<PAGE>
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported) July 26, 1999
ABN AMRO MORTGAGE CORPORATION (as depositor under the Pooling
and Servicing Agreement, dated as of July 1, 1999 providing
for, inter alia, the issuance of ABN AMRO Mortgage Corporation
Mortgage Pass-Through Certificates Series 1999-5)
ABN AMRO Mortgage Corporation
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Delaware
- --------------------------------------------------------------------------------
(State or Other Jurisdiction of Incorporation)
<TABLE>
<S> <C>
333-57027 363886007
- -------------------------------- -----------------------------------------
(Commission File Number) (I.R.S. Employer Identification No.)
181 West Madison Street
Chicago, Illinois 60602
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
</TABLE>
248-643-2530
- --------------------------------------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
Not Applicable
- --------------------------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
================================================================================
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
Description of the Certificates and the Mortgage Pool.
On July 27,1999, a single series of certificates, entitled ABN AMRO
Mortgage Corporation, Mortgage Pass-Through Certificates, Series 1999-5 (the
"Certificates"), was issued pursuant to a Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement") attached hereto as Exhibit 4.1 dated as of
July 1, 1999, among ABN AMRO Mortgage Corporation as depositor (the
"Depositor"), LaSalle Home Mortgage Corporation as servicer and Chase Bank of
Texas, National Association as trustee. The Certificates consist of nineteen
classes identified as the "Class A-1 Certificates", the "Class A-2
Certificates", the "Class A-3 Certificates", the "Class A-4 Certificates", the
"Class A-5 Certificates", the "Class A-6 Certificates", the "Class A-7
Certificates", the "Class A-8 Certificates", the "Class A-9 Certificates", the
"Class A-10 Certificates", the "Class A-P Certificates", the "Class A-X
Certificates", the "Class M Certificates", the "Class B-1 Certificates", the
"Class B-2 Certificates", the "Class B-3 Certificates", the "Class B-4
Certificates", the "Class B-5 Certificates" and the "Class R Certificate",
respectively, and were issued in exchange for, and evidence the entire
beneficial ownership interest in, the assets of a trust fund (the "Trust Fund")
consisting primarily of a pool (the "Mortgage Pool") of conventional,
one-to-four unit residential first mortgage loans (the "Mortgage Loans"), having
as of the close of business on July 1, 1999 (the "Cut-off Date"), an aggregate
principal balance of approximately $310,855,850 (the "Initial Pool Balance"),
after taking into account all payments of principal due on the Mortgage Loans on
or before such date, whether or not received. The Depositor acquired certain of
the Trust Fund assets from ABN AMRO Mortgage Group, Inc. ("AAMGI") pursuant to a
Mortgage Loan Purchase Agreement (the "Mortgage Loan Purchase Agreement") dated
July 25, 1999, attached hereto as Exhibit 4.2, between AAMGI as seller and the
Depositor as purchaser. 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-P, Class
A-X, Class M, Class B-1, Class B-2 and Class R Certificates were publicly
offered, as described in a Prospectus, dated July 26, 1998, and a Prospectus
Supplement, dated July 26, 1999, pursuant to an Underwriting Agreement (the
"Underwriting Agreement") dated December 22, 1998, attached hereto as Exhibit
1.1, among the Depositor, Standard Federal Bancorporation, Inc. ("Standard
Federal Bancorporation"), Bear, Stearns & Co. Inc. ("Bear Stearns") and ABN AMRO
Incorporated ("AAI") (Bear Stearns and AAI being referred to herein,
collectively, as the "Underwriters") and the Terms Agreement (the "Terms
Agreement") dated July 26, 1999, attached hereto as Exhibit 1.2, among the
Depositor, Standard Federal Bancorporation and the Underwriters. The Depositor
sold the Class B-3, Class B-4 and Class B-5 Certificates to Bear Stearns as
initial purchaser (in such capacity, the "Initial Purchaser") pursuant to a
purchase agreement dated July 26, 1999 among the Depositor, Standard Federal
Bancorporation and the Initial Purchaser.
Each Class of Certificates will have an initial certificate principal
balance ("Certificate Principal Balance"). The Class A-1 Certificates have an
initial Certificate Principal Balance of $60,514,000. The Class A-2 Certificates
have an initial Certificate Principal Balance of $30,000,000. The Class A-3
Certificates have an initial Certificate Principal Balance of $475,000. The
Class A-4 Certificates have an initial Certificate Principal Balance of
$11,500,000. The Class A-5 Certificates have an initial Certificate Principal
Balance of $1,344,755. The Class A-6 Certificates have an initial Certificate
Principal Balance of $79,131,433. The Class A-7 Certificates have an initial
Certificate Principal Balance of $26,377,144. The Class A-8 Certificates have an
initial Certificate Principal Balance of $24,339,323. The Class A-9 Certificates
have an initial Certificate Principal Balance of $31,085,699. The Class A-10
Certificates have an initial Certificate Principal Balance of $31,085,585. The
Class A-P initial Certificate Principal Balance $3,136,144. The Class A-X
Certificates have an initial Certificate Principal Balance of $7,685,750. The
Class M Certificates have an initial Certificate Principal Balance of
$6,994,300. The Class B-1 Certificates have an initial Certificate Principal
Balance of $2,486,800. The Class B-2 Certificates have an initial Certificate
Principal Balance of $1,243,400. The Class B-3 Certificates have an initial
Certificate Principal Balance of $1,088,000. The Class B-4 Certificates have an
initial Certificate Principal Balance of $621,700. The Class B-5 Certificates
have an initial Certificate Principal Balance of $777,222. The Class R
Certificate has an initial Certificate Principal Balance of $100.
-2-
<PAGE>
Capitalized terms used herein and not otherwise defined shall have the meanings
assigned to them in the Pooling and Servicing Agreement.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Not applicable
(b) Not applicable
(c) Exhibits
<TABLE>
<CAPTION>
EXHIBIT
NO. DOCUMENT DESCRIPTION
- ------- --------------------
<S> <C>
1.1 Underwriting Agreement, dated as of December 22, 1998, among
ABN AMRO Mortgage Corporation, Standard Federal
Bancorporation, Inc., ABN AMRO Incorporated and Bear, Stearns
& Co. Inc.
1.2 Terms Agreement, dated July 26, 1999, among ABN AMRO Mortgage
Corporation, Standard Federal Bancorporation, Inc., ABN AMRO
Incorporated and Bear, Stearns & Co. Inc.
4.1 Pooling and Servicing Agreement, dated as of July 1, 1999,
among ABN AMRO Mortgage Corporation as depositor, LaSalle Home
Mortgage Corporation as servicer, and Chase Bank of Texas,
National Association as trustee.
4.2 Mortgage Loan Purchase Agreement, dated as of July 27, 1999,
between ABN AMRO Mortgage Group, Inc. and ABN AMRO Mortgage
Corporation as purchaser.
</TABLE>
-3-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ABN AMRO MORTGAGE CORPORATION
(Registrant)
Dated: August 10, 1999 By: /s/ Maria Fregosi
------------------------------------------
Name: Maria Fregosi
Title: Vice-President
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DOCUMENT DESCRIPTION
- ------- --------------------
<S> <C>
1.1 Underwriting Agreement, dated as of December 22, 1998, among
ABN AMRO Mortgage Corporation, Standard Federal
Bancorporation, Inc., ABN AMRO Incorporated and Bear, Stearns
& Co. Inc. (Incorporated by reference to Exhibit 1.1 to ABN AMRO
Mortgage Corporation's 8-K filed January 5, 1999 with respect
to the ABN AMRO Mortgage Pass-Through Certificates Series 1998-5.)
1.2 Terms Agreement, dated July 26, 1999, among ABN AMRO Mortgage
Corporation, Standard Federal Bancorporation, Inc., ABN AMRO
Incorporated and Bear, Stearns & Co. Inc.
4.1 Pooling and Servicing Agreement, dated as of July 1, 1999,
among ABN AMRO Mortgage Corporation as depositor, LaSalle Home
Mortgage Corporation as servicer, and Chase Bank of Texas,
National Association as trustee.
4.2 Mortgage Loan Purchase Agreement, dated as of July 27, 1999,
between ABN AMRO Mortgage Group, Inc. and ABN AMRO Mortgage
Corporation as purchaser.
</TABLE>
STATEMENT OF DIFFERENCES
------------------------
The section symbol shall be expressed as .............................. 'SS'
The dagger symbol shall be expressed as ............................... 'D'
<PAGE>
PASS-THROUGH CERTIFICATES
ABN AMRO MORTGAGE CORPORATION, DEPOSITOR
TERMS AGREEMENT
---------------
Dated: July 26, 1999
To: ABN AMRO MORTGAGE CORPORATION
Re: Underwriting Agreement, dated as of December 22, 1998 (the
"Underwriting Agreement")
Ladies and Gentlemen:
The undersigned (being herein called the "Underwriters"), understand
that ABN AMRO Mortgage Corporation, a Delaware corporation (the "Company"),
proposes to issue and sell $308,368,928 original principal amount of
Pass-Through Certificates described below (the "Certificates"). The Certificates
will be issued under a Pooling and Servicing Agreement dated as of July 1, 1999
among the Company as depositor, LaSalle Home Mortgage Corporation as servicer
and Chase Bank of Texas, National Association as trustee. The terms of the
Certificates are summarized below and are more fully described in the Company's
Prospectus Supplement prepared with respect to the Certificates.
All the provisions (including defined terms) contained in the
Underwriting Agreement are incorporated by reference herein in their entirety
and shall be deemed to be part of this Terms Agreement to the same extent as if
such provisions had been set forth in full herein. The Closing Time referred to
in Section 2 of the Underwriting Agreement shall be 9:00 a.m., Chicago, Illinois
time, on July 27, 1999. Subject to the terms and conditions set forth or
incorporated by reference herein, the Company hereby agrees to sell and the
Underwriters agree to purchase, severally and not jointly, the respective
original principal amounts of Certificates set forth opposite their names in
Exhibit I hereto at the purchase price set forth below.
The Underwriters will offer the Certificates for sale upon the terms
and conditions set forth in the Prospectus.
Subject to the terms and conditions set forth or incorporated by
reference herein, the Underwriters will pay for the Certificates at the time and
place and in the manner set forth in the Underwriting Agreement.
The Underwriters will pay their pro rata share (based upon the
principal amount of Offered Certificates each of the Underwriters has agreed to
purchase as indicated on Exhibit I
<PAGE>
hereto) of all fees and expenses relating to any letter of independent certified
public accountants delivered in connection with the Computational Materials.
<PAGE>
Series Designation: 1999-5
- ------------------
Terms of the Certificates and Underwriting Compensation:
- --------------------------------------------------------
<TABLE>
<CAPTION>
Classes Original Principal Amount Interest Rate* Price to Public
- ------- ------------------------- -------------- ---------------
<S> <C> <C> <C>
Class A-1 $60,514,000.00 6.60%
Class A-2 $30,000,000.00 6.75%
Class A-3 $475,000.00 6.75%
Class A-4 $11,500,000.00 6.75%
Class A-5***** $1,344,755.56 6.75%****
Class A-6 $79,131,433.00 Adjustable***
Class A-7 $26,377,144.00 Adjustable***
Class A-8 $34,339,323.00 6.75%
Class A-9 $31,085,699.00 6.75%
Class A-10 $31,085,585.00 6.75%
Class A-P** $3,136,144.00 0.00%
Class A-X***** $7,685,750.89 6.75%****
Class M $6,994,300.00 6.75%
Class B-1 $2,486,800.00 6.75%
Class B-2 $1,243,400.00 6.75%
Class R****** $100.00 6.75%
</TABLE>
* Interest distributed to the Offered Certificates on each
Distribution Date will have accrued during the preceding
calendar month at the applicable per annum Interest Rate (as
defined in the Prospectus Supplement).
** Not entitled to receive distributions of interest.
*** The adjustable rate for the Class A-6 Certificates will be
LIBOR + 0.60% with a maximum of 9.00% and a minimum of 0.60%.
The adjustable rate for the Class A-7 Certificates will be
25.20% - (3.0 x LIBOR) with a maximum of 25.20% and a
<PAGE>
minimum of 0.00%. The initial rates for the Class A-6 Certificates and
the Class A-7 Certificates will be 5.7675% and 9.6975%, respectively.
**** Will accrue interest on the related Notional Amount as described in
the Prospectus Supplement.
***** Not entitled to receive distributions of principal.
****** Will be comprised of two Components, Component R-1, which represents
the sole residual interest in REMIC I (as defined in the Prospectus
Supplement), and Component R-2, which represents the sole residual
interest in REMIC II (as defined in the Prospectus Supplement).
Certificate Rating:
- -------------------
Standard & Poor's, a division of the McGraw-Hill Companies,
Inc. ("S&P") shall assign a rating of "AAA" to the Class A and Class R
Certificates (except for the Class A-5, Class A-7, Class A-P and Class A-X
Certificates, which will be rated "AAAr") and Fitch IBCA, Inc. ("Fitch") shall
assign a rating of "AAA" to the Class A and Class R Certificates. Fitch shall
assign a rating of not less than"AA" to the Class M Certificates, not less
than"A" to the Class B-1 Certificates and not less than "BBB" to the Class B-2
Certificates.
REMIC Election:
- ---------------
The Company intends to cause an election to be made to treat
REMIC I and REMIC II as "real estate mortgage investment conduits" (each, a
"REMIC") for federal income tax purposes. All of the Certificates issued by
REMIC I and REMIC II, other than the Class R Certificate, will represent
ownership of REMIC "regular interests". The Class R Certificate will represent
ownership of the REMIC "residual interest" in REMIC I and REMIC II.
Credit Enhancement:
- -------------------
Senior/Subordinated: Shifting interest
Cut-off Date:
- -------------
The Cut-off Date is July 1, 1999.
Distribution Date:
- ------------------
<PAGE>
The 25th day of each month (or, if such 25th day is not a
business day, the business day immediately following) commencing August 1999.
Purchase Price:
- ---------------
The purchase price payable by the Underwriters for the
Certificates is 95.39% of the aggregate principal balance of the Certificates as
of the Closing Time plus accrued interest from July 1, 1999 up to but not
including the Closing Time.
Underwriting Commission:
- ------------------------
Notwithstanding anything to the contrary in the Underwriting
Agreement, no additional underwriting commission shall be payable by the Company
to the Underwriters in connection with the purchase of the Certificates.
Closing Date and Location:
- --------------------------
July 27, 1999 at the Chicago, Illinois offices of Mayer, Brown
& Platt.
<PAGE>
Please confirm your agreement by having an authorized Officer
sign a copy of this Agreement in the space set forth below and returning a
signed copy to us.
BEAR, STEARNS & CO. INC.
By: /s/ Paul Friedman
---------------------------------
Name: Paul Friedman
Title: Senior Managing Director
ABN AMRO INCORPORATED
By: /s/ Maria Fregosi
-----------------------------------
Name: Maria Fregosi
Title: First Vice President
ACCEPTED:
ABN AMRO MORTGAGE CORPORATION
By: /s/ Stewart Fleming
----------------------------
Name: Stewart Fleming
Title: Senior Vice President
STANDARD FEDERAL BANCORPORATION, INC.
By: /s/ Joseph E. Krul
----------------------------
Name: Joseph E. Krul
Title: Executive Vice President
<PAGE>
Exhibit I
---------
<TABLE>
<CAPTION>
Original
Principal
Amount of
Name Certificates
- ---- ------------
<S> <C>
BEAR, STEARNS & CO. INC. 100% of the Certificates
Total $308,368,928.00
</TABLE>
<PAGE>
================================================================================
ABN AMRO MORTGAGE CORPORATION
Depositor
and
LASALLE HOME MORTGAGE CORPORATION,
Servicer
and
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
Trustee
--------------------
POOLING AND SERVICING AGREEMENT
Dated as of July 1, 1999
--------------------
$310,855,850
Mortgage Pass-Through Certificates
SERIES 1999-5
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
ARTICLE I DEFINITIONS.....................................................4
Class A-6 Interest Rate........................................12
Class A-7 Interest Rate........................................12
ARTICLE II CONVEYANCE OF TRUST FUND; ORIGINAL ISSUANCE
OF CERTIFICATES................................................35
Section 2.1 Conveyance of Trust Fund.........................35
Section 2.2 Acceptance by Trustee............................39
Section 2.3 Representations and Warranties of the Depositor..40
Section 2.4 Authentication and Delivery of Certificates;
Designation of Certificates as REMIC Regular
and Residual Interests.........................44
Section 2.5 Designation of Startup Day.......................45
Section 2.6 No Contributions.................................45
Section 2.7 Representations and Warranties of the Servicer...46
ARTICLE III ADMINISTRATION AND SERVICING OF LOANS..........................47
Section 3.1 Servicer to Act as Servicer; Administration of
the Loans......................................47
Section 3.2 Collection of Certain Loan Payments;
Certificate Account............................50
Section 3.3 Permitted Withdrawals from the Custodial
Account for P&I................................52
Section 3.4 Taxes, Assessments and Similar Items; Escrow
Accounts.......................................53
Section 3.5 Maintenance of Insurance.........................54
Section 3.6 Enforcement of Due-on-Sale Clauses; Assumption
and Substitution Agreements....................55
Section 3.7 Realization upon Defaulted Loans.................56
Section 3.8 Trustee to Cooperate; Release of Mortgage Files..58
Section 3.9 Servicing Compensation...........................59
Section 3.10 Reports to the Trustee; Custodial Account for
P&I Statements ................................59
Section 3.11 Annual Statement as to Compliance................60
Section 3.12 Annual Independent Public Accountants'
Servicing Report...............................60
</TABLE>
i
<PAGE>
<TABLE>
<S> <C> <C>
Section 3.13 Access to Certain Documentation and Information
Regarding the Loans............................60
Section 3.14 [Reserved].......................................60
Section 3.15 Sale of Defaulted Loans and REO Properties.......61
Section 3.16 Delegation of Duties.............................62
Section 3.17 [Reserved].......................................62
Section 3.18 [Reserved].......................................62
Section 3.19 Appointment of a Special Servicer................62
Section 3.20 Allocation of Realized Losses....................63
ARTICLE IV PAYMENTS TO CERTIFICATEHOLDERS; ADVANCES;
STATEMENTS AND REPORTS.........................................64
Section 4.1 Distributions to Certificateholders..............64
Section 4.2 Statements to Certificateholders.................65
Section 4.3 Advances by the Servicer; Distribution Reports
to the Trustee.................................66
Section 4.4 Nonrecoverable Advances..........................67
Section 4.5 Foreclosure Reports..............................68
Section 4.6 Adjustment of Servicing Fees with Respect to
Payoffs .......................................68
Section 4.7 Prohibited Transactions Taxes and Other Taxes....68
Section 4.8 Tax Administration...............................69
Section 4.9 Equal Status of Servicing Fee....................69
Section 4.10 Appointment of Paying Agent and Certificate
Administrator .................................70
ARTICLE V THE CERTIFICATES...............................................70
Section 5.1 The Certificates.................................70
Section 5.2 Certificates Issuable in Classes;
Distributions of Principal and Interest;
Authorized Denominations ......................77
Section 5.3 Registration of Transfer and Exchange of
Certificates ..................................77
Section 5.4 Mutilated, Destroyed, Lost or Stolen
Certificates ..................................78
Section 5.5 Persons Deemed Owners............................78
Section 5.6 Temporary Certificates...........................78
Section 5.7 Book-Entry for Book-Entry Certificates...........79
Section 5.8 Notices to Clearing Agency.......................80
Section 5.9 Definitive Certificates..........................80
Section 5.10 Office for Transfer of Certificates..............81
ARTICLE VI THE DEPOSITOR AND THE SERVICER.................................81
Section 6.1 Liability of the Depositor and the Servicer......81
Section 6.2 Merger or Consolidation of the Depositor or
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C> <C>
the Servicer...................................81
Section 6.3 Limitation on Liability of the Servicer and
Others ........................................81
Section 6.4 Servicer Not to Resign...........................82
ARTICLE VII DEFAULT........................................................83
Section 7.1 Events of Default................................83
Section 7.2 Other Remedies of Trustee........................84
Section 7.3 Directions by Certificateholders and Duties
of Trustee During Event of Default.............84
Section 7.4 Action upon Certain Failures of Servicer and
upon Event of Default..........................85
Section 7.5 Appointment of Successor Servicer................85
Section 7.6 Notification to Certificateholders...............87
ARTICLE VIII CONCERNING THE TRUSTEE.........................................87
Section 8.1 Duties of Trustee................................87
Section 8.2 Certain Matters Affecting Trustee................89
Section 8.3 Trustee Not Required to Make Investigation.......89
Section 8.4 Trustee Not Liable for Certificates or Loans.....90
Section 8.5 Trustee May Own Certificates.....................90
Section 8.6 Servicer to Pay Trustee's Fees and Expenses......91
Section 8.7 Eligibility Requirements for Trustee.............91
Section 8.8 Resignation and Removal of Trustee...............91
Section 8.9 Successor Trustee................................92
Section 8.10 Merger or Consolidation of Trustee...............93
Section 8.11 Appointment of Co-Trustee or Separate Trustee....93
Section 8.12 Appointment of Custodians........................94
Section 8.13 Authenticating Agent.............................94
Section 8.14 Bloomberg........................................95
Section 8.15 Reports to Securities and Exchange Commission....95
Section 8.16 Calculation of LIBOR.............................95
ARTICLE IX TERMINATION....................................................96
Section 9.1 Termination upon Purchase by the Depositor or
Liquidation of All Loans........................96
Section 9.2 Trusts Irrevocable...............................98
Section 9.3 Additional Termination Requirements..............98
ARTICLE X MISCELLANEOUS PROVISIONS.......................................99
Section 10.1 Amendment........................................99
Section 10.2 Recordation of Agreement........................100
</TABLE>
iii
<PAGE>
<TABLE>
<S> <C> <C>
Section 10.3 Limitation on Rights of Certificateholders......100
Section 10.4 Governing Law; Jurisdiction.....................101
Section 10.5 Notices.........................................101
Section 10.6 Severability of Provisions......................102
</TABLE>
iv
<PAGE>
EXHIBITS
Exhibit A - Forms of Certificates
Exhibit B - Form of Residual Certificate
Exhibit C - [Reserved]
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 - [Reserved]
Exhibit N - [Reserved]
Exhibit O - Planned Principal Balances
Exhibit P - [Reserved]
Exhibit Q - Bloomberg Data
Exhibit R - Form of Special Servicing and Collateral Fund Agreement
v
<PAGE>
This Pooling and Servicing Agreement, dated and effective as of July 1,
1999 (this "Agreement"), is executed by and among ABN AMRO Mortgage Corporation,
as depositor (the "Depositor"), LaSalle Home Mortgage Corporation, as servicer
(the "Servicer"), and Chase Bank of Texas, National Association, 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 July 26, 1999, and a Prospectus Supplement, dated July 26, 1999, 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 July 27, 1999. 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
1
<PAGE>
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 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:
<TABLE>
<CAPTION>
Initial Class
Principal
Remittance or Notional Last Scheduled
Designation Rate (1) Balance Distribution Date*
- ----------- ---------- --------- -----------------
<S> <C> <C> <C>
Class A-1 6.60% $60,514,000.00 August 25, 2029
Class A-2 6.75% $30,000,000.00 August 25, 2029
Class A-3 6.75% $ 475,000.00 August 25, 2029
Class A-4 6.75% $11,500,000.00 August 25, 2029
Class A-5 6.75%(2) $ 1,344,755.56 August 25, 2029
Class A-6 (3) $79,131,433.00 August 25, 2029
Class A-7 (4) $26,377,144.00 August 25, 2029
Class A-8 6.75% $24,339,323.00 August 25, 2029
Class A-9 6.75% $31,085,699.00 August 25, 2029
Class A-10 6.75% $31,085,585.00 August 25, 2029
Class A-P 0.00%(5) $ 3,136,144.00 August 25, 2029
Class A-X 6.75%(6) $ 7,685,750.89 August 25, 2029
Class M 6.75% $ 6,994,300.00 August 25, 2029
Class B-1 6.75% $ 2,486,800.00 August 25, 2029
Class B-2 6.75% $ 1,243,400.00 August 25, 2029
Class B-3 6.75% $ 1,088,000.00 August 25, 2029
Class B-4 6.75% $ 621,700.00 August 25, 2029
Class B-5 6.75% $ 777,222.86 August 25, 2029
Class R'D' 6.75% $ 100.00(7) August 25, 2029
</TABLE>
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<PAGE>
* The Distribution Date in the month after the maturity date for the latest
maturing Loan.
'D' 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
Certificate) on each Distribution Date will have accrued during the
preceding calendar month at the applicable per annum Remittance Rate.
(2) The Class A-5 Certificates will accrue interest on the Class A-5 Notional
Amount (as defined herein). The Class A-5 Notional Amount as of the
Closing Date will be approximately $1,344,755.56.
(3) Interest will accrue on the Class A-6 Certificates at an initial interest
rate of 5.7675% and after the first Distribution Date at a per annum rate
of 0.60% above LIBOR, determined monthly as described herein, subject to a
maximum rate of 9.00% and a minimum rate of 0.60%.
(4) Interest will accrue on the Class A-7 Certificates at an initial interest
rate of 9.6975% and after the first Distribution Date at a per annum rate
of 25.20% minus (3.0 x LIBOR), determined monthly as described herein,
subject to a maximum rate of 25.20% and a minimum rate of 0.00%.
(5) The Class A-P Certificates will not be entitled to distributions of
interest and will only receive principal in respect of those Loans with
Pass-Through Rates that are less than 6.75% per annum.
(6) The Class A-X Certificates will accrue interest on the Class A-X Notional
Amount (as defined herein). The Class A-X Notional Amount as of the
Closing Date will be approximately $7,685,750.89.
(7) 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:
Advance: An Advance made by the Servicer pursuant to Section 4.3.
Adjustable Rate Certificates: The Class A-6 Certificates and the Class A-7
Certificates.
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.
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
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 Class
A-X and Class A-5 Certificates, a Class Notional Amount as of the Cut-Off Date
equal to $100,000 and integral multiples of $1 in excess thereof. With respect
to the Class R Certificate, one Certificate with a Percentage Interest equal to
100%.
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 such Loans by the Determination Date for such
Distribution Date and not previously distributed (including Liquidation
Proceeds), except:
(a) all Prepaid Monthly Payments;
(b) all Curtailments received after the applicable Prepayment
Period (together with any interest payment received with such
prepayments 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);
(d) Insurance Proceeds and Liquidation Proceeds on such 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 such Loan; and
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<PAGE>
(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 such 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, $116,000, and thereafter, the
initial Bankruptcy Coverage amount of $116,000, 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.
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.
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<PAGE>
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 Account Statement: With respect to the Certificate Account, a
statement delivered by the Certificate Administrator to the Trustee pursuant to
Section 3.10.
Certificate Administrator: Any Certificate Administrator appointed by the
Trustee as provided pursuant to Section 4.10. Initially, the Certificate
Administrator will be LaSalle Bank National Association.
Certificate Administrator and Trustee Fee: For each Loan, a fee per annum
equal to 0.0125% 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:
(1) First, to the Class A-P Certificates, the Discount Fractional
Principal Amount;
(2) Second, to the Senior Certificates (other than the Principal
Only Certificate), concurrently, the sum of the Interest
Distribution Amounts for such Classes of Certificates
remaining unpaid from previous Distribution Dates, pro rata
according to their respective shares of such unpaid amounts;
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<PAGE>
(3) Third, to the Senior Certificates, concurrently, the sum of
the Interest Distribution Amounts for such Classes of
Certificates (other than the Principal Only Certificate) for
the current Distribution Date, pro rata according to their
respective Interest Distribution Amounts;
(4) Fourth, to the Senior Certificates (other than the Principal
Only Certificate), the Senior Principal Amount as follows:
(a) first, to the Class R Certificate, until its Principal
Balance has been reduced to zero;
(b) second, to the Class A Certificates (other than the
Principal Only Certificate) in the following order of
priority:
(i) first, to the Class A-10 Certificates, the Lockout
Principal Amount, until its Principal Balance has
been reduced to zero; and
(ii) second, to the Class A-1, Class A-2, Class A-3,
Class A-4, Class A-6, Class A-7 and Class A-8
Certificates, the Senior Principal Amount
remaining, concurrently, as follows: to the extent
necessary to reduce their respective Principal
Balances to zero;
(A) 77.325958690% sequentially as, follows:
1. first, to the Class A-1 Certificates
to the extent necessary to reduce its
Principal Balance to its Planned
Principal Balance;
2. second, to the Class A-6 and Class A-7
Certificates, pro rata, according to
their respective Class Principal
Balances, until their respective
Principal Balances have been reduced
to zero;
3. third, to the Class A-1 Certificates,
without regard to its Planned
Principal Balance, until its Principal
Balance has been reduced to zero;
4. fourth, to the Class A-8 Certificates,
until its Principal Balance has been
reduced to zero;
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<PAGE>
(B) 17.5030985550% to the Class A-2 and Class
A-8 Certificates, sequentially, until their
Principal Balances have been reduced to
zero;
(C) 0.2212339490% to the Class A-3 and Class A-8
Certificates, sequentially, until their
Principal Balances have been reduced to
zero; and
(D) 4.9497088060% to the Class A-4 certificates,
until its Principal Balance has been reduced
to zero; and
(iii) third, to the Class A-9 and Class A-10
certificates, sequentially, until their principal
balances have been reduced to zero.
(5) Fifth, the Class A-P Certificates up to the applicable
Subordinate Principal Amount (determined without regard to the
proviso of such definition) for such Distribution Date, the
portion of the Discount Fractional Principal Shortfall amount
payable to the Class A-P Certificates on previous Distribution
Dates pursuant to clause (I)(a)(vi) of this definition of
"Certificate Distribution Amount" and remaining unpaid from
such previous Distribution Dates; and
(6) Sixth, to the Class A-P Certificates up to the applicable
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)(v)), the Discount Fractional Principal
Shortfall, provided, that any amounts distributed in respect
of the Discount Fractional Principal Shortfall pursuant to
paragraph (I)(a)(v) or this paragraph (I)(a)(vi) of this
definition of "Certificate Distribution Amount" shall not
cause a further reduction of the Class A-P Principal Balance;
B. with respect to the Subordinate Certificates and the Class R
Certificate, on any Distribution Date prior to the Credit Support Depletion
Date, to the extent of the Available Distribution Amount remaining:
(1) First, to the Class M, B-1, B-2, B-3, B-4 and B-5 Certificates,
in their order of seniority, the following:
(a) their respective amounts of previously unpaid and then
current Interest Distribution Amounts;
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<PAGE>
(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 Principal Balances have been
reduced to zero;
(2) Second, to the Subordinate Certificates in their order of
seniority, the amount of unreimbursed Realized Losses previously allocated
to such Class, 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 Subordinate Certificates; and
(3) 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;
B. Second, to the Senior 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 Principal Only
Certificate), the Senior Principal Amount, pro rata, according to their
respective Class Principal Balances (other than the Principal Only
Certificate);
D. Fourth, to the Senior 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 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,
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<PAGE>
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-5 Notional Amount: As of the Closing Date approximately
$1,344,755.56 and thereafter, with respect to any distribution date, will be
equal to 3/135ths of the Certificate Principal Balance of the Class A-1
Certificates.
Class A-X Notional Amount: As of the Closing Date approximately
$7,685,750.89, and thereafter, with respect to any Distribution Date will equal
the total Principal Balance, as of the first day of the month of such
Distribution Date, 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 6.75%
-----------------------------------------------------------
6.75%
Class Notional Amount: With respect to the Class A-X Certificates, the
corresponding notional amount of such Component.
Class A Certificates: The Class A-1, A-2, A-3, A-4, A-5, A-6, A-7, A-8,
A-9, A-10, A-P and A-X Certificates, collectively, and designated as such on the
face thereof in substantially the forms attached hereto as Exhibits A-1 through
A-12, respectively.
Class Principal Balance: For any Class of Certificates (other than the
Class A-X 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
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<PAGE>
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.
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
2.1.
Class R Certificateholder: The registered Holder of the Class R
Certificate.
Class A-6 Interest Rate: With respect to the initial Interest Accrual
Period, 5.7675% per annum, and as to any Interest Accrual Period thereafter,
will be a per annum rate equal to LIBOR plus 0.60% (subject to a maximum rate of
9.00% per annum and a minimum rate of 0.60% per annum).
Class A-7 Interest Rate: With respect to the initial Interest Accrual
Period, 9.6975% per annum, and as to any Interest Accrual Period thereafter,
will be a per annum rate equal to 25.20% minus the product of LIBOR and 3.0
(subject to a maximum rate of 25.20% per annum and a minimum rate of 0.00% per
annum).
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: July 27, 1999.
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 on such Distribution
Date, (b) the aggregate Payoff Earnings and (c) the aggregate Payoff Interest
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 600 Travis Street, Suite 1150,
Houston, Texas 77002, Attention: S. Whitten Rusk III.
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<PAGE>
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.
Curtailment Shortfall: With respect to any Curtailment applied with a
Monthly Payment, an amount equal to one month's interest on such Curtailment at
the applicable Pass-Through Rate on such Loan.
Custodial Account for P&I: The Custodial Account for Principal and
Interest established and maintained by the Servicer and caused by the Servicer
to be established and maintained pursuant to Section 3.2(b) 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, (a) within FDIC insured accounts (or other
accounts with comparable insurance coverage acceptable to each Rating Agency)
created, maintained and monitored by the Servicer or (b) 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 (a) 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 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: July 1, 1999.
Data: As defined in Section 8.14.
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.
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<PAGE>
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.
Depository Agreement: The Letter of Representations, dated July __, 1999
by and among DTC, the Depositor and the Trustee.
Depositor: ABN AMRO Mortgage Corporation, a Delaware corporation, or its
successor-in- interest.
Depository: DTC or any successor thereto.
Destroyed Mortgage Note: A Mortgage Note the original of which was
permanently lost or destroyed and has not been replaced.
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:
6.75% - the Pass-Through Rate on such Discount Loan
---------------------------------------------------
6.75%
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 Prior 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 such Discount Loan 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 6.75%.
Disqualified Organization: As defined in Section 5.1(b)
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<PAGE>
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 August 25, 1999.
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.
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 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, 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" in the case of S&P and Fitch (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,
15
<PAGE>
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 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 term provide that it is terminable
by the purchaser without penalty in the event any such rating is at any time
lower than such level;
(g) repurchase obligations with respect to any security described in
clause (a) or (b) above entered into with a depository institution or trust
company (acting as principal) meeting the rating standards described in (c)
above;
(h) securities bearing interest or sold at a discount that are issued by
any corporation incorporated under the laws of the United States of America or
any State thereof and rated by each Rating Agency in one of its two highest
long-term unsecured rating categories at the time of such investment or
contractual commitment providing for such investment; provided, however, that
securities issued by any such corporation will not be 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
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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.
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.
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
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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: Federal Home Loan Mortgage Corporation, or any successor thereto.
Fitch: Fitch IBCA, Inc. provided, that at any time it be a Rating Agency.
FNMA: Federal National Mortgage Association, or any successor thereto.
Fraud Coverage: As of the Cut-Off Date approximately $3,108,559, and
thereafter, the Fraud Coverage will generally be equal to (1) prior to the third
Anniversary, an amount equal to 1.00% of the aggregate principal balance of all
Loans as of the Cut-Off Date minus 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
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. 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,
promotor, 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.
Installment Due Date: The first day of the month in which the related
Distribution Date occurs.
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,
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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 (other than the
Class A-6 and Class A-7 Certificates), the calendar month preceding the month in
which the Distribution Date occurs. For the Class A-6 and Class A-7
Certificates, the period from the 25th day of the month before the month in
which the Distribution Date occurs and ending on the 24th day of the month in
which that Distribution Date occurs.
Interest Distribution Amount: On any Distribution Date, for any Class of
Certificates (other than the Principal Only Certificate), 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, before giving effect to allocations of
Realized Losses for the applicable Prepayment Period or distributions to be made
on such Distribution Date, reduced by 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 Class A-P Certificates on any Distribution Date
shall equal zero.
Interest Only Certificate: Class A-X and Class A-5 Certificates.
Interested Person: The Depositor, the Servicer, any Holder of a
Certificate, or any Affiliate of any such Person.
Junior Subordinate Certificates: The Class B-3, B-4 and B-5 Certificates,
collectively.
LIBOR: The per annum rate established by the Trustee or the Certificate
Administrator, if any, in accordance with Section 8.16.
LIBOR Business Day: Means any day on which dealings in United States
dollars are transacted in the London interbank market.
LIBOR Determination Date: Means the second LIBOR Business Day before the
first day of the related Interest Accrual Period.
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.
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Liquidation Expenses: 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 (exclusive of the Discount Fractional Principal Amount) with respect to
each Loan which became a Liquidated Loan (but not in excess of the Principal
Balance thereof) during the applicable Prepayment Period.
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 and name of the related Mortgagor;
(ii) the street address of the Mortgaged Property including city,
state and zip code;
(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 and as of the Cut-Off
Date;
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(xi) the type of property;
(xii) the nature of occupancy at origination;
(xiii) the county in which Mortgaged Property is located, if
available; and
(xiv) 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, may not be greater than
100%, and will equal (i) the Certificate Principal Balance of the Class A-4
Certificates divided by (ii) the aggregate Scheduled Principal Balance of all
Loans immediately preceding such Distribution Date (exclusive of the Discount
Fractional Principal Amount).
Lockout Principal Amount: For any Distribution Date, an amount equal to
the product of: (i) the Lockout Percentage; (ii) the Step Down Percentage; and
(iii) the sum of: (a) the Principal Payment Amount (exclusive of the portion
thereof attributable to the Discount Fractional Principal Amount), (b) the
Principal Prepayment Amount (exclusive of the portion thereof attributable to
the Discount Fractional Principal Amount), and (c) 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: The following documents or instruments with respect to each
Loan transferred and assigned pursuant to Section 2.1:
(i) The original Mortgage Note bearing all intervening endorsements
endorsed, "Pay to the order of Chase Bank of Texas, National Association,
as Trustee, for the benefit of the Certificateholders of ABN AMRO Mortgage
Corporation Series 1999-5 Attn: Corporate Trust Department, 600 Travis
Street, Houston, TX 77002, 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
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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 Seller shall deliver or cause to
be delivered to the Purchaser 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
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 "Chase Bank of Texas, National
Association, as Trustee" which assignment shall be in form and substance
acceptable for recording, or a copy certified by the Seller as a true and
correct copy of the original Assignment 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 Seller
shall deliver or cause to be delivered to the Purchaser 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;
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(v) The original mortgage 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;
(vi) The primary mortgage insurance certificate, if any;
(vii) Hazard insurance certificates and copies of the hazard
insurance policy and, if applicable, flood insurance policy; and
(viii) Any and all other documents, opinions and certificates
executed and/or delivered by the related Mortgagor and/or its counsel in
connection with the origination of such Mortgage.
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.
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
both by the Chairman of the Board, the President or a Vice-President, and by the
Treasurer, the Secretary or one of the Assistant Treasurers or Assistant
Secretaries of such Person (or, in the case of a Person which is not a
corporation, signed by the person or persons having like responsibilities), and
delivered to the Trustee.
Opinion of Counsel: A written opinion of counsel, who may be outside or
salaried counsel for the Depositor or the Servicer, or any affiliate of the
Depositor or the Servicer, acceptable to the Trustee;
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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, a 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: Any paying agent appointed by the Trustee pursuant to
Section 4.10. Initially, the Paying Agent shall be LaSalle Bank National
Association.
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.
Payoff Earnings: For any Distribution Date with respect to each Loan on
which a Payoff was received by the Servicer during the Prepayment Period, the
aggregate of the interest earned by Servicer from investment of each such Payoff
from the date of receipt of such Payoff until the last day of such Prepayment
Period (net of investment losses).
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Payoff Interest: For any Distribution Date with respect to a Loan for
which a Payoff 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.
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, 8.1, 8.3, 10.1 and 10.3, "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) 98.00% and (y) the percentage calculated
by dividing its Certificate Principal Balance by the Aggregate Certificate
Principal Balance; provided, however, that the percentage in (x) above
shall be increased by one percent (1%) upon each retirement of an Interest
Only Certificate; and
(ii) with respect to each Interest Only Certificate, one percent
(1%) of such Certificate's 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 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
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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 a
REMIC 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.
Planned Principal Balance: For any Distribution Date, the amount set forth
in the table attached hereto as Exhibit O for such Distribution Date, for the
Class A-1 Certificates.
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 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.
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Principal Only Certificate: 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 and for the Loans, the
sum with respect to the Loans 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 applicable Prepayment Period, 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 and for the Loans,
the sum with respect to the Loans of (i) Curtailments received during the
applicable Prepayment Period from such Loans and (ii) Payoffs received during
the applicable Prepayment Period from the Loans.
Pro Rata Allocation: The allocation of the principal portion of losses
relating to a Loan to the Senior Certificates (other than the Principal Only
Certificate and the Interest Only Certificate) and to the Subordinate
Certificates (in the limited circumstances described below) pro rata according
to their respective Certificate Principal Balances (except if the loss is
recognized with respect to a Discount Loan, in which event the applicable
Discount Fraction of such loss will be allocated to the Class A-P Certificates,
and the remainder of such loss will be allocated as described above), and the
allocation of the interest portion of such losses to the Certificates (other
than the Principal Only Certificate) pro rata according to the amount of
interest accrued but unpaid on each such Class 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, and
unpaid accrued 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 Pass-
Through 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,
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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.
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 after the
application of Liquidation Proceeds 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.
Record Date: 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.
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.
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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 (other
than the Class A-6 Certificates and the Class A-7 Certificates), the per annum
rate set forth as the Remittance Rate for such Class in the Preliminary
Statement hereto. The "Remittance Rate" for the Class A-6 Certificates shall be
the Class A-6 Interest Rate. The Remittance Rate for the Class A-7 Certificates
shall be the Class A-7 Interest Rate.
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 Certificate: 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 each
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. 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 of the amounts set forth in Section 9.1
of this Agreement, and subject to the conditions set forth therein.
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
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<PAGE>
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.
S&P: Standard & Poor's Rating Services, a division of the McGraw Hill
Companies, Inc. provided, that at any time it be 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 Certificates, 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 95.71%, and
thereafter, with respect to any Distribution Date, the sum of the Class
Principal Balances of the Senior Certificates (other than the Principal Only
Certificate) divided by aggregate Scheduled Principal Balance of all Loans
(reduced by the Discount Fraction thereof), 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 August, 2004, 100%; (ii) on any
other Distribution Date on which the Senior Percentage for such Distribution
Date exceeds the initial Senior Percentage as of the CutOff Date, 100%; and
(iii) on any other Distribution Date in each of the months of August, 2004 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
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immediately preceding six calendar months is less than or equal to 50% of
the Subordinate Amount as of such Distribution Date, and
(b) cumulative Realized Losses on the Loans allocated to the
Subordinate Certificates are less than or equal to the following amounts:
<TABLE>
<CAPTION>
Percentage of the Subordinate
Distribution Date Occurring In Amount as of the Cut-Off Date
------------------------------ -----------------------------
<S> <C>
August 2004 through July 2005.............. 30%
August 2005 through July 2006.............. 35%
August 2006 through July 2007.............. 40%
August 2007 through July 2008.............. 45%
August 2008 and thereafter................. 50%
</TABLE>
in which case, the Senior Prepayment Percentage shall be as follows:
<TABLE>
<CAPTION>
Distribution Date Occurring In Senior Prepayment Percentage
- ------------------------------ ----------------------------
<S> <C>
August 1999 through July 2004...... 100%
August 2004 through July 2005...... Senior Percentage + 70% of Subordinate Percentage
August 2005 through July 2006...... Senior Percentage + 60% of Subordinate Percentage
August 2006 through July 2007...... Senior Percentage + 40% of Subordinate Percentage
August 2007 through July 2008...... Senior Percentage + 20% of Subordinate Percentage
August 2008 and thereafter......... Senior Percentage
</TABLE>
If on any Distribution Date the allocation to the Certificates (other than
the Principal Only Certificate) of Principal Prepayments in the percentage
required would reduce the sum of the Class Principal Balances of the
Certificates (other than the Principal Only Certificate) 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 Principal Only Certificate 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.
Servicer: LaSalle Home Mortgage Corporation, an Illinois 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.
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<PAGE>
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 $3,587,319,
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 amount of $3,587,319 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
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
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<PAGE>
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:
<TABLE>
<CAPTION>
Distribution Date Occurring In Step Down Percentage
------------------------------ --------------------
<S> <C>
August 1999 through July 2004.............. 0%
August 2004 through July 2005.............. 30%
August 2005 through July 2006.............. 40%
August 2006 through July 2007.............. 60%
August 2007 through July 2008.............. 80%
August 2008 and thereafter................. 100%
</TABLE>
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-13
through A-18, respectively 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 4.29%, 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
(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 Certificate with
respect to the Discount Fractional Principal Shortfall on such Distribution
Date.
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<PAGE>
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 REMIC I and REMIC II 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.
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).
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<PAGE>
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); (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: Chase Bank of Texas, National Association, 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 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.
Uncompensated Interest Shortfall: For any Distribution Date, the excess,
if any, of (i) the sum of (a) aggregate Uncollected Interest, (b) aggregate
Curtailment Shortfall and (c) 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: Bear, Stearns & Co. Inc. and ABN AMRO Incorporated.
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 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.
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<PAGE>
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.
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 Illinois 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 bearing all intervening endorsements
endorsed, "Pay to the order of Chase Bank of Texas, National Association,
as Trustee, for the benefit of the Certificateholders of ABN AMRO Mortgage
Corporation Series 1999-5 Attn: Corporate Trust Department, 600 Travis
Street, Houston, TX 77002, 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
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<PAGE>
Mortgage has been delivered for recordation or because such original
Mortgage has been lost, the Seller shall deliver or cause to be delivered
to the Purchaser (with a copy 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 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 "Chase Bank of Texas, National
Association, as Trustee," which assignment shall be in form and substance
acceptable for recording, or a copy certified by the Seller as a true and
correct copy of the original Assignment 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 Seller
shall deliver or cause to be delivered to the Purchaser (with a copy 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;
(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
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<PAGE>
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;
(vi) The mortgage insurance certificate;
(vii) Hazard insurance certificates and copies of the hazard
insurance policy and, if applicable, flood insurance policy; and
(viii) Any and all other documents, opinions and certificates
executed and/or delivered by the related Mortgagor and/or its counsel in
connection with the origination of such Mortgage.
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 admitted to practice law in the state
in which such Mortgaged Property is located to the effect that such recordation
is not necessary to secure the interest in the related Mortgaged Properties
against any other transferee or creditor of the Depositor, in which case such
Assignments shall be delivered to the Trustee for the benefit of the
Certificateholders in recordable form. If the Depositor cannot deliver the
original Assignment concurrently with the execution and delivery of this
Agreement solely because it is in the process of being prepared and recorded or
because of a delay caused by the public recording office where such original
Assignment has been delivered for recordation, the Depositor shall deliver a
blanket Officer's Certificate covering all such Assignments stating that such
original Assignment is in the process of being prepared and recorded or it has
been delivered to the appropriate public recording official for recordation and
a photocopy of such Assignment. Any such original recorded Assignment shall be
delivered to the Trustee within 180 days following the execution of this
Agreement.
If the Depositor cannot deliver the original title insurance policy
concurrently with the execution and delivery of this Agreement, the Depositor
shall promptly deliver each such original title insurance policy as soon as such
policy becomes available but in no event later than 120 days following the
execution of this Agreement.
All rights arising out of 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
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<PAGE>
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) 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 9-305 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 any bank or trust company approved by
the Depositor as Custodian of the documents or instruments referred to under (i)
through (viii) 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.
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Section 2.2 Acceptance by Trustee. The Trustee acknowledges, subject to
the provisions of Section 2.1 and to any document exceptions reported pursuant
to the Trustee's reviews as described below, receipt of the Mortgage Notes, the
Mortgages, the assignments 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 to determine that the
appropriate Mortgage Notes 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 discrepancies relating to such
review. In addition, the Trustee agrees, for the benefit of Certificateholders,
to review each Mortgage File within 45 days, or with respect to assignments
which must be recorded, within 180 days, after execution of this Agreement to
ascertain that all required documents set forth in items (i), (ii), (v), (vi)
and, to the extent delivered to the Trustee, items (iii), (iv), (vii) and (viii)
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), (iv), (vii) and (viii). 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 45-day period or
180-day period the Trustee finds any document constituting a part of a Mortgage
File not to have been executed or received or to be unrelated to the Loans
identified in said Exhibit D (each such finding, a "material defect"), the
Trustee shall promptly notify the Depositor, which shall have a period of 90
days after such notice within which to correct or cure any such material defect;
provided, however, that if the Trustee shall not have received a document by
reason of the fact that such document shall not have been returned by the
appropriate recording office then the Depositor shall have until a date one year
later from the Cut-Off Date to correct or cure such defect. The Depositor hereby
covenants and agrees that, if any such material defect as defined above is not
corrected or cured, the Depositor will, not later than 90 days in the case of
repurchase referred to below or not later than 75 days in the case of a
substitution referred to below after the Trustee's notice to it respecting such
defect either (i) repurchase the related 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 Pass-Through
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 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
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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, however, that no such substitution may occur after 90 days of the
Closing Date unless the Trustee shall have received from the Depositor an
Opinion of Counsel to the effect that such substitution will not adversely
affect the REMIC status of REMIC I or 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. 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. Neither the Trustee nor the Custodian shall be responsible for
determining whether any assignment or mortgage delivered pursuant to Section
2.1(ii) is in recordable form or, if recorded, has been properly recorded.
Section 2.3 Representations and Warranties of the Depositor. The Depositor
hereby represents and warrants to the Trustee:
(i) that the information set forth in the 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;
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(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 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 and disclosure 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;
(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
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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) the condominium projects that include the condominiums that
are the subject of any condominium loan are generally acceptable to FNMA
or FHLMC;
(xiii) 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;
(xiv) that each Loan was originated on FNMA or FHLMC uniform
instruments for the state in which the Mortgaged Property is located;
(xv) that based upon a representation by each Mortgagor at the time
of origination or assumption of the applicable Loan, 100% of the Loans
measured by Principal Balance were to be secured by owner-occupied
residences and no more than 0% of the Loans measured by Principal Balance
were to be secured by non-owner-occupied residences;
(xvi) 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 with FNMA or FHLMC criteria, on FNMA or FHLMC
forms and comparables on at least three properties were obtained;
(xvii) that no Loan had a Loan-to-Value Ratio at origination in
excess of 95%;
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(xviii) 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;
(xix) 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;
(xx) each Loan is a "qualified mortgage" within the meaning of
Section 860G of the Code without regard to ss. 1.860G-2(f) of the REMIC
Provisions or any similar rule;
(xxi) each Loan that has a Loan-to-Value Ratio in excess of 80% is
covered by a primary mortgage insurance policy; and
(xxii) that no Loan permits negative amortization or the deferral of
accrued interest.
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
Balance at the Mortgage Interest Rate to the next scheduled Installment 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
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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. 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 860(G)(a)(1) of the Code) of
REMIC I shall consist of a single Pre-Strip Regular Interest, the Class
A-2 Regular Interest, the Class A-3 Regular Interest, the Class A-4
Regular Interest, a single Pre- Inversion Regular Interest, the Class A-8
Regular Interest, the Class A-9 Regular Interest, the Class A-10 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. (The
Pre-Strip Regular Interest shall consist of a single REMIC I Regular
Interest, which shall correspond as to principal amount to the Class A-1
Certificates.) (The Pre-Inversion Regular Interest shall consist of a
single REMIC I Regular Interest which shall correspond as to principal
amount to the sum of the principal amounts of the Class A-6 and Class A-7
Certificates.)
(c) All payments with respect to each of the Class A-2, A-3, A-4,
A-8, A-9, A-10, A-X, A-P, M, B-1, B-2, B-3, B-4 and B-5 Certificates shall
each be considered to have been
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made solely from the Regular Interest of REMIC I having the same
designation. All payments with respect to the Class A-1 and Class A-5
Certificates shall be considered to have been made solely from the
Pre-Strip Regular Interest of REMIC I. All payments with respect to the
Class A-6 and Class A-7 Certificates shall be considered to have been made
solely from the Pre-Inversion Regular Interest of REMIC I.
The interest rate of each of the REMIC I Regular Interest Classes
A-2, A-3, A-4, A-8, A-9, A-10, A-X, M, B-1, B-2, B-3, B-4 and B-5 of REMIC
I shall be the same as the Remittance Rate of the Certificate of REMIC II
having the same designation. The Class A-P Regular Interest Class shall
not bear interest, but will receive principal only in respect of the
Loans.
The Pre-Strip Regular Interest shall have an interest rate of 6.75%.
The Pre-Inversion Regular Interest shall have an interest rate of 6.75%.
The principal balance of each of the Regular Interests of REMIC I
(except the Class A-X Regular Interest, the Pre-Inversion Regular Interest
and Pre-Strip Regular Interest) is equal at all times to the Class
Principal Balance of the Class of REMIC II which has the same designation.
The notional principal balance of the Class A-X Regular Interest is equal
at all times to the Class A-X Notional Amount. The principal balance of
the Pre-Strip Regular Interest is equal at all times to the principal
balance of the Class A-1 Certificates. The principal balance of the
Pre-Inversion Regular Interest is equal at all times to the sum of the
principal balances of the Class A-6 and A-7 Certificates.
(d) The Class A-5 Certificates of REMIC II shall for purposes of the
REMIC provisions be deemed to have a notional principal balance that
corresponds at all times to the principal balance of the Pre-Strip Regular
Interest.
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:
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(a) the Servicer is a corporation duly formed and validly existing under
the laws of the State of Illinois;
(b) the execution and delivery of this Agreement by the 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;
(c) this Agreement, assuming due authorization, execution and delivery by
the Trustee and the Depositor, constitutes a valid, legal and binding obligation
of the Servicer, enforceable against it in accordance with the terms hereof
subject to applicable bankruptcy, insolvency, reorganization, moratorium and
other laws affecting the enforcement of creditors' rights generally and to
general principles of equity, regardless of whether such enforcement is
considered in a proceeding in equity or at law;
(d) the Servicer is not in default with respect to any order or decree of
any court or any order, regulation or demand of any federal, state, municipal or
governmental agency, which default might have consequences that would materially
and adversely affect the condition (financial or other) or operations of the
Servicer or its properties or might have consequences that would affect its
performance hereunder;
(e) no litigation is pending or, to the best of the Servicer's knowledge,
threatened against the Servicer which would prohibit its entering into this
Agreement or performing its obligations under this Agreement; and
(f) as long as the Servicer has any obligations to service the Loans
hereunder (and it has not assigned such obligations pursuant to Section 3.1(c)),
it shall be a FNMA or a FHLMC-qualified servicer.
It is understood and agreed that the representations and warranties set
forth in this Section 2.7 shall survive delivery of the respective Mortgage
Files to the Trustee, or to a Custodian, as the case may be.
ARTICLE III
ADMINISTRATION AND SERVICING OF 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
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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,
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
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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
'SS' 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 are consistent
with the provisions of this Section 3.1(c).
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.
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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 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; Certificate Account.
(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
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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 REMIC 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;
(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 Advances made by the Servicer pursuant to Section 4.3;
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(vi) All repurchase proceeds from the repurchase of a Loan pursuant
to a Purchase Obligation;
(vii) 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;
(viii) all income and gain realized from any investment of the funds
in the Custodial Account for P&I in Eligible Investments;
(ix) all net income from the renting of REO Property pursuant to
Section 3.7(c); and
(x) 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 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.
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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 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)) or to reimburse itself for Advances
from funds in the Custodial Account for P&I held for future distribution or
withdrawal, such funds 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;
(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 Class R Certificateholder pursuant to Section 9.1 all amounts
received thereon and not distributed as of the date on which the related
Principal Balance is determined;
(f) to reimburse itself for any Nonrecoverable Advances;
(g) to disburse to the Trustee in order that the Trustee may make payments
to Certificateholders in the amounts and in the manner provided for in Section
4.1;
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(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 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 and
comparable items; (ii) refund to Mortgagors any sums that are determined to be
overages; (iii) pay interest, if required and as described below, to Mortgagors
on balances in the Escrow Account; (iv) withdraw interest or other income which
may lawfully be retained by the Trust Fund, for deposit into the Certificate
Account; or (v) 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.
(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
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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 (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
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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 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 reserves the right to enforce any
due-on-sale clause contained in the related Mortgage Note or Mortgage, to the
extent permitted under applicable law and governmental regulations, but only to
the extent that such enforcement will not adversely affect or jeopardize
coverage under any related insurance policy or result in legal action by the
Mortgagor. Subject to the foregoing, the 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
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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 foreclosure or other
conversion of a Liquidated Loan shall be distributed to the Class R
Certificateholder. 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)
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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 90 days or more delinquent and which the Servicer
determines in good faith would otherwise become subject to foreclosure
proceedings or any Loan as to which the Mortgagor tenders a deed in lieu of
foreclosure at a price equal to the outstanding Principal Balance of the Loan
plus accrued interest at the applicable Pass-Through Rate to the next Due Date.
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 either REMIC I or REMIC II to
fail to qualify as a REMIC under the REMIC Provisions at any time that any REMIC
I 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 and
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
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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 3.3(b)(ix).
(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 either REMIC I or REMIC II of the Trust Fund to fail
to qualify as a REMIC at any time that any Certificate is outstanding.
Section 3.8 Trustee to Cooperate; Release of Mortgage Files. Upon the
payment in full of any 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. 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
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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.
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 compute 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
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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. The Servicer will deliver
to the Trustee, on or before March 15 of each year, beginning March 15, 2000, 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. On
or before March 15 of each year, beginning March 15, 2000, 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.
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(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 Repurchase 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 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
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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 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 at least a 75%
Percentage Interest of the most subordinate class of Subordinate Certificates
then outstanding 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
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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. 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 Special Hazard Losses, Fraud Losses and Bankruptcy
Losses in excess of the designated amounts of the applicable Special Hazard
Coverage, Fraud Coverage and Bankruptcy Coverage (each, as defined herein), will
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 Principal Only Certificate and the Interest Only
Certificate), pro rata, according to their Class Principal Balances in reduction
of their respective Class Principal Balances, as applicable; provided, however,
that if the loss is recognized with respect to a Discount Loan, the Discount
Fraction of such loss will first be allocated to the Class A-P Certificates and
the remainder of such loss will be allocated as described above in this 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
Principal Only Certificate), pro rata according to accrued but unpaid interest
thereon and then pro rata according to their Class Principal Balances in
reduction of their respective Class Principal Balance.
Special Hazard Losses in excess of the Special Hazard Coverage, Fraud
Losses in excess of the Fraud Coverage and Bankruptcy Losses in excess of the
Bankruptcy Coverage 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 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
CutOff 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 to the most junior Class of Subordinate
Certificates then outstanding, in reduction of the Certificate Principal Balance
thereof.
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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 4.3.
(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
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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 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.
Section 4.2 Statements to Certificateholders. (a) Not later than three (3)
days prior to each Distribution 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 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 Balance after giving effect to such
distribution.
In addition, not later than each Distribution Date, the Certificate
Administrator or Trustee, as applicable, shall forward 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 amount of Special Hazard Coverage available to the Senior
Certificates remaining as of the close of business on the applicable
Determination Date;
(iv) The amount of Bankruptcy Coverage available to the Senior
Certificates remaining as of the close of business on the applicable
Determination Date;
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(v) The amount of Fraud Coverage available to the Senior
Certificates remaining as of the close of business on the applicable
Determination Date;
(vi) 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;
(vii) 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 Cut-Off Date;
(viii) The amount of funds advanced by the Servicer on the related
Withdrawal Date; and
(ix) The total amount of Payoffs and Curtailments received during
the related Prepayment Period.
Upon 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 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.
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.
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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 is entitled to receive from the Custodial
Accounts for P&I established by the Servicer under its supervision amounts
received by the Servicer on particular Loans as late payments of principal and
interest or as Liquidation or Insurance Proceeds and respecting which the
Servicer has made an unreimbursed Advance of principal and interest. The
Servicer is also entitled to receive other amounts from the related Custodial
Accounts for P&I established by the Servicer under its supervision to reimburse
the Servicer for prior Nonrecoverable Advances.
In accordance with Section 3.3, Advances are reimbursable to the Servicer
from cash in the Custodial Account for P&I to the extent that the Servicer shall
determine that any such advances previously made are Nonrecoverable Advances
pursuant to Section 4.4.
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).
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
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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 Depositor and
the Servicer shall not be obligated to, and shall not, make any advance that,
after reasonable inquiry and in its sole discretion, the Depositor or the
Servicer shall determine would be a Nonrecoverable Advance, and (b) the
Depositor and the Servicer shall be entitled to reimbursement for any Advance as
provided in Section 3.5 of this Agreement.
Section 4.5 Foreclosure Reports. Each year beginning in 1999 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 1999, 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. The
aggregate amount of the Servicing Fee subject to retention from deposit into or
withdrawal from the Certificate Account 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 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 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 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
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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 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).
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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.
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 Trustee 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 Trustee, 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
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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 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 not
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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 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" (as defined in Section
860E (e)(5) of the Code) 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
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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.
(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.
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(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 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 TRANSFEROR TO IMPEDE THE ASSESSMENT OR
COLLECTION OF TAX. SUCH
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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) In the case of any Subordinate or Class R Certificate presented for
registration in the name of an employee benefit plan or other plan or
arrangement subject to the prohibited transaction provisions of ERISA or Section
4975 of 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, the Trustee or the Certificate
Registrar, if not the same Person as the Trustee, 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, the Certificate Administrator, if any, the Certificate
Registrar or the Depositor.
So long as the Class M, Class B-1 and Class B-2 Certificates are
Book-Entry Certificates, each Person who has or who acquires any Class M
or Class B Certificates shall be deemed by the acceptance or acquisition
of such Certificate to have represented that (a) such Person is not a
Plan, and such Person is not using "plan assets" of any such Plan to
effect such acquisition or (b) if the transferee is an insurance company
and the source of funds used to purchase such Certificate is an "insurance
company general account" (as such term is defined in PTCE 95-60) and the
conditions set forth in Sections I and III of PTCE 95-60 have been
satisfied.
(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)
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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 Registrar, 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
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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, initial Component 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 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 itself 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, 100 Wall
Street, Suite 1600, New York, NY 10005, Attention: Glenn Anderson, 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
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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.
Upon the transfer of a Class Certificate each transferee that purchases a
Class A Certificate with the assets of one or more Plans shall be deemed to
represent that each such Plan qualifies as an "accredited investor" as defined
in Rule 501(a)(1) of Regulation D under the Securities Act. If at any time the
Class A Certificates fail to receive a rating from any of S&P or Fitch that is
one of the three highest generic rating categories for that respective rating
agency, then such Class A Certificate shall not thereafter be eligible for
transfer to a Plan, and each transferee shall be deemed to represent that it is
not purchasing or holding its Class A Certificate with plan assets of a Plan.
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 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.
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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 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. 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 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:
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(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 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
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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.
Section 5.10 Office for Transfer of Certificates. The Trustee shall
maintain in New York, New York, an office or agency where Certificates may be
surrendered for registration of transfer or exchange. First Trust of New York,
National Association, 100 Wall Street, Suite 1600, New York, New York 10005,
Attention: Glenn Anderson, is initially designated for said purposes.
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.
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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 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
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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.
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;
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(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 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 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 of this Agreement 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
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interests, and enforce the rights and remedies, of the Certificateholders
(including the institution and prosecution of all judicial, administrative and
other proceedings and the filing of proofs of claim and debt in connection
therewith). Except as otherwise expressly provided in this Agreement, no remedy
provided for by this Agreement shall be exclusive of any other remedy, and each
and every remedy shall be cumulative and in addition to any other remedy and no
delay or omission to exercise any right or remedy shall impair any such right or
remedy or shall be deemed to be a waiver of any Event of Default.
Section 7.3 Directions by Certificateholders and Duties of Trustee During
Event of Default. During the continuance of any Event of Default, Holders of
Certificates evidencing, in aggregate, not less than 25% of the Trust Fund or
51% of the aggregate Percentage Interests of any Class of Certificates may
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred upon the
Trustee under this Agreement; provided, however, that the Trustee shall be under
no obligation to pursue any such remedy, or to exercise any of the trusts or
powers vested in it by this Agreement (including, without limitation, (i) the
conducting or defending of any administrative action or litigation hereunder or
in relation hereto and (ii) the terminating of the 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.
(a) 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
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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), 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.
(b) 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
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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.
(c) 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 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.
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
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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 the direction of Certificateholders
holding Certificates which have an aggregate Principal Balance not less
than 25% of the aggregate Principal Balance of all 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
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
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(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.
Section 8.2 Certain Matters Affecting Trustee. Except as otherwise
provided in Section 8.1:
(i) Before acting or refraining from acting the Trustee may request
or require an Officer's Certificate; the Trustee may rely and shall be
protected in acting or refraining from acting upon any resolution,
Officer's Certificate, 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 of such act;
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(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 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
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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 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 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
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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 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
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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.
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
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.
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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.
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. Any Custodian
appointed shall be an institution subject to supervision by federal or state
authority, shall have combined capital and surplus of at least $50,000,000 and
shall be qualified to do business in the jurisdiction in which it holds any
Mortgage File.
Section 8.13 Authenticating Agent.
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(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 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 Reports to Securities and Exchange Commission. Unless
otherwise directed by the Depositor in writing, the Certificate Administrator or
the Trustee, as applicable, shall prepare, sign and
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file with the Securities and Exchange Commission, on behalf of the Depositor,
(i) no later than ten days after each Distribution Date, the Certificateholders'
Report on the appropriate form and in the appropriate medium authorized or
prescribed therefor under the Exchange Act, (ii) no later than March 25 of each
calendar year, an annual report meeting the requirements of the Exchange Act on
the appropriate form and in the appropriate medium authorized or prescribed
therefor under the Exchange Act. The Trustee or the Certificate Administrator,
as applicable, shall promptly forward copies of all filings made pursuant to
this Section 8.15 to the Depositor.
Section 8.16 Calculation of LIBOR. Until the Principal Balance of each of
the Adjustable Rate Certificates has been reduced to zero, the Trustee or the
Certificate Administrator, 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 Jones 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
Trustee or the Certificate Administrator, if any, after consultation with the
Servicer), the rate shall be determined as follows:
(i) The Trustee 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 Trustee, to
provide the Trustee 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 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 Trustee 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.
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(c) The establishment of LIBOR on each LIBOR Rate Adjustment Date by the
Trustee or the Certificate Administrator, if any, and the Trustee's or
Certificate Administrator's calculation of the rate of interest applicable to
the Class A-6 and Class A-7 Certificates for the related Interest Accrual Period
shall (in the absence of manifest error) be final and binding.
ARTICLE IX
TERMINATION
Section 9.1 Termination upon Purchase by the Depositor 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 Depositor
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 Pass-Through Rate to the
next scheduled Installment Due Date, less any Nonrecoverable Advances made with
respect to any such Loans and (b) the fair market value of all acquired property
in respect of Loans, less any Nonrecoverable Advances made with respect to any
such Loans, such fair market value to be determined by an appraiser selected by
the Trustee or (iii) the purchase by the Servicer, so long as the Servicer is
the Depositor, of all outstanding Certificates and delivery of such Certificates
to the Trustee; provided, however, that in no event shall the trust created
hereby continue beyond the expiration of 21 years from the death of the last
survivor of the descendants of Joseph P. Kennedy, the late ambassador of the
United States to the Court of St. James, living on the date hereof; and
provided, further, that a "plan of liquidation" of each of REMIC I and II in
accordance with Section 860F of the Code must be adopted in conjunction with any
termination effected pursuant to subclauses (i), (ii), or (iii) of this Section
9.1.
The Depositor is hereby granted the right to purchase the Loans pursuant
to clause (ii) above, provided, however, that such right shall be conditioned
upon 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.
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
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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 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. 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 Depositor 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 and the Certificate
Administrator have 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:
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(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 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.
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 a REMIC
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, as evidenced by an
Opinion of Counsel, 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 July 26, 1999, together
with the Prospectus Supplement dated July 26, 1999.
This Agreement may also be amended from time to time by the Depositor and
the Trustee with the consent of the Holders of Certificates evidencing, in
aggregate, not less than 50% of the Trust Fund for the purpose of adding any
provisions or changing in any manner or eliminating any of the provisions of
this Agreement or of modifying in any manner the rights of the Holders of
Certificates; provided, however, that no such amendment shall (a) reduce in any
manner the amount of, or delay the timing of, payments received on 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
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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; provided, that for the purposes of this Agreement, the Holder of
the Class R Certificate shall have no right to vote at all times that any Class
A or Subordinate Certificates are outstanding if such amendment relates to the
modification, elimination or addition of any provision necessary to maintain the
qualification of the Trust Fund as a REMIC.
Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel to the effect that such amendment will not cause
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.
101
<PAGE>
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 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
102
<PAGE>
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, 181 West
Madison Street, Suite 3250, Chicago, Illinois 60602, Attention: Maria Fregosi -
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 LaSalle Home Mortgage Corporation, 4242 North
Harlem Avenue, Norridge, Illinois 60634, Attention: Servicer, 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 case of S&P, to Standard & Poor's Rating Services, 55
Water Street, 41st Floor, New York, New York 10041-0003, 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 IBCA, Inc., One State Street Plaza, 32nd Floor, New York, New York 10004,
Attention: Alla Tyurina, 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.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
103
<PAGE>
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/ Stewart W. Fleming
------------------------------------
Name: Stewart W. Fleming
Its: Senior Vice President
104 Pooling and Servicing Agreement
<PAGE>
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, as Trustee
By: /s/ S. Whitten Rusk III
------------------------------------
S. Whitten Rusk III
Its: Vice President
105 Pooling and Servicing Agreement
<PAGE>
LASALLE HOME MORTGAGE
CORPORATION, as Servicer
By: /s/ Richard Geary
------------------------------------
Richard Geary
Its: Senior Vice President
106 Pooling and Servicing Agreement
<PAGE>
STATE OF Michigan )
ss.:
COUNTY OF Oakland )
On the 1st day of July 1999, before me, Sally A. Raffler, personally
appeared Stewart W. Fleming, a Senior 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 /s/Sally Raffler (SEAL)
Pooling and Servicing Agreement
<PAGE>
STATE OF Texas )
ss.:
COUNTY OF Harris )
On the 1st day of July, 1999, before me, Christopher S. Jackson,
personally appeared S. Whitten Rusk III, known to me to be Vice Presidentof
Chase Bank of Texas, National Association, 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.
/s/ Christopher S. Jackson
Notary Public
[NOTARIAL SEAL]
Pooling and Servicing Agreement
<PAGE>
STATE OF Illinois )
ss.:
COUNTY OF Cook )
On the 1st day of July, 1999, before me, Sarah Heidkamp, personally
appeared Richard Geary, known to me to be Senior Vice President of LaSalle Home
Mortgage Corporation, 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.
/s/ Sarah Heidkamp
----------------------------------------
Notary Public
[NOTARIAL SEAL]
Pooling and Servicing Agreement
<PAGE>
EXHIBIT A
FORMS OF CERTIFICATES
<PAGE>
Exhibit A-1
CUSIP ________
MORTGAGE PASS-THROUGH CERTIFICATE
Class A-1
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 July 27, 1999. The rate at which
interest is payable as of the Issue Date with respect to this Certificate is
6.60% per annum.
[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.]
Series 1999-5 Portion of the Class A-1 Principal Balance
as of the Cut-Off Date evidenced by this
Certificate: $60,514,000.00
Class A-1 Remittance Rate: 6.60%
Cut-Off Date: July 1, 1999
First Distribution Date: August 25, 1999
Last Scheduled Distribution Date: August 25, 2029
Class A-1 Principal Balance as of the Cut-Off Date:
$60,514,000.00
________________
Registered Owner Certificate No. __
A-1-1
<PAGE>
[OID LEGEND]
This certificate was issued on [July 27, 1999] with original issued discount
("OID") of $________ per $1,000 of original certificate [notional] principal
balance, an initial class coupon rate of _____% per annum, an annualized monthly
compounded yield to maturity of _____%, an adjusted issue price as a percentage
of original certificate [notional] principal balance of __% and OID allocable to
the initial short accrual period of $__________ per $1,000 of original
certificate [notional] principal balance. The prepayment assumption used by the
issuer in pricing this certificate is __% [PSA, CPR]. The yield to maturity was
based upon fractional monthly compounding taking into account the initial short
accrual period.
A-1-2
<PAGE>
Exhibit A-2
CUSIP_______
MORTGAGE PASS-THROUGH CERTIFICATE
Class A-2
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 July 27, 1999. The rate at which
interest is payable as of the Issue Date with respect to this Certificate is
6.75% per annum.
[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.]
Series 1999-5 Portion of the Class A-2 Principal Balance
as of the Cut-Off Date evidenced by this
Certificate: $30,000,000.00
Class A-2 Remittance Rate: 6.75%
Cut-Off Date: July 1, 1999
First Distribution Date: August 25, 1999
Last Scheduled Distribution Date: August 25, 2029
Class A-2 Principal Balance as of the Cut-Off Date:
$30,000,000.00
________________
Registered Owner Certificate No. __
A-2-1
<PAGE>
[OID LEGEND]
This certificate was issued on [July 27, 1999] with original issued discount
("OID") of $_______ per $1,000 of original certificate [notional] principal
balance, an initial class coupon rate of ______% per annum, an annualized
monthly compounded yield to maturity of ___%, an adjusted issue price as a
percentage of original certificate [notional] principal balance of ___% and OID
allocable to the initial short accrual period of $_______ per $1,000 of original
certificate [notional] principal balance. The prepayment assumption used by the
issuer in pricing this certificate is ____% [PSA, CPR]. The yield to maturity
was based upon fractional monthly compounding taking into account the initial
short accrual period.
A-2-2
<PAGE>
Exhibit A-3
CUSIP_______
MORTGAGE PASS-THROUGH CERTIFICATE
Class A-3
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 July 27, 1999. The rate at which
interest is payable as of the Issue Date with respect to this Certificate is
6.75% per annum.
[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 (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.]
Series 1999-5 Portion of the Class A-3 Principal Balance
as of the Cut-Off Date evidenced by this
Certificate: $475,000.00
Class A-3 Remittance Rate: 6.75%
Cut-Off Date: July 1, 1999
First Distribution Date: August 25, 1999
Last Scheduled Distribution Date: August 25, 2029
Class A-3 Principal Balance as of the Cut-Off Date:
$475,000.00
________________
Registered Owner Certificate No. __
A-3-1
<PAGE>
[OID LEGEND]
This certificate was issued on [July 27, 1999] with original issued discount
("OID") of $_______ per $1,000 of original certificate [notional] principal
balance, an initial class coupon rate of _____% per annum, an annualized monthly
compounded yield to maturity of ___%, an adjusted issue price as a percentage of
original certificate [notional] principal balance of ___% and OID allocable to
the initial short accrual period of $_______ per $1,000 of original certificate
[notional] principal balance. The prepayment assumption used by the issuer in
pricing this certificate is ___% [PSA, CPR]. The yield to maturity was based
upon fractional monthly compounding taking into account the initial short
accrual period.
A-3-2
<PAGE>
Exhibit A-4
CUSIP_______
MORTGAGE PASS-THROUGH CERTIFICATE
Class A-4
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 July 27, 1999. The rate at which
interest is payable as of the Issue Date with respect to this Certificate is
6.75% per annum.
[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.]
Series 1999-5 Portion of the Class A-4 Principal Balance
as of the Cut-Off Date evidenced by this
Certificate: $11,500,000.00
Class A-4 Remittance Rate: 6.75%
Cut-Off Date: July 1, 1999
First Distribution Date: August 25, 1999
Last Scheduled Distribution Date: August 25, 2029
Class A-4 Principal Balance as of the Cut-Off Date:
$11,500,000.00
________________
Registered Owner Certificate No. __
A-4-1
<PAGE>
[OID LEGEND]
This certificate was issued on [July 27, 1999] with original issued discount
("OID") of $_______ per $1,000 of original certificate [notional] principal
balance, an initial class coupon rate of _____% per annum, an annualized monthly
compounded yield to maturity of ___%, an adjusted issue price as a percentage of
original certificate [notional] principal balance of ___% and OID allocable to
the initial short accrual period of $_______ per $1,000 of original certificate
[notional] principal balance. The prepayment assumption used by the issuer in
pricing this certificate is ___% [PSA, CPR]. The yield to maturity was based
upon fractional monthly compounding taking into account the initial short
accrual period.
A-4-2
<PAGE>
Exhibit A-5
CUSIP_______
MORTGAGE PASS-THROUGH CERTIFICATE
Class A-5
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 July 27, 1999. The rate at which
interest is payable as of the Issue Date with respect to this Certificate is
6.75%.
[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.]
Series 1999-5 Portion of the Class A-5 Notional Amount
as of the Cut-Off Date evidenced by this
Certificate: $1,344,755.56
Class A-5 Remittance Rate: 6.75%
Applied to the Class A-5 Notional Amount
Cut-Off Date: July 1, 1999
First Distribution Date: August 25, 1999
Last Scheduled Distribution Date: August 25, 2029
Class A-5 Notional Amount as of the Cut-Off Date:
$1,344,755.56
________________
Registered Owner Certificate No. __
A-5-1
<PAGE>
[OID LEGEND]
This certificate was issued on [July 27 , 1999] with original issued discount
("OID") of $_______ per $1,000 of original certificate [notional] principal
balance, an initial class coupon rate of _____% per annum, an annualized monthly
compounded yield to maturity of ___%, an adjusted issue price as a percentage of
original certificate [notional] principal balance of ___% and OID allocable to
the initial short accrual period of $_______ per $1,000 of original certificate
[notional] principal balance. The prepayment assumption used by the issuer in
pricing this certificate is ___% [PSA, CPR]. The yield to maturity was based
upon fractional monthly compounding taking into account the initial short
accrual period.
A-5-2
<PAGE>
Exhibit A-6
CUSIP_______
MORTGAGE PASS-THROUGH CERTIFICATE
Class A-6
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 July 27, 1999. The rate at which
interest is payable as of the Issue Date with respect to this Certificate is a
variable rate as described below.
[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.]
Series 1999-5 Portion of the Class A-6 Principal Balance as
of the Cut-Off Date evidenced by this
Certificate: $79,131,433.00
Class A-6 Remittance Rate: Initially
5.7675% and for any Distribution Date
after the first Distribution Date will
equal a per annum rate of LIBOR + 0.60%,
subject to a maximum rate of 9.00% and a
minimum rate of 0.60%.
Cut-Off Date: July 1, 1999
First Distribution Date: August 25, 1999
Last Scheduled Distribution Date: August 25, 2029
Class A-6 Principal Balance as of the Cut-Off Date:
$79,131,433.00
________________
Registered Owner Certificate No. __
A-6-1
<PAGE>
[OID LEGEND
This certificate was issued on [July 27, 1999] with original issued discount
("OID") of $_________________ per $1,000 of original certificate [notional]
principal balance, an initial class coupon rate of ____% per annum, an
annualized monthly compounded yield to maturity of ___%, an adjusted issue price
as a percentage of original certificate [notional] principal balance of ___% and
OID allocable to the initial short accrual period of $___________ per $1,000 of
original certificate [notional] principal balance. The prepayment assumption
used by the issuer in pricing this certificate is ___% [PSA, CPR]. The yield to
maturity was based upon fractional monthly compounding taking into account the
initial short accrual period.]
A-6-2
<PAGE>
Exhibit A-7
CUSIP_______
MORTGAGE PASS-THROUGH CERTIFICATE
Class A-7
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 July 27, 1999. The rate at which
interest is payable as of the Issue Date with respect to this Certificate is a
variable rate as described below.
[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.]
Series 1999-5 Portion of the Class A-7 Principal Balance as
of the Cut-Off Date evidenced by this
Certificate: $26,377,144.00
Class A-7 Remittance Rate: Initially
9.6975%, and for any Distribution Date
after the first Distribution Date will
equal a per annum rate equal to 25.20% -
(3.0 x LIBOR), subject to a maximum rate
of 25.20% and a minimum rate of 0.00%.
Cut-Off Date: July 1, 1999
First Distribution Date: August 25, 2029
Last Scheduled Distribution Date: August 25, 2029
Class A-7 Principal Balance as of the Cut-Off Date:
$26,377,144.00
________________
Registered Owner Certificate No. __
A-7-1
<PAGE>
[OID LEGEND
This certificate was issued on [July 27, 1999] with original issued discount
("OID") of $_________________ per $1,000 of original certificate [notional]
principal balance, an initial class coupon rate of ____% per annum, an
annualized monthly compounded yield to maturity of ___%, an adjusted issue price
as a percentage of original certificate [notional] principal balance of ___% and
OID allocable to the initial short accrual period of $___________ per $1,000 of
original certificate [notional] principal balance. The prepayment assumption
used by the issuer in pricing this certificate is ___% [PSA, CPR]. The yield to
maturity was based upon fractional monthly compounding taking into account the
initial short accrual period.]
A-7-2
<PAGE>
Exhibit A-8
CUSIP_______
MORTGAGE PASS-THROUGH CERTIFICATE
Class A-8
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 July 27, 1999. The rate at which
interest is payable as of the Issue Date with respect to this Certificate is
6.75% per annum.
[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.]
Series 1999-5 Portion of the Class A-8 Principal Balance
as of the Cut-Off Date evidenced by this
Certificate: $24,339,323.00
Class A-8 Remittance Rate: 6.75%
Cut-Off Date: July 1, 1999
First Distribution Date: August 25, 1999
Last Scheduled Distribution Date: August 25, 2029
Class A-8 Principal Balance as of the Cut-Off Date:
$24,339,323.00
________________
Registered Owner Certificate No. __
A-8-1
<PAGE>
[OID LEGEND
This certificate was issued on [July 27, 1999] with original issued discount
("OID") of $_________________ per $1,000 of original certificate [notional]
principal balance, an initial class coupon rate of ____% per annum, an
annualized monthly compounded yield to maturity of ___%, an adjusted issue price
as a percentage of original certificate [notional] principal balance of ___% and
OID allocable to the initial short accrual period of $___________ per $1,000 of
original certificate [notional] principal balance. The prepayment assumption
used by the issuer in pricing this certificate is ___% [PSA, CPR]. The yield to
maturity was based upon fractional monthly compounding taking into account the
initial short accrual period.]
A-8-2
<PAGE>
Exhibit A-9
CUSIP_______
MORTGAGE PASS-THROUGH CERTIFICATE
Class A-9
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 July 27, 1999. The rate at which
interest is payable as of the Issue Date with respect to this Certificate is
6.75% per annum.
[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.]
Series 1999-5 Portion of the Class A-9 Principal Balance
as of the Cut-Off Date evidenced by this
Certificate: $31,085,699.00
Class A-9 Remittance Rate: 6.75% applied
to the Class A-9 Principal Balance
Cut-Off Date: July 1, 1999
First Distribution Date: August 25, 1999
Last Scheduled Distribution Date: August 25, 2029
Class A-9 Principal Balance as of the Cut-Off Date:
$31,085,699.00
________________
Registered Owner Certificate No. __
A-9-1
<PAGE>
[OID LEGEND
This certificate was issued on [July 27, 1999] with original issued discount
("OID") of $_________________ per $1,000 of original certificate [notional]
principal balance, an initial class coupon rate of ____% per annum, an
annualized monthly compounded yield to maturity of ___%, an adjusted issue price
as a percentage of original certificate [notional] principal balance of ___% and
OID allocable to the initial short accrual period of $___________ per $1,000 of
original certificate [notional] principal balance. The prepayment assumption
used by the issuer in pricing this certificate is ___% [PSA, CPR]. The yield to
maturity was based upon fractional monthly compounding taking into account the
initial short accrual period.]
A-9-2
<PAGE>
Exhibit A-10
CUSIP_______
MORTGAGE PASS-THROUGH CERTIFICATE
Class A-10
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 July 27, 1999. The rate at which
interest is payable as of the Issue Date with respect to this Certificate is
6.75% per annum.
[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.]
Series 1999-5 Portion of the Class A-10 Principal Balance
as of the Cut-Off Date evidenced by this
Certificate: $31,085,585.00
Class A-10 Remittance Rate: 6.75%
Cut-Off Date: July 1, 1999
First Distribution Date: August 25, 1999
Last Scheduled Distribution Date: August 25, 2029
Class A-10 Principal Balance as of the Cut-Off Date:
$31,085,585.00
________________
Registered Owner Certificate No. __
A-10-1
<PAGE>
[OID LEGEND
This certificate was issued on [July 27, 1999] with original issued discount
("OID") of $_________________ per $1,000 of original certificate [notional]
principal balance, an initial class coupon rate of ____% per annum, an
annualized monthly compounded yield to maturity of ___%, an adjusted issue price
as a percentage of original certificate [notional] principal balance of ___% and
OID allocable to the initial short accrual period of $___________ per $1,000 of
original certificate [notional] principal balance. The prepayment assumption
used by the issuer in pricing this certificate is ___% [PSA, CPR]. The yield to
maturity was based upon fractional monthly compounding taking into account the
initial short accrual period.]
A-10-2
<PAGE>
Exhibit A-11
CUSIP_______
MORTGAGE PASS-THROUGH CERTIFICATE
Class A-P
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 July 27, 1999. 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.]
Series 1999-5 Portion of the Class A-P Principal Balance
as of the Cut-Off Date evidenced by this
Certificate: $3,136,144.00
Class A-P Remittance Rate: 0.00%
Cut-Off Date: July 1, 1999
First Distribution Date: August 25, 1999
Last Scheduled Distribution Date: August 25, 2029
Class A-P Principal Balance as of the Cut-Off Date:
$3,136,144.00
________________
Registered Owner Certificate No. __
A-11-1
<PAGE>
[OID LEGEND]
This certificate was issued on [July 27, 1999] with original issued discount
("OID") of $__________ per $1,000 of original certificate [notional] principal
balance, an initial class coupon rate of _____% per annum, an annualized monthly
compounded yield to maturity of ___%, an adjusted issue price as a percentage of
original certificate [notional] principal balance of ___% and OID allocable
to the initial short accrual period of $_________ per $1,000 of original
certificate [notional] principal balance. The prepayment assumption used by the
issuer in pricing this certificate is _____% [PSA, CPR]. The yield to maturity
was based upon fractional monthly compounding taking into account the initial
short accrual period.
A-11-2
<PAGE>
Exhibit A-12
CUSIP_______
MORTGAGE PASS-THROUGH CERTIFICATE
Class A-X
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 July 27, 1999. The rate at which
interest is payable as of the Issue Date with respect to this Certificate is
6.75% per annum.
[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.]
Series 1999-5 Portion of the Class A-X Notional Amount
as of the Cut-Off Date evidenced by this
Certificate: $7,685,750.89
Class A-X Remittance Rate: 6.75%
Cut-Off Date: July 1, 1999
First Distribution Date: August 25, 1999
Last Scheduled Distribution Date: August 25, 2029
Class A-P Notional Amount as of the Cut-Off Date:
$7,685,750.89
________________
Registered Owner Certificate No. __
A-12-1
<PAGE>
[OID LEGEND]
This certificate was issued on [July 27, 1999] with original issued discount
("OID") of $________ per $1,000 of original certificate [notional] principal
balance, an initial class coupon rate of _____% per annum, an annualized monthly
compounded yield to maturity of ___%, an adjusted issue price as a percentage
of original certificate [notional] principal balance of ___% and OID allocable
to the initial short accrual period of $_________ per $1,000 of original
certificate [notional] principal balance. The prepayment assumption used by
the issuer in pricing this certificate is _____% [PSA, CPR]. The yield to
maturity was based upon fractional monthly compounding taking into account
the initial short accrual period.
A-12-2
<PAGE>
Exhibit A-13
CUSIP_______
MORTGAGE PASS-THROUGH CERTIFICATE
Class M
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 July 27, 1999.
The rate at which interest is payable as of the Issue Date with respect to this
Certificate is 6.75% per annum.
[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.]
IN THE CASE OF ANY CLASS M 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 (i) 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 (ii) 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 ADMINISTRATOR, IF ANY, OR THE DEPOSITOR; PROVIDED
THAT IF THE CLASS M CERTIFICATE IS A BOOK-ENTRY CERTIFICATE, SUCH
TRANSFEREE SHALL BE DEEMED BY THE ACCEPTANCE OR ACQUISITION OF SUCH
CERTIFICATE TO HAVE MADE THE REPRESENTATIONS IN CLAUSES (i) AND (ii)
ABOVE.
The Class M 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 1999-5 Portion of the Class M Principal Balance
as of the Cut-Off Date evidenced by this
Certificate: $6,994,300.00
Class M Remittance Rate: 6.75%
Cut-Off Date: July 1, 1999
First Distribution Date: August 25, 1999
A-13-1
<PAGE>
Last Scheduled Distribution Date: August 25, 2029
Class M Principal Balance as of the Cut-Off Date: $6,994,300.00
________________
Registered Owner Certificate No. __
A-13-2
<PAGE>
[OID LEGEND]
This certificate was issued on [July 271999] with original issued discount
("OID") of $_________ per $1,000 of original certificate [notional] principal
balance, an initial class coupon rate of _____% per annum, an annualized monthly
compounded yield to maturity of ___%, an adjusted issue price as a percentage
of original certificate [notional] principal balance of ___% and OID allocable
to the initial short accrual period of $_____ per $1,000 of original certificate
[notional] principal balance. The prepayment assumption used by the issuer in
pricing this certificate is ___% [PSA, CPR]. The yield to maturity was based
upon fractional monthly compounding taking into account the initial short
accrual period.
A-13-3
<PAGE>
Exhibit A-14
CUSIP_______
MORTGAGE PASS-THROUGH CERTIFICATE
Class B-1
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 July 27, 1999. The rate at which
interest is payable as of the Issue Date with respect to this Certificate is
6.75% per annum.
[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.]
IN THE CASE OF ANY CLASS B-1 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 (i) 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 (ii) 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 ADMINISTRATOR, IF ANY, OR THE DEPOSITOR; PROVIDED
THAT IF THE CLASS B-1 CERTIFICATE IS A BOOK-ENTRY CERTIFICATE, SUCH
TRANSFEREE SHALL BE DEEMED BY THE ACCEPTANCE OR ACQUISITION OF SUCH
CERTIFICATE TO HAVE MADE THE REPRESENTATIONS IN CLAUSES (i) AND (ii)
ABOVE.
The Class B-1 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 1999-5 Portion of the Class B-1 Principal Balance
as of the Cut-Off Date evidenced by this
Certificate: $2,486,800.00
Class B-1 Remittance Rate: 6.75%
Cut-Off Date: July 1, 1999
First Distribution Date: August 25, 1999
A-14-1
<PAGE>
Last Scheduled Distribution Date: August 25, 2029
Class B-1 Principal Balance as of the Cut-Off Date:
$2,486,800.00
________________
Registered Owner Certificate No. __
A-14-2
<PAGE>
[OID LEGEND]
This certificate was issued on [July 27, 1999] with original issued discount
("OID") of $_________ per $1,000 of original certificate [notional] principal
balance, an initial class coupon rate of _____% per annum, an annualized monthly
compounded yield to maturity of ___%, an adjusted issue price as a percentage
of original certificate [notional] principal balance of ___% and OID allocable
to the initial short accrual period of $_____ per $1,000 of original certificate
[notional] principal balance. The prepayment assumption used by the issuer in
pricing this certificate is %___ [PSA, CPR]. The yield to maturity was based
upon fractional monthly compounding taking into account the initial short
accrual period.
A-14-3
<PAGE>
Exhibit A-15
CUSIP_______
MORTGAGE PASS-THROUGH CERTIFICATE
Class B-2
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 July 27, 1999. The rate at which
interest is payable as of the Issue Date with respect to this Certificate is
6.75% per annum.
[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.]
IN THE CASE OF ANY CLASS B-2 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" AF 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 (i) 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 (ii) 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 ADMINISTRATOR, IF ANY, OR THE DEPOSITOR; PROVIDED
THAT IF THE CLASS B-2 CERTIFICATE IS A BOOK-ENTRY CERTIFICATE, SUCH
TRANSFEREE SHALL BE DEEMED BY THE ACCEPTANCE OR ACQUISITION OF SUCH
CERTIFICATE TO HAVE MADE THE REPRESENTATIONS IN CLAUSES (i) AND (ii)
ABOVE.
The Class B-2 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 1999-5 Portion of the Class B-2 Principal Balance
as of the Cut-Off Date evidenced by this
Certificate: $1,243,400.00
Class B-2 Remittance Rate: 6.75%
Cut-Off Date: July 1, 1999
First Distribution Date: August 25, 1999
A-15-1
<PAGE>
Last Scheduled Distribution Date: August 25, 2029
Class B-2 Principal Balance as of the Cut-Off Date:
$1,243,400.00
________________
Registered Owner Certificate No. __
A-15-2
<PAGE>
[OID LEGEND]
This certificate was issued on [July 27, 1999] with original issued discount
("OID") of $_________ per $1,000 of original certificate [notional] principal
balance, an initial class coupon rate of _____% per annum, an annualized monthly
compounded yield to maturity of ___%, an adjusted issue price as a percentage
of original certificate [notional] principal balance of ___% and OID allocable
to the initial short accrual period of $________ per $1,000 of original
certificate [notional] principal balance. The prepayment assumption used by
the issuer in pricing this certificate is _____% [PSA, CPR]. The yield to
maturity was based upon fractional monthly compounding taking into account
the initial short accrual period.
A-15-3
<PAGE>
Exhibit A-16
CUSIP_______
MORTGAGE PASS-THROUGH CERTIFICATE
Class B-3
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 July 27, 1999.
The rate at which interest is payable as of the Issue Date with respect to this
Certificate is 6.75% per annum.
IN THE CASE OF ANY CLASS B-3 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, THE
CERTIFICATE ADMINISTRATOR, IF ANY, OR THE DEPOSITOR.
The Class B-3 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 1999-5 Portion of the Class B-3 Principal Balance
as of the Cut-Off Date evidenced by this
Certificate: $1,088,000.00
Class B-3 Remittance Rate: 6.75%
Cut-Off Date: July 1, 1999
First Distribution Date: August 25, 1999
Last Scheduled Distribution Date: August 25, 2029
Class B-3 Principal Balance as of the Cut-Off Date:
$1,088,000.00
________________
Registered Owner Certificate No. __
A-16-1
<PAGE>
[OID LEGEND]
This certificate was issued on [July 27, 1999] with original issued discount
("OID") of $_________ per $1,000 of original certificate [notional] principal
balance, an initial class coupon rate of _____% per annum, an annualized monthly
compounded yield to maturity of ___%, an adjusted issue price as a percentage
of original certificate [notional] principal balance of ___% and OID allocable
to the initial short accrual period of $_________ per $1,000 of original
certificate [notional] principal balance. The prepayment assumption used by
the issuer in pricing this certificate is ___% [PSA, CPR]. The yield to
maturity was based upon fractional monthly compounding taking into account
the initial short accrual period.
A-16-2
<PAGE>
Exhibit A-17
CUSIP_______
MORTGAGE PASS-THROUGH CERTIFICATE
Class B-4
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 July 27, 1999.
The rate at which interest is payable as of the Issue Date with respect to this
Certificate is 6.75% per annum.
IN THE CASE OF ANY CLASS B-4 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, THE
CERTIFICATE ADMINISTRATOR, IF ANY, OR THE DEPOSITOR
The Class B-4 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 1999-5 Portion of the Class B-4 Principal Balance
as of the Cut-Off Date evidenced by this
Certificate: $621,700.00
Class B-4 Remittance Rate: 6.75%
Cut-Off Date: July 1, 1999
First Distribution Date: August 25, 1999
Last Scheduled Distribution Date: August 25, 2029
Class B-4 Principal Balance as of the Cut-Off Date:
$621,700.00
________________
Registered Owner Certificate No. __
A-17-1
<PAGE>
[OID LEGEND]
This certificate was issued on [July 27 , 1999] with original issued discount
("OID") of $_________ per $1,000 of original certificate [notional] principal
balance, an initial class coupon rate of _____% per annum, an annualized monthly
compounded yield to maturity of ___%, an adjusted issue price as a percentage
of original certificate [notional] principal balance of ___% and OID allocable
to the initial short accrual period of $_________ per $1,000 of original
certificate [notional] principal balance. The prepayment assumption used by
the issuer in pricing this certificate is _____% [PSA, CPR]. The yield to
maturity was based upon fractional monthly compounding taking into account
the initial short accrual period.
A-17-2
<PAGE>
Exhibit A-18
CUSIP_______
MORTGAGE PASS-THROUGH CERTIFICATE
Class B-5
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 July 27, 1999.
The rate at which interest is payable as of the Issue Date with respect to this
Certificate is 6.75% per annum.
IN THE CASE OF ANY CLASS B-5 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, THE
CERTIFICATE ADMINISTRATOR, IF ANY, OR THE DEPOSITOR.
The Class B-5 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 1999-5 Portion of the Class B-5 Principal Balance
as of the Cut-Off Date evidenced by this
Certificate: $777,222.86
Class B-5 Remittance Rate: 6.75%
Cut-Off Date: July 1, 1999
First Distribution Date: August 25, 1999
Last Scheduled Distribution Date: August 25, 2029
Class B-5 Principal Balance as of the Cut-Off Date:
$777,222.86
________________
Registered Owner Certificate No. __
A-18-1
<PAGE>
[OID LEGEND]
This certificate was issued on [July 27, 1999] with original issued discount
("OID") of $_________ per $1,000 of original certificate [notional] principal
balance, an initial class coupon rate of _____% per annum, an annualized monthly
compounded yield to maturity of ___%, an adjusted issue price as a percentage
of original certificate [notional] principal balance of ___% and OID allocable
to the initial short accrual period of $_________ per $1,000 of original
certificate [notional] principal balance. The prepayment assumption used by
the issuer in pricing this certificate is _____% [PSA, CPR]. The yield to
maturity was based upon fractional monthly compounding taking into account
the initial short accrual period.
A-18-2
<PAGE>
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 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 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 FIDUCIARY RESPONSIBILITY
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
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, THE CERTIFICATE ADMINISTRATOR, IF ANY, OR THE DEPOSITOR.
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 1999-5 Percentage Interest evidenced by this Class R Certificate
in the distributions to be made with respect to the
Class R Certificate: 100%
Class R Remittance Rate: 6.75%. Additionally,
the Class R Certificates are entitled to Excess
Liquidation Proceeds and the Residual
Distribution Amount as defined in the Pooling
Agreement.
Cut-Off Date: July 1, 1999
First Distribution Date: August 25, 1999
B-1
<PAGE>
Last Scheduled Distribution Date: August 25, 2029
Class R Principal Balance as of the Cut-Off Date:
$100
________________
Registered Owner Certificate No. __
B-2
<PAGE>
EXHIBIT C
[RESERVED]
C-1
<PAGE>
EXHIBIT D
SCHEDULE OF LOANS
A copy of the Schedule of Loans may be obtained by contacting the
Registrant.
D-1
<PAGE>
EXHIBIT E
FIELDS OF LOAN INFORMATION
Deal Name
Distribution Date
Loan Number
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
<PAGE>
EXHIBIT F
FORM OF TRANSFEROR CERTIFICATE FOR
PRIVATELY OFFERED CERTIFICATES
[Date]
Chase Bank of Texas, National Association, as Trustee
600 Travis
Houston, Texas 77002
Attn: Corporate Trust Group
[LaSalle Bank National Association, as Certificate Registrar
135 South LaSalle Street, Suite 1625
Chicago, Illinois 60674-4107
Attn: ABN AMRO Series 1999-5]
Re: Purchase of ABN AMRO Mortgage Corporation Mortgage Pass-Through
Certificates Series 1999-5, 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
<PAGE>
EXHIBIT G
FORM OF TRANSFEREE'S CERTIFICATE FOR
PRIVATELY OFFERED CERTIFICATES
[Date]
Chase Bank of Texas, National Association
600 Travis
Houston, Texas 77002
Attn: Corporate Trust Group
ABN AMRO Mortgage Corporation
181 West Madison, 32nd Floor
Chicago, IL 60602
[LaSalle Bank National Association, as Certificate Registrar
135 South LaSalle Street, Suite 1625
Chicago, Illinois 60674-4107
Attn: ABN AMRO Series 1999-5]
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 1999-5 (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 April 1, 1999, between ABN AMRO Mortgage
Corporation ("AMAC"), LaSalle Home Mortgage Corporation, as servicer (the
"Servicer") and Chase Bank of Texas, National Association, as trustee (the
"Trustee"), of the ABN AMRO Mortgage Corporation Mortgage Pass-Through
Certificates, Series 1999-5.
Section 2. Representations and Warranties of the Purchaser. In connection
with the proposed transfer, the Purchaser represents and warrants to AMAC, 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
<PAGE>
(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 AMAC has made available to the Purchaser
the opportunity to ask questions of, and receive answers from AMAC concerning
the Trust, the purchase by the Purchaser of the Purchased Certificates and all
matters relating thereto that AMAC 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 AMAC 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 AMAC, 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 AMAC 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 AMAC. Any such
Certificateholder desiring to effect such transfer shall, and does hereby agree
to, indemnify the Trustee and AMAC 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 AMAC, the Certificate Registrar and the Trustee with (i) a
Transferee's Agreement, substantially in the
G-2
<PAGE>
form of this Agreement, and (ii) an affidavit substantially in the form of
Exhibit A hereto that the 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 the purchase is being made in
reliance upon the availability of the exemptive relief afforded 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
<PAGE>
Exhibit A to Form of Transferee Agreement (Exhibit G)
BENEFIT PLAN AFFIDAVIT
RE: ABN AMRO Mortgage Corporation Mortgage Pass-through Certificates, Series
1999-5 (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 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 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
_________, 199__.
[Purchaser]
By:_____________
Its:
G-4
<PAGE>
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 __________________, 19__.
_______________________
Notary Public
G-5
<PAGE>
EXHIBIT H
[RESERVED]
H-1
<PAGE>
EXHIBIT I
FORM OF TRANSFEROR CERTIFICATE
[Date]
Chase Bank of Texas, National Association, as Trustee
600 Travis
Houston, Texas 77002
Attn: Corporate Trust Group
[LaSalle Bank National Association, as Certificate Registrar
135 South LaSalle Street, Suite 1625
Chicago, Illinois 60674-4107
Attn: ABN AMRO Series 1999-5_________________________]
Re: ABN AMRO Mortgage Corporation Mortgage Pass-Through Certificates,
Series 1999-5 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 1999-5, Class R (the "Certificate"), pursuant
to Section 5.1 of the Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"), dated as of July 1, 1999 among ABN AMRO Mortgage
Corporation, as depositor (the "Company"), LaSalle Home Mortgage Corporation, as
servicer (the "Servicer"), and Chase Bank of Texas, National Association, 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
<PAGE>
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. 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.
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.
Very truly yours,
[Seller]
By:__________________________
Name:________________________
Title:_______________________
I-2
<PAGE>
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 Class R Certificate if at any time during the taxable year
of the pass-through entity a disqualified organization is
J-1
<PAGE>
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. That the purpose of the Owner relating to the sale of the Class R
Certificate by the Owner will be to impede the assessment or collection of tax.
13. The Owner is a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in, or under the
laws of, the United States or any political subdivision thereof, or an estate or
trust whose income from sources without the United States is includible in gross
income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States.
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 the REMIC I or the REMIC II.
J-2
<PAGE>
15. The Owner hereby agrees that it will not take any action that could
endanger the REMIC status of the REMIC I or the REMIC II, as applicable, or
result in the imposition of tax on the REMIC I or the 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.
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 ______________, 19__.
[Name of Owner]
By: _____________________________
[Name of Officer]
[Title of Officer]
[Corporate Seal]
ATTEST:
[Assistant] Secretary
J-3
<PAGE>
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 ____________, 19__.
NOTARY PUBLIC
COUNTY OF
STATE OF
My Commission expires the ___ day
of __________, 19__
J-4
<PAGE>
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, of 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, LaSalle Home Mortgage Corporation, as Servicer (the
"Servicer"), and Chase Bank of Texas, National Association, 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
<PAGE>
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.
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, as Trustee
_____________________________
By:
K-2
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Pooling Agreement.
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
as Trustee
By: ______________________
Dated: ___________________
K-3
<PAGE>
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 transferees.
K-4
<PAGE>
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
Junior Subordinate Certificate shall be made unless such transfer, sale, pledge
or other disposition is made in accordance with 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
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,
K-5
<PAGE>
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-6
<PAGE>
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-7
<PAGE>
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 1933 Act.
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 July 1, 1999
between ABN AMRO Mortgage Corporation, as Depositor, LaSalle Home Mortgage
Corporation, as Servicer, and Chase Bank of Texas, National Association, 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.
L-1
<PAGE>
(c) The Buyer has received and reviewed the Private Placement
Memorandum dated as of July __, 1999 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-1, Class B-2, Class
B-3, Class B-4, or 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
L-2
<PAGE>
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 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 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 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.
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 Seller
By:_____________________________ By:_____________________________
Name: Name:
Title: Title:
Taxpayer Identification:________ Taxpayer Identification:________
No.:____________________________ No.:____________________________
Date:___________________________ Date:___________________________
L-3
<PAGE>
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 $__________________(1) 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.
- ----------
(1) 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
<PAGE>
_____ 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.
L-1-2
<PAGE>
4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Buyer, the Buyer used the
cost of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph. 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
Securities only for the Buyer's own account?
Yes No
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
<PAGE>
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.
L-2-1
<PAGE>
5. The Buyer is familiar with Rule 144A and understands that each of
the parties 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
<PAGE>
EXHIBIT M
[RESERVED]
M-1
<PAGE>
EXHIBIT N
[RESERVED]
N-1
<PAGE>
EXHIBIT O
PLANNED PRINCIPAL BALANCES
<TABLE>
<CAPTION>
Distribution Dates Class A-1
- ------------------ ---------
<S> <C>
August 25, 1999.................................................. $60,514,00.000
September 25, 1999............................................... 60,514,000.00
October 25, 1999................................................. 60,514,000.00
November 25, 1999................................................ 60,514,000.00
December 25, 1999................................................ 60,011,671.47
January 25, 2000................................................. 59,459,288.31
February 25, 2000................................................ 58,857,076.82
March 25, 2000................................................... 58,205,295.64
April 25, 2000................................................... 57,504,235.60
May 25, 2000..................................................... 56,754,219.54
June 25, 2000.................................................... 55,955,602.13
July 25, 2000.................................................... 55,108,679.64
August 25, 2000.................................................. 54,214,139.62
September 25, 2000............................................... 53,272,160.67
October 25, 2000................................................. 52,283,312.01
November 25, 2000................................................ 51,248,103.19
December 25, 2000................................................ 50,167,073.63
January 25, 2001................................................. 49,040,792.19
February 25, 2001................................................ 47,869,856.71
March 25, 2001................................................... 46,654,893.50
April 25, 2001................................................... 45,396,556.78
May 25, 2001..................................................... 44,095,528.15
June 25, 2001.................................................... 42,752,515.97
July 25, 2001.................................................... 41,368,254.74
August 25, 2001.................................................. 39,943,504.44
September 25, 2001............................................... 38,479,049.82
October 25, 2001................................................. 36,975,699.75
November 25, 2001................................................ 35,434,286.41
December 25, 2001................................................ 33,871,099.74
January 25, 2002................................................. 32,318,281.00
February 25, 2002................................................ 30,775,763.71
March 25, 2002................................................... 29,243,481.79
April 25, 2002................................................... 27,721,369.59
May 25, 2002..................................................... 26,209,361.93
June 25, 2002.................................................... 24,707,394.00
July 25, 2002.................................................... 23,215,401.46
August 25, 2002.................................................. 21,733,320.37
September 25, 2002............................................... 20,261,087.20
October 25, 2002................................................. 18,798,638.87
November 25, 2002................................................ 17,345,912.67
December 25, 2002................................................ 15,902,846.33
January 25, 2003................................................. 14,469,377.98
February 25, 2003................................................ 13,045,446.16
March 25, 2003................................................... 11,630,989.80
</TABLE>
O-1
<PAGE>
<TABLE>
<CAPTION>
Distribution Dates Class A-1
- ------------------ ---------
<S> <C>
April 25, 2003................................................... 10,225,948.23
May 25, 2003..................................................... 8,830,261.20
June 25, 2003.................................................... 7,443,868.83
July 25, 2003.................................................... $6,066,711.65
August 25, 2003.................................................. 4,698,730.56
September 25, 2003............................................... 3,339,866.87
October 25, 2003................................................. 1,990,062.26
November 25, 2003................................................ 649,258.79
December 25, 2003................................................ 0.00
</TABLE>
O-2
<PAGE>
EXHIBIT P
[RESERVED]
P-1
<PAGE>
EXHIBIT Q
BLOOMBERG DATA
Loan Number
Property Type
Owner Occupied
Loan Purpose
Loan Type
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
<PAGE>
EXHIBIT R
SPECIAL SERVICING AGREEMENT
---------------------------
This SPECIAL SERVICING AGREEMENT (the "Agreement") is made and entered
into as of ____________ 1, 1999, between _______________, as seller and master
servicer (the "Company"), Credit-Based Asset Servicing and Securitization LLC,
as holder of the Class B Certificates identified on Schedule I (the "Class B
Holder") and Litton Loan Servicing LP, 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.
1
<PAGE>
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 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 Litton Loan Servicing LP as an Approved
Servicer under the Servicer Guide.
The Company hereby approves Litton Loan Servicing LP 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.]
2
<PAGE>
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 15" 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 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
3
<PAGE>
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 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
4
<PAGE>
liquidator in any insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the 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, marshalling 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
5
<PAGE>
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 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
6
<PAGE>
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 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
7
<PAGE>
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 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;
8
<PAGE>
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 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
9
<PAGE>
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
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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
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.
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(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
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.
(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
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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
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court) binding on the Special 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
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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 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
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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.
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:
(a) in the case of the Company,
Company
Address
Attention: ___________________
Telephone: ___________________
Facsimile: ___________________
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or such other address as may hereafter be furnished to the
Class B Holder and the Special Servicer in writing.
(b) in the case of the Class B Holder,
Credit-Based Asset Servicing and Securitization LLC
335 Madison Avenue
New York, New York 10017
Attention: B-Piece Surveillance Department
Telephone: (212) 850-7765
Facsimile: (212) 850-7760
or such other address as may hereafter be furnished to the Company
in writing.
(c) in the case of the Special Servicer,
Litton Loan Servicing LP
5373 W. Alabama, Suite 600
Houston, Texas 77056
Attention: Janice McClure
Telephone: (713) 966-8801
Facsimile: (713) 960-0539
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.
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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.
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: __________________________
CREDIT-BASED ASSET SERVICING AND
SECURITIZATION LLC
By: _____________________________
Name: ___________________________
Title: __________________________
LITTON LOAN SERVICING LP
By: _____________________________
Name: ___________________________
Title: __________________________
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SCHEDULE I
Describe each Series of Class B Certificates and the related Pooling and
Servicing Agreement
20
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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.
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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 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 713-621-2285) for approval prior to
mailing.
<PAGE>
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.
IV. HAZARD/FLOOD INSURANCE
A. Company to prepare a change to the mortgagee clause as follows:
Litton Loan Servicing LP
Its Successors or Assigns
5373 West Alabama, Suite 600
Houston, TX 77056-5923
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
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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.
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.
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
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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 hardcopies 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 hardcopy 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 and mailing address for preparation of Special Servicer's
Notification Letters.
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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 Litton Loan
Servicing LP. and forwarded by overnight service to the following address within
twenty-four hours, properly identified with Company's loan number.
Litton Loan Servicing LP.
Attn: Cashiering Department
5373 West Alabama, Suite 600
Houston, TX 77056-5923
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.
All shipments to be sent to:
Litton Loan Servicing LP
Attn:
5373 West Alabama, Suite 600
Houston, TX 77056-5923
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.
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EXHIBIT A to Schedule II
LOAN INFORMATION TO BE PROVIDED TO COMPANY
<PAGE>
Mortgage Loan Purchase Agreement
Mortgage Loan Purchase Agreement (the "Agreement"), dated as of July __,
1999 between ABN AMRO Mortgage Group, Inc. (the "Seller") and ABN AMRO Mortgage
Corporation (the "Purchaser").
Subject to the terms and conditions of this Agreement, the Seller agrees to
sell and the Purchaser agrees to purchase certain mortgage loans (the "Mortgage
Loans") as described herein and as identified on the Mortgage Loan Schedule
defined in Section 2 hereof. The Mortgage Loans will be purchased on a servicing
retained basis.
Now, therefore, in consideration of the premises and the mutual agreements
set forth herein, the parties agree as follows:
SECTION 1. Purchase and Sale of the Mortgage Loans.
(a) Pursuant to the terms hereof and upon satisfaction of the conditions
set forth herein, the Seller agrees to sell and the Purchaser agrees to
purchase, Mortgage Loans having the general characteristics set forth in this
Agreement and specifically identified on the Mortgage Loan Schedule, for the
Purchase Price set forth below in Section 3(a) hereof and having an aggregate
principal balance on and as of the date of such Mortgage Loan Schedule (the
"Cut-Off Date") of approximately $310,855,851 after deduction of principal
payments due on or before the Cut-Off Date (which amount may vary plus or minus
5% thereof), or such other aggregate principal balance as agreed by the
Purchaser and the Seller as evidenced by the actual aggregate principal balance
of the Mortgage Loans accepted by the Purchaser on the Closing Date (as defined
below).
(b) Subject to mutual agreement between the Purchaser and the Seller, the
closing for the purchase and sale of the Mortgage Loans shall take place on July
__, 1999 (the "Closing Date") at the office of Purchaser's counsel in Chicago,
Illinois or such other place as the parties shall agree.
SECTION 2. Mortgage Loan Schedule. Attached to this Agreement as Schedule 1
is a listing of the Mortgage Loans evidenced by promissory notes, mortgage notes
or other evidence of indebtedness (the "Mortgage Notes") evidencing the
indebtedness of an obligor (the "Mortgagor") under the mortgages, deeds of trust
or other instruments securing a Mortgage Loan (the "Mortgages") to be purchased
by and delivered to the Purchaser on the Closing Date (as such may be amended
prior to the Closing Date by mutual agreement of the parties) (the "Mortgage
Loan Schedule"). The "Mortgage Loan Schedule" as of the Closing Date shall refer
to the Mortgage Loan Schedule as delivered on the Cut-off Date related to such
Mortgage Loans to be purchased by or on behalf of the Purchaser pursuant to the
terms of this Agreement. The Mortgage Loan Schedule shall contain as to each
Mortgage Loan listed thereon, at a minimum, the Mortgage Loan information
indicated on Schedule 2 hereto.
<PAGE>
SECTION 3. Purchase Price.
(a) In exchange for the Mortgage Loans, on the Closing Date, the Purchaser
shall transfer to the Seller by wire transfer in immediately available funds the
purchase price (the "Purchase Price") which is equal to the principal balance
thereof as of the Cut-Off Date plus any accrued and unpaid interest thereon to
such Cut-Off Date.
(b) The Purchaser shall be entitled to all scheduled payments of principal
and interest due with respect to the Mortgage Loans after the Cut-Off Date, and
all other recoveries of principal and interest collected after the Cut-Off Date
(other than in respect of principal and interest on the Mortgage Loans due on or
before the Cut-Off Date). The Seller shall be entitled to all scheduled payments
of principal and interest due with respect to the Mortgage Loans on or before
the Cut-Off Date, and all other recoveries of principal and interest collected
on or before the Cut-Off Date (other than in respect of principal and interest
on the Mortgage Loans due after the Cut-Off Date). The Principal Balance of each
Mortgage Loan as of the Cut-Off Date is determined after deduction of payments
of principal due on or before the Cut-Off Date whether or not collected.
Therefore, payments of scheduled principal and interest prepaid for a date due
following the Cut-Off Date shall not be deducted from the Principal Balance as
of the Cut-Off Date but such prepaid amounts shall belong to and be promptly
remitted to the Purchaser.
SECTION 4. Examination of Mortgage Files.
Prior to the Closing Date, the Seller will have made files for each
Mortgage Loan, that consist at least of the documents listed on Schedule 3
attached hereto (with respect to each Mortgage Loan, a "Mortgage File", and
collectively, the "Mortgage Files"), available to the Purchaser or its agents,
for examination at the Seller's offices or such other location as shall
otherwise be agreed upon by the Purchaser and the Seller. The Purchaser may
purchase all or part of the Mortgage Loans with or without conducting any
partial or complete examination. The fact that the Purchaser or its agents have
conducted or have failed to conduct any partial or complete examination of the
Mortgage Files shall not affect the Purchaser's rights under this Agreement,
including, but not limited to, the rights to demand repurchase, substitution or
other relief as provided in this Agreement.
SECTION 5. Transfer of Mortgage Loans; Possession of Mortgage Files.
(a) On the Closing Date, subject to the satisfaction of the terms and
conditions hereof the Seller shall sell, transfer, assign, set over and
otherwise convey to the Purchaser, without recourse, but subject to the terms of
this Agreement, all right, title and interest of the Seller in and to the
Mortgage Loans and all proceeds thereof, wherever located, including without
limitation, all amounts in respect of principal and interest received or
receivable with respect to Mortgage Loan payments due after the Cut-Off Date
(and including scheduled payments of principal and interest due after the
Cut-Off Date but received by the Seller on or before the Cut-Off Date, but not
including payments of principal and interest due on the Mortgage Loans on or
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before the Cut-Off Date), together with the proceeds of any related mortgage
insurance policies. Such transfer shall be made directly to the Purchaser in
accordance with the letter delivered to the Seller by the Purchaser attached
hereto as Exhibit A (the "Instruction Letter"). The Seller's records will
accurately reflect the sale of each Mortgage Loan to the Purchaser.
(b) The ownership of each Mortgage Loan and the related Mortgage Note, the
Mortgage and the contents of the related Mortgage File shall be, upon
satisfaction of subsection 5(a) hereof, vested in the Purchaser and the
ownership of all records and documents with respect to such Mortgage Loan
prepared by or which come into the possession of the Seller shall immediately
vest in the Purchaser and shall be retained and maintained by the Seller at the
will and for the benefit of the Purchaser in a custodial capacity only. The
Seller shall deliver to the Purchaser or its agent in accordance with the
instructions set forth in Exhibit A, simultaneously with the execution and
delivery of this Agreement or prior to the Closing Date, all of the documents
pertaining to each Mortgage Loan.
(c) The transfer of the Mortgage Loans as described herein shall be
absolute and is intended by the parties to be a sale. In the event that a court
deems the conveyance set forth herein not to constitute a sale, the Seller shall
have granted to the Purchaser and the Trustee a first priority security interest
in the Mortgage Loans and in the proceeds thereof of any kind or nature
whatsoever, and in the proceeds of any related insurance policies, subject to
the satisfaction or waiver of the conditions set forth in Section 11 hereof, and
shall take, or shall cause to have been taken, all steps necessary prior to the
Closing Date to perfect such security interest in the Purchaser.
SECTION 6. Books and Records.
On the Closing Date, following the sale of the Mortgage Loans to the
Purchaser, title to each Mortgage and the related Mortgage Note shall be
transferred to the Purchaser or its assignee in accordance with this Agreement.
All rights arising out of the Mortgage Loans after the Cut-Off Date including,
but not limited to, any and all funds received on or in connection with a
Mortgage Loan and due after the Cut-Off Date shall be received and held by the
Seller in a custodial capacity for the benefit of the Purchaser or its assignee
as the owner of the Mortgage Loans in accordance herewith and shall be delivered
or caused to be delivered by the Seller to the Purchaser or its assignee on or
immediately following the Closing Date. Any funds received by the Seller, the
Purchaser or LaSalle Home Mortgage Corporation after the Cut-Off Date but due
prior to the Cut-Off Date shall remain the property of the Seller and shall be
promptly remitted to the Seller.
SECTION 7. Further Actions; Financing Statements.
(a) In furtherance of the provisions of Section 5(c) hereof, the Seller
agrees to take or cause to be taken such further actions to execute, deliver and
file or cause to be executed, delivered and filed, such further documents and
instruments (including, without limitation, any UCC financing statements) as may
be necessary, or as the Purchaser may reasonably request, in
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order to perfect and maintain the security interest created pursuant to said
section and to otherwise fully effectuate the purposes, terms and conditions of
this Agreement, and the Purchaser shall cooperate in any such action.
(b) The Seller shall: (i) promptly execute, deliver, and file any financing
statements, amendments, continuation statements, assignments, certificates and
other documents with respect to such security interest as may be necessary to
enable the Purchaser to perfect or to maintain the perfection of such security
interest, each in form and substance satisfactory to the Purchaser; and the
Seller hereby grants to the Purchaser, subject to the satisfaction or waiver of
the conditions set forth in Section 11 hereof, the right, at the Purchaser's
option, to file any or all such financing statements, amendments, continuation
statements, assignments, certificates and other documents pursuant to the UCC
and otherwise without its signature and hereby irrevocably appoints the
Purchaser, subject to the satisfaction or waiver of the conditions set forth in
Section 11 hereof, as its attorney-in-fact to execute, deliver and file any such
financing statements, amendments, continuation statements, assignments,
certificates and other documents in the Seller's name and to perform all other
acts which the Purchaser deems appropriate to perfect or to maintain the
perfection of the security interest; and (ii) notify the Purchaser within five
(5) days after the occurrence of any of the following: (A) any change in the
Seller's corporate name or any trade name; (B) any change in the Seller's
location of its chief executive office or principal place of business; and (C)
any merger or consolidation or other change in Seller's identity or material
change in its corporate structure.
SECTION 8. Representations, Warranties and Agreements of Seller.
(a) The Seller hereby represents and warrants to the Purchaser as of the
Closing Date (or such other date as is specified in the related representation
or warranty) as follows:
(i) The Seller has been duly created and is validly existing as a
corporation under the laws of the State of Delaware;
(ii) The execution and delivery of this Agreement by the Seller and its
performance of and compliance with the terms of this Agreement will not
violate the Seller's charter or by-laws or will not conflict with or result
in a breach of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
material agreement or instrument to which the Seller is a party or by which
the Seller or to which any of the property or assets of the Seller is
subject;
(iii) This Agreement, assuming due authorization, execution and
delivery by the Purchaser, constitutes a valid and legally binding
obligation of the Seller, enforceable against the Seller in accordance with
its terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles, regardless
of whether such enforcement is considered in a proceeding in equity or at
law;
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(iv) The Seller is not in default with respect to any order or decree
of any court or any order, regulation or demand of any federal, state,
municipal or governmental agency, which default might have consequences
that would materially and adversely affect the condition (financial or
other) or operations of the Seller or its properties or might have
consequences that would affect its performance hereunder;
(v) No litigation is pending or, to the best of the Seller's knowledge,
threatened against the Seller which would prohibit its entering into this
Agreement or performing its obligations under this Agreement;
(vi) The Seller is an approved conventional seller/servicer for FNMA or
FHLMC in good standing;
(vii) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Seller, and the
transfer, assignment and conveyance of the Mortgage Notes and the Mortgages
by the Seller pursuant to this Agreement is not subject to the bulk
transfer or any similar statutory provisions in effect in the State of
Michigan;
(viii) With respect to each Mortgage Loan:
(a) that the information set forth in the Mortgage Loan Schedule
appearing as an exhibit to this Agreement is true and correct in all
material respects at the date or dates respecting which such
information is furnished as specified therein;
(b) the Seller is the sole owner and holder of each Mortgage Loan
free and clear of all liens, pledges, charges or security interests of
any nature and has full right and authority, subject to no interest or
participation of, or agreement with, any other party, to sell and
assign the same;
(c) no payment of principal of or interest on or in respect of
any Mortgage Loan is 30 days or more past due from the Due Date of such
payment;
(d) to the best of the Seller's knowledge, as of the date of the
transfer of the Mortgage Loans to the Purchaser, there is no valid
offset, defense or counterclaim to any Mortgage Note or Mortgage;
(e) there is no proceeding pending, or to the best of the
Seller's knowledge, threatened for the total or partial condemnation of
any of the real property, together with any improvements thereto,
securing the indebtedness of the Mortgagor under the related Mortgage
Loan (the "Mortgaged Property") and
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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;
(f) that each Mortgage Loan complies in all material respects
with applicable state or federal laws, regulations and other
requirements, pertaining to usury, equal credit opportunity and
disclosure laws, and each Mortgage Loan was not usurious at the time of
origination;
(g) to the best of the Seller's knowledge, all insurance premiums
previously due and owing with respect to each 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;
(h) 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;
(i) that each Mortgage is a valid and enforceable first lien on
the property securing the related Mortgage Note, and that each Mortgage
Loan is covered by an ALTA mortgagee title insurance policy or other
form of policy or insurance generally acceptable to FNMA or FHLMC,
issued by, and is a valid and binding obligation of, a title insurer
acceptable to FNMA or FHLMC insuring the originator, its successor and
assigns, as to the lien of the Mortgage in the original principal
amount of the Mortgage Loan subject only to (a) the lien of current
real property taxes and assessments not yet due and payable, (b)
covenants, conditions and restrictions, rights of way, easements and
other matters of public record as of the date of recording of such
Mortgage acceptable to mortgage lending institutions in the area in
which the Mortgaged Property is located or specifically referred to in
the appraisal performed in connection with the origination of the
related Mortgage Loan and (c) such other matters to which like
properties are commonly subject which do not individually, or in the
aggregate, materially interfere with the benefits of the security
intended to be provided by the Mortgage;
(j) neither the Seller nor any prior holder of any Mortgage has,
except as the Mortgage File may reflect, modified the Mortgage in any
material
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respect; satisfied, cancelled or subordinated such Mortgage in whole or
in part; released such Mortgaged Property in whole or in part from the
lien of the Mortgage; or executed any instrument of release,
cancellation, modification or satisfaction;
(k) that each Mortgaged Property consists of a fee simple estate
or condominium form of ownership in real property;
(l) the condominium projects that include the condominiums that
are the subject of any condominium loan are generally acceptable to
FNMA or FHLMC;
(m) no foreclosure action is threatened or has been commenced
(except for the filing of any notice of default) with respect to the
Mortgage Loan; and except for payment delinquencies not in excess of 30
days, to the best of the Seller'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 Seller has not waived any default, breach, violation or event
of acceleration;
(n) that each Mortgage Loan was originated on FNMA or FHLMC
uniform instruments for the state in which the Mortgaged Property is
located;
(o) that based upon a representation by each Mortgagor at the
time of origination or assumption of the applicable Mortgage Loan,
100% of the Mortgage Loans measured by Principal Balance were to be
secured by owner-occupied residences and no more than 0% of the
Mortgage Loans measured by Principal Balance were to be secured by
non-owner-occupied residences;
(p) that an appraisal of each Mortgaged Property was conducted at
the time of origination of the related Mortgage Loan, and that each
such appraisal was conducted in accordance with FNMA or FHLMC criteria,
on FNMA or FHLMC forms and comparables on at least three properties
were obtained;
(q) that no Mortgage Loan had a Loan-to-Value Ratio at
origination in excess of 95%;
(r) the Mortgage Loans were not selected in a manner to adversely
affect the interests of the Purchaser and the Seller knows of no
conditions which reasonably would cause it to expect any Mortgage Loan
to become delinquent or otherwise lose value;
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(s) each Mortgage Loan was either (A) originated directly by or
closed in the name of either: (i) a savings and loan association,
savings bank, commercial bank, credit union, insurance company, or
similar institution which is supervised and examined by a federal or
state authority or (ii) a mortgagee approved by the Secretary of
Housing and Urban Development pursuant to Sections 203 and 211 of the
National Housing Act or (B) originated or underwritten by an entity
employing underwriting standards consistent with the underwriting
standards of an institution as described in subclause (A)(i) or (A)(ii)
above;
(t) each Mortgage Loan is a "qualified mortgage" within the
meaning of Section 860G of the Internal Revenue Code of 1986, without
regard to ss.1.860 G-2(f) of the REMIC provisions or any similar rule;
(u) each Mortgage Loan that has a Loan-to-Value Ratio at
origination in excess of 80% is covered by a primary mortgage insurance
policy; and
(v) that no Mortgage Loan permits negative amortization or the
deferral of accrued interest.
It is understood and agreed that the representations and warranties set
forth in this Section 8 shall survive the sale of the Mortgage Loans to the
Purchaser and shall inure to the benefit of the Purchaser, notwithstanding
any restrictive or qualified endorsement on any Mortgage Note or assignment
of Mortgage or the examination of any Mortgage File.
Upon discovery by either the Seller, the Purchaser or its designees of
a breach of any of the foregoing representations or warranties of the
Seller which materially and adversely affects (1) the value of any of the
Mortgage Loans actually delivered or (2) the interests of the Purchaser
therein, the party discovering such breach shall give prompt written notice
to the other. Within 90 (ninety) days of its discovery or its receipt of
notice of any such breach of a representation or warranty, the Seller
shall, with respect to the Mortgage Loan(s) to which such breach relates,
(i) cure such breach in all material respects (except for a breach of that
portion of the representation and warranty relating to any casualty from
the presence of hazardous waste or hazardous substances), (ii) repurchase
such Mortgage Loan or Mortgage Loans (or any property acquired in respect
thereof) from the Purchaser at the Purchase Price, as adjusted for the then
current principal balance or (iii) within the 90 (ninety)-day period
following the Closing Date substitute another mortgage loan for such
Mortgage Loan. Such substitute mortgage loan shall on the date of
substitution, (i) have a principal balance not in excess of the principal
balance of the defective Mortgage Loan,
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(ii) be accruing interest at a rate of interest at least equal to that of
the defective Mortgage Loan, (iii) have a remaining term to stated maturity
not greater than, and not more than two years less than, that of the
Mortgage Loan so substituted, (iv) have an original loan-to-value ratio not
higher than that of the Mortgage Loan so substituted and a current
loan-to-value ratio not higher than that of the Mortgage Loan so
substituted, and (v) comply with all the representations and warranties
relating to Mortgage Loans set forth herein, as of the date of substitution
(such mortgage loan being referred to herein as a "Qualifying Substitute
Mortgage Loan"). Except as set forth in Section 12 hereof, it is understood
and agreed that the obligations of the Seller set forth in this Section 8
to cure, substitute for or repurchase a defective Mortgage Loan constitute
the sole remedies of the Purchaser respecting a breach of the foregoing
representations and warranties.
The Purchaser, upon receipt by it of the full amount of the Purchase
Price as adjusted for the then current principal balance for a Mortgage
Loan that is repurchased, or upon receipt of the Mortgage File for a
Qualifying Substitute Mortgage Loan for a Mortgage Loan that is substituted
or repurchased, shall release or cause to be released and reassign to the
Seller the related Mortgage File for the Mortgage Loan that is substituted
and shall execute and deliver such instruments of transfer or assignment,
in each case without recourse, representation, or warranty, as shall be
necessary to vest in the Seller or its designee or assignee title to any
such substituted Mortgage Loan released pursuant hereto, free and clear of
all security interests, liens and other encumbrances created by this
Agreement, which instruments shall be prepared by the Seller at its expense
and shall be reasonably acceptable to the Purchaser, and the Purchaser
shall have no further responsibility with respect to the Mortgage File
relating to such Mortgage Loan that is substituted.
Any cause of action against the Seller or relating to or arising out of
the breach of any representations and warranties made in this Section 8
shall accrue as to any Mortgage Loan upon (i) discovery of such breach by
the Purchaser or notice thereof by the Seller to the Purchaser, (ii)
failure by the Seller to cure such breach, repurchase such Mortgage Loan or
substitute a Qualifying Substitute Mortgage Loan as specified above, and
(iii) demand upon the Seller by the Purchaser for all amounts payable in
respect of such Mortgage Loan.
SECTION 9. Representations, Warranties and Agreements of Purchaser.
(a) The Purchaser hereby represents and warrants to the Seller, as of the
date hereof (or such other date as is specified in the related representation or
warranty) as follows:
(i) The Purchaser is a corporation duly formed and validly existing
under the laws of the State of Delaware;
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(ii) The execution and delivery of this Agreement by the Purchaser and
its performance of and compliance with the terms of this Agreement will not
violate the Purchaser's corporate charter or by-laws or will not conflict
with or result in a breach of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other material agreement or instrument to which the Purchaser
is a party or by which the Purchaser or to which any property or assets of
the Purchaser is subject;
(iii) This Agreement, assuming due authorization, execution and
delivery by the Seller, constitutes a valid and legally binding obligation
of the Purchaser, enforceable against the Purchaser in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles, regardless
of whether such enforcement is considered in a proceeding in equity or at
law;
(iv) The Purchaser is not in default with respect to any order or
decree of any court or any order, regulation or demand of any federal,
state, municipal or governmental agency, which the Purchaser default might
have consequences that would materially and adversely affect the condition
(financial or other) or operations of the Purchaser 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 Purchaser's
knowledge, threatened against the Purchaser which would prohibit its
entering into this Agreement or performing its obligations under this
Agreement;
SECTION 10. Purchaser's Conditions to Closing. The obligations of the
Purchaser under this Agreement shall be subject to the satisfaction, on or prior
to the Closing Date, of the following conditions:
(a) The obligations of the Seller required to be performed by it on or
prior to the Closing Date pursuant to the terms of this Agreement shall have
been duly performed and complied with and all of the representations and
warranties of the Seller under this Agreement shall be true and correct as of
the date hereof and as of the Closing Date, and no event shall have occurred
which, with notice or the passage of time, or both, would constitute a default
under this Agreement, and the Purchaser shall have received a certificate to
that effect signed by an Authorized Officer (as defined below) of the Seller.
(b) The Purchaser or the Purchaser's document custodian shall have
received, or the Purchaser's attorney shall have received in escrow, all of the
following closing documents, in such forms as are agreed upon and acceptable to
the Purchaser, duly executed by all signatories other than the Purchaser, as
required pursuant to the respective terms thereof:
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(i) An assignment or assignments of the Mortgage Loans to the Purchaser
substantially in the form attached hereto as Exhibit B with such changes as
are required to adapt the assignment to the proper form in the jurisdiction
where the related Mortgage Property is located, and each original Mortgage
Note, duly endorsed originally or by facsimile, without recourse, to the
Purchaser, in each case in accordance with the instructions set forth in
Exhibit A attached hereto, which assignment or assignments and Mortgage
Note shall be delivered to and held by the Purchaser or its agent on behalf
of the Purchaser;
(ii) The Mortgage Loan Schedule prepared by Purchaser dated as of the
related Closing Date and attached hereto;
(iii) A certificate signed by an officer, which officer may be either a
senior vice president, a vice president, an assistant vice president or
assistant secretary (an "Authorized Officer"), dated as of the Closing
Date, substantially in the form attached hereto as Exhibit C, to the
parties hereto, and attached thereto copies of the charter and by-laws and
a Good Standing Certificate or a memorandum setting forth the verbal
assurances from the appropriate regulatory authorities with respect to the
Seller will be immediately forthcoming; and
(iv) An opinion of Seller's counsel in substantially the form attached
hereto as Exhibit D.
(v) A security release certification, in a form acceptable to the
Purchaser, executed by the appropriate mortgagee or secured party, if any
of the Mortgage Loans have at any time been subject to any security
interest, pledge or hypothecation for the benefit of such person.
(c) The Seller will furnish to the Purchaser such other certificates of its
officers or others and such other documents to evidence fulfillment of the
conditions set forth in this Agreement as the Purchaser and its attorney may
reasonably request.
SECTION 11. Seller's Conditions to Closing. The obligations of the Seller
under this Agreement shall be subject to the satisfaction, on or prior to the
Closing Date, of the following conditions:
(a) The obligations of the Purchaser required to be performed by it on or
prior to the Closing Date pursuant to the terms of this Agreement shall have
been duly performed and complied with and all of the representations and
warranties of the Purchaser under this Agreement shall be true and correct as of
the date hereof and as of the Closing Date, and no event shall have occurred
which, with notice or the passage of time, or both, would constitute a default
under this Agreement, and the Seller shall have received a certificate to that
effect signed by an Authorized Officer of the Purchaser.
11
<PAGE>
(b) The Seller shall have received, or the Seller's attorney shall have
received in escrow, all of the following closing documents, in such forms as are
agreed upon and acceptable to the Seller, duly executed by all signatories other
than the Seller as required pursuant to the respective terms thereof:
(i) A certificate signed by an Authorized Officer dated as of the
Closing Date, in the form acceptable to the parties hereto, and attached
thereto the resolutions of the Purchaser authorizing the transactions
contemplated by this Agreement, together with copies of the Articles of
Association and by-laws as of a recent date with respect to the Purchaser;
(c) The Purchaser will furnish to the Seller such other certificates of its
officers or others and such other documents to evidence fulfillment of the
conditions set forth in this Agreement as the Seller and its attorney may
reasonably request.
SECTION 12. Indemnification.
(a) The Seller agrees to indemnify and hold harmless the Purchaser against
any and all losses, claims, expenses, damages or liabilities to which Purchaser
may become subject, insofar as such losses, claims, expenses, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
representation or warranty made by the Seller in Section 8 hereof on which
Purchaser has relied, being, or alleged to be, materially untrue or incorrect.
This indemnity will be in addition to any liability which the Seller may
otherwise have.
(b) The Purchaser agrees to indemnify and hold harmless the Seller solely
in its capacity as seller of the Mortgage Loans against any and all losses,
claims, expenses, damages or liabilities to which the Seller may become subject,
insofar as such losses, claims, expenses, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any representation or warranty
made by the Purchaser in Section 9 hereof on which the Seller has relied, being,
or alleged to be, materially untrue or incorrect (notwithstanding the
Purchaser's lack of knowledge with respect to the substance of any
representation or warranty to which Section 9 applies which is made to the best
of the Purchaser's knowledge). This indemnity will be in addition to any
liability which the Purchaser may otherwise have.
(c) Promptly after receipt by either the Purchasers or the Seller of notice
of the commencement of any action or proceeding in any way relating to or
arising from this Agreement, such party will notify the other party of the
commencement thereof; but the omission so to notify the party from whom
indemnification is sought (the "Indemnifying Party") will not relieve the
Indemnifying Party from any liability which it may have to the party seeking
indemnification (the "Indemnified Party") except to the extent that the
Indemnifying Party is adversely affected by the lack of notice. In case any such
action is brought against the Indemnified Party, and it notifies the
Indemnifying Party of the commencement thereof, the Indemnifying Party will be
entitled to participate in the defense (with the consent of the
12
<PAGE>
Indemnified Party which shall not be unreasonably withheld) of such action at
the Indemnifying Party's expense.
SECTION 13. Notices. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed, by
registered or certified mail, return receipt requested, or, if by other means,
when received by the other party. Notices to the Seller shall be directed to
InterFirst, 777 East Eisenhower Parkway, Ann Arbor, Michigan 48108, Attention:
Steve Kapp - Vice President with a copy to ABN AMRO Mortgage Group, Inc., 2600
West Big Beaver Road, Troy, Michigan 48084, Attention: Karen Severn Jackson Vice
President; and notices to the Purchaser shall be directed to ABN AMRO Mortgage
Corporation, 181 West Madison Street, Suite 3250, Chicago, Illinois 60602,
Attention: Maria Fregosi - First Vice President - ABN AMRO Mortgage Operations;
or such other addresses as may hereafter be furnished to the other party by like
notice.
SECTION 14. Termination. This Agreement may be terminated (i) by the mutual
consent of the parties hereto, or (ii) by the Purchaser if the conditions to the
Purchaser's obligations to closing set forth under Section 10 hereof are not
fulfilled as and when required to be fulfilled or (iii) by the Seller if the
Purchaser's obligations under Section 11 hereof are not fulfilled as and when
required. In the event of a termination pursuant to Section 14(ii), the Seller
agrees that it will pay the out-of-pocket fees and expenses of the Purchaser in
connection with the transactions contemplated by this Agreement and in the event
of a termination pursuant to Section 14(iii), the Purchaser agrees that it will
pay the out-of-pocket fees and expenses of the Seller in connection with the
transactions contemplated by this Agreement.
SECTION 15. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement, or
in certificates of officers of the Seller and the Purchaser submitted pursuant
hereto, shall remain operative and in full force and effect and shall survive
transfer and sale of the Mortgage Loans to the Purchaser.
SECTION 16. Severability. If any provision of this Agreement shall be
prohibited or invalid under applicable law, the Agreement shall be ineffective
only to such extent, without invalidating the remainder of this Agreement.
SECTION 17. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but both of which together
shall constitute one and the same agreement.
SECTION 18. Governing Law. This Agreement shall be deemed to have been made
in the State of New York and shall be interpreted in accordance with the laws of
such state without regard to the principles of conflicts of law of such state.
SECTION 19. Further Assurances. The Seller and the Purchaser agree to
execute and deliver such instruments and take such actions as the other party
may, from time to time,
13
<PAGE>
reasonably request in order to effectuate the purpose and to carry out the terms
of this Agreement.
SECTION 20. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the Seller and the Purchaser
and their permitted successors and assigns. The Seller acknowledges and agrees
that the Purchaser may assign its rights under this Agreement. Any person into
which the Seller may be merged or consolidated (or any person resulting from any
merger or consolidation involving the Seller), or any person succeeding to the
business of the Seller shall be considered the "successor" of the Seller
hereunder. Except as provided in the two preceding sentences, this Agreement
cannot be assigned, pledged or hypothecated by any party hereto without the
written consent of the other party to this Agreement. Notwithstanding anything
to the contrary in this Section 20, the parties hereto agree that the Purchaser
has the right to assign its rights and interest in, to and under Section 8
hereof.
SECTION 21. Amendments. No term or provision of this Agreement may be
waived or modified unless such waiver or modification is in writing and signed
by a duly authorized officer of the party against whom such waiver or
modification is sought to be enforced.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
14
<PAGE>
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their names to
be signed hereto by their respective duly authorized officers as of the date
first above written.
ABN AMRO Mortgage Group, Inc.,
as Seller
By: /s/ Stewart W. Fleming
------------------------------
Name: Stewart W. Fleming
Title: Senior Vice President
Mortgage Loan Purchase Agreement
<PAGE>
ABN AMRO Mortgage Corporation,
as Purchaser
By: /s/ Stewart W. Fleming
------------------------------
Name: Stewart W. Fleming
Title: Senior Vice President
Mortgage Loan Purchase Agreement
<PAGE>
SCHEDULE 1
MORTGAGE LOAN SCHEDULE
A copy of the Mortgage Loan Schedule may be obtained by contacting
the Registrant.
<PAGE>
SCHEDULE 2
MORTGAGE LOAN SCHEDULE INFORMATION
Each Mortgage Loan shall be identified by at least the following
details, among others, relating to each Mortgage Loan:
(i) the loan number of the Mortgage Loan and name of the
related Mortgagor;
(ii) the street address of the Mortgaged Property
including city, state and zip code;
(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 and as of the
Cut-Off Date;
(xi) the type of property;
(xii) the nature of occupancy at origination;
(xiii) the county in which the Mortgaged Property is located, if
available; and
(xiv) the Closing Date.
<PAGE>
SCHEDULE 3
MORTGAGE FILE INFORMATION
Each Mortgage File shall include at least the following documents,
among others, with respect to each Mortgage Loan transferred and assigned from
the Seller to the Purchaser, or its agent:
(i) the original Mortgage Note bearing all intervening
endorsements endorsed, "Pay to the order of Chase Bank of
Texas, National Association for the benefit of the
Certificateholders of ABN AMRO Mortgage Corporation Series
1999-5 Attn: Corporate Trust Department, 600 Travis Street,
Houston, TX 77002, without recourse" and signed in the name
of the mortgagee at the request 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 Seller shall deliver or cause to be
delivered to the Purchaser a true and correct copy of such
Mortgage, together with (1) in the case of a delay caused by
the public recording office, a certificate signed by an
Authorized Officer of the Seller stating that such original
Mortgage has been dispatched to the 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 "Chase Bank of Texas, National
Association, as Trustee," which assignment shall be in form
and substance acceptable for recording, or a copy certified
by the Seller as a true and correct copy of the original
assignment which has been sent for recordation. Subject to
the foregoing, such assignments may, if permitted by law, be
by blanket assignments for Mortgage Loans covering Mortgaged
Properties situated within the same county. If the assignment
is in blanket form, a copy of the assignment shall be
included in the related individual Mortgage File;
<PAGE>
(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 Seller shall deliver or cause to be delivered to
the Purchaser a true and correct copy of such assignment,
together with (a) in the case of a delay caused by the public
recording office, a certificate signed by an Authorized
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;
(v) the original mortgagee policy of title insurance (including,
if applicable, the endorsement relating to the negative
amortization of the Mortgage 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;
(vi) the mortgage insurance certificate;
(vii) hazard insurance certificates and copies of the Hazard
Insurance Policy and, if applicable, flood insurance policy;
and
(viii) any and all other documents, opinions and certificates
executed and/or delivered by the related Mortgagor and/or its
counsel in connection with the origination of such Mortgage
Loan which may include Truth-in-Lending Statement and other
legal statements, Appraisal and Survey.
-2-
<PAGE>
EXHIBIT A
INSTRUCTION LETTER
ABN AMRO Mortgage Corporation
181 West Madison Street, Suite 3250
Chicago, Illinois 60602
________ __, 1999
ABN AMRO Mortgage Group, Inc.
2600 West Big Beaver Road
Troy, Michigan 48084
Dear Ladies and Gentlemen:
Pursuant to the Mortgage Loan Purchase Agreement dated as of
_____________ ___, 1999 (the "Purchase Agreement") between you and us, we have
agreed to purchase from you certain Mortgage Loans. All capitalized terms used
herein and not otherwise defined shall have the meanings set forth in the
Purchase Agreement.
In order to facilitate these transactions, and for the purpose of
convenience only, we hereby authorize and direct you to:
<TABLE>
<CAPTION>
Action Due Date
<S> <C>
1. Endorse mortgage notes to: one week prior to funding
"Pay to the order of
Chase Bank of Texas, National Association
for the benefit of the Certificateholders
of ABN AMRO Mortgage Corporation
Series 1999-5, Attn: Corporate Trust
Department, 600 Travis Street,
Houston, TX 77002,
without recourse"
2. Assign mortgages to be recorded one week prior to funding
to Chase Bank of Texas, National Association
for the benefit of the Certificateholders
of ABN AMRO Mortgage Corporation
Series 1999-5:
</TABLE>
<PAGE>
<TABLE>
<S> <C>
3. Deliver to the Purchaser or its agent all two business days after funding
Mortgage Loan documents pertaining to each
loan
4. Deliver to the Purchaser's servicer all Mortgage one week prior to Servicing transfer
Loan servicing documents pertaining to each date
loan
5. Provide lost mortgage note affidavits, certified one week prior to funding
copies of all missing mortgages, and certified
recorded copies of missing intervening
assignments
6. Mortgage Loan Schedule generated by one day prior to funding
Purchaser and agreed to by Seller
</TABLE>
Sincerely,
ABN AMRO Mortgage Corporation
By: _____________________________________
Name: ___________________________________
Title: __________________________________
-2-
<PAGE>
EXHIBIT B
FORM OF ASSIGNMENT
ABN AMRO Mortgage Group, Inc., a Delaware corporation on behalf of ABN
Mortgage Group Inc. (the "Seller"), in exchange for $__________ in hand paid and
other good and valuable consideration, hereby grants, bargains, sells, assigns,
transfers, conveys, and sets over to ABN AMRO Mortgage Corporation, a Delaware
corporation (the "Purchaser"), all of the Seller's right, title, and interest
in, to, and under the mortgage loans listed on Schedule 1 attached hereto, the
mortgage notes evidencing or relating to such mortgage loans, all mortgages,
trust deeds, title insurance policies, property insurance policies, chattel
paper, loan guaranties, loan accounts, surveys, instruments, certificates, and
other documents whatsoever evidencing or relating to such mortgage notes and
mortgage loans, and all books, ledgers, books of account, records, writings,
data bases, information, and computer software (and all documentation therefor
or relating thereto, and all licenses relating to or covering such computer
software and/or documentation), and all other property, rights, title, and
interests whatsoever relating to, used, or useful in connection with, or
evidencing, embodying, incorporating, or referring to, any of the foregoing (the
"Mortgages"). The Seller warrants to the Purchaser that the Seller is the owner
of the Mortgages, subject to no liens, claims, or encumbrances.
<PAGE>
Dated: _____________, 1999 ABN AMRO Mortgage Group, Inc.
By: ________________________________
Name: _____________________________
Title: ____________________________
-2-
<PAGE>
ACKNOWLEDGED ON __________ __, 1999
ABN AMRO Mortgage Corporation
By: ________________________________
Name: _____________________________
Title: ____________________________
-3-
<PAGE>
STATE OF ____________ )
)
COUNTY OF ___________ )
I, ______________, a Notary Public in and for the said County and
State, do hereby certify that ____________, personally known to me to be the
same person whose name is subscribed to the foregoing instrument as
_______________ of __________________, appeared before me this day in person
and, being first sworn, acknowledged that he signed and delivered the said
instrument as his own free and voluntary act, and as the free and voluntary act
of said corporation as the ___________ of ____________, a ____________, for the
uses and purposes therein set forth and that he was duly authorized to execute
the said instrument by the __________________ of said _________________.
Given under my hand and seal, this ____ day of ____________, 1999.
__________________________________________
Notary Public
My commission expires:____________________
<PAGE>
EXHIBIT C
FORM OF OFFICER'S CERTIFICATE
ABN AMRO Mortgage Group, Inc.
I, ____________________, do hereby certify pursuant to Section 10(a)
and (b)(iii) of the Purchase Agreement (as hereinafter defined) that I am the
duly elected ____________________ of ABN AMRO Mortgage Group, Inc. ("AAMGI"), a
Delaware corporation, and further certify as follows:
1. Attached hereto as Exhibit "A" is a true and correct copy of the
articles of incorporation of AAMGI. There has been no amendment or other
document filed affecting the charter as of the date of this certification of
AAMGI, and no such amendment has been authorized.
2. Attached hereto as Exhibit "B" is a true and correct copy of the
by-laws of AAMGI as in full force and effect as of the date of this
certification.
3. No proceedings looking toward merger, consolidation, liquidation, or
dissolution of AAMGI are pending or contemplated other than the merger of La
Salle Home Mortgage Corporation into AAMG.
4. Each person who, as an officer or representative of AAMGI, signed,
or will sign (a) the Purchase Agreement, and (b) any other document delivered
pursuant thereto or on the date hereof in connection with the Mortgage Loan
Purchase Agreement, dated as of _________ ___, ____, between AAMGI, as seller,
and ABN AMRO Mortgage Corporation, as Purchaser (the "Purchase Agreement") was,
at the respective times of such signing and delivery, and is as of the date
hereof duly elected or appointed, qualified and acting as such officer or
representative, and the signatures of such persons appearing on such documents
are their genuine signatures.
5. Attached hereto as Exhibit "C" is a true, complete and correct copy
of the Resolutions of AAMGI's Board of Directors, which were duly adopted as of
_____ __, ____, and such Resolutions have not been amended, altered or repealed,
and remain in full force and effect without modification on the date hereof.
6. Attached hereto as Exhibit "D" is a Good Standing Certificate issued
by the Office of the Secretary of State of Delaware as of __________, ____. A
current Good Standing Certificate has been requested from the Office of the
Secretary of State of _________ and will be supplied when it is received.
7. AAMGI has performed all obligations and satisfied all conditions on
its part to be performed or satisfied under the Purchase Agreement on or prior
to the Closing Date and all of
<PAGE>
the representations and warranties of the Seller under the Purchase Agreement
are true and correct as of the date hereof and as of the Closing Date, and no
event has occurred which, with notice or passage of time, or both, would
constitute a default under the Purchase Agreement.
All capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Purchase Agreement.
IN WITNESS WHEREOF, I have hereunto signed my name.
Date: __________ __, ____
ABN AMRO Mortgage Group, Inc.
By: _____________________________________
Name: ___________________________________
Title: __________________________________
-2-
<PAGE>
I, ____________________, [ASSISTANT SECRETARY] of ABN AMRO Mortgage
Group, Inc., a Delaware corporation, hereby certify that ____________________ is
the duly elected, qualified and acting ____________________ of ABN AMRO Mortgage
Group, Inc. and that the signature appearing on the preceding page is his
genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Date: __________ __, ____
ABN AMRO Mortgage Group, Inc.
By: _____________________________________
Name: ___________________________________
Title: __________________________________
-3-
<PAGE>
[OPINION TO BE REVISED IN ACCORDANCE WITH
GENERAL COUNSEL'S FORM OF OPINION LETTER]
Exhibit D
[OPINION OF SELLER'S IN-HOUSE COUNSEL
PURSUANT TO SECTION 10(b)(iv)]
__________ __, 1999
ABN AMRO Mortgage Corporation
181 West Madison Street, Suite 3250
Chicago, Illinois 60602
Re: ABN AMRO Mortgage Corporation Purchase of Mortgage Loans
Ladies and Gentlemen:
As General Counsel to ABN AMRO Mortgage Group, Inc., a Delaware
Corporation ("Seller"), I and attorneys working under my supervision have acted
as counsel to Seller in connection with the sale of Mortgage Loans by Seller to
ABN AMRO Mortgage Corporation (the "Purchaser") pursuant to a Mortgage Loan
Purchase Agreement, dated as of _________ ___, 1999 (the "Purchase Agreement"),
between the Purchaser and Seller. This opinion is being delivered to the
Purchaser pursuant to Section 10(b)(iv) of the Purchase Agreement. All
capitalized terms not otherwise defined herein have the meanings given them in
the Purchase Agreement.
In rendering the opinions set forth below, we have examined and relied
upon originals or copies, certified or otherwise identified to our satisfaction,
of the charter and by-laws of Seller, the Purchase Agreement and such corporate
records, agreements or other instruments of Seller, and such certificates,
records and other documents, agreements and instruments, including, among other
things, certain documents delivered on the Closing Date, as we have deemed
necessary and proper as the basis for our opinions. In connection with such
examination, we have assumed the genuineness of all signatures, the authenticity
of all documents, agreements and instruments submitted to us as originals, the
conformity to original documents, agreements and instruments of all documents,
agreements and instruments submitted to us as copies or specimens, the
authenticity of the originals of such documents, agreements and instruments
submitted to us as copies or specimens, the conformity to executed original
documents of all documents submitted to us in draft and the accuracy of the
matters set forth in the documents we
<PAGE>
ABN AMRO Mortgage Corporation
__________ __, 199_
Page 2
reviewed. We have also assumed that all documents, agreements and instruments
have been duly authorized, executed and delivered by all parties thereto. As to
any facts material to such opinions that we did not independently establish or
verify, we have relied upon statements and representations of officers and other
representatives of Seller as we have deemed necessary and proper as the basis
for our opinions, including, among other things, the representations and
warranties of Seller in the Purchase Agreement.
Based upon the foregoing, I am of the opinion that:
1. Seller is a federal savings bank, duly organized, validly existing
and in good standing under the laws of the United States and either is not
required to be qualified to do business under the laws of any states where such
qualification is necessary to transact the business contemplated by the Purchase
Agreement, or is qualified to do business under the laws of any states where
such qualification is necessary to transact the business contemplated by the
Purchase Agreement, or is qualified to do business under the laws of any states
where such qualification is necessary to transact the business contemplated by
the Purchase Agreement, and Seller is duly authorized and has full corporate
power and authority to transact the business contemplated by the Purchase
Agreement.
2. The Purchase Agreement has been duly authorized, executed and
delivered by Seller and is a legal, valid and binding obligation of and is
enforceable against Seller in accordance with its terms, except that the
enforceability thereof may be subject to (A) bankruptcy, insolvency,
receivership, conservatorship, reorganization, moratorium or other laws, now or
hereafter in effect, relating to creditors' rights generally or the right of
creditors of a Delaware corporation, (B) general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law) and (C) limitations of public policy under applicable securities laws as to
rights of indemnity and contribution under the Purchase Agreement.
3. No consent, approval, authorization or order of any court or
supervisory, regulatory, administrative or governmental agency or body is
required for the execution, delivery and performance by Seller of or compliance
by Seller with the Purchase Agreement, the sale of the Mortgage Loans or the
consummation of the transactions contemplated by the Purchase Agreement.
4. Neither the execution and delivery by Seller of the Purchase
Agreement, nor the consummation by Seller of the transactions contemplated
therein, nor the compliance by Seller with the provisions thereof, will conflict
with or result in a breach of any of the terms, conditions or provisions of
Seller's charter or by-laws or board or shareholder's resolutions, or any
<PAGE>
ABN AMRO Mortgage Corporation
__________ __, 199_
Page 3
agreement or instrument to which Seller is now a party or by which it is bound,
or constitute a default or result in an acceleration under any of the foregoing,
or result in the violation of any law, rule, regulation, order, judgment or
decree to which Seller or its property is subject, which, in any of the above
cases, would materially and adversely affect Seller's ability to perform its
obligations under the Purchase Agreement.
5. There is not an action, suit, proceeding or investigation pending,
or, to the best of my knowledge, threatened against Seller which, either in any
one instance or in the aggregate, would draw into question the validity of the
Purchase Agreement or the Mortgage Loans or of any action taken or to be taken
in connection with the obligations of Seller contemplated therein, or which
would be likely to materially impair the ability of Seller to perform under the
terms of the Purchase Agreement.
The Opinions expressed herein are limited to matters of federal and
Michigan law and do not purport to cover any matters as to which laws of any
other jurisdiction are applicable. Except as expressly provided herein, this
opinion is being furnished to you solely for your benefit in connection with the
purchase of the Mortgage Loans, and it is not to be used, circulated, quoted or
otherwise referred to for any purpose without my express written consent.
Sincerely,
ABN AMRO Mortgage Group, Inc.
By: ____________________
Title: General Counsel
