due date.
D. Company to provide a report detailing advanced delinquent principal monthly
by due date.
X. OTHER
A. Company to provide hard copies of the last 24 months history for each loan
accompanied by an explanation of transaction codes.
B. Company to provide copies of the last escrow analysis for each loan with an
explanation of analysis method (cushion, etc.).
C. Company to provide the loan servicing file in hard copy or microfiche format.
D. Company to provide the currently active collection records and pertinent
information on delinquent loans.
E. Net escrow and unapplied funds as of the transfer date will be sent to
Special Servicer via check or wire within three business days of the transfer,
accompanied by an explanation of Unapplied Funds codes.
F. The advances (exclusive of escrow advances, which will be handled in Section
X (E) above) incurred by Company will be billed to Special Servicer accompanied
by appropriate documentation. Special Servicer to reimburse Company via check or
wire for all advances (exclusive of escrow advances, which will be handled in
Section X (E) above) on the subject loans within three business days of receipt
of billing.
G. Company to provide a listing containing the mortgagor name, co-mortgagor
name, property address
R-23
and mailing address for preparation of Special Servicer's Notification Letters.
H. Company to provide the following items, sorted and clearly marked for special
handling.
1. Active foreclosure and bankruptcy files should have the status shown
on the front of each file.
2. Insurance loss drafts should provide all documentation on the current
status.
3. Unprocessed payoff funds should be accompanied by a copy of the payoff
quotation.
4. Information should be furnished on any pending payoff or assumption.
5. Information on any incomplete partial releases should be provided.
I. Loan payments received after the cutoff will be endorsed to __________ and
forwarded by overnight service to the following address within twenty-four
hours, properly identified with Company's loan number.
[Address]
Returned Items received after the transfer date will be forwarded to Special
Servicer for reimbursement. Special Servicer to reimburse Company within 10
business days of receipt.
J. Company to ship all loan files and documentation related to the individual
transfers by the 3rd business day after the cut-off. Any information, such as
preliminary trial balances, master file data records, delinquency information,
etc. will be furnished as early as possible prior to the transfer date.
R-24
All shipments to be sent to:
[Address]
K. Company to furnish all required IRS reporting statements for the current year
up to the transfer date, both to the mortgagors and to the appropriate
government agencies. Special Servicer to furnish all required year-end reporting
commencing on the effective date of transfer through the year-end.
R-25
EXHIBIT A to Schedule II
LOAN INFORMATION TO BE PROVIDED TO COMPANY
R-26
EXHIBIT S
FORM OF FORM 10-K CERTIFICATE
I, [identify the certifying individual], certify that:
1. I have reviewed the annual report on Form 10-K for the fiscal year
[___], and all reports on Form 8-K containing distribution or servicing reports
filed in respect of periods included in the year covered by that annual report,
of the trust (the "Trust") created pursuant to the Pooling and Servicing
Agreement dated June 1, 2003 (the "P&S Agreement") among ABN AMRO Mortgage
Corporation (the "Depositor"), ABN AMRO Mortgage Group, Inc. (the "Servicer")
and JPMorgan Chase Bank (the "Trustee");
2. Based on my knowledge, the information in these reports, taken as a
whole, does not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading as of the
last day of the period covered by this annual report;
3. Based on my knowledge, the servicing information required to be provided
to the Trustee by the Servicer under the P&S Agreement for inclusion in these
reports is included in these reports;
4. I am responsible for reviewing the activities performed by the Servicer
under the P&S Agreement and based upon my knowledge and the annual compliance
review required under the P&S Agreement, and except as disclosed in the reports,
the Servicer has fulfilled its obligations under the P&S Agreement; and
5. The reports disclose all significant deficiencies relating to the
Servicer's compliance with the minimum servicing standards based upon the report
provided by an independent public accountant, after conducting a review in
compliance with the Uniform Single Attestation Program for Mortgage Bankers as
set forth in the P&S Agreement, that is included in these reports.
[In giving the certifications above, I have reasonably relied on the
information provided to me by the following unaffiliated parties: the Trustee.]
Date:____________
_________________________________*
[Signature]
Name:
Title:
* - to be signed by the senior officer in charge of the servicing functions of
the Servicer
S-1
EXHIBIT T
FORM OF BACK-UP CERTIFICATION TO FORM 10-K CERTIFICATE
I, [identify the certifying individual], on behalf of [LaSalle Bank
National Association, as certificate administrator (the "Certificate
Administrator")] [JPMorgan Chase Bank, as trustee (the "Trustee")] certify that:
1. I have reviewed the annual report on Form 10-K for the fiscal year
[___], and all reports on Form 8-K containing distribution or servicing reports
filed in respect of periods included in the year covered by that annual report,
of the trust (the "Trust") created pursuant to the Pooling and Servicing
Agreement dated June 1, 2003 (the "P&S Agreement") among ABN AMRO Mortgage
Corporation (the "Depositor"), ABN AMRO Mortgage Group, Inc. (the "Servicer")
and JPMorgan Chase Bank (the "Trustee"); and
2. Based on my knowledge, the distribution information in these reports and
any other information provided by the [Trustee] [Certificate Administrator],
taken as a whole, does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light of
the circumstances under which the statements were made, not misleading as of the
last day of the period covered by that annual report.
Date:____________
_________________________________
[Signature]
Name:
Title:
T-1
