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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) August 24, 1998
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ABN AMRO Mortgage Corporation
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware
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(STATE OR OTHER JURISDICTION OF INCORPORATION)
333-42127 363886007
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(COMMISSION FILE NUMBER) (I.R.S. EMPLOYER IDENTIFICATION NO.)
181 West Madison Street
Chicago, Illinois 60602
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
248-643-2530
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(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
Not Applicable
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(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
Description of the Certificates and the Mortgage Pool.
On August 26, 1998, a single series of certificates, entitled ABN AMRO
Mortgage Corporation, Mortgage Pass-Through Certificates, Series 1998-3 (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 August 1, 1998, 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 fifteen
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-X
Certificates", the "Class A-P 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 August 1, 1998 (the
"Cut-off Date"), an aggregate principal balance of $332,842,023 (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 the Trust Fund assets from Standard Federal Bank
("Standard Federal") pursuant to a Mortgage Loan Purchase Agreement (the
"Standard Federal Mortgage Loan Purchase Agreement") dated August 26, 1998,
attached hereto as Exhibit 4.2, between Standard Federal 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-X, Class A-P, Class M, Class B-1, Class B-2 and Class
R Certificates were publicly offered, as described in a Prospectus, dated
March 25, 1998, and a Prospectus Supplement, dated August 24, 1998, pursuant
to an Underwriting Agreement (the "Underwriting Agreement") dated March 27,
1998, attached hereto as Exhibit 1.1, among the Depositor, Standard Federal
Bancorporation, Inc. ("Standard Federal Bancorporation"), Donaldson, Lufkin &
Jenrette Securities Corporation ("DLJ") and ABN AMRO Incorporated ("AAI")
(DLJ and AAI being referred to herein, collectively, as the "Underwriters")
and the Terms Agreement (the "Terms Agreement") dated August 24, 1998,
attached hereto as Exhibit 1.2, among the Depositor, Standard Federal
Bancorporation and the Underwriters. The Depositor sold the Class IA-1,
Class B-3, Class B-4 and Class B-5 Certificates to DLJ as initial purchaser
(in such capacity, the "Initial Purchaser") pursuant to a purchase agreement
dated August 26, 1998 among the Depositor, Standard Federal Bancorporation
and the Initial Purchaser.
Each Class of Certificates will have either an initial certificate
principal balance ("Certificate Principal Balance") or represent the right to
receive distributions of interest as provided in the Pooling and Servicing
Agreement on a hypothetical or notional principal balance ("Notional Principal
Balance"). The Class A-1 Certificates have an initial Certificate Principal
Balance of $53,863,388.00. The Class A-2 Certificates have an initial
Certificate Principal Balance of $16,343,000.00. The Class A-3 Certificates
have an initial Certificate Principal Balance of $31,807,248.00. The Class A-4
Certificates have an initial Certificate Principal Balance of $131,221,234.00.
The Class A-5 Certificates have an initial Certificate Principal Balance of
$84,232,214.00. The Class A-6 Certificates have an initial Certificate
Principal Balance of $605,297.00. The Class A-X Certificates have an initial
Notional Principal Balance of $18,334,272.44. The Class A-P Certificates have
an initial Certificate Principal Balance of $623,756.24. The Class M
Certificates have an initial Certificate Principal Balance of $7,156,103.00.
The Class B-1 Certificates have an initial Certificate Principal Balance of
$2,829,158.00. The Class B-2 Certificates have an initial Certificate Principal
Balance of $1,497,789.00. The Class B-3 Certificates have an initial Certificate
Principal Balance of $998,526.00. The Class B-4 Certificates have an initial
Certificate Principal Balance of $832,105.00. The Class B-5 Certificates have
an initial Certificate Principal Balance of $832,105.18. The Class R
Certificate has an initial Certificate Principal Balance of $100.00.
Capitalized terms used herein and not otherwise defined shall have the meanings
assigned to them in the Pooling and Servicing Agreement.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Not applicable
(b) Not applicable
(c) Exhibits
EXHIBIT
NO. DOCUMENT DESCRIPTION
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1.1 Underwriting Agreement, dated as of March 27, 1998, among ABN AMRO
Mortgage Corporation, Standard Federal Bancorporation, Inc., ABN AMRO
Incorporated and Donaldson, Lufkin & Jenrette Securities Corporation.
1.2 Terms Agreement, dated August 24, 1998, among ABN AMRO Mortgage
Corporation, Standard Federal Bancorporation, Inc., ABN AMRO
Incorporated and Donaldson, Lufkin & Jenrette Securities Corporation.
4.1 Pooling and Servicing Agreement, dated as of August 1, 1998, 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 August 26, 1998, between
Standard Federal Bank as seller and ABN AMRO Mortgage Corporation as
purchaser.
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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: September 3, 1998 By: /s/ Maria Fregosi
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Name: Maria Fregosi
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Title: Vice President
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INDEX TO EXHIBITS
EXHIBIT
NO. DOCUMENT DESCRIPTION
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1.1 Underwriting Agreement, dated as of March 27, 1998, among ABN AMRO
Mortgage Corporation, Standard Federal Bancorporation, Inc., ABN AMRO
Incorporated and Donaldson, Lufkin & Jenrette Securities Corporation.
1.2 Terms Agreement, dated August 24, 1998, among ABN AMRO Mortgage
Corporation, Standard Federal Bancorporation, Inc., ABN AMRO
Incorporated and Donaldson, Lufkin & Jenrette Securities Corporation.
4.1 Pooling and Servicing Agreement, dated as of August 1, 1998, 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 August 26, 1998, between
Standard Federal Bank as seller and ABN AMRO Mortgage Corporation as
purchaser.
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AMAC, SERIES 1998-1
MORTGAGE PASS-THROUGH CERTIFICATES
UNDERWRITING AGREEMENT
March 27, 1998
Donaldson, Lufkin & Jenrette
Securities Corporation
277 Park Avenue, 9th Floor
New York, New York 10017
ABN AMRO Incorporated
181 West Madison Street
Chicago, Illinois 60602
Ladies and Gentlemen:
ABN AMRO Mortgage Corporation (the "Company"), a Delaware corporation,
has authorized the issuance and sale of Mortgage Pass-Through Certificates
(the "Certificates") evidencing interests in pools of mortgage loans (the
"Mortgage Loans"). The Certificates may be issued in various series, and,
within each series, in one or more classes, and, within each class, in one or
more sub-classes, in one or more offerings on terms determined at the time of
sale (each such series, a "Series" and each such class, a "Class"). Each
Series of the Certificates will be issued under a separate Pooling and
Servicing Agreement (each, a "Pooling and Servicing Agreement") with respect
to such Series among the Company, as depositor, a servicer to be identified
in the prospectus supplement for each such Series (the "Servicer") and a
trustee to be identified in the prospectus supplement for each such Series
(the "Trustee"). The Certificates of each Series will evidence specified
interests in separate pools of Mortgage Loans (each a "Mortgage Pool"), and
certain other property held in trust with respect to such Series (each, a
"Trust Fund").
The Certificates are more fully described in a Registration Statement which
the Company has furnished to you. Capitalized terms used but not defined herein
shall have the meanings given to them in the Pooling and Servicing Agreement.
The term "you" as used herein, unless the context otherwise requires, shall mean
you and such persons as are named as co-managers in the applicable Terms
Agreement (defined below).
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Whenever the Company determines to make an offering of Certificates
pursuant to this Agreement through you or through an underwriting syndicate
managed by you it will enter into an agreement (the "Terms Agreement") providing
for the sale of such Certificates to, and the purchase and offering thereof by,
you and such other underwriters, if any, selected by you as have authorized you
to enter into such Terms Agreement on their behalf (the "Underwriters," which
term shall include you whether acting alone in the sale of Certificates or as a
member of an underwriting syndicate; as the context requires, Donaldson, Lufkin
& Jenrette Securities Corporation is sometimes referred to individually herein
as "DLJ" and ABN AMRO Incorporated is sometimes referred to individually herein
as "AAI"). The Terms Agreement relating to each offering of Certificates shall
specify, among other things, the stated balance or balances of Certificates to
be issued, the price or prices at which the Certificates are to be purchased by
the Underwriters from the Company and the initial public offering price or
prices or the method by which the price or prices at which such Certificates are
to be sold will be determined. A Terms Agreement, which shall be substantially
in the form of Exhibit A hereto, may take the form of an exchange of any
standard form of written telecommunication between you and the Company. Each
such offering of Certificates which the Company elects to make pursuant to this
Agreement will be governed by this Agreement, as supplemented by the applicable
Terms Agreement, and this Agreement and such Terms Agreement shall inure to the
benefit of and be binding upon the Underwriters participating in the offering of
such Certificates.
SECTION 1. REPRESENTATIONS AND WARRANTIES. (a) The Company represents
and warrants to you as of the date hereof, and to the Underwriters named in the
applicable Terms Agreement, all as of the date of such Terms Agreement (in each
case, the "Representation Date"), as follows (any representations and warranties
so made to the Underwriters named in an applicable Terms Agreement respecting
the Certificates being deemed to relate only to the Certificates described
therein):
(1) The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 (No. 333-42127),
relating to the offering of Certificates from time to time in accordance
with Rule 415 under the Securities Act of 1933, as amended (the "1933
Act"), and has filed, and proposes to file, such amendments thereto as may
have been required to the date hereof and the same has become effective
under the 1933 Act and the rules of the Commission thereunder (the
"Regulations") and no stop order suspending the effectiveness of such
registration statement has been issued and no proceedings for that purpose
have been initiated or, to the Company's knowledge, threatened, by the
Commission. Such registration statement, including incorporated documents,
exhibits and financial statements, as amended at the time when it became
effective under the 1933 Act, and the prospectus relating to the sale of
Certificates by the Company constituting a part thereof, as from time to
time each is amended or supplemented pursuant to the 1933 Act or otherwise,
are referred to herein as the "Registration Statement" and the
"Prospectus," respectively; provided, however, that a supplement to the
Prospectus contemplated by Section 3(a) hereof (a "Prospectus Supplement")
shall be deemed to have supplemented the Prospectus only with respect to
the offering or offerings of Certificates to which it relates. Any
reference herein to the Registration Statement, a preliminary
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prospectus, the Prospectus or the Prospectus Supplement shall be deemed
to refer to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 which were filed under the Securities
Exchange Act of 1934, as amended (the "1934 Act") on or before the date
on which the Registration Statement, as amended, became effective or the
issue date of such preliminary prospectus, Prospectus, or Prospectus
Supplement, as the case may be; and any reference herein to the terms
"amend," "amendment" or supplement with respect to the Registration
Statement, any preliminary prospectus, the Prospectus or the Prospectus
Supplement shall be deemed to refer to and include the filing of any
document under the 1934 Act after the date on which the Registration
Statement became effective or the issue date of any preliminary
prospectus, the Prospectus or the Prospectus Supplement, as the case may
be, deemed to be incorporated therein by reference. The Registration
Statement and Prospectus, at the time the Registration Statement became
effective did, and as of the applicable Representation Date will,
conform in all material respects to the requirements of the 1933 Act and
the Regulations. The Registration Statement, at the time it became
effective did not, and as of the applicable Representation Date and the
applicable Closing Time (as defined in Section 2 hereof) will not,
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading. The Prospectus, as amended or
supplemented as of the applicable Representation Date and the applicable
Closing Time (as defined in Section 2 hereof), will not contain any
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the representations and warranties in this subsection
shall not apply to (i) statements in, or omissions from, the
Registration Statement or Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by the
Underwriters expressly for use in the Registration Statement or
Prospectus or (ii) the DLJ Information (as defined in Section 10
hereof). The conditions to the use by the Company of a registration
statement on Form S-3 under the 1933 Act, as set forth in the General
Instructions to Form S-3, have been satisfied with respect to the
Registration Statement and the Prospectus. There are no contracts or
documents of the Company which are required to be described in the
Registration Statement or Prospectus or filed as exhibits to the
Registration Statement pursuant to the 1933 Act or the Regulations which
have not been so described or filed.
(2) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware with
corporate power and authority to enter into and perform its obligations
under this Agreement, the applicable Pooling and Servicing Agreement, and
with respect to a Series of Certificates, the Certificates and the
applicable Terms Agreement; and the Company is duly qualified or registered
as a foreign corporation to transact business and is in good standing in
each jurisdiction in which the ownership or lease of its properties or the
conduct of its business requires such qualification.
(3) The Company is not in violation of its certificate of
incorporation or by-laws or in default in the performance or observance of
any material obligation, agreement,
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covenant or condition contained in any material contract, indenture,
mortgage, loan agreement, note, lease or other material instrument to
which it is a party or by which it or its properties may be bound, which
default might result in any material adverse change in the financial
condition, earnings, affairs or business of the Company or which might
materially and adversely affect the properties or assets thereof or the
Company's ability to perform its obligations under this Agreement, the
applicable Terms Agreement or the applicable Pooling and Servicing
Agreement.
(4) The execution and delivery by the Company of this Agreement, the
applicable Terms Agreement and the applicable Pooling and Servicing
Agreement and the signing of the Registration Statement by the Company are
within the corporate power of the Company and have been duly authorized by
all necessary corporate action on the part of the Company; and with respect
to a Series of Certificates described in the applicable Terms Agreement,
neither the issuance and sale of the Certificates to the Underwriters, nor
the execution and delivery by the Company of this Agreement, such Terms
Agreement and the related Pooling and Servicing Agreement, nor the
consummation by the Company of the transactions herein or therein
contemplated, nor compliance by the Company with the provisions hereof or
thereof, will conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Company other than as contemplated by a Pooling and
Servicing Agreement, pursuant to any material indenture, mortgage, contract
or other material instrument to which the Company is a party or by which it
is bound or to which the property or assets of the Company are subject, or
result in the violation of the provisions of the certificate of
incorporation or by-laws of the Company or any statute or any material
order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Company or any of its properties.
(5) This Agreement has been, and each applicable Terms Agreement when
executed and delivered as contemplated hereby and thereby will have been,
duly authorized, executed and delivered by the Company, and each
constitutes, or will constitute when so executed and delivered, a legal,
valid and binding instrument enforceable against the Company in accordance
with its terms (assuming due authorization, execution and delivery by the
other parties thereto), subject (a) to applicable bankruptcy, insolvency,
reorganization, moratorium, or other similar laws affecting creditors'
rights generally, (b) as to enforceability to general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or
at law) and (c) as to enforceability with respect to rights of indemnity
thereunder, to limitations of public policy under applicable securities
laws.
(6) Each applicable Pooling and Servicing Agreement when executed and
delivered as contemplated hereby and thereby will have been duly
authorized, executed and delivered by the Company, and will constitute when
so executed and delivered, a legal, valid and binding instrument
enforceable against the Company in accordance with its terms (assuming due
authorization, execution and delivery by the other parties thereto),
subject (a) to applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws
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affecting creditors' rights generally and (b) as to enforceability to
general principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law); and as of the Closing Time,
the representations and warranties made by the Company in the applicable
Pooling and Servicing Agreement will be true and correct as of the date
made.
(7) As of the Closing Time (as defined in Section 2 hereof) with
respect to a Series of Certificates, the Certificates will have been duly
and validly authorized by the Company, and, when executed and authenticated
as specified in the related Pooling and Servicing Agreement, will be
validly issued and outstanding and will be entitled to the benefits of the
related Pooling and Servicing Agreement, and the Classes of Certificates so
designated in the related Prospectus Supplement will be "mortgage related
securities," as defined in Section 3(a)(41) of the 1934 Act.
(8) There are no actions, proceedings or investigations now pending
against the Company or, to the knowledge of the Company, threatened against
the Company, before any court, administrative agency or other tribunal (i)
asserting the invalidity of this Agreement, the applicable Terms Agreement,
the applicable Pooling and Servicing Agreement or with respect to a Series
of Certificates, the Certificates, (ii) seeking to prevent the issuance of
such Certificates or the consummation of any of the transactions
contemplated by this Agreement, the applicable Terms Agreement or such
Pooling and Servicing Agreement, (iii) which would be likely to materially
and adversely affect the performance by the Company of its obligations
under, or which would if adversely determined materially and adversely
affect the validity or enforceability of, this Agreement, the applicable
Terms Agreement, such Pooling and Servicing Agreement or such Certificates
or (iv) seeking to adversely affect the federal income tax attributes of
such Certificates described in the Prospectus and the related Prospectus
Supplement.
(9) Any material taxes, fees and other governmental charges that are
assessed and due in connection with the execution, delivery and issuance of
this Agreement, the applicable Terms Agreement, the applicable Pooling and
Servicing Agreement and with respect to a Series of Certificates shall have
been paid at or prior to the Closing Time.
(10) No filing or registration with, notice to or consent, approval,
authorization, order or qualification of or with any court or governmental
agency or body is required for the issuance and sale of the Certificates or
the consummation by the Company of the transactions contemplated by this
Agreement, the applicable Pooling and Servicing Agreement or the applicable
Terms Agreement, except the registration under the 1933 Act of the
Certificates, and such consents, approvals, authorizations, registrations
or qualifications as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the Certificates
by the Underwriters.
(11) The Company possesses all material licenses, certificates,
authorities or permits issued by the appropriate state, federal or foreign
regulatory agencies or bodies deemed by the Company to be reasonably
necessary to conduct the business now operated
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by it and as described in the Prospectus and the Company has received no
notice of proceedings relating to the revocation or modification of any
such license, certificate, authority or permit which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding,
would materially and adversely affect the conduct of the business,
operations, financial condition or income of the Company.
(12) No litigation is pending or, to the best of the Company's
knowledge, threatened, against the Company which would prohibit the
Company's entering into this Agreement or the applicable Pooling and
Servicing Agreement.
(13) As of the Closing Time, with respect to a Series of Certificates
described in the relevant Terms Agreement evidencing interests in a
Mortgage Pool, the Trustee will have either good and marketable title, free
and clear of all prior liens, charges, pledges, mortgages, security
interests and encumbrances, to or a validly perfected first priority
security interest in the Mortgage Notes and the related Mortgages included
in the Trust Fund, with respect to (a) the Mortgage Notes, upon delivery
thereof to the Trustee and (b) the Mortgages, upon delivery to the Trustee
of instruments of assignment in recordable form assigning each Mortgage to
the Trustee and the recording of each such instrument of assignment in the
appropriate recording office in which the Mortgaged Property is located, or
if supported by an opinion of counsel, without recording.
(14) As of the Closing Time, with respect to a Series of Certificates,
the Mortgage Pool will have substantially the characteristics described in
the Prospectus Supplement and in the Form 8-K of the Company prepared with
respect to such Certificates, if the Mortgage Pool is described in such
Form 8-K.
(15) Neither the Company nor the Trust Fund created by the applicable
Pooling and Servicing Agreement will be subject to registration as an
"investment company" under the Investment Company Act of 1940, as amended
(the "1940 Act").
(16) The Certificates, the applicable Pooling and Servicing Agreement,
the applicable Terms Agreement and any primary insurance policies, mortgage
pool insurance policies, standard hazard insurance policies, special hazard
insurance policies, mortgagor bankruptcy insurance and alternate credit
enhancement related to the Certificates described in the relevant Terms
Agreement conform in all material respects to the descriptions thereof
contained in the Prospectus.
(17) As of the Closing Time, the Mortgage Loans will have been duly
and validly assigned and delivered by the Company to the Trustee under the
related Pooling and Servicing Agreement.
(18) As of the Closing Time, the representations and warranties of the
Company contained in the applicable Pooling and Servicing Agreement are
true and correct in all material respects.
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(b) Standard Federal Bancorporation, Inc. ("Standard Federal") represents
and warrants to you as of the date hereof, and to the Underwriters named in the
applicable Terms Agreement, all as of the date of such Terms Agreement (in each
case, the "Representation Date"), as follows (any representations and warranties
so made to the Underwriters named in an applicable Terms Agreement respecting
the Certificates being deemed to relate only to the Certificates described
therein):
(1) Standard Federal has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Michigan with corporate power and authority to enter into and perform its
obligations under this Agreement, and with respect to a Series of
Certificates, the applicable Terms Agreement; and Standard Federal is duly
qualified or registered as a foreign corporation to transact business and
is in good standing in each jurisdiction in which the ownership or lease of
its properties or the conduct of its business requires such qualification.
(2) Standard Federal is not in violation of its certificate of
incorporation or by-laws or in default in the performance or observance of
any material obligation, agreement, covenant or condition contained in any
material contract, indenture, mortgage, loan agreement, note, lease or
other material instrument to which it is a party or by which it or its
properties may be bound, which default might result in any material adverse
change in the financial condition, earnings, affairs or business of
Standard Federal or which might materially and adversely affect the
properties or assets thereof or Standard Federal's ability to perform its
obligations under this Agreement or the applicable Terms Agreement.
(3) The execution and delivery by Standard Federal of this Agreement
and the applicable Terms Agreement are within the corporate power of
Standard Federal and have been duly authorized by all necessary corporate
action on the part of Standard Federal; and with respect to a Series of
Certificates described in the applicable Terms Agreement, neither the
execution and delivery by Standard Federal of this Agreement and such Terms
Agreement, nor the consummation by Standard Federal of the transactions
herein or therein contemplated, nor compliance by Standard Federal with the
provisions hereof or thereof, will conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of Standard Federal, pursuant to
any material indenture, mortgage, contract or other material instrument to
which Standard Federal is a party or by which it is bound or to which the
property or assets of Standard Federal are subject, or result in the
violation of the provisions of the certificate of incorporation or by-laws
of Standard Federal or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over Standard
Federal or any of its properties.
(4) This Agreement has been, and each applicable Terms Agreement when
executed and delivered as contemplated hereby and thereby will have been,
duly authorized, executed and delivered by Standard Federal, and each
constitutes, or will constitute when
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so executed and delivered, a legal, valid and binding instrument
enforceable against Standard Federal in accordance with its terms
(assuming due authorization, execution and delivery by the other parties
thereto), subject (a) to applicable bankruptcy, insolvency,
reorganization, moratorium, or other similar laws affecting creditors'
rights generally, (b) as to enforceability to general principles of
equity (regardless of whether enforcement is sought in a proceeding in
equity or at law) and (c) as to enforceability with respect to rights of
indemnity thereunder, to limitations of public policy under applicable
securities laws.
(5) This Agreement when executed and delivered as contemplated hereby
and thereby will have been duly authorized, executed and delivered by
Standard Federal, and will constitute when so executed and delivered, a
legal, valid and binding instrument enforceable against Standard Federal in
accordance with its terms (assuming due authorization, execution and
delivery by the other parties thereto), subject (a) to applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and (b) as to enforceability to
general principles of equity (regardless of whether enforcement is sought
in a proceeding in equity or at law).
(6) There are no actions, proceedings or investigations now pending
against Standard Federal or, to the knowledge of Standard Federal,
threatened against Standard Federal, before any court, administrative
agency or other tribunal (i) asserting the invalidity of this Agreement or
the applicable Terms Agreement, (ii) seeking to prevent the issuance of
such Certificates or the consummation of any of the transactions
contemplated by this Agreement or the applicable Terms Agreement, (iii)
which would be likely to materially and adversely affect the performance by
Standard Federal of its obligations under, or which would if adversely
determined materially and adversely affect the validity or enforceability
of, this Agreement, the applicable Terms Agreement, or such Certificates or
(iv) seeking to adversely affect the federal income tax attributes of such
Certificates described in the Prospectus and the related Prospectus
Supplement.
SECTION 2. PURCHASE AND SALE. The commitment of each Underwriter to
purchase Certificates pursuant to any Terms Agreement shall be several and not
joint and shall be deemed to have been made on the basis of the representations
and warranties herein contained and shall be subject to the terms and conditions
herein set forth.
Payment of the purchase price for, and delivery of, any Certificates to be
purchased by the Underwriters shall be made at the offices of Mayer, Brown &
Platt, Chicago, Illinois or at such other place as shall be agreed upon by you
and the Company, at such time or date as shall be agreed upon by you and the
Company in the Terms Agreement (each such time and date being referred to as a
"Closing Time"). Unless otherwise specified in the applicable Terms Agreement,
payment shall be made to the Company in immediately available Federal funds
wired to such bank as may be designated by the Company. Such Certificates shall
be in such denominations and registered in such names as you may request in
writing at least two business days prior to the applicable Closing Time.
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Such Certificates will be made available for examination and packaging by you no
later than 12:00 noon on the first business day prior to the applicable Closing
Time.
It is understood that the Underwriters intend to offer the Certificates for
sale to the public as set forth in the Prospectus Supplement.
SECTION 3. COVENANTS OF THE COMPANY. The Company covenants with each of
you and each Underwriter participating in an offering of Certificates pursuant
to a Terms Agreement, with respect to such Certificates and such offering, as
follows:
(a) Immediately following the execution of each Terms Agreement, the
Company will prepare a Prospectus Supplement setting forth the principal
amount of Certificates covered thereby, the price or prices at which the
Certificates are to be purchased by the Underwriters, either the initial
public offering price or prices or the method by which the price or prices
by which the Certificates are to be sold will be determined, the selling
concession(s) and reallowance(s), if any, any delayed delivery
arrangements, and such other information as you and the Company deem
appropriate in connection with the offering of the Certificates. The
Company will furnish you a copy of the Prospectus Supplement for your
review prior to filing such Prospectus Supplement with the Commission.
Thereafter, the Company will promptly transmit copies of the Prospectus
Supplement to the Commission for filing pursuant to Rule 424 under the 1933
Act and will furnish to the Underwriters as many copies of the Prospectus
and such Prospectus Supplement as you shall reasonably request.
(b) If the delivery of a prospectus is required at any time in
connection with the offering or sale of the Certificates described in the
relevant Terms Agreement and if at such time any event shall have occurred
as a result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be
necessary during such period of time to amend or supplement the Prospectus
in order to comply with the 1933 Act, the Company agrees to notify you
promptly and upon your request so to amend or supplement the Prospectus and
to prepare and furnish without charge to each Underwriter and to any dealer
in securities as many copies as you may from time to time reasonably
request of an amended Prospectus or a supplement to the Prospectus which
will correct such statement or omission or effect such compliance.
(c) During any period in which the delivery of a prospectus is
required at any time in connection with the offering or sale of the
Certificates described in the relevant Terms Agreement the Company will
give you reasonable notice of its intention to file any amendment to the
Registration Statement or any amendment or supplement to the Prospectus,
whether pursuant to the 1933 Act or otherwise, and will furnish you with
copies
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of any such amendment or supplement or other documents proposed to be
filed a reasonable time in advance of filing.
(d) During any period in which the delivery of a prospectus is
required at any time in connection with the offering or sale of the
Certificates described in the relevant Terms Agreement the Company will
notify you promptly (i) of the effectiveness of any amendment to the
Registration Statement, (ii) of the mailing or the delivery to the
Commission for filing of any supplement to the Prospectus or any document
other than quarterly and annual reports to be filed pursuant to the 1934
Act, (iii) of the receipt of any comments from the Commission with respect
to the Registration Statement, the Prospectus or any Prospectus Supplement,
(iv) of any request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus or for
additional information, (v) of the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Certificates for sale in any jurisdiction or the threat of any proceeding
for that purpose and (vi) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose. The Company will use its
best efforts to prevent the issuance of any such stop order and, if any
stop order is issued, to obtain the lifting thereof as soon as possible.
(e) The Company agrees, so long as the Certificates shall be
outstanding, or until such time as you shall cease to maintain a secondary
market in the Certificates, whichever first occurs, to deliver to you the
annual statement as to compliance delivered to the Trustee pursuant to the
applicable Pooling and Servicing Agreement and the annual statement of a
firm of independent public accountants furnished to the Trustee pursuant to
the applicable Pooling and Servicing Agreement, as soon as such statements
are furnished to the Company.
(f) The Company will deliver to you as many conformed copies of the
Registration Statement (as originally filed) and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein
and documents incorporated by reference in the Prospectus) as you may
reasonably request.
(g) The Company will endeavor, in cooperation with you, to qualify
the Certificates for offering and sale under the applicable securities laws
of such states and other jurisdictions of the United States as you may
reasonably designate, and will maintain or cause to be maintained such
qualifications in effect for as long as may be required for the
distribution of the Certificates, provided that in connection therewith the
Company shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any jurisdiction. The
Company will file or cause the filing of such statements and reports as may
be required by the laws of each jurisdiction in which the Certificates have
been qualified as above provided.
SECTION 4. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the
Underwriters to purchase Certificates pursuant to any Terms Agreement shall be
subject to the accuracy of the
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representations and warranties on the part of the Company herein contained, to
the accuracy of the statements of the Company's officers made pursuant hereto,
to the performance by the Company of all of its obligations hereunder and to
the following additional conditions precedent:
(a) At the applicable Closing Time (i) no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been initiated or threatened by the
Commission and the Prospectus Supplement shall have been filed or
transmitted for filing by means reasonably calculated to result in filing
with the Commission not later than the time required by Rule 424(b) under
the 1933 Act, (ii) the Certificates shall have received the rating or
ratings specified in the applicable Terms Agreement, and (iii) there shall
not have come to your attention any facts that would cause you to believe
that the Prospectus, together with the applicable Prospectus Supplement at
the time it was required to be delivered to a purchaser of the
Certificates, contained an untrue statement of a material fact or omitted
to state a material fact necessary in order to make the statements therein,
in light of the circumstances existing at such time, not misleading. No
challenge by the Commission shall have been made to the accuracy or
adequacy of the Registration Statement and any request of the Commission
for inclusion of additional information in the Registration Statement or
the Prospectus or the Prospectus Supplement shall have been complied with
and the Company shall not have filed with the Commission any amendment or
supplement to the Registration Statement, the Prospectus or the Prospectus
Supplement without prior written notice to the Underwriters.
(b) At the applicable Closing Time you shall have received:
(1) The opinion, dated as of the applicable Closing Time, of
Mayer Brown & Platt, counsel for the Company, in form and substance
satisfactory to such of you as may be named in the applicable Terms
Agreement, to the effect that:
(i) The Company is validly existing as a corporation in good
standing under the laws of the State of Delaware.
(ii) This Agreement and the applicable Terms Agreement have
been duly authorized, executed and delivered by the Company, and each
is a valid and binding obligation of the Company.
(iii) The applicable Pooling and Servicing Agreement has been
duly authorized, executed and delivered by the Company, and is a
legal, valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, except that (A) such
enforceability thereof may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally and (B) the remedy of
specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
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(iv) The execution and delivery by the Company of this
Agreement, the applicable Terms Agreement and applicable Pooling and
Servicing Agreement and the signing of the Registration Statement by
the Company are within the corporate power of the Company and have
been duly authorized by all necessary corporate action on the part of
the Company; and neither the issue and sale of the Certificates nor
the consummation of the transactions contemplated herein or therein
nor the fulfillment of the terms hereof or thereof will, conflict with
or constitute a breach or violation of any of the terms or provisions
of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company pursuant to, any contract, indenture, mortgage,
or other instrument to which the Company is a party or by which it may
be bound of which such counsel is aware, other than the lien or liens
created by the applicable Pooling and Servicing Agreement, nor will
such action result in any violation of the provisions of the
certificate of incorporation or by-laws of the Company or, any
statute, rule or regulation to which the Company is subject or by
which it is bound or any writ, injunction or decree of any court,
governmental authority or regulatory body to which it is subject or by
which it is bound of which such counsel is aware.
(v) The Certificates have been duly authorized and, when
executed and authenticated as specified in the related Pooling and
Servicing Agreement and delivered and paid for, will be validly
issued, fully paid, nonassessable and entitled to the benefits of the
related Pooling and Servicing Agreement.
(vi) Assuming strict compliance by the Underwriters with the
provisions of this Agreement, no filing or registration with or notice
to or consent, approval, authorization, order or qualification of or
with any court or governmental agency or body is required for the
issuance and sale of the Certificates or the consummation by the
Company of the transactions contemplated by this Agreement, the
applicable Pooling and Servicing Agreement or the applicable Terms
Agreement, except the registration under the 1933 Act of the
Certificates, and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of the Certificates by the Underwriters.
(vii) Other than as may be set forth or contemplated in the
Prospectus, there is no action, suit or proceeding of which such
counsel is aware before or by any court or governmental agency or
body, domestic or foreign, now pending or, to the best of such
counsel's knowledge, threatened against the Company which might result
in any material adverse change in the financial condition, earnings,
affairs or business of the Company, or which might materially and
adversely affect the properties or assets thereof or might materially
and adversely affect the performance by the Company of its obligations
under, or the validity or enforceability of, the Certificates, this
Agreement or the Pooling and Servicing Agreement, or which is required
to be disclosed in the Registration Statement.
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(viii) The Registration Statement is effective under the 1933
Act and, to the best of such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement has been
issued under the 1933 Act or proceedings therefor initiated or
threatened by the Commission.
(ix) The applicable Pooling and Servicing Agreement is not
required to be qualified under the Trust Indenture Act of 1939, as
amended.
(x) The Registration Statement and the Prospectus (other than
the financial statements and other financial and statistical
information included therein, as to which no opinion need be rendered)
as of their respective effective or issue dates, complied as to form
in all material respects with the requirements of the 1933 Act and the
Regulations thereunder.
(xi) (A) The statements in the Prospectus under the headings
"ERISA Considerations" and "Certain Federal Income Tax Consequences"
and the statements in the applicable Prospectus Supplement under the
headings "Certain Federal Income Tax Considerations" and "ERISA
Considerations", to the extent that they describe matters of United
States federal income tax law or ERISA or legal conclusions with
respect thereto, have been prepared or reviewed by such counsel and
are accurate in all material respects and (B) the statements in the
Prospectus under the heading "Certain Legal Aspects of the Mortgage
Loans," to the extent they constitute matters of United States federal
law or legal conclusions with respect thereto, while not purporting to
discuss all possible consequences of investment in the Certificates,
are accurate in all material respects with respect to those
consequences or matters discussed therein.
(xii) The statements in the Prospectus and the applicable
Prospectus Supplement under the caption "Description of the
Certificates", insofar as they purport to summarize certain terms of
the Certificates and the applicable Pooling and Servicing Agreement,
constitute a fair summary of the provisions purported to be
summarized.
(xiii) The Trust Funds created by the applicable Pooling and
Servicing Agreement is not, and will not as a result of the offer and
sale of the Certificates as contemplated in the Prospectus and in this
Agreement become, required to be registered as an "investment company"
under the 1940 Act.
(xiv) The Classes of Certificates so designated in the
Prospectus Supplement will be "mortgage related securities", as
defined in Section 3(a)(41) of the 1934 Act, so long as the
Certificates are rated in one of the two highest grades by at least
one nationally recognized statistical rating organization.
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(xv) Assuming (a) ongoing compliance with all of the
provisions of the Pooling and Servicing Agreement and (b) the filing
of elections, in accordance with the Pooling and Servicing Agreement,
to be treated as "real estate mortgage investment conduits" ("REMICs")
pursuant to Section 860D of the Internal Revenue Code of 1986, as
amended (the "Code") for Federal income tax purposes, REMIC I and
REMIC II of the Trust Fund will qualify as REMICs as of the Closing
Date and will continue to qualify as REMICs for so long as there is
compliance with amendments after the date hereof to any applicable
provisions of the Code and applicable Treasury Regulations.
(xvi) Assuming that REMIC I and REMIC II of the Trust Fund are
treated as REMICs for Federal income tax purposes, neither of them nor
the Trust Fund will be subject as an entity to any tax imposed on
income, franchise or capital stock by the laws of Illinois.
Such counsel shall deliver to you such additional opinions addressing the
transfer by the Company to the Trustee of its right, title and interest in and
to the Mortgage Loans and other property included in the Trust Fund at the
Closing Time as may be required by each Rating Agency rating the Certificates.
Such counsel shall state that it has participated in conferences with
officers and other representatives of the Company, your counsel, representatives
of the independent accountants for the Company and you at which the contents of
the Registration Statement and the Prospectus and related matters were discussed
and, although such counsel is not passing upon and does not assume
responsibility for, the factual accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus (except as
stated in paragraphs (xi) and (xii) above) and has made no independent check or
verification thereof for the purpose of rendering its opinion, on the basis of
the foregoing, nothing has come to their attention that leads such counsel to
believe that either the Registration Statement, at the time it became effective
and at the applicable Closing Time, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or that the Prospectus
contained or contains as of the date thereof and at the applicable Closing Time
any untrue statement of a material fact or omitted or omits to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that such counsel need
express no view with respect to the financial statements, schedules and other
financial and statistical data included in or incorporated by reference into the
Registration Statement, the Prospectus or the Prospectus Supplement.
Such counsel may state that their opinions relate only to laws of the State
of New York, the Federal laws of the United States and the General Corporation
Law of the State of Delaware.
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In rendering such opinions, such counsel may rely, as to matters of fact,
to the extent deemed proper and stated therein, on certificates of responsible
officers of the Company, the Trustee or public officials.
(2) The favorable opinion of counsel to the Trustee, dated as of
the applicable Closing Time, addressed to you and in form and scope
satisfactory to your counsel, to the effect that:
(i) The Trustee is a national association, duly
organized and validly existing in good standing under the laws of the
United States, and has all requisite power and authority to enter into
the Pooling and Servicing Agreement and to perform its obligations
thereunder.
(ii) To the knowledge of such counsel, there is no
action, suit, proceeding or investigation pending or threatened
against the Trustee that could materially adversely affect the ability
of the Trustee to perform its obligations under the Pooling and
Servicing Agreement.
(iii) The Trustee has duly authorized, executed and
delivered the applicable Pooling and Servicing Agreement and such
Pooling and Servicing Agreement will constitute the legal, valid and
binding obligation of the Trustee.
(iv) The Trustee has full power and authority to execute
and deliver the applicable Pooling and Servicing Agreement and to
perform its obligations thereunder.
(v) No consent, approval or authorization of, or
registration, declaration or filing with, any court or governmental
agency or body of the jurisdiction of its organization is required for
the execution, delivery or performance by the Trustee of the Pooling
and Servicing Agreement.
(vi) The Certificates have been duly and validly
executed, authenticated and delivered by the Trustee in accordance
with the Pooling and Servicing Agreement.
(vii) The performance by the Trustee of its duties
pursuant to the Pooling and Servicing Agreement does not conflict with
or result in a breach or violation of any term or provision of, or
constitute a default under, any statute or regulation currently
governing the Trustee.
In rendering such opinion, such counsel may rely, as to matters of
fact, to the extent deemed proper and stated therein, on certificates of
responsible officers of the Trustee or public officials.
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(3) The favorable opinion of counsel to the Servicer, dated as
of the applicable Closing Time, addressed to you and in form and scope
satisfactory to your counsel, to the effect that:
(i) The Servicer is validly existing as a corporation in
good standing under the laws of the jurisdiction of its incorporation.
(ii) The execution and delivery by the Servicer of the
applicable Pooling and Servicing Agreement is within the corporate
power of the Servicer and has been duly authorized by all necessary
corporate action on the part of the Servicer; and to the knowledge of
such counsel, neither the execution and delivery of either such
instrument, nor the consummation of the transactions provided for
therein, nor compliance with the provisions thereof, will conflict
with or constitute a breach of, or default under, any contract,
indenture, mortgage, loan agreement, note, lease, deed of trust, or
other instrument to which the Servicer is a party or by which it may
be bound, nor will such action result in any violation of the
provisions of the charter or by-laws of the Servicer or to the
knowledge of such counsel, any law, administrative regulation or
administrative or court decree.
(iii) The applicable Pooling and Servicing Agreement has
been duly executed and delivered by the Servicer and constitutes a
legal, valid and binding obligation of the Servicer enforceable
against the Servicer in accordance with its terms, except that such
enforceability thereof may be subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally and subject, as to enforceability, to
general principles of equity (regardless whether enforcement is sought
in a proceeding in equity or at law).
(iv) To the knowledge of such counsel, the execution,
delivery and performance by the Servicer of the applicable Pooling and
Servicing Agreement do not require the consent or approval of, the
giving of notice to, the registration with, or the taking of any other
action in respect of any federal, state or other governmental agency
or authority which has not previously been effected.
(v) To the knowledge of such counsel, there is no
action, suit or proceeding of which such counsel is aware before or by
any court or governmental agency or body, domestic or foreign, now
pending or threatened against the Servicer which might materially and
adversely affect the performance by the Servicer under, or the
validity or enforceability of the applicable Pooling and Servicing
Agreement.
(vi) The description of the Servicer in the applicable
Prospectus Supplement is true and correct in all material respects.
(4) The favorable opinion or opinions, dated as of the
applicable Closing Time, of counsel for the Underwriters, acceptable
to the Underwriters.
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(5) The favorable opinion, dated the applicable Closing Time of
counsel for Standard Federal, acceptable to the Underwriters.
(c) At the applicable Closing Time you shall have received a
certificate of the President or a Vice President and the Treasurer or the
Secretary of each of the Company and Standard Federal, dated as of such
Closing Time, to the effect that the representations and warranties of the
Company or Standard Federal, as the case may be, contained in Section 1 are
true and correct with the same force and effect as though such Closing Time
were a Representation Date and that the Company or Standard Federal, as the
case may be, has complied with all agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to the
Closing Time.
(d) You shall have received from Ernst & Young with respect to
certain information relating to the Company and from Deloitte & Touche with
respect to certain other information in the Prospectus Supplement, or other
independent certified public accountants acceptable to you, letters, dated
as of the date of the applicable Terms Agreement and as of the applicable
Closing Time, delivered at such times, in the form and substance reasonably
satisfactory to you.
(e) At the applicable Closing Time, with respect to a Series of
Certificates, each of the representations and warranties of the Servicer
set forth in the related Pooling and Servicing Agreement will be true and
correct and you shall have received a Certificate of an Executive Vice
President, Senior Vice President or Vice President of the Servicer, dated
as of such Closing Time, to such effect.
(f) At the applicable Closing Time, with respect to a Series of
Certificates, the Certificates shall have received the certificate rating
or ratings specified in the related Terms Agreement.
(g) At the applicable Closing Time, counsel for the Underwriters
shall have been furnished with such other documents and opinions as they
may reasonably require for the purpose of enabling them to pass upon the
issuance and sale of the Certificates as herein contemplated and related
proceedings or in order to evidence the accuracy and completeness of any of
the representations and warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Certificates as herein
contemplated shall be reasonably satisfactory in form and substance to you
and counsel for the Underwriters.
If any condition specified in this Section shall not have been fulfilled
when and as required to be fulfilled or, if any of the opinions and certificates
required hereby shall not be in all material respects reasonably satisfactory to
you and your counsel, the applicable Terms Agreement may be terminated by you by
notice to the Company at any time at or prior to the applicable Closing Time,
and such termination shall be without liability of any party to any other party
except as provided in Section 5.
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SECTION 5. PAYMENT OF EXPENSES. The Company covenants and agrees
with the Underwriters that the Company will pay or cause to be paid all expenses
incident to the performance of its obligations under this Agreement and all
other fees and expenses associated with the transactions referred to herein,
including, but not limited to, the fees and expenses of the Trustee, Rating
Agencies, printer, accounting firms, the fees and expenses relating to the
establishment of the Company's shelf registration statement and related ongoing
fees and expenses; provided, however, that the Underwriters covenant and agree
to pay all of their own costs and expenses, including underwriting and due
diligence expenses, the fees of their counsel, transfer taxes on resale of any
of the Certificates by them and any advertising expenses connected with any
offers they may make.
SECTION 6. INDEMNIFICATION.
(a) The Company and Standard Federal, jointly and severally, will
indemnify and hold harmless the Underwriters and each person, if any, who
controls the Underwriters within the meaning of the 1933 Act, against any
losses, claims, damages, expenses or liabilities, joint or several, to
which such Underwriter or such controlling person may become subject, under
the 1933 Act or otherwise, insofar as such losses, claims, damages,
expenses or liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (or any amendment thereto) or
the Prospectus (or any amendment or supplement thereto), or arise out of or
are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading in each case in respect of the relevant Certificates, and will
reimburse each such indemnified party for any legal or other expenses
reasonably incurred by it in connection with investigating or defending any
such action or claim; provided, however, that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in any such document
in reliance upon and in conformity with written information furnished to
the Company by or on behalf of the Underwriters expressly for use therein.
This indemnity agreement will be in addition to any liability which the
Company may otherwise have.
(b) The Underwriters, severally and not jointly, will indemnify and
hold harmless the Company, each of its officers who signed the Registration
Statement, its directors, and any person controlling the Company within the
meaning of the 1933 Act against any losses, claims, damages, expenses or
liabilities to which the Company or any such officer, director or
controlling person may become subject, under the 1933 Act or otherwise,
insofar as such losses, claims, damages, expenses or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto) or the Prospectus (or any
amendment or supplement thereto), or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make
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the statements therein, in light of the circumstances under which they
were made, not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity
with written information furnished to the Company by or on behalf of the
Underwriters expressly for use therein and will reimburse the Company or
any such director, officer or controlling person for any legal or other
expenses reasonably incurred by the Company, any such officer, director
or controlling person in connection with investigating or defending any
such action or claim. This indemnity agreement is in addition to any
liability which the Underwriters may otherwise have. The Company
acknowledges that, unless otherwise set forth in the applicable Terms
Agreement, the statements set forth in the last paragraph of the cover
page, and fourth sentence of the first paragraph under the caption
"Method of Distribution" each as included in the applicable Prospectus
Supplement relating to a Series of Certificates, together with the DLJ
Information (as defined in Section 10 hereof) relating to a Series of
Certificates constitute the only information furnished in writing by or
on behalf of the Underwriters expressly for use in the Registration
Statement relating to such Series of Certificates as originally filed or
in any amendment thereof, any related preliminary prospectus or the
Prospectus or in any amendment thereof or supplement thereto, as the
case may be.
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party shall,
if a claim in respect thereof is to be made against an indemnifying party
under this Section, notify such indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party
shall not relieve it from any liability which it may have to any
indemnified party otherwise than under this Section. In case any such
action shall be brought against any indemnified party and it shall notify
the indemnifying party of the commencement thereof, the indemnifying party
shall be entitled to participate therein and, to the extent that it shall
wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel satisfactory to such indemnified
party (who shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party); and, after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified
party under this Section for any legal expenses of other counsel or any
other expenses, in each case subsequently incurred by such indemnified
party, in connection with the defense thereof other than reasonable costs
of investigation. Notwithstanding the foregoing, the indemnified party or
parties shall have the right to employ its or their own counsel in any such
case and the fees and expenses of one such counsel shall be at the expense
of the indemnifying party if (i) the employment of such counsel shall have
been authorized in writing by the indemnifying party in connection with the
defense of such action, (ii) the indemnifying party shall not have employed
counsel to have charge of the defense of such action within a reasonable
time after notice of commencement of the action, or (iii) the indemnified
party or parties shall have reasonably concluded that there may be defenses
available to it or them and/or other indemnified parties which are
different from or additional to those available to the indemnifying party
(in which case the indemnifying party shall not
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have the right to direct the defense of such action on behalf of the
indemnified party). Anything in this subsection to the contrary
notwithstanding, an indemnifying party shall not be liable for any
settlement of any claim or action effected without its written consent;
provided, however, that such consent was not unreasonably withheld.
(d) If the indemnification provided for in this Section 6 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages,
expenses or liabilities (or actions in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages, expenses or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received by
the Company on the one hand and the Underwriters on the other from the
offering of the Certificates to which such loss, claim, damage, expense or
liability (or actions in respect thereof) relates. If, however, the
allocation provided by the immediately preceding sentence is not permitted
by applicable law, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the
relative fault of the Company on the one hand and the Underwriters on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions in respect thereof), as
well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the other
shall be deemed to be in the same proportion as the total net proceeds from
such offering (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions (or in the case of a
public offering in negotiated transactions, the difference between the
proceeds to the Company and the aggregate price received from the public)
received by such Underwriters. The relative fault of the Company on the
one hand and the Underwriters on the other shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company on the one hand or such
Underwriters on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement
or omission. Notwithstanding anything to the contrary in this Section
6(d), if the losses, claims, damages or liabilities (or actions in respect
thereof) referred to in this Section 6(d) arise out of an untrue statement
or alleged untrue statement of a material fact contained in any DLJ 8-K (as
such term is defined in Section 10 hereof) then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as
a result of such losses, claims, damages or liabilities (or actions in
respect thereof) in such proportion as is appropriate to reflect the
relative fault of the Company on the one hand and the Underwriters on the
other (determined in accordance with the preceding sentence) in connection
with the statements or omissions in such DLJ 8-K which resulted in such
losses, claims, damages or liabilities (or actions in respect thereof), as
well as any other equitable considerations. The Company and the
Underwriters agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were determined by pro rata allocation even
if the Underwriters were treated as one entity for such purpose or by any
other method of allocation which does not
-20-
<PAGE>
take account of the equitable considerations referred to in this
subsection (d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigation or defending any
such action or claim. Notwithstanding the provisions of this subsection
(d), no Underwriter shall be required to contribute any amount in excess
of the amount by which the total price at which the Certificates
underwritten by it and distributed to the public were sold to the public
exceeds the amount of any damages which such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
1933 Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The obligations of the
Underwriters to contribute pursuant to this subsection (d) are several
in proportion to their respective underwriting obligations with respect
to such Certificates and not joint.
SECTION 7. REPRESENTATIONS, WARRANTIES, AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements contained in this
Agreement, or contained in certificates of officers of the Company submitted
pursuant hereto, shall remain operative and in full force and effect, regardless
of any termination of this Agreement, or the applicable Terms Agreement or any
investigation made by or on behalf of the Underwriters or any controlling person
thereof, or by or on behalf of the Company, its officers or directors and shall
survive delivery of any Certificates to the Underwriters.
SECTION 8. TERMINATION OF AGREEMENT. This Agreement may be terminated for
any reason at any time by either the Company or you upon the giving of thirty
days' notice of such termination to the other party hereto; provided, however,
that if a Terms Agreement has been entered into with respect to a particular
transaction, this Agreement and the Terms Agreement may not be terminated in the
manner set forth in this sentence with respect to such particular transaction.
You, as Representative of the Underwriters named in any Terms Agreement may also
terminate such Terms Agreement, immediately upon notice to the Company, at any
time at or prior to the applicable Closing Time (i) if there has been, since the
date of such Terms Agreement or since the respective dates as of which
information is given in the Registration Statement or Prospectus, any change, or
any development involving a prospective change, in or affecting the condition,
financial or otherwise, earnings, affairs or business of the Company or Standard
Federal, whether or not arising in the ordinary course of business, which in
your judgment would materially impair the market for, or the investment quality
of, the Certificates, or (ii) if there has occurred any material outbreak or
escalation of hostilities or other calamity or crisis the effect of which on the
financial markets of the United States is such as to make it, in your reasonable
judgment, impracticable to market the Certificates or enforce contracts for the
sale of the Certificates, or (iii) if trading in securities generally on either
the New York Stock Exchange or the American Stock Exchange has been suspended or
materially limited or any setting of minimum prices shall have been established
or (iv) if a general moratorium of commercial banking activities has been
declared by either Federal or New York State authorities. In the event of any
such termination, (A) the covenants set forth in Section
-21-
<PAGE>
3 with respect to any offering of Certificates shall remain in effect so long
as the Underwriters own any such Certificates purchased from the Company
pursuant to the applicable Terms Agreement and (B) the covenant set forth in
Section 3(c), the provisions of Section 5, the indemnity agreement and
contribution provisions set forth in Section 6, and the provisions of
Sections 7 and 12 shall remain in effect.
SECTION 9. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS.
(a) If one or more of the Underwriters participating in an offering
of Certificates shall fail at the applicable Closing Time to purchase the
Certificates which it or they are obligated to purchase hereunder and under
the applicable Terms Agreement (the "Defaulted Certificates"), then such of
you as are named therein shall arrange for you or another party or other
parties to purchase the Defaulted Certificates upon the terms contained
herein. If within thirty-six hours after such default by any Underwriter
you do not arrange for the purchase of such Defaulted Certificates, then
the Company shall be entitled to a further period of thirty-six hours
within which to procure another party or other parties reasonably
satisfactory to you to purchase such Defaulted Certificates on the terms
contained herein. In the event that, within the respective prescribed
periods, you notify the Company that you have so arranged for the purchase
of such Defaulted Certificates, or the Company notifies you that it has so
arranged for the purchase of such Defaulted Certificates, you or the
Company shall have the right to postpone the Closing Time for a period of
not more than seven days, in order to effect whatever changes may thereby
be made necessary in the Registration Statement or the Prospectus, or in
any other documents or arrangements, and the Company agrees to file
promptly any amendments to the Registration Statement or the Prospectus
which in your opinion may thereby be made reasonably necessary. The term
"Underwriter" as used in this Agreement shall include any person
substituted under this Section with like effect as if such person had
originally been party to this Agreement with respect to the Certificate.
(b) If, after giving effect to any arrangements for the purchase of
Defaulted Certificates of a defaulting Underwriter or Underwriters by you
and the Company as provided in subsection (a) above, the aggregate
principal amount of such Defaulted Certificates which remains unpurchased
does not exceed 10% of the aggregate principal amount of the Certificates
to be purchased pursuant to the applicable Terms Agreement, then the
Company shall have the right to require each non-defaulting Underwriter to
purchase the principal amount of Certificates which such Underwriter agreed
to purchase hereunder and, in addition, to require each non-defaulting
Underwriter to purchase its pro rata share (based on the principal amount
of Certificates which such Underwriter agreed to purchase pursuant to the
applicable Terms Agreement) of the Defaulted Certificates of the defaulting
Underwriter or Underwriters for which such arrangements have not been made;
but nothing herein shall relieve a defaulting Underwriter from liability
for its default.
(c) If, after giving effect to any arrangements for the purchase of
the Defaulted Certificates of the defaulting Underwriter or Underwriters by
you and the Company as
-22-
<PAGE>
provided in subsection (a) above, the aggregate principal amount of such
Defaulted Certificates which remains unpurchased exceeds 10% of the
aggregate principal amount of the Certificates to be purchased pursuant
to the applicable Terms Agreement, or if the Company shall not exercise
the right described in subsection (b) above to require non-defaulting
Underwriters to purchase Defaulted Certificates of a defaulting
Underwriter or Underwriters, then this Agreement shall thereupon
terminate, without liability on the part of any non-defaulting
Underwriter or the Company, except for the expenses to be borne by the
Company and the Underwriters as provided in Section 5 hereof and the
indemnity agreement and contribution provisions in Section 6 hereof; but
nothing herein shall relieve a defaulting Underwriter from liability for
its default.
SECTION 10. COMPUTATIONAL MATERIALS AND ABS TERM SHEETS.
(a) DLJ acknowledges that, subsequent to the date on which the
Registration Statement became effective and up to and including the date
on which the Prospectus Supplement and Prospectus with respect to a
Series of Certificates is first made available to DLJ, DLJ may furnish
to various potential investors in such Series of Certificates, in
writing: (i) "Computational Materials", as defined in a no-action
letter (the "Kidder No-Action Letter") issued by the staff of the
Commission on May 20, 1994 to Kidder, Peabody Acceptance Corporation I,
et al., as modified by a no-action letter (the "First PSA No-Action
Letter") issued by the staff of the Commission on May 27, 1994 to the
Public Securities Association (the "PSA") and as further modified by a
no-action letter (the "Second PSA No-Action Letter", and together with
the Kidder No-Action Letter and the First PSA No-Action Letter, the
"No-Action Letters") issued by the staff of the Commission on February
17, 1995 to the PSA; (ii) "Structural Term Sheets" as defined in the
Second PSA No-Action Letter; and/or (iii) "Collateral Term Sheets" as
defined in the Second PSA No-Action Letter. AAI covenants and agrees
that it will not furnish, prepare or use any Computational Materials,
Structural Term Sheets or Collateral Term Sheets in connection with the
offering of Series 1998-1 Certificates.
(b) In connection with each Series of Certificates, DLJ shall furnish
to the Company (via hard copy), at least one (1) business day prior to the
time of filing of the Prospectus pursuant to Rule 424 under the 1933 Act,
all Computational Materials used by DLJ and required to be filed with the
Commission in accordance with the No-Action Letters (such Computational
Materials, the "DLJ Furnished Computational Materials").
(c) In connection with each Series of Certificates, DLJ shall furnish
to the Company (via hard copy), at least one (1) business day prior to the
time of filing of the Prospectus pursuant to Rule 424 under the Act, all
Structural Term Sheets used by DLJ and required to be filed with the
Commission in accordance with the No-Action Letters (such Structural Term
Sheets, the "DLJ Furnished Structural Term Sheets").
(d) In connection with each Series of Certificates, DLJ shall furnish
to the Company (via hard copy), within one (1) business day after the first
use thereof, all
-23-
<PAGE>
Collateral Term Sheets used by DLJ and required to be filed with the
Commission in accordance with the No-Action Letters (such Collateral
Term Sheets, the "DLJ Furnished Collateral Term Sheets") and shall
advise the Company of the date on which each such Collateral Term Sheet
was first used.
(e) The Company shall prepare and file with the Commission, in
accordance with the No-Action Letters, one or more current reports on Form
8-K (collectively, together with any amendments and supplements thereto,
the "DLJ 8-K," and each a "DLJ 8-K") which shall include as one or more
exhibits thereto the DLJ Furnished Computational Materials, the DLJ
Furnished Structural Term Sheets and the DLJ Furnished Collateral Term
Sheets.
(f) DLJ shall cooperate with the Company and with Deloitte & Touche
in obtaining a letter, in form and substance satisfactory to the Company
and DLJ, of Deloitte & Touche regarding the information in any DLJ 8-K
consisting of DLJ Furnished Computational Materials and/or DLJ Furnished
Structural Term Sheets, in each case in EDGAR format as formatted by the
Company.
(g) DLJ represents and warrants to, and covenants with, the Company
that the DLJ Information (defined below) is not misleading and not
inaccurate in any material respect and that any Pool Information (defined
below) contained in any DLJ 8-K which is not otherwise inaccurate in any
material respect is not presented in the DLJ 8-K in a way that is either
misleading or inaccurate in any material respect. DLJ further covenants
with the Company that if any Computational Materials or ABS Term Sheets (as
such term is defined in the Second PSA No-Action Letter) contained in any
DLJ 8-K are found to include any information that is misleading or
inaccurate in any material respect, DLJ promptly shall inform the Company
of such finding, provide the Company with revised and/or corrected
Computational Materials or ABS Term Sheets, as the case may be, and
promptly prepare and deliver to the Company (in hard copy) for filing with
the Commission in accordance herewith, revised and/or corrected
Computational Materials or ABS Term Sheets, as the case may be.
(h) DLJ covenants that all Computational Materials and ABS Term
Sheets used by it shall contain a legend substantially as set forth below:
"THIS INFORMATION IS FURNISHED TO YOU SOLELY BY DONALDSON, LUFKIN &
JENRETTE SECURITIES CORPORATION AND NOT BY THE ISSUER OR ANY OF ITS
AFFILIATES. NEITHER THE ISSUER NOR ANY OF ITS AFFILIATES MAKES ANY
REPRESENTATION AS TO THE ACCURACY OR COMPLETENESS OF THE INFORMATION
HEREIN. THE INFORMATION HEREIN IS PRELIMINARY, AND WILL BE SUPERSEDED
BY THE APPLICABLE PROSPECTUS SUPPLEMENT AND BY ANY OTHER INFORMATION
SUBSEQUENTLY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
-24-
<PAGE>
(I) DLJ covenants that all Collateral Term Sheets used by it shall
contain an additional legend substantially as set forth below:
"THE INFORMATION CONTAINED HEREIN WILL BE SUPERSEDED BY THE
DESCRIPTION OF THE MORTGAGE LOANS CONTAINED IN THE PROSPECTUS
SUPPLEMENT."
(j) DLJ covenants that all Collateral Term Sheets (other than the
initial Collateral Term Sheet) shall contain the following additional
legend:
"THE INFORMATION CONTAINED HEREIN SUPERSEDES THE INFORMATION IN ALL
PRIOR COLLATERAL TERM SHEETS, IF ANY."
(k) For purposes of this Agreement, the term "DLJ Information" means
such portion, if any, of the information contained in the DLJ 8-K that is
not Pool Information. "Pool Information" means the information furnished
to the Underwriters by the Company regarding the Mortgage Loans; provided,
however, that if any information that would otherwise constitute Pool
Information is presented in the DLJ 8-K in a way that is either inaccurate
or misleading in any material respect, such information shall not be Pool
Information.
(l) If the Underwriters does not provide any Computational Materials
or ABS Term Sheets to the Company pursuant to subsections (b) - (d) above,
the Underwriters shall be deemed to have represented, as of the Closing
Time, that they did not provide any prospective investors with any
information in written or electronic form in connection with the offering
of the Certificates that is required to be filed with the Commission in
accordance with the No-Action Letters, and the Underwriters shall provide
the Company with a certification to that effect at the Closing Time.
SECTION 11. NOTICES. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed, delivered,
telexed, or telegraphed and confirmed or transmitted by any standard form of
telecommunication. Notices to DLJ shall be directed to you at the address set
forth on the first page hereof, to the attention of Paul J. Najarian, with a
copy to the General Counsel's office on the 23rd floor and notices to AAI shall
be directed to you at the address set forth on the first page hereof, to the
attention of Fixed Income Department--Maria Fregosi; with a copy to Legal
Department, ABN AMRO Incorporated, 1325 Avenue of the Americas, New York, New
York 10019, attention: Mark Egert. Notices to the Company or to Standard
Federal shall be directed to ABN AMRO Mortgage Corporation Securitization
Department, c/o Standard Federal Bank, 2600 West Big Beaver Road, Troy,
Michigan, attention: Stewart Fleming, with a copy to Legal Department, ABN AMRO
North America, 135 S. LaSalle Street, Suite 925, Chicago, Illinois.
SECTION 12. PARTIES. This Agreement shall be binding upon and inure
solely to the benefit of you and the Company and to the extent provided in
Section 6 hereof, the officers and directors
-25-
<PAGE>
of the Company and each person who controls the Company or any Underwriter
and their respective heirs, executors, administrators, successors and assigns
and any Terms Agreement shall be binding upon and inure solely to the benefit
of the Company and any Underwriter who becomes a party to a Terms Agreement
and to the extent provided in Section 6 hereof, the officers and directors of
the Company and each person who controls the Company or any Underwriter and
their respective heirs, executors, administrators, successors and assigns.
Nothing expressed or mentioned in this Agreement or a Terms Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the parties hereto or thereto and their respective successors and the
controlling person and officers and directors referred to in Section 6 hereof
and their heirs any legal or equitable right, remedy or claim under or with
respect to this Agreement or a Terms Agreement or any provision herein or
therein contained.
SECTION 13. GOVERNING LAW AND TIME. This Agreement and each Terms
Agreement shall be governed by and construed in accordance with the laws of the
State of New York. Specified times of day refer to New York City time.
SECTION 14. COUNTERPARTS. This Agreement and any Terms Agreement may be
executed in any number of counterparts (which execution may take the form of an
exchange of any standard form of written telecommunication between you and the
Company), each of which shall constitute an original of any party whose
signature appears on it, and all of which shall together constitute a single
instrument.
[SIGNATURES COMMENCE ON FOLLOWING PAGE]
-26-
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us a counterpart hereof, whereupon this instrument
along with all counterparts will become a binding agreement between you and the
Company in accordance with its terms.
Very truly yours,
ABN AMRO MORTGAGE CORPORATION
By: /s/
----------------------------------
Name:
Title:
STANDARD FEDERAL BANCORPORATION, INC.
By: /s/
----------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED, as of
the date first above written:
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: /s/
---------------------------------
Name:
Title:
ABN AMRO INCORPORATED
By: /s/
---------------------------------
Name:
Title:
<PAGE>
EXHIBIT A
PASS-THROUGH CERTIFICATES
ABN AMRO MORTGAGE CORPORATION, DEPOSITOR
TERMS AGREEMENT
Dated: _________, 19__
To: ABN AMRO MORTGAGE CORPORATION
Re: Underwriting Agreement, dated as of March __, 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 $_________ 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 _______________ among
the Company, as depositor, _______________, as servicer and _____________ 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 _______ a.m., [Chicago,
Illinois] time, on _____________. 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 amount[ s] of Certificates set forth opposite [its] [their]
name[s] 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.
SERIES DESIGNATION: ____________
TERMS OF THE CERTIFICATES AND UNDERWRITING COMPENSATION:
-1-
<PAGE>
<TABLE>
<CAPTION>
Original
Principal Remittance Price to
Classes Amount* Rate Public
- ------- --------- ---------- --------
<S> <C> <C> <C>
**
</TABLE>
* Approximate. Subject to permitted variance in each case of plus or
minus 5%.
** The [Class A] Certificates are being offered by the Underwriter from
time to time in negotiated transactions or otherwise at varying prices
to be determined, in each case, at the time of sale.
CERTIFICATE RATING:
_____ by [Rating Agency]
_____ by [Rating Agency]
REMIC ELECTION:
The Company [does not] intend[s] to cause the Mortgage Pool to be
treated as a REMIC.
CREDIT ENHANCEMENT:
CUT-OFF DATE:
The Cut-off Date is ___________, 19__.
REMITTANCE DATE:
The ____ day of each month (or, if such ____ day is not a business
day, the business day immediately following) commencing __________, 19__.
PURCHASE PRICE:
The purchase price payable by the Underwriter for the [Class A]
Certificates is ___% of the aggregate principal balance of the [Class A]
Certificates as of the Closing Date plus accrued interest at the per annum rate
of ___% from __________, 19__ up to but not including the Closing Date.
-2-
<PAGE>
UNDERWRITING COMMISSION:
Notwithstanding anything to the contrary in the Underwriting
Agreement, no additional underwriting commission shall be payable by the Company
to the Underwriter in connection with the purchase of the Certificates.
INFORMATION PROVIDED BY UNDERWRITER:
CLOSING DATE AND LOCATION:
__________ 19__ at the [Chicago, Illinois] offices of Mayer,
Brown & Platt
-3-
<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.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By:
----------------------------------
Name:
Title:
ABN AMRO INCORPORATED
By:
----------------------------------
Name:
Title:
ACCEPTED:
ABN AMRO MORTGAGE CORPORATION
By:
-----------------------------------
Name:
Title:
STANDARD FEDERAL BANCORPORATION, INC.
By:
-----------------------------------
Name:
Title:
<PAGE>
EXHIBIT I
<TABLE>
<CAPTION>
Original
Principal
Amount of
Name Certificates
- ---- ------------
<S> <C>
Total
--------------
--------------
</TABLE>
-5-
<PAGE>
PASS-THROUGH CERTIFICATES
ABN AMRO MORTGAGE CORPORATION, DEPOSITOR
TERMS AGREEMENT
Dated: August 24, 1998
To: ABN AMRO MORTGAGE CORPORATION
Re: Underwriting Agreement, dated as of March 27, 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 $330,179,287 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 August 1, 1998 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 August 26, 1998. 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 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: 1998-3
TERMS OF THE CERTIFICATES AND UNDERWRITING COMPENSATION:
<TABLE>
<CAPTION>
Original
Principal Remittance Price to
Classes Amount Rate* Public
- ------- --------- ---------- --------
<S> <C> <C> <C>
Class A-1 $ 53,863,388 6.750%
Class A-2 $ 16,343,000 7.000%
Class A-3 $ 31,807,248** 6.750%
Class A-4 $ 131,221,234 6.750%
Class A-5 $ 84,232,214 6.750%
Class A-6 $ 605,297 ***
Class A-X $ 18,344,272**** 6.750%*****
Class A-P $ 623,756**** ******
Class M $ 7,156,103 6.750%
Class B-1 $ 2,829,158 6.750%
Class B-2 $ 1,497,789 6.750%
Class R******* $ 100 6.750%
</TABLE>
* Interest distributed to the Offered Certificates on each
Distribution Date will have accrued during the preceding calendar
month at the applicable per annum Remittance Rate (as defined in
the Prospectus Supplement).
** Generally not entitled to receive principal until the Distribution
Date occurring in September 2003.
*** Not entitled to receive distributions of interest.
**** Pennies removed for purposes of delivery to DTC.
***** Will accrue interest on the Class A-X Notional Amount. Will not be
entitled to receive distributions of principal.
****** Will not be entitled to distributions of interest and will only
receive principal in respect of the Loans with Pass-Through Rates
that are less than 6.750% per annum.
******* 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).
<PAGE>
CERTIFICATE RATING:
It is a condition to the issuance of the Certificates that the
Class A and Class R Certificates each be rated "AAA" (except for the Class
A-6, Class A-P and Class A-X Certificates, which will be rated "AAAr") by
Standard & Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P") and
"AAA" by Fitch IBCA, Inc. ("Fitch"), that the Class M Certificates be rated
not less than "AA" by Fitch, that the Class B-1 Certificates be rated not
less than "A" by Fitch; and that the Class B-2 Certificates be rated not less
than "BBB" by Fitch.
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 II and REMIC I.
CREDIT ENHANCEMENT:
Senior/Subordinated: Shifting interest
CUT-OFF DATE:
The Cut-off Date is August 1, 1998.
REMITTANCE DATE:
The 25th day of each month (or, if such 25th day is not a business
day, the business day immediately following) commencing September 1998.
PURCHASE PRICE:
The purchase price payable by the Underwriters for the Certificates is
100.17% of the aggregate principal balance of the Certificates as of the Closing
Date plus accrued interest from August 1, 1998 up to but not including the
Closing Date.
UNDERWRITING COMMISSION:
Notwithstanding anything to the contrary in the Underwriting
Agreement, no additional underwriting commission shall be payable by the Company
to the Underwriter in connection with the purchase of the Certificates.
CLOSING DATE AND LOCATION:
August 26, 1998 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.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: /S/
----------------------------------
Name:
Title:
ABN AMRO INCORPORATED
By: /S/
----------------------------------
Name:
Title:
ACCEPTED:
ABN AMRO MORTGAGE CORPORATION
By: /S/
--------------------------------
Name:
Title:
STANDARD FEDERAL BANCORPORATION, INC.
By: /S/
--------------------------------
Name:
Title:
<PAGE>
EXHIBIT I
<TABLE>
<CAPTION>
Original
Principal
Amount of
Name Certificates
- ---- ------------
<S> <C>
DONALDSON, LUFKIN & JENRETTE 100% of the Certificates
SECURITIES CORPORATION
Total $330,179,287
</TABLE>
<PAGE>
EXECUTION
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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 August 1, 1998
________________
$332,842,023.42
Mortgage Pass-Through Certificates
SERIES 1998-3
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<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
PRELIMINARY STATEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . 3
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 . . . . . . . . . . 41
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. . . . . . . . . . . 45
ARTICLE III
ADMINISTRATION AND SERVICING OF LOANS. . . . . . . . . . . . . . 46
Section 3.1. Servicer to Act as Servicer; Administration of the Loans. . . . . . 46
Section 3.2. Collection of Certain Loan Payments; Certificate Account. . . . . . 49
Section 3.3. Permitted Withdrawals from the Custodial Account for P&I. . . . . . 52
Section 3.4. Taxes, Assessments and Similar Items. . . . . . . . . . . . . . . . 53
Section 3.5. Maintenance of Insurance. . . . . . . . . . . . . . . . . . . . . . 53
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. . . . . . . . . . . . . . . . . . . . . . . 58
Section 3.10. Reports to the Trustee; Custodial Account for P&I Statements. . . . 59
Section 3.11. Annual Statement as to Compliance . . . . . . . . . . . . . . . . . 59
Section 3.12. Annual Independent Public Accountants' Servicing Report . . . . . . 60
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. . . . . . . . . . . . . 60
Section 3.16. Delegation of Duties. . . . . . . . . . . . . . . . . . . . . . . . 62
Section 3.17. [Reserved]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 3.18. [Reserved]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
</TABLE>
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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 . . . 67
Section 4.4. Nonrecoverable Advances . . . . . . . . . . . . . . . . . . . . . . 68
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 . . . . . . . . . . . 69
Section 4.8. Tax Administration. . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 4.9. Equal Status of Servicing Fee . . . . . . . . . . . . . . . . . . . 70
Section 4.10. Appointment of Paying Agent and Certificate Administrator . . . . . 70
ARTICLE V
THE CERTIFICATES . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 5.1. The Certificates. . . . . . . . . . . . . . . . . . . . . . . . . . 71
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 . . . . . . . 78
Section 5.4. Mutilated, Destroyed, Lost or Stolen Certificates . . . . . . . . . 79
Section 5.5. Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . . 79
Section 5.6. Temporary Certificates. . . . . . . . . . . . . . . . . . . . . . . 79
Section 5.7. Book-Entry for Book-Entry Certificates. . . . . . . . . . . . . . . 80
Section 5.8. Notices to Clearing Agency. . . . . . . . . . . . . . . . . . . . . 81
Section 5.9. Definitive Certificates . . . . . . . . . . . . . . . . . . . . . . 81
Section 5.10. Office for Transfer of Certificates . . . . . . . . . . . . . . . . 81
ARTICLE VI
THE DEPOSITOR AND THE SERVICER . . . . . . . . . . . . . . . . . 82
Section 6.1. Liability of the Depositor and the Servicer . . . . . . . . . . . . 82
Section 6.2. Merger or Consolidation of the Depositor or the Servicer. . . . . . 82
Section 6.3. Limitation on Liability of the Servicer and Others. . . . . . . . . 82
Section 6.4. Servicer Not to Resign. . . . . . . . . . . . . . . . . . . . . . . 83
</TABLE>
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<TABLE>
<S> <C>
ARTICLE VII
DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Section 7.1. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . 83
Section 7.2. Other Remedies of Trustee . . . . . . . . . . . . . . . . . . . . . 85
Section 7.3. Directions by Certificateholders and Duties of Trustee During
Event of Default. . . . . . . . . . . . . . . . . . . . . . . . . . 85
Section 7.4. Action upon Certain Failures of Servicer and upon Event of
Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Section 7.5. Appointment of Successor Servicer . . . . . . . . . . . . . . . . . 86
Section 7.6. Notification to Certificateholders. . . . . . . . . . . . . . . . . 87
ARTICLE VIII
CONCERNING THE TRUSTEE . . . . . . . . . . . . . . . . . . . . . 88
Section 8.1. Duties of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 88
Section 8.2. Certain Matters Affecting Trustee . . . . . . . . . . . . . . . . . 90
Section 8.3. Trustee Not Required to Make Investigation. . . . . . . . . . . . . 90
Section 8.4. Trustee Not Liable for Certificates or Loans. . . . . . . . . . . . 91
Section 8.5. Trustee May Own Certificates. . . . . . . . . . . . . . . . . . . . 91
Section 8.6. Servicer to Pay Trustee's Fees and Expenses . . . . . . . . . . . . 91
Section 8.7. Eligibility Requirements for Trustee. . . . . . . . . . . . . . . . 92
Section 8.8. Resignation and Removal of Trustee. . . . . . . . . . . . . . . . . 92
Section 8.9. Successor Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 93
Section 8.10. Merger or Consolidation of Trustee. . . . . . . . . . . . . . . . . 93
Section 8.11. Appointment of Co-Trustee or Separate Trustee . . . . . . . . . . . 94
Section 8.12. Appointment of Custodians . . . . . . . . . . . . . . . . . . . . . 95
Section 8.13. Authenticating Agent. . . . . . . . . . . . . . . . . . . . . . . . 95
Section 8.14. Bloomberg . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
Section 8.15. Reports to Securities and Exchange Commission . . . . . . . . . . . 96
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
Section 10.3. Limitation on Rights of Certificateholders. . . . . . . . . . . . .100
Section 10.4. Governing Law; Jurisdiction . . . . . . . . . . . . . . . . . . . .101
</TABLE>
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<TABLE>
<S> <C>
Section 10.5. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .101
Section 10.6. Severability of Provisions. . . . . . . . . . . . . . . . . . . . .102
EXHIBITS
Exhibit A -- Forms of Class A and Subordinate 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 -- [Reserved]
Exhibit P -- [Reserved]
Exhibit Q -- Bloomberg Data
Exhibit R -- Form of Special Servicing and Collateral Fund Agreement
</TABLE>
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<PAGE>
This Pooling and Servicing Agreement, dated and effective as of August
1, 1998 (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 March 25, 1998, and a Prospectus Supplement, dated August
24, 1998, 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 August 26, 1998. The Trust Fund created
hereunder is intended to be the "Trust" as described in the Prospectus and
the Private Placement Memorandum and the Certificates are intended to be the
"Certificates" described therein.
As provided herein, the Trustee will elect to treat the segregated pool
of assets consisting of the Loans and other related assets in the Trust Fund
subject to this Agreement as a REMIC for federal income tax purposes, and
such segregated pool of assets will be designated as "REMIC I." Component
R-1 of the Class R Certificate will represent the sole class of "residual
interests" in REMIC I for purposes of the REMIC Provisions under federal
income tax law.
As provided herein, the Trustee will elect to treat the segregated pool
of assets consisting of the REMIC I Regular Interests as a REMIC for federal
income tax purposes, and such segregated pool of assets will be designated as
"REMIC II". Component R-2 of the Class R Certificate will represent the sole
class of "residual interests" in REMIC II for purposes of the REMIC
Provisions under federal income tax law. The following table irrevocably
sets forth the designations, the Remittance Rate and initial Class Principal
Balance for each Class of Certificates which, together with the Class R-2
Component, constitute the entire beneficial interests in REMIC II. Determined
solely for purposes of satisfying Treasury regulation section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for each of the
REMIC I Regular Interests and for each Class of Certificates shall be
<PAGE>
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
Remittance Principal Last Scheduled
Designation Rate(1) Balance Distribution Date*
----------- ---------- ------------- ------------------
<S> <C> <C> <C>
Class A-1 6.750% $53,863,388 September 25, 2028
Class A-2 7.000% $16,343,000 September 25, 2028
Class A-3 6.750% $31,807,248(2) September 25, 2028
Class A-4 6.750% $131,221,234 September 25, 2028
Class A-5 6.750% $84,232,214 September 25, 2028
Class A-6 (3) $605,297 September 25, 2028
Class A-X 6.750%(4) $ 0 September 25, 2028
Class A-P (5) $623,756 September 25, 2028
Class M 6.750% $7,156,103 September 25, 2028
Class B-1 6.750% $2,829,158 September 25, 2028
Class B-2 6.750% $1,497,789 September 25, 2028
Class B-3 6.750% $998,526 September 25, 2028
Class B-4 6.750% $832,105 September 25, 2028
Class B-5 6.750% $832,105 September 25, 2028
Class R+ 6.750% $100(6) September 25, 2028
</TABLE>
* The Distribution Date in the month after the maturity date for the latest
maturing Loan.
+ The Class R Certificate is entitled to receive the Residual Distribution
Amount and Excess Liquidation Proceeds.
(1) Interest distributed to the Certificates (other than the Principal Only
Certificates (as defined herein)) on each Distribution Date will have
accrued during the preceding calendar month at the applicable per annum
Remittance Rate.
(2) The Class A-3 Certificates will generally not be entitled to receive any
distributions of principal until the Distribution Date occurring in
September 2003.
(3) The Class A-6 Certificates will not be entitled to distributions of
interest.
(4) 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 $18,334,272. Class A-X Certificates
will not be entitled to receive distributions of principal.
(5) The Class A-P Certificates will not be entitled to distributions of
interest and will only receive principal in respect of the Loans with
Pass-Through Rates that are less than 6.750% per annum.
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(6) 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).
W I T N E S S E T H
In consideration of the mutual agreements herein contained, the
Depositor, 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:
ADJUSTED LOCKOUT PERCENTAGE: For any Distribution Date prior to the
fifth anniversary of the first Distribution Date will equal 0%, and for any
Distribution Date thereafter will equal the Lockout Percentage.
ADVANCE: An Advance made by the Servicer pursuant to Section 4.3.
AFFILIATE: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect
to any specified Person means the power to direct the management and policies
of such Person, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise, and the terms "controlling" and
"controlled" have meanings correlative to the foregoing. The Trustee may
obtain and rely on an Officer's Certificate of the Servicer or the Depositor
to determine whether any Person is an Affiliate of such party.
AGGREGATE CERTIFICATE PRINCIPAL BALANCE: At any given time, the sum of
the then current Class Principal Balances of all Classes of Certificates.
AGGREGATE SUBORDINATE PERCENTAGE: For any Distribution Date, the
aggregate of the Class Principal Balances of the Subordinate Certificates
immediately prior to such Distribution Date divided by the aggregate
Scheduled Principal Balance of all of the Loans immediately prior to such
Distribution Date.
AGREEMENT: This Pooling and Servicing Agreement and all amendments and
supplements hereto.
ALTA: The American Land Title Association, or any successor.
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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.
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 A-2, Class A-X and Class R Certificates), an initial Certificate
Principal Balance equal to $25,000 each and integral multiples of $1 in
excess thereof. With respect to the Class A-2 Certificates, an initial
Certificate Principal Balance equal to $1,000 each and integral multiples of
$1 in excess thereof. With respect to the Class A-X 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
immediately preceding such Determination Date (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 Certificate Account which are due and
reimbursable to the Servicer pursuant to the terms of this Agreement;
(f) the Servicing Fee for each such Loan; and
(g) Excess Liquidation Proceeds;
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(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: With respect to all Loans, the Bankruptcy Coverage
Initial Amount for such Loans, 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. Bankruptcy Coverage
may be reduced upon written confirmation from the Rating Agency that such
reduction will not adversely affect the then current ratings assigned to the
Certificates by the Rating Agency.
BANKRUPTCY COVERAGE INITIAL AMOUNT: $132,759.
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.
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
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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 the Rating
Agency which is incorporated 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 the 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 National Bank.
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, as applicable, the Available Distribution
Amount for the Loans shall be distributed to the related Certificates in the
following amounts and priority:
(a) With respect to the Class A 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 for the Loans
remaining following prior distributions, if any, on such Distribution Date:
(i) First, to the Class A-P Certificates, the Discount
Fractional Principal Amount;
(ii) Second, to the Class A Certificates and Class R
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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(iii) Third, to the Class A Certificates and Class R
Certificate, concurrently, the sum of the Interest Distribution
Amounts for such Classes of Certificates (and components thereof) for
the current Distribution Date, pro rata according to their respective
Interest Distribution Amounts;
(iv) Fourth, to the Class A Certificates (other than the
Class A-P and Class A-X Certificates) and Class R Certificate, the
Senior Principal Amount as follows:
(a) first, to the Class A-3 Certificates, an amount up
to the amount of the Lockout Principal Amount (as defined herein)
for such Distribution Date, until the Certificate Principal
Balance of the Class A-3 Certificates is reduced to zero; and
(b) second, concurrently, until the Certificate
Principal Balance of the Class A-1 Certificates is reduced to
zero, 20.000000297% to the Class A-1 Certificates and
79.9999997030% as follows:
(1) first, to the Class R Certificate, until the
Certificate Principal Balance of the Class R
Certificate has been reduced to zero;
(2) second, to the Class A-4 Certificates until
the Class A-4 Certificate Principal Balance
is reduced to $72,280,044;
(3) third, concurrently, until the Class A-5
Certificate Principal Balance is reduced to
zero, as follows;
(a) 59.0000001681% to the Class A-5
Certificates; and
(b) 40.9999998319% to the Class A-4
Certificates;
(4) fourth, to the Class A-4 Certificates until
the Class A-4 Certificate Principal Balance
is reduced to zero;
(c) third, concurrently, to the Class A-2 Certificates
and Class A-6 Certificates, on a pro rata basis, based on the
respective Certificate Principal Balances thereof, until the
Certificate Principal Balances thereof have been reduced to
zero; and
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(d) fourth, to the Class A-3 Certificates, until the
Certificate Principal Balance of the Class A-3 Certificates is
reduced to zero.
(v) Fifth, to the Class A-P Certificates, 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
(vi) Sixth, to the Class A-P Certificates, 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 Class 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 for the Loans
remaining following prior distributions on such Distribution Date:
(i) First, to the Class M Certificates, the Interest
Distribution Amount for such Class of Certificates remaining unpaid
from previous Distribution Dates;
(ii) Second, to the Class M Certificates, the Interest
Distribution Amount for such Class of Certificates for the current
Distribution Date;
(iii) Third, to the Class M Certificates, the portion of the
Subordinate Principal Amount allocable to such Class of Certificates
pursuant to the definition of "Subordinate Principal Amount" herein,
until the Class M Principal Balance has been reduced to zero;
(iv) Fourth, to the Class B-1 Certificates, the Interest
Distribution Amount for such Class of Certificates remaining unpaid
from previous Distribution Dates;
(v) Fifth, to the Class B-1 Certificates, the Interest
Distribution Amount for such Class of Certificates for the current
Distribution Date;
(vi) Sixth, to the Class B-1 Certificates, the portion of
the Subordinate Principal Amount allocable to such Class of
Certificates pursuant to the definition of "Subordinate Principal
Amount" herein, until the Class B-1 Principal Balance has been reduced
to zero;
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<PAGE>
(vii) Seventh, to the Class B-2 Certificates, the Interest
Distribution Amount for such Class of Certificates remaining unpaid
from previous Distribution Dates;
(viii) Eighth, to the Class B-2 Certificates, the Interest
Distribution Amount for such Class of Certificates for the current
Distribution Date;
(ix) Ninth, to the Class B-2 Certificates, the portion of
the Subordinate Principal Amount allocable to such Class of
Certificates pursuant to the definition of "Subordinate Principal
Amount" herein, until the Class B-2 Principal Balance has been reduced
to zero;
(x) Tenth, to the Class B-3 Certificates, the Interest
Distribution Amount for such Class of Certificates remaining unpaid
from previous Distribution Dates;
(xi) Eleventh, to the Class B-3 Certificates, the Interest
Distribution Amount for such Class of Certificates for the current
Distribution Date;
(xii) Twelfth, to the Class B-3 Certificates, the portion of
the Subordinate Principal Amount allocable to such Class of
Certificates pursuant to the definition of "Subordinate Principal
Amount" herein, until the Class B-3 Principal Balance has been reduced
to zero;
(xiii) Thirteenth, to the Class B-4 Certificates, the Interest
Distribution Amount for such Class of Certificates remaining unpaid
from previous Distribution Dates;
(xiv) Fourteenth, to the Class B-4 Certificates, the Interest
Distribution Amount for such Class of Certificates for the current
Distribution Date;
(xv) Fifteenth, to the Class B-4 Certificates, the portion
of the Subordinate Principal Amount allocable to such Class of
Certificates pursuant to the definition of "Subordinate Principal
Amount" herein, until the Class B-4 Principal Balance has been reduced
to zero;
(xvi) Sixteenth, to the Class B-5 Certificates, the Interest
Distribution Amount for such Class of Certificates remaining unpaid
from previous Distribution Dates;
(xvii) Seventeenth, to the Class B-5 Certificates, the
Interest Distribution Amount for such Class of Certificates for the
current Distribution Date;
(xviii) Eighteenth, to the Class B-5 Certificates, the portion
of the Subordinate Principal Amount allocable to such Class of
Certificates pursuant to the
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<PAGE>
definition of "Subordinate Principal Amount" herein, until the
Class B-5 Principal Balance has been reduced to zero;
(xix) Nineteenth, to each Class of Subordinate Certificates
in the 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)(c)(xix) of this definition of "Certificate Distribution Amount"
shall not cause a further reduction in the Class Principal Balances of
the Subordinate Certificates; and
(xx) Twentieth, to the Class R Certificate, the Residual
Distribution Amount for such Distribution Date;
(II) For any Distribution Date on or after the Credit Support Depletion
Date, the Available Distribution Amount remaining following prior
distributions, if any, on such Distribution Date, shall be distributed to the
outstanding Class A Certificates and Class R Certificate in the following
amounts and priority:
(a) First, to the Class A-P Certificates, principal in the amount
that would otherwise be distributed to such Class on such Distribution Date
pursuant to clause (I)(a)(i) of this definition of "Certificate
Distribution Amount";
(b) Second, to the Class A Certificates and the Class R Certificate,
the amount payable to each such Class of Certificates on prior Distribution
Dates pursuant to clause (I)(a)(ii) or (II)(a)(iii) of this definition of
"Certificate Distribution Amount," and remaining unpaid, pro rata according
to such amount payable to the extent of amounts available;
(c) Third, to the Class A Certificates and the Class R Certificate
(other than the Principal Only Certificates), concurrently, the sum of the
Interest Distribution Amounts for such Classes of Certificates for the
current Distribution Date, pro rata according to their respective Interest
Distribution Amounts;
(d) Fourth, to the Class A Certificates other than the Class A-X and
Class A-P Certificates, the Senior Principal Amount, pro rata, according to
their respective Class Principal Balances; and
(e) Fifth, to the Class R Certificate, the Residual Distribution
Amount for such Distribution Date.
CERTIFICATE GROUP: The Class A Certificates.
CERTIFICATE PRINCIPAL BALANCE: For each Certificate of any Class, the
portion of the related Class Principal Balance, if any, represented by such
Certificate.
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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 National Bank.
CERTIFICATEHOLDER OR HOLDER: The person in whose name a Certificate is
registered in the Certificate Register, except that, solely for the purposes
of giving any consent pursuant to this Agreement, any Certificate registered
in the name of the Depositor, the Certificate Administrator, the Servicer or
any affiliate thereof shall be deemed not to be outstanding and the
Percentage Interest evidenced thereby shall not be taken into account in
determining whether the requisite percentage of Percentage Interests
necessary to effect any such consent has been obtained; PROVIDED, that the
Trustee, the Certificate Registrar and the Paying Agent may conclusively rely
upon an Officer's Certificate to determine whether any Person is an affiliate
of the Depositor, the Certificate Administrator or the Servicer.
CERTIFICATEHOLDERS' REPORT: As defined in Section 4.2(a).
CLASS: All Certificates having the same priority and rights to payments
from the Available Distribution Amount, designated as a separate Class, as
set forth in the forms of Certificates attached hereto as Exhibits A and B.
Each Class shall be entitled to receive the amounts allocated to such Class
pursuant to the definition of "Certificate Distribution Amount" only to the
extent of the Available Distribution Amount for such Distribution Date
remaining after distributions in accordance with prior clauses of the
definition of "Certificate Distribution Amount."
CLASS A CERTIFICATES: The Class A-1, A-2, A-3, A-4, A-5, A-6, A-X and
A-P Certificates, collectively.
CLASS A-1 CERTIFICATES: The Certificates designated as "Class A-1" on
the face thereof in substantially the form attached hereto as Exhibit A-1.
CLASS A-2 CERTIFICATES: The Certificates designated as "Class A-2" on
the face thereof in substantially the form attached hereto as Exhibit A-2.
CLASS A-3 CERTIFICATES: The Certificates designated as "Class A-3" on
the face thereof in substantially the form attached hereto as Exhibit A-3.
CLASS A-4 CERTIFICATES: The Certificates designated as "Class A-4" on
the face thereof in substantially the form attached hereto as Exhibit A-4.
CLASS A-5 CERTIFICATES: The Certificates designated as "Class A-5" on
the face thereof in substantially the form attached hereto as Exhibit A-5.
CLASS A-6 CERTIFICATES: The Certificates designated as "Class A-6" on
the face thereof in substantially the form attached hereto as Exhibit A-6.
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<PAGE>
CLASS A-P CERTIFICATES: The Certificates designated as "Class A-P" on
the face thereof in substantially the form attached hereto as Exhibit A-8.
CLASS A-X CERTIFICATES: The Certificates designated as "Class A-X" on
the face thereof in substantially the form attached hereto as Exhibit A-7.
CLASS A-X NOTIONAL AMOUNT: With respect to any Distribution Date, the
product of (x) the aggregate Scheduled Principal Balance, as of the second
preceding Due Date after giving effect to payments scheduled to be received
as of such Due Date, whether or not received, or with respect to the initial
Distribution Date, as of the Cut-Off Date, of the Premium Rate Loans and (y)
a fraction, the numerator of which is the weighted average of the Stripped
Interest Rates for the Premium Rate Loans as of such Due Date and the
denominator of which is 6.750%.
CLASS B-1 CERTIFICATES: The Certificates designated as "Class B-l" on
the face thereof in substantially the form attached hereto as Exhibit A-11.
CLASS B-2 CERTIFICATES: The Certificates designated as "Class B-2" on
the face thereof in substantially the form attached hereto as Exhibit A-12.
CLASS B-3 CERTIFICATES: The Certificates designated as "Class B-3" on
the face thereof in substantially the form attached hereto as Exhibit A-13.
CLASS B-4 CERTIFICATES: The Certificates designated as "Class B-4" on
the face thereof in substantially the form attached hereto as Exhibit A-14.
CLASS B-5 CERTIFICATES: The Certificates designated as "Class B-5" on
the face thereof in substantially the form attached hereto as Exhibit A-15.
CLASS M CERTIFICATES: The Certificates designated as "Class M" on the
face thereof in substantially the form attached hereto as Exhibit A-10.
CLASS NOTIONAL AMOUNT: With respect to the Class A-X Certificates, the
Class A-X Notional Amount.
CLASS PRINCIPAL BALANCE: For any Class of Certificates, the applicable
Initial Class Principal Balance therefor 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 the
definition of "Realized Loss" 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 the definition of "Realized Loss" 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, (i) the Class Principal Balance
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<PAGE>
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 and
(ii) any amounts distributed in respect of losses pursuant to paragraphs
(I)(a)(v) or (I)(a)(vi) of the definition of "Certificate Distribution
Amount" shall not cause a further reduction in the Class A-P Class Principal
Balance. The Class Principal Balance for the Class A-2 Certificates shall be
referred to as the "Class A-2 Principal Balance", the Class Principal Balance
for the Class A-3 Certificates shall be referred to as the "Class A-3
Principal Balance" and so on. The Class Principal Balance of the Class A-X
Certificates shall be zero.
CLASS R CERTIFICATE: The Certificate designated as "Class R" on the
face thereof in substantially the form attached hereto as Exhibit B, that is
composed of Components R-1 and R-2, each of which has been designated as the
sole class of "residual interests" in the REMIC I and REMIC II, respectively,
pursuant to Section 2.1.
CLASS R CERTIFICATEHOLDER: The registered Holder of the Class R
Certificate.
CLOSING DATE: August 26, 1998, which is the date of settlement of the
sale of the Certificates to the initial purchasers thereof.
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.
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 other than a Prepaid Monthly Payment, an amount equal to one
month's interest on such Curtailment at the applicable Pass-Through Rate on
such Loan.
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CUSTODIAL ACCOUNT FOR P&I: The Custodial Account for Principal and
Interest established and maintained by the Servicer and caused by the related
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
the 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: August 1, 1998.
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 or in respect of such Loan is more
than 89 days past due, determined without giving effect to any grace period
permitted by the related Mortgage or Mortgage Note or any other document in
the Mortgage File.
DEFINITIVE CERTIFICATES: As defined in Section 5.7.
DENOMINATION: The amount specified on a Certificate as representing the
aggregate Principal Balance of the Loans as of the Cut-Off Date evidenced by
such Certificate.
DEPOSITARY AGREEMENT: The Letter of Representations, dated August 26,
1998 by and among DTC, the Depositor and the Trustee.
DEPOSITOR: ABN AMRO Mortgage Corporation, a Delaware corporation, or
its successor-in-interest.
DESTROYED MORTGAGE NOTE: A Mortgage Note the original of which was
permanently lost or destroyed and has not been replaced.
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<PAGE>
DETERMINATION DATE: A day not later than the 10th day preceding a
related Distribution Date.
DISCOUNT FRACTION: For any Discount Loan, a fraction, the numerator of
which is 6.750% minus the Pass-Through Rate on such Discount Loan and the
denominator of which is 6.750%.
DISCOUNT FRACTIONAL PRINCIPAL AMOUNT: On each Distribution Date, an
amount equal to the sum of the product of the Discount Fraction multiplied by
the sum of (x) 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, (y) the principal portion received in
respect of each Discount Loan during the Prior Period of (1) Curtailments,
(2) Insurance Proceeds, (3) 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 (4) Liquidation Proceeds and (z) 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 6.750%.
DISQUALIFIED ORGANIZATION: As defined in Section 5.1(b).
DISTRIBUTION DATE: With respect to distributions on the Certificates,
the 25th day (or, if such 25th day is not a Business Day, the Business Day
immediately succeeding such 25th day) of each month, with the first such date
being September 25, 1998.
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 the 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 the Rating Agency, or (iii) the approval of the Rating Agency.
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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 or purchase or contractual
commitment providing for the purchase thereof, is qualified by each Rating
Agency as an investment of funds backing securities rated "AAA" in the case
of 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,
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;
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<PAGE>
(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 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.
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
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<PAGE>
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.
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 any date of determination after the Cut-Off Date,
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 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 the Rating Agency that such reduction will not
adversely affect the then current ratings assigned to the Certificates in the
related Certificate Group by the 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.
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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, including, without
limitation, any 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 DISTRIBUTION AMOUNT: On any Distribution Date, for any Class
of Certificates (other than the Principal Only Certificates), the amount of
interest accrued on the respective Class Principal Balance or Class Notional
Amount, as applicable, at 1/12th of the related Remittance Rate for such
Class during the applicable Prepayment 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 definitions of "Uncompensated Interest Shortfall"
and "Realized Loss," respectively. The Interest Distribution Amount for the
Principal Only Certificates on any Distribution Date shall equal zero.
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.
LIQUIDATED LOAN: A Loan as to which the Servicer has determined in
accordance with its customary servicing practices that all amounts which it
expects to recover from or on account of such Loan, whether from Insurance
Proceeds, Liquidation Proceeds or otherwise, have been recovered. For
purposes of this definition, acquisition of a Mortgaged Property by the Trust
Fund shall not constitute final liquidation of the related Loan.
LIQUIDATION EXPENSES: 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 portion thereof attributable to principal
distributions to the Class A-P Certificates pursuant to the definition of
"Certificate Distribution Amount" herein) 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
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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;
(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 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.
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LOCKOUT LIQUIDATION AMOUNT: The aggregate, for each Loan which became a
Liquidated Loan during the applicable Prepayment Period, of the lesser of (i)
the Lockout Percentage of the Principal Balance of such Loan (exclusive of
the Discount Fraction thereof, if applicable) and (ii) the Lockout Prepayment
Percentage of the Liquidation Principal with respect to such Loan.
LOCKOUT PERCENTAGE: For any Distribution Date will equal the sum of the
Class A-3 Certificate Principal Balance divided by the aggregate Scheduled
Principal Balances of all Loans (reduced by the Class A-P Class Principal
Balance), immediately prior to such Distribution Date.
LOCKOUT PREPAYMENT PERCENTAGE: For any Distribution Date, the product
of (a) the Lockout Percentage for such Distribution Date and (b) the
applicable Step Down Percentage.
LOCKOUT PRINCIPAL AMOUNT: For any Distribution Date, an amount equal to
the sum of (i) the Adjusted Lockout Percentage of the Principal Payment
Amount for the Loans (exclusive of the portion thereof attributable to
principal distributions to the Class A-P Certificates pursuant to clause
(I)(a)(i) of the definition of "Certificate Distribution Amount" herein),
(ii) the Lockout Prepayment Percentage of the Principal Prepayment Amount for
the Loans (exclusive of the portion thereof attributable to principal
distributions to the Class A-P Certificates pursuant to clause (I)(a)(i) of
the definition of "Certificate Distribution Amount" herein), and (iii) the
Lockout Liquidation Amount.
MONTHLY PAYMENT: The scheduled payment of principal and interest on a
Loan which is due on the related Due Date for such Loan.
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 1998-3 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) 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
(a) in the case of a delay
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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 (b) 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;
(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;
(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.
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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.
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; 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).
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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 National Bank.
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).
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. To the extent
(together with Payoff Earnings and the aggregate Servicing Fee) not required
to be distributed as Compensating Interest on such Distribution Date, Payoff
Interest shall be payable to the Servicer of such Loans as additional
servicing compensation.
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 Class A-X Certificates), its Certificate Principal Balance divided by
the applicable Class Principal Balance;
(ii) with respect to the Class A-X Certificates, the portion of
the respective Class Notional Amount evidenced by such Certificate divided
by the respective Class Notional Amount; and
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(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 Class A-X
Certificates), the product of (x) 99.00% 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 the retirement of the Class
A-X Certificates;
(ii) with respect to the Class A-X Certificates, 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, 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 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.
PREMIUM RATE LOANS: The Loans having Pass-Through Rates in excess of
6.750% per annum.
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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.
PRIME RATE: Means, for any period, a fluctuating interest rate per annum
as shall be in effect from time to time, which rate of interest shall be
announced publicly by LaSalle National Bank from time to time as LaSalle
National Bank's prime rate.
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.
PRINCIPAL ONLY CERTIFICATES: The Class A-P and Class A-6 Certificates,
which will not be entitled to receive interest.
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.
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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 all Classes of Certificates in the related Certificate
Group (other than the Class A-P Certificates and the Class A-X Certificates) 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 first 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 related to such Loan pro rata according to the amount of interest
accrued but unpaid on each such Class (other than the Principal Only
Certificates) in reduction thereof and then in reduction of their related Class
Principal Balances, is hereinafter referred to as "Pro Rata Allocation".
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, 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 the 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
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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.
REMIC: A real estate mortgage investment conduit, as such term is defined
in the Code.
REMIC I: The pool of assets consisting of the Trust Fund.
REMIC I REGULAR INTERESTS: The regular interests in REMIC I as described
in Section 2.4 of this Agreement.
REMIC II: The pool of assets consisting of the REMIC I Regular Interests
and all payments of principal or interest on or with respect to the REMIC I
Regular Interests after the Cut-Off Date.
REMIC PROVISIONS: Sections 860A through 86OG 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 Certificates, the per annum rate set
forth as the Remittance Rate for such Class in the Preliminary Statement hereto.
REO PROPERTY: A Mortgaged Property, title to which has been acquired by
the Servicer on behalf of the Trust Fund through foreclosure, deed in lieu of
foreclosure or otherwise.
RESIDUAL 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
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of the Committee on Trust Matters, any Vice-President, any Assistant Vice
President, the Secretary, any Assistant Secretary, the Treasurer, any
Assistant Treasurer, the Cashier, any Assistant Cashier, any Trust Officer or
Assistant Trust Officer, the Controller, any Assistant Controller or any
other officer of the Trustee customarily performing functions similar to
those performed by any of the above-designated officers and in each case
having direct responsibility for the administration of this Agreement, and
also, with respect to a particular matter, any other officer to whom such
matter is referred because of such officer's knowledge of and familiarity
with the particular subject. When used with respect to the Servicer, the
Chairman or Vice-Chairman of the Board of Directors or Trustees, the Chairman
or Vice-Chairman of the Executive or Standing Committee of the Board of
Directors or Trustees, the President, any Vice-President, the Secretary, any
Assistant Secretary, the Treasurer, any Assistant Treasurer, the Controller
and any Assistant Controller or any other officer of the Servicer customarily
performing functions similar to those performed by any of the
above-designated officers and also, with respect to a particular matter, any
other officer to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject. When used with
respect to the Depositor or any other Person, the Chairman or Vice-Chairman
of the Board of Directors, the Chairman or Vice-Chairman of any executive
committee of the Board of Directors, the President, any Vice President, the
Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer,
or any other officer of the Depositor customarily performing functions
similar to those performed by any of the above-designated officers and also,
with respect to a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
S&P: Standard & Poor's Ratings 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: Standard Federal Bank.
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.
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SENIOR PERCENTAGE: With respect to any Distribution Date, the sum of the
Class Principal Balances of the Class A Certificates (other than the Class A-P
Certificates) and the Class R 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 the fifth Anniversary, 100%; (ii)
on any other Distribution Date on which the Senior Percentage for such
Distribution Date exceeds the initial Senior Percentage as of the Cut-Off Date,
100%; and (iii) on any other Distribution Date in each of the months of the
fifth Anniversary and thereafter, 100%, unless:
(a) the mean aggregate Principal Balance of the Loans which are
60 or more days delinquent (including loans in foreclosure and property
held by the Trust Fund) for each of the immediately preceding six calendar
months is less than or equal to 50% of the mean aggregate 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 (1) for any Distribution
Date before the month of the sixth Anniversary, 30% of the sum of the
Subordinate Amount as of the Cut-Off Date, (2) for any Distribution Date in
or after the month of the sixth Anniversary but before the seventh
Anniversary, 35% of the sum of the Subordinate Amount as of the Cut-Off
Date, (3) for any Distribution Date in or after the month of the seventh
Anniversary but before the eighth Anniversary, 40% of the sum of the
Subordinate Amount as of the Cut-Off Date, (4) for any Distribution Date in
or after the month of the eighth Anniversary but before the ninth
Anniversary, 45% of the sum of the Subordinate Amount as of the Cut-Off
Date, and (5) for any Distribution Date in or after the month of the ninth
Anniversary, 50% of the sum of the Subordinate Amount as of the Cut-Off
Date,
in which case, as follows: (1) for any such Distribution Date in or after the
month of the fifth Anniversary of but before the sixth Anniversary, the Senior
Percentage for such Distribution Date plus 70% of the Subordinate Percentage for
such Distribution Date; (2) for any such Distribution Date in or after the month
of the sixth Anniversary but before the seventh Anniversary, the Senior
Percentage for such Distribution Date plus 60% of the Subordinate Percentage for
such Distribution Date; (3) for any such Distribution Date in or after the month
of the seventh Anniversary but before the eighth Anniversary, the Senior
Percentage for such Distribution Date plus 40% of the Subordinate Percentage for
such Distribution Date; (4) for any such Distribution Date in or after the month
of the eighth Anniversary but before the ninth Anniversary, the Senior
Percentage for such Distribution Date plus 20% of the Subordinate Percentage for
the Loans for such Distribution Date; and (5) for any such Distribution Date
thereafter, the Senior Percentage for such Distribution Date.
If on any Distribution Date the allocation to the Certificates (other than
the Class A-P Certificates) of Principal Prepayments in the percentage required
would reduce the sum of the Class Principal Balances of the Certificates (other
than the Class A-P Certificates) below zero, the Senior Prepayment Percentage
for such Distribution Date shall be limited to the percentage necessary to
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reduce such sum to zero. Notwithstanding the foregoing, however, on each
Distribution Date, the Class A-P Certificates will receive the Discount Fraction
of all principal payments, including, without limitation, Principal Prepayments,
received in respect of each Discount Loan.
SENIOR PRINCIPAL AMOUNT: For any Distribution Date, an amount equal to the
sum of (a) the Senior Percentage of the Principal Payment Amount for the Loans
(exclusive of the portion thereof attributable to principal distributions to the
Class A-P Certificates pursuant to clause (I)(a)(i) of the definition of
"Certificate Distribution Amount"), (b) the Senior Prepayment Percentage of the
Principal Prepayment Amount for the Loans (exclusive of the portion thereof
attributable to principal distributions to the Class A-P Certificates pursuant
to clause (I)(a)(i) of the definition of "Certificate Distribution Amount") and
(c) the Senior Liquidation Amount.
SERVICER: LaSalle Home Mortgage Corporation, a Delaware corporation, or
any successor thereto appointed as provided pursuant to Section 7.5, acting to
service and administer such Loans pursuant to Section 3.1.
SERVICER'S SECTION 3.10 REPORT: A report delivered by the Servicer to the
Trustee or the Certificate Administrator pursuant to Section 3.10.
SERVICING FEE: For each Loan, the fee paid to the Servicer to perform
primary servicing functions with respect to such Loan, equal to the per annum
rate of 0.2500% for each Loan in the Loan Schedule on the outstanding Principal
Balance of such Loan.
SERVICING OFFICER: Any individual involved in, or responsible for, the
administration and servicing of the Loans whose name and specimen signature
appear on a list of servicing officers furnished to the Trustee on the Closing
Date by the Servicer in the form of an Officer's Certificate, as such list may
from time to time be amended.
SPECIAL HAZARD COVERAGE: With respect to all Loans, the Special Hazard
Coverage Initial Amount less Special Hazard Losses allocated to the Certificates
and the amount of any scheduled reduction in the amount of Special Hazard
Coverage as follows: 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 Special Hazard Coverage Initial Amount 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 the Rating
Agency that such reduction will not adversely affect the then current ratings
assigned to the Certificates by the Rating Agency.
SPECIAL HAZARD COVERAGE INITIAL AMOUNT: $4,824,150.
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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: (ii)
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 of 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
occurrence; or (viii) seizure or destruction under quarantine or customs
regulations, or confiscation by order of any government or public authority.
STANDARD FEDERAL BANK: Standard Federal Bank, a Federal Savings Bank.
STEP DOWN PERCENTAGE: For any Distribution Date, the percentage indicated
below:
<TABLE>
<CAPTION>
Distribution Date Occurring In Step Down Percentage
------------------------------ --------------------
<S> <C>
September 1998 through August 2003 0%
September 2003 through August 2004 30%
September 2004 through August 2005 40%
September 2005 through August 2006 60%
September 2006 through August 2007 80%
September 2007 and thereafter 100%
</TABLE>
STRIPPED INTEREST RATE: For each Loan, the excess, if any, of the Pass-
Through Rate for such Loan over 6.750%.
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SUBORDINATE AMOUNT: The excess of the aggregate Scheduled Principal
Balance of the Loans over the Class A 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.
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: With respect to any Distribution Date, the excess
of 100% over the Senior Percentage for such date.
SUBORDINATE PREPAYMENT PERCENTAGE: On any Distribution Date for the Loans,
the excess of 100% over the Senior Prepayment Percentage for such Distribution
Date; PROVIDED, HOWEVER, that if the aggregate of the Class Principal Balances
of the Class A Certificates and the Class R Certificate have been reduced to
zero, then the Subordinate Prepayment Percentage shall equal 100%.
SUBORDINATE PRINCIPAL AMOUNT: On any Distribution Date, the excess of (A)
the sum of (i) the Subordinate Percentage of the Principal Payment Amount for
the Loans (exclusive of the portion thereof attributable to principal
distributions to the Class A-P Certificates pursuant to clause (I)(a)(i) of the
definition of "Certificate Distribution Amount"), (ii) the Subordinate Principal
Prepayments Amount and (iii) the Subordinate Liquidation Amount over (B) the
amount required to be distributed to the Class A-P Certificates pursuant to
clauses (I)(a)(v) and (I)(a)(vi) of the definition of "Certificate Distribution
Amount" on such Distribution Date. Any reduction in the Subordinate Principal
Amount pursuant to clause (B) of this definition shall: (i) first, be
subtracted from the amount calculated pursuant to clause (A)(i) of this
definition, (ii) second, be subtracted from the amount calculated pursuant to
clause (A)(iii) of this definition and (iii) third, be subtracted from the
amount calculated pursuant to clause (A)(ii) of this definition. 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)(a) 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 Prepayments 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. For purposes of this definition
and the definition of "Subordination Level," the relative seniority, from
highest to lowest, of the Classes of Subordinate Certificates shall be as
follows: Class M, Class B-1, Class B-2, Class B-3, Class B-4 and B-5.
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SUBORDINATE PRINCIPAL PREPAYMENTS AMOUNT: On any Distribution Date, the
Subordinate Prepayment Percentage of the Principal Prepayment Amount for the
Loans (exclusive of the portion thereof attributable to principal distributions
to the Class A-P Certificates pursuant to clause (I)(a)(i) of the definition of
"Certificate Distribution Amount").
SUBORDINATION LEVEL: On any specified date, with respect to any Class of
Subordinate Certificates, the percentage obtained by dividing the sum of the
Class Principal Balances of all Classes of Certificates which are subordinate in
right of payment to such Class by the sum of the Class Principal Balances of all
Classes of Certificates as of such date prior to 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).
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); (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 August 26, 1998, 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.
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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 and (b) aggregate
Curtailment Shortfall over (ii) Compensating Interest.
UNDERWRITERS: Donaldson, Lufkin & Jenrette Securities Corporation and ABN
AMRO Incorporated.
U.S. PERSON: 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 that
is subject to U.S. federal income tax regardless of the source of its income, 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 United States
fiduciaries have the authority to control all substantial decisions of the
trust.
VA: The Department of Veterans Affairs, formerly known as the Veterans
Administration, or any successor thereto.
WITHDRAWAL DATE: The Business Day immediately preceding the related
Distribution Date.
All references to the origination date or original date in the Loan
Schedule with respect to a Loan shall refer to the date upon which the related
Mortgage Note was originated or modified, whichever is later.
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
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<PAGE>
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 1998-3 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) 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 (with a copy to the Trustee) a true and correct copy of
such Mortgage, 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 Mortgage has been
dispatched to the appropriate public recording official for recordation or
(b) 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;
(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
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<PAGE>
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 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 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
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<PAGE>
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 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
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<PAGE>
as may be necessary to ensure that, if this Agreement were deemed to create a
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.
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
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<PAGE>
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, less any Nonrecoverable Advances made with respect to
any 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 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 the
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.
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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 the information relating to the Loans set forth in the
Prospectus, Prospectus Supplement and the Form 8-K filed pursuant to the
Securities Exchange Act of 1934 relating to offering of the Certificates is
true and correct in all material respects at the date or dates respecting
which such information is furnished as specified therein;
(iii) that as of the date of the transfer of the 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;
(iv) that as of the date of initial issuance of the Certificates,
no payment of principal of or interest on or in respect of any Loan is 30
days or more past due from the Due Date of such Loan;
(v) 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;
(vi) 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;
(vii) 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;
(viii) that to the best of the Depositor's knowledge, as of the
date of the initial issuance of the Certificates, all taxes, governmental
assessments and insurance premiums previously due and owing with respect to
the Mortgaged Property have been paid;
(ix) that each Mortgage Note and the related Mortgage are genuine
and each is the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms except as such enforcement may be
limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally
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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;
(x) that each Mortgage is a valid and enforceable first lien on
the property securing the related Mortgage Note, and that each Loan is
covered by an ALTA mortgagee title insurance policy or other form of policy
or insurance generally acceptable to FNMA or FHLMC, issued by, and is a
valid and binding obligation of, a title insurer acceptable to FNMA or
FHLMC insuring the originator, its successor and assigns, as to the lien of
the Mortgage in the original principal amount of the Loan subject only to
(a) the lien of current real property taxes and assessments not yet due and
payable, (b) covenants, conditions and restrictions, rights of way,
easements and other matters of public record as of the date of recording of
such Mortgage acceptable to mortgage lending institutions in the area in
which the Mortgaged Property is located or specifically referred to in the
appraisal performed in connection with the origination of the related Loan
and (c) such other matters to which like properties are commonly subject
which do not individually, or in the aggregate, materially interfere with
the benefits of the security intended to be provided by the Mortgage;
(xi) that as of the initial issuance of the Certificates, neither
the Depositor nor any prior holder of any Mortgage has, except as the
Mortgage File may reflect, modified the Mortgage in any material respect;
satisfied, cancelled or subordinated such Mortgage in whole or in part;
released such Mortgaged Property in whole or in part from the lien of the
Mortgage; or executed any instrument of release, cancellation, modification
or satisfaction;
(xii) that each Mortgaged Property consists of a fee simple estate
or a leasehold estate or condominium form of ownership in real property;
(xiii) the condominium projects that include the condominiums that
are the subject of any condominium loan are generally acceptable to FNMA or
FHLMC;
(xiv) 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;
(xv) that each Loan was originated on FNMA or FHLMC uniform
instruments;
(xvi) 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
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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;
(xvii) 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;
(xviii) that no Loan had a Loan-to-Value Ratio at origination in
excess of 95%;
(xix) the Loans were not selected in a manner to adversely affect the
interests of the Certificateholders and the Depositor knows of no
conditions which reasonably would cause it to expect any Loan to become
delinquent or otherwise lose value;
(xx) 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; and
(xxi) each Loan is a "qualified mortgage" within the meaning of
Section 860G of the Code without regard to Section 1.860G-2(f) of the
REMIC Provisions or any similar rule.
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 the 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
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the date such breach was discovered; PROVIDED, FURTHER, that no substitution
(or cure which would constitute a loan modification for federal income tax
purposes) may be effected any later than two years after the Closing Date;
PROVIDED, FURTHER, that as a pre-condition to any substitution (or cure which
would constitute a loan modification for federal income tax purposes) to be
effected later than 90 days after the Closing Date (and within two years of
the Closing Date), the Trustee shall receive from the Depositor an Opinion of
Counsel to the effect that such substitution (or cure which would constitute
a loan modification for federal income tax purposes) will not adversely
affect the REMIC status of REMIC I or REMIC II or constitute a prohibited
transaction under the REMIC Provisions of the Code and, if applicable, the
REMIC provisions of the relevant State. 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
ABN AMRO Mortgage Corporation , 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-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-X
Certificates, the Class A-P 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 and the Class B-5 Certificates.
The "residual interest" (within the meaning of Section 860(G)(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 the Class A-1 Regular
Interest, the Class A-2 Regular Interest, the Class A-3 Regular Interest,
the Class A-4 Regular Interest, the Class A-5 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.
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(c) All payments with respect to each of the Class A-1, A-3,
A-4, A-5, A-X, M, B-1, B-2, B-3, B-4 and B-5 Certificates shall be
considered to have been made solely from the Class of Regular Interests of
REMIC I having the same designation. All payments with respect to the
Class A-2 and Class A-6 Certificates shall be considered to have been made
solely from the Class A-2 Regular Interest of REMIC I.
The interest rate of each of the REMIC I Regular Interest Classes A-1,
A-3, A-4, A-5, 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 Class of REMIC II having the
same designation. The Class A-2 Regular Interest shall have an interest
rate of 6.750%.
The principal balance of each of the Regular Interests of REMIC I
(except the Class A-2 and A-X Regular Interests) is equal to the principal
balance of the Certificate of REMIC II which has the same designation. The
principal balance of the Class A-2 Regular Interest is equal to the sum of
the principal balances of the Class A-2 and A-6 Certificates. The notional
principal balance of the non-principal-bearing Regular Interest of REMIC I
(i.e., the Class A-X Regular Interest) is equal to the Notional Amount of
the Class of Certificates of REMIC II (i.e., the Class A-X Certificates)
which has the same designation.
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:
(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;
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(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 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:
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(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 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
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Trustee for, any action taken by the Servicer pursuant to the application
of any such power of attorney. The relationship of the Servicer (and of
any successor thereto) to the Trustee under this Agreement is intended by
the parties to be that of an independent contractor and not that of a joint
venturer, partner or agent.
(b) The Servicer, Trustee and Depositor intend that REMIC I
and REMIC II formed hereunder shall constitute, and that the Servicer
shall perform its duties and obligation hereunder so as to qualify each
of them as, a "real estate mortgage investment conduit" as defined in and
in accordance with the REMIC Provisions. The Tax Matters Person, or the
Person acting as attorney-in-fact and agent therefor, shall: (a) prepare
and file, or cause to be prepared and filed, federal tax returns (as well
as any other federal and state information and other returns) using a
calendar year as the taxable year when and as required by the REMIC
Provisions; (b) make (or cause to be made) an election, on behalf of each
of REMIC I and REMIC II, to be treated as a REMIC on the Federal tax
return and any applicable state or local returns for the first taxable
year, in accordance with the REMIC Provisions; (c) prepare and forward,
or cause to be prepared and forwarded, to the Certificateholders all
information reports (including, without limitation, the information
required in connection with the computation of the present value of
anticipated excess inclusions as required by Section 1.860E-2(a)(5) of
the REMIC Provisions) as and when required to be provided to them in
accordance with the REMIC Provisions; (d) conduct the affairs of the
Trust Fund at all times that REMIC I Regular Interests or REMIC II
Certificates are outstanding so as to maintain the status of each of
REMIC I and REMIC II as a REMIC under the REMIC Provisions; and (e) not
knowingly or intentionally take any action or omit to take any action
that would cause the termination of the REMIC status of either REMIC I or
REMIC II.
(c) The Servicer may enter into sub-servicing agreements with
third parties with respect to any of its respective obligations hereunder,
PROVIDED, that (1) any such agreement shall be consistent with the
provisions of this Agreement and (2) no sub-servicer retained by the
Servicer shall grant any modification, waiver or amendment to any Loan
without the approval of the Servicer. Any such sub-servicing agreement may
permit the sub-servicer to delegate its duties to agents or subcontractors
so long as the related agreements or arrangements with such agents or
subcontractors 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.
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,
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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 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 Agreement,
follow such collection procedures as it follows with
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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;
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(v) All Advances made by the Servicer pursuant to
Section 4.3;
(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 the 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.
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Certain of the Loans may provide for payment by the Mortgagor of amounts to
be used for payment of taxes, assessments, hazard or other insurance premiums or
comparable items for the account of the Mortgagor. The Servicer may deal with
these amounts in accordance with its normal servicing procedures.
Section 3.3. PERMITTED WITHDRAWALS FROM THE CUSTODIAL ACCOUNT FOR P&I.
The Servicer may, from time to time, make withdrawals from the Custodial Account
for P&I for the following purposes:
(a) to reimburse itself for Advances made by it pursuant to
Section 3.4 or 4.3, the Servicer's right to reimburse itself pursuant to
this subclause (a) being limited to 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;
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(f) to reimburse itself for any Nonrecoverable Advances;
(g) to disburse to the Trustee in order that the Trustee may make
payments to Certificateholders in the amounts and in the manner provided
for in Section 4.1;
(h) to pay 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. With respect to each
Loan, the Servicer shall maintain accurate records with respect to each related
Mortgaged Property reflecting the status of taxes, assessments and other similar
items that are or may become a lien on the related Mortgaged Property and the
status of insurance premiums payable with respect thereto. The Servicer shall
require that payments for taxes, assessments, insurance premiums and other
similar items be made by the Mortgagor at the time they first become due. If a
Mortgagor fails to make any such payment on a timely basis, the Servicer shall
advance the amount of any shortfall unless the Servicer determines in its good
faith judgment that such advance would not be ultimately recoverable from future
payments and collections on the related Loan (including without limitation
Insurance Proceeds and Liquidation Proceeds), or otherwise. The Servicer shall
be entitled to reimbursement of advances it makes pursuant to the preceding
sentence, together with interest thereon at the Prime 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
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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 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
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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 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
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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 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) 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
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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 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
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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 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
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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 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 September 30 of each year, beginning
September 30, 1999, 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
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officer and the nature and status thereof. Copies of such statement shall be
provided to the Rating Agency and to any Certificateholder upon request by the
Servicer, or by the Trustee at the Servicer's expense if the Servicer shall fail
to provide such copies and the Trustee is aware that the Servicer has not so
provided copies and so long as the Trustee shall have received the report as
stipulated above.
Section 3.12. ANNUAL INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING REPORT. On
or before September 30 of each year, beginning September 30, 1999, 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 the 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 if the Servicer shall fail to provide such copies and the
Trustee is aware that the Servicer has not so provided copies and so long as the
Trustee shall have received the report as stipulated above.
Section 3.13. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING
THE LOANS. The Servicer shall provide access to the Trustee or to its designees
at its request, and to Certificateholders which are savings and loan
associations, banks or insurance companies, the OTS, the FDIC and the
Supervisory Agents and examiners of the OTS and the FDIC or examiners of any
other federal or state banking or insurance regulatory authority to the
documentation regarding the Loans if so required by applicable regulations of
the OTS or other regulatory authority, such access to be afforded without charge
but only upon reasonable request and during normal business hours at the offices
of the Servicer designated by it. The Trustee or its designee may without
charge copy any document or electronic record maintained by the Servicer
hereunder.
Section 3.14. [Reserved].
Section 3.15. SALE OF DEFAULTED LOANS AND REO PROPERTIES.
(a) With respect to any Defaulted Loan or REO Property which the
Servicer has determined to sell in accordance with the standards set forth
in Section 3.7, the Servicer shall deliver to the Trustee an Officer's
Certificate to the effect that no satisfactory arrangements can be made for
collection of delinquent payments thereon pursuant to Section 3.2, and,
consistent with the servicing standard set forth in Section 3.1 and with a
view to the best economic interest of the Trust Fund, the Servicer has
determined to sell such Loan or REO
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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 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).
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(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 a 100%
Percentage Interest of a Subordinate Certificate or a holder of a class of
securities representing interests in such Subordinate Certificate and/or other
subordinate mortgage pass-through certificates, such agreement to be (i)
substantially in the form of Exhibit R hereto or (ii) subject to each Rating
Agency's acknowledgment that the ratings of the Certificates in effect
immediately prior to the entering into of such agreement would not be qualified,
downgraded or withdrawn and the Certificates would not be placed on credit
review status (except for possible upgrading) as a result of such agreement.
Any such agreement may contain provisions whereby such holder may instruct the
Servicer to commence or delay foreclosure proceedings with respect to delinquent
Loans and will contain provisions for the deposit of cash by the holder that
would be available for distribution to Certificateholders if Liquidation
Proceeds are less than they otherwise may have been had the Servicer acted in
accordance with its normal procedures.
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Section 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 Class B-5 Certificates, until the Class Principal Balance thereof has been
reduced to zero, (b) second, to the Class B-4 Certificates, until the Class
Principal Balance thereof has been reduced to zero, (c) third, to the Class B-3
Certificates, until the Class Principal Balance thereof has been reduced to
zero, (d) fourth, to the Class B-2 Certificates, until the Class Principal
Balance thereof has been reduced to zero, (e) fifth, to the Class B-1
Certificates, until the Class Principal Balance thereof has been reduced to
zero, (f) sixth, to the Class M Certificates, until the Class Principal Balance
thereof has been reduced to zero, and (g) seventh, to the Senior Certificates
related to such Loan (other than the Class A-P and the Class A-X Certificates),
pro rata, according to their Class Principal Balances in reduction of their
respective Class or Principal Balances, as applicable; PROVIDED, HOWEVER, that
if the loss is recognized with respect to a Discount Loan, the applicable
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
Class B-5 Certificates, in reduction of accrued but unpaid interest thereon and
then in reduction of the Class Principal Balance of such Certificates, (b)
second, to the Class B-4 Certificates, in reduction of accrued but unpaid
interest thereon and then in reduction of the Class Principal Balance of such
Certificates, (c) third, to the Class B-3 Certificates, in reduction of accrued
but unpaid interest thereon and then in reduction of the Class Principal Balance
of such Certificates, (d) fourth, to the Class B-2 Certificates, in reduction of
accrued but unpaid interest thereon and then in reduction of the Class Principal
Balance of such Certificates, (e) fifth, to the Class B-1 Certificates, in
reduction of accrued but unpaid interest thereon and then in reduction of the
Class Principal Balance of such Certificates, (f) sixth, to the Class M
Certificates, in reduction of accrued but unpaid interest thereon and then in
reduction of the Class Principal Balance of such Certificates, and (g) seventh,
to the applicable Senior Certificates related to such Loan (other than the Class
A-P Certificates), 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 Balances, as applicable.
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 related 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
Cut-Off Date in respect of each such Loan whether or not paid and (ii) all
amounts of principal in respect of each such Loan that have been received or
advanced and included in the related Available
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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.
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 Certificateholders by wire transfer in immediately available
funds for the account of each 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.
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(d) Whenever, on the basis of Curtailments, Payoffs and Monthly
Payments on the Loans and Insurance Proceeds and Liquidation Proceeds
received and expected to be received during the applicable Prepayment
Period, the Trustee believes, or the Certificate Administrator, if any, has
notified the Trustee that it believes, that the entire remaining unpaid
Class Principal Balance of any Class of Certificates will become
distributable on the next Distribution Date, the Trustee or the Certificate
Administrator, if any, shall, no later than the Determination Date of the
month of such Distribution Date, mail or cause to be mailed to each Person
in whose name a Certificate to be so retired is registered at the close of
business on the Record Date, to the Underwriters and to each 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;
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(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
Certificateholders remaining as of the close of business on the
applicable Determination Date;
(v) The amount of Fraud Coverage available to the
Certificateholders 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. The Trustee or the Certificate Administrator shall include
in each monthly remittance report delivered pursuant to Section 4.2(a) a
statement that the monthly loan by loan information described in this subsection
is available upon
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request and at the expense of any Eligible Certificateholder directed to the
Trustee or the Certificate Administrator.
Section 4.3. ADVANCES BY THE SERVICER; DISTRIBUTION REPORTS TO THE
TRUSTEE. To the extent described below, the Servicer is obligated to advance
its own funds to the Certificate Account to cover any shortfall between (i)
payments scheduled to be received in respect of Loans serviced by such Servicer,
and (ii) the amounts actually deposited in the Certificate Account on account of
such payments. The Servicer's obligation to make any Advance or Advances
described in this Section 4.3 is effective only to the extent that such Advance
is, in the good faith judgment of the Servicer, reimbursable from Insurance
Proceeds or Liquidation Proceeds of the related Loans or recoverable as late
Monthly Payments with respect to the related Loans or otherwise.
Prior to the close of business on each Determination Date, the Servicer
shall determine whether or not it will make an Advance on the next Withdrawal
Date and shall furnish a statement to the Certificate Administrator, if any, the
Trustee, the Paying Agent, if any, and to any Certificateholder requesting the
same, setting forth the aggregate amount to be distributed on the next
succeeding Distribution Date on account of principal and interest in respect of
the Loans, stated separately. In the event that full scheduled amounts of
principal and interest in respect of the related Loans shall not have been
received by or on behalf of the Servicer prior to the Withdrawal Date preceding
such Distribution Date and the Servicer shall have determined that an Advance
shall be made in accordance with this Section 4.3, the Servicer shall so specify
and shall specify the aggregate amount of such Advance.
In the event that the Servicer shall be required to make an Advance, it
shall on the Withdrawal Date either (i) deposit in the Certificate Account an
amount equal to such Advance, (ii) direct the Trustee or the Certificate
Administrator (if so appointed by the Trustee) to make an appropriate entry in
the records of the Certificate Account that funds in such account being held for
future distribution or withdrawal have been, as permitted by this Section 4.3,
used by such Servicer to make such Advance, or (iii) make advances in the form
of any combination of (i) and (ii) aggregating the amount of such Advance. Any
funds being held for future distribution to Certificateholders and so used shall
be replaced by the related Servicer by deposit in the Certificate Account on any
future Withdrawal Date to the extent that funds in the Certificate Account on
the related Distribution Date with respect to the related Loans shall be less
than payments to Certificateholders required to be made on such date with
respect to such Loans. The Servicer 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.
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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 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.
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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 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
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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).
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 National Bank will be the Certificate Administrator and
Paying Agent. If LaSalle National Bank ceases to serve as Certificate
Administrator or Paying Agent, the Trustee shall send written notice to all
Certificateholders (i) indicating that LaSalle National Bank is no longer in
such capacity and (ii) setting forth its replacement, if any, appointed pursuant
to this Section 4.10.
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ARTICLE V
THE CERTIFICATES
Section 5.1. THE CERTIFICATES.
(a) The Certificates shall be substantially in the forms set
forth in Exhibits A and B attached hereto, and shall be executed by the
Trustee, authenticated by the Trustee (or any duly appointed Authenticating
Agent) and delivered to or upon the order of the Depositor upon receipt by
the Trustee of the documents specified in Section 2.1. The Certificates
shall be issuable in Authorized Denominations evidencing Percentage
Interests. Certificates shall be executed by manual or facsimile signature
on behalf of the 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 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
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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 is not acquiring its Ownership Interest in
the Residual Certificate that is the subject of the proposed
Transfer as a nominee, trustee or agent for any Person who is not
a Permitted Transferee, that for so long as it retains its
Ownership Interest in a Residual Certificate, it will endeavor to
remain a Permitted Transferee, and that it has reviewed the
provisions of this Section 5.1(c) and agrees to be bound by them,
and (2) a certificate, attached hereto as Exhibit I, from the
Holder wishing to transfer the Residual Certificate, in form and
substance satisfactory to the Depositor, representing and
warranting, among other things, that no purpose of the proposed
Transfer is to allow such Holder to impede the assessment or
collection of tax.
(C) Notwithstanding the delivery of a Transferee
Affidavit and Agreement by a proposed Transferee under clause (B)
above, if the Trustee or the Certificate Registrar if not the
same Person as the Trustee has actual knowledge that the proposed
Transferee is not a Permitted Transferee, no Transfer of an
Ownership Interest in a Residual Certificate to such proposed
Transferee shall be effected.
(D) Each Person holding or acquiring any Ownership
Interest in a Residual Certificate agrees by holding or acquiring
such Ownership Interest (i) to require a Transferee Affidavit and
Agreement from any other Person to whom such Person attempts to
transfer its Ownership Interest and to
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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 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
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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.
(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:
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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 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
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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 a
"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) 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
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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 the Rating Agency. Notwithstanding the
foregoing, any Class of Junior Subordinate Certificate may be
transferred, sold, pledged or otherwise disposed of in accordance with
the requirements set forth in Section 5.1(f).
(f) Transfers of the Junior Subordinate Certificates may be made
in accordance with this Section 5.1(f). To effectuate a Certificate
transfer in accordance with this Section 5.1(f), the proposed transferee
of such Certificate must provide the Trustee, the Certificate Registrar and
the Depositor with an investment letter substantially in the form of
Exhibit L attached hereto, which investment letter shall not be an expense
of the Trustee, the Certificate Administrator, the Certificate Registrar
or the Depositor, and which investment letter states that, among other
things, such transferee (i) is a "qualified institutional buyer" as defined
under Rule 144A, acting for its own account or the accounts of other
"qualified institutional buyers" as defined under Rule 144A, and (ii) is
aware that the proposed transferor intends to rely on the exemption from
registration requirements under the Securities Act provided by Rule 144A.
Notwithstanding the foregoing, the proposed transferee of such Certificate
shall not be required to provide the Trustee, the Certificate Registrar or
the Depositor with Annex 1 or Annex 2 to the form of Exhibit L attached
hereto if the Depositor so consents prior to each such transfer. Such
transfers shall be deemed to have complied with the requirements of this
Section 5.1(f). The Holder of a Certificate desiring to effect such
transfer does hereby agree to indemnify the Trustee, the Certificate
Administrator, if any, the Depositor, and the Certificate Registrar against
any liability that may result if transfer is not made in accordance with
this Agreement.
(g) None of the Trustee, the Certificate Administrator, the
Certificate Registrar or the Paying Agent shall have any liability to the
Trust Fund arising from a registration or transfer of a Certificate in
reliance upon a certification, Officer's Certificate, affidavit, ruling or
Opinion of Counsel described in this Section 5.1.
Section 5.2. CERTIFICATES ISSUABLE IN CLASSES; DISTRIBUTIONS OF PRINCIPAL
AND INTEREST; AUTHORIZED DENOMINATIONS. The aggregate principal amount of
Certificates that may be authenticated and delivered under this Agreement is
limited to the aggregate Principal Balance of the Loans as of the Cut-Off Date,
as specified in the Preliminary Statement to this Agreement, except for
Certificates authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Certificates pursuant to Section 5.3. Such
aggregate principal amount shall be allocated among one or more Classes having
designations, types of interests, initial per annum Remittance Rates, initial
Class Principal Balances and last scheduled Distribution Dates as specified in
the Preliminary Statement to this Agreement. The aggregate Percentage Interest
of each Class of Certificates of which the Class Principal Balance equals zero
as of the Cut-Off Date that may be
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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 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 cancelled by
the Trustee or any Authenticating Agent.
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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.
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.
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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:
(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
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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 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, or to the extent applicable with respect to such
Definitive Certificates, 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.
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ARTICLE VI
THE DEPOSITOR AND THE SERVICER
Section 6.1. LIABILITY OF THE DEPOSITOR AND THE SERVICER. The Depositor
and the Servicer shall each be liable in accordance herewith only to the extent
of the obligations specifically imposed by this Agreement and undertaken
hereunder by the Depositor and the Servicer herein.
Section 6.2. MERGER OR CONSOLIDATION OF THE DEPOSITOR OR THE
SERVICER. Subject to the following paragraph, the Depositor and the Servicer
each will keep in full effect its existence, rights and franchises as
corporations, each under the laws of the jurisdiction of its incorporation, and
will obtain and preserve its qualification to do business as a foreign
corporation in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Agreement, the
Certificates or any of the Loans and to perform its respective duties under this
Agreement.
The Depositor or the Servicer may be merged or consolidated with or into
any Person, or transfer all or substantially all of its assets to any Person, in
which case any Person resulting from any merger or consolidation to which the
Depositor or Servicer shall be a party, or any Person succeeding to the business
of the Depositor or Servicer, shall be the successor of the Depositor or
Servicer hereunder, without the execution or filing of any paper or any further
act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 6.3. LIMITATION ON LIABILITY OF THE SERVICER AND OTHERS. Neither
the Servicer nor any of the directors, officers, employees or agents of the
Servicer shall be under any liability to the Trust Fund or the
Certificateholders for any action taken or for refraining from the taking of any
action in good faith pursuant to this Agreement, or for errors in judgment;
PROVIDED, HOWEVER, that this provision shall not protect any director, officer,
employee or agent of the Servicer against any liability which would otherwise be
imposed by reason of willful misfeasance, bad faith or gross negligence in the
performance of duties or by reason of reckless disregard of obligations and
duties hereunder, nor shall this provision protect the Servicer against any
liability that would otherwise be imposed by reason of negligence in the
performance of duties hereunder. The Servicer and any director, officer,
employee or agent of the Servicer may rely in good faith on any document of any
kind prima facie properly executed and submitted by any Person respecting any
matters arising hereunder. The Servicer and any director, officer, employee or
agent of the Servicer shall be indemnified by the Trust Fund and held harmless
against any loss, liability or expense incurred in connection with any legal
action relating to this Agreement or the Certificates, other than any loss,
liability or expense, in the case of the Servicer and any director, officer,
employee or agent of the Servicer, incurred by reason of willful misfeasance,
bad faith or gross negligence in the performance of duties hereunder or by
reason of reckless disregard of obligations and duties hereunder or, in the case
of the Servicer, as Servicer, incurred by reason of negligence in the
performance of any duties hereunder. The Servicer shall not be under any
obligation to appear in, prosecute or defend any legal 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,
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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 the 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 the 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 (except
the repurchase obligations set forth in Sections 2.2 and 2.3 hereof, which shall
remain obligations of the Depositor) in accordance with Section 7.5 hereof, and
(iv) the then-current rating of the Class A Certificates will not be reduced as
a result of such transfer, and (v) has, in the reasonable opinion of the
Trustee, the qualifications, resources and experience to properly carry out,
observe and perform the duties, obligations and responsibilities of 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.
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(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, marshalling of assets and liabilities or similar proceedings, or for
the winding-up or liquidation of its affairs, shall have been entered
against the Servicer and such decree or order shall have remained in force
undischarged or unstayed for a period of 60 days;
(iv) the Servicer shall consent to the appointment of a
conservator or receiver or liquidator or liquidating committee in any
insolvency, readjustment of debt, marshalling of assets and liabilities,
voluntary liquidation or similar proceedings of or relating to the Servicer
or of or relating to all or substantially all of its property;
(v) the Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of
any applicable insolvency or reorganization statute, make an assignment for
the benefit of its creditors or voluntarily suspend payment of its
obligations; or
(vi) any failure of the Servicer to make any Advance required to
be made from its own funds pursuant to Section 4.3 which continues
unremedied for a period of one Business Day after the date upon which such
Advance was to have been made;
then, if an Event of Default described in clauses (i)-(v) of this Section 7.1
shall occur, and in each and every such case, subject to applicable law, so long
as an Event of Default shall not have been 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
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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 the Rating Agency notice of any Event of
Default.
Section 7.2. OTHER REMEDIES OF TRUSTEE. During the continuance of any
Event of Default, so long as such Event of Default shall not have been remedied,
the Trustee, in addition to the rights specified in Section 7.1, shall have the
right, in its own name as trustee of an express trust, to take all actions now
or hereafter existing at law, in equity or by statute to enforce its rights and
remedies and to protect the interests, and enforce the rights and remedies, of
the Certificateholders (including the institution and prosecution of all
judicial, administrative and other proceedings and the filing of proofs of claim
and debt in connection therewith). Except as otherwise expressly provided in
this Agreement, no remedy provided for by this Agreement shall be exclusive of
any other remedy, and each and every remedy shall be cumulative and in addition
to any other remedy and no delay or omission to exercise any right or remedy
shall impair any such right or remedy or shall be deemed to be a waiver of any
Event of Default.
Section 7.3. DIRECTIONS BY CERTIFICATEHOLDERS AND DUTIES OF TRUSTEE
DURING EVENT OF DEFAULT. During the continuance of any Event of Default,
Holders of Certificates evidencing, in aggregate, not less than 25% of the Trust
Fund or 51% of the aggregate Percentage Interests of any Class of Certificates
may direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred upon
the Trustee under this Agreement; PROVIDED, HOWEVER, that the Trustee shall be
under no obligation to pursue any such remedy, or to exercise any of the trusts
or powers vested in it by this Agreement (including, without limitation, (i) the
conducting or defending of any administrative action or litigation hereunder or
in relation hereto and (ii) the terminating of the 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
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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 the Rating Agency. For all
purposes of this Agreement, in the absence of actual knowledge by a Responsible
Officer of the Trustee, the Trustee shall not be deemed to have knowledge of any
failure of the 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 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 (except
those contained in Sections 2.2 and 2.3) and in its capacity as such
successor shall have the same limitation of liability herein granted to the
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 as
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
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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 Section 2.2 and 2.3 hereof, which
shall remain obligations of the Depositor) to the qualified party
submitting the highest qualifying bid. The Trustee shall deduct all costs
and expenses of any public announcement and of any 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
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as practicable give written notice thereof to Certificateholders at
their respective addresses appearing in the Certificate Register and the
Rating Agency.
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.1. DUTIES OF TRUSTEE. The Trustee, prior to the occurrence of
an Event of Default and after the curing of all Events of Default which may have
occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement. In case an Event of Default has
occurred (which has not been cured), the Trustee, subject to the provisions of
Sections 7.1, 7.3, 7.4 and 7.5, shall exercise such of the rights and powers
vested in it by this Agreement, and use the same degree of care and skill in
their exercise as a prudent person would exercise or use under the circumstances
in the conduct of such person's own affairs. Any permissive right of the
Trustee enumerated in this Agreement shall not be construed as a duty.
Subject to Sections 8.2(i), 8.3 and 8.4, the Trustee, upon receipt of all
resolutions, certificates, statements, opinions, reports, documents, orders or
other instruments furnished to the Trustee which are specifically required to be
furnished pursuant to any provision of this Agreement, shall examine them to
determine whether they are in the form required by this Agreement; PROVIDED,
HOWEVER, that the Trustee shall not be responsible for the accuracy or content
of any resolution, certificate, statement, opinion, report, document, order or
other instrument furnished by any party hereunder. If any such instrument is
found not to conform to the requirements of this Agreement in a material manner,
the Trustee shall take action as it deems appropriate to have the instrument
corrected, and if the instrument is not corrected to the Trustee's reasonable
satisfaction, the Trustee will provide notice thereof to the Certificateholders
and the Rating Agency.
No provision of this Agreement shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act or
its own willful misconduct or in the event the Trustee is acting as successor
servicer pursuant to Section 7.5, to the standard imposed on the 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;
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(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
(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 to any
insurance, (C) to see to the payment or discharge of any tax, assessment,
or other governmental charge or any lien or encumbrance of any kind owing
with respect to, assessed or levied against, any part of the Trust Fund
other than from funds available in the Certificate Account, and (D) to
confirm or verify the contents of any reports or certificates of the
Servicer delivered to the Trustee pursuant to this Agreement believed by
the Trustee to be genuine and to have been signed or presented by the
proper party or parties.
None of the provisions contained in this Agreement shall require the
Trustee to expend or risk its own funds or otherwise incur financial liability
in the performance of any of its duties as Trustee hereunder or in the exercise
of any of its rights or powers if there is reasonable ground for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it, and none of the provisions contained in this
Agreement shall in any event require the Trustee to perform, or be responsible
for the manner of performance of, any of the obligations of the Servicer under
this Agreement except during such time, if any, as the Trustee shall be the
successor to, and be vested with the rights, duties, powers and privileges of,
the Servicer in accordance with the terms of this Agreement.
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Section 8.2. CERTAIN MATTERS AFFECTING TRUSTEE. Except as otherwise
provided in Section 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;
(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
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afforded to it by the terms of this Agreement, the Trustee may require
reasonable indemnity against such expense or liability as a condition to
such proceeding. The reasonable expense of every such examination shall
be paid by the Depositor or, if paid by the Trustee, shall be repaid by
the Depositor upon demand.
Section 8.4. TRUSTEE NOT LIABLE FOR CERTIFICATES OR LOANS. The recitals
contained herein and in the Certificates (other than the certificate of
authentication on the Certificates) shall be taken as the statements of the
Depositor, and the Trustee assumes no responsibility for the correctness of the
same. The Trustee makes no representations or warranties as to the validity or
sufficiency of this Agreement or of the Certificates or of any Loan or related
document. The Trustee shall not be accountable for the use or application by
the Depositor of any of the Certificates or of the proceeds of such Certificates
or for the use or application of any funds paid to the Servicer in respect of
the Loans or deposited in or withdrawn from the Custodial Account for P&I by the
Servicer or for investment of any such amounts. The Trustee shall not be
responsible for the legality or validity of this Agreement or the validity,
priority, perfection or sufficiency of the security for the Certificates issued
or intended to be issued hereunder. The Trustee shall have no responsibility
for filing any financing or continuation statement in any public office at any
time or to otherwise perfect or maintain the perfection of any security interest
or lien granted to it hereunder or to record this Agreement.
Neither the Trustee nor any of the directors, officers, employees or agents
of the Trustee shall be under any liability to the Trust Fund or the
Certificateholders for any action taken or for refraining from the taking of any
action in good faith pursuant to this Agreement, or for errors in judgment while
an Event of Default exists; PROVIDED, HOWEVER, that this provision shall not
protect the Trustee or any such person against any liability which would
otherwise be imposed by reason of willful misfeasance, bad faith or negligence
in the performance of duties. The Trustee and any director, officer, employee
or agent of the Trustee shall be indemnified by the Depositor and held harmless
against any loss, liability or expense, including reasonable attorneys' fees,
incurred in connection with or related to the Trustee's performance of its
powers and duties under this Agreement (including, without limitation,
performance under Section 8.1 hereof), or any action relating to this Agreement
or the Certificates, or the performance of the Trustee's duties hereunder, other
than any loss, liability or expense incurred by any such Person by reason of
willful misfeasance, bad faith or negligence in the performance of duties. Any
such losses, liabilities and expenses resulting therefrom shall be losses,
liabilities and expenses of the Depositor. The indemnification provided
hereunder shall survive termination of this Agreement.
Section 8.5. TRUSTEE MAY OWN CERTIFICATES. The Trustee and any 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
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the compensation of a trustee of an express trust) for all services rendered
by it in the execution of the trusts hereby created and in the exercise and
performance of any of the powers and duties hereunder of the Trustee, and the
Servicer shall pay or reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances, including reasonable
attorneys' fees, incurred or made by the Trustee in accordance with any of
the provisions of this Agreement (including the reasonable compensation and
the expenses and disbursements of its counsel and of all persons not
regularly in its employ) except any such expense, disbursement or advance as
may arise from its negligence or bad faith. The Tax Matters Person (or
Person acting as its attorney-in-fact or agent) shall indemnify the Trustee
for any liability of or assessment against the Trustee resulting from any
error in any tax or tax information returns prepared or caused to be prepared
by such Person. In the event that (i) the Servicer does not pay to the
Trustee any compensation owed to the Trustee pursuant to this Agreement or
(ii) the Trustee is not reimbursed for any expense, disbursement or advance
incurred or made by the Trustee pursuant to this Agreement, the Trustee shall
be entitled to withdraw and retain such amount from the Certificate Account.
In the event the Trustee incurs expenses or renders services in any
proceedings which result from an Event of Default under Section 7.1,
subsections (iii), (iv) or (v) of this Agreement, or from any default which,
with the passage of time, would become an Event of Default, the expenses so
incurred and compensation for services so rendered are intended to constitute
expenses of administration under the United States Bankruptcy Code or
equivalent law.
Section 8.7. ELIGIBILITY REQUIREMENTS FOR TRUSTEE. The Trustee hereunder
shall at all times be a corporation or association organized and doing business
under the laws of any state of the United States of America, authorized under
such laws to exercise corporate trust powers, having a combined capital and
surplus of at least $50,000,000 and subject to supervision or examination by
federal or state authority. The Trustee shall not control the Servicer nor be a
parent of or a subsidiary of the Servicer. If such corporation or association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 8.7 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 8.7, the Trustee shall resign immediately in the
manner and with the effect specified in Section 8.8.
Section 8.8. RESIGNATION AND REMOVAL OF TRUSTEE. The Trustee may at any
time resign and be discharged from the trusts hereby created by giving written
notice of resignation to the Servicer. Such notice shall also be furnished to
the 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,
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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 a successor
trustee pursuant to any of the provisions of this Section 8.8 shall become
effective only upon acceptance of appointment by the successor trustee as
provided in Section 8.9.
Section 8.9. SUCCESSOR TRUSTEE. Any successor trustee appointed as
provided in Section 8.8 shall execute, acknowledge and deliver to the Servicer
and to its predecessor trustee an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the predecessor trustee
shall become effective, and such successor trustee, without any further act,
deed or conveyance, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor hereunder, with like effect as if
originally named as trustee herein. The predecessor trustee shall deliver or
cause to be delivered to the successor trustee all Mortgage Files and related
documents and statements held by it hereunder (other than any Mortgage Files at
the time held by the Custodian, if it shall agree to become the agent of any
successor trustee hereunder), and the Servicer and the predecessor trustee shall
execute and deliver such instruments and do such other things as may reasonably
be required for more fully and certainly vesting and confirming in the successor
trustee all such rights, powers, duties and obligations.
No successor trustee shall accept appointment as provided in this Section
8.9 unless at the time of such acceptance such successor trustee shall be
eligible under the provisions of Section 8.7.
Upon acceptance of appointment by a successor trustee as provided in this
Section 8.9, the Servicer shall mail notice of the succession of such trustee
hereunder to all holders of Certificates at their addresses as shown in the
Certificate Register and to the 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
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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 or separate trustee hereunder shall not be required to meet the
terms of eligibility as a successor trustee under Section 8.7 hereunder but no
notice to holders of Certificates of the appointment of co-trustee(s) or
separate trustee(s) shall be required under Section 8.9 hereof.
In the case of any appointment of a co-trustee or separate trustee pursuant
to this Section 8.11, all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co-trustee jointly, except
to the extent that under any law of any jurisdiction in which any particular act
or acts are to be performed (whether as Trustee hereunder or as successor to the
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
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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 National Bank. 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.
(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
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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 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 15 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.
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
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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 the Rating Agency mailed by first class mail no later
than the 25th day of the month preceding the month of such final distribution
specifying (i) the Distribution Date upon which final payment on the
Certificates will be made upon presentation and surrender of Certificates at the
office or agency of the Trustee or the Certificate Registrar therein designated,
(ii) the amount of any such final payment and (iii) that the Record Date
otherwise applicable to such Distribution Date is not applicable, payments being
made only upon presentation and surrender of the Certificates at the office or
agency of the Trustee or the Certificate Registrar therein specified. The
Trustee or its agent shall give such notice to the Certificate Registrar and the
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 the 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 Custodians 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.
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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:
(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.
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ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.1. AMENDMENT. This Agreement may be amended from time to time
by the Depositor and the Trustee, without the consent of any of the
Certificateholders, (a) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision herein, or
to make any other provisions with respect to matters or questions arising under
this Agreement, or (b) to modify, eliminate or add to any provisions to such
extent as shall be necessary to maintain the qualification of the Trust Fund as
a REMIC at all times that any Class A or 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.
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 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 Holders 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.
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As soon as practicable after the execution of any such amendment, the
Trustee shall furnish written notification of the substance of such amendment to
each Certificateholder and the Rating Agency.
It shall not be necessary for the consent of the Certificateholders under
this Section 10.1 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
Prior to the execution of any amendment to this Agreement, the Trustee
shall be entitled to receive and rely upon an opinion of counsel stating that
the execution of such amendment is authorized or permitted by this Agreement.
The Trustee may, but shall not be obligated to, enter into any such amendment
which affects the Trustee's own rights, duties or immunities under this
Agreement.
Section 10.2. RECORDATION OF AGREEMENT. This Agreement (or an abstract
hereof, if acceptable by the applicable recording office) is subject to
recordation in all appropriate public offices for real property records in all
the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Servicer at its expense, but only after the Depositor has delivered to the
Trustee an Opinion of Counsel to the effect that such recordation materially and
beneficially affects the interests of the Certificateholders.
For the purpose of facilitating the recordation of this Agreement as herein
provided and for other purposes, this Agreement may be executed simultaneously
in any number of counterparts, each of which counterparts shall be deemed to be
an original, and such counterparts shall constitute but one and the same
instrument.
Section 10.3. LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS. The death or
incapacity of any Certificateholder shall not operate to terminate this
Agreement or the Trust Fund, nor entitle such Certificateholder's legal
representatives or heirs to claim an accounting or take any action or proceeding
in any court for a partition or winding up of the Trust Fund, nor otherwise
affect the rights, obligations and liabilities of the parties hereto or any of
them.
Except as otherwise expressly provided herein no Certificateholder, solely
by virtue of its status as a Certificateholder, shall have any right to vote or
in any manner otherwise control the operation and management of the Trust Fund,
or the obligations of the parties hereto, nor shall anything herein set forth,
or contained in the terms of the Certificates, be construed so as to constitute
the Certificateholders from time to time as partners or members of an
association, nor shall any Certificateholder be under any liability to any third
person by reason of any action taken by the parties to this Agreement pursuant
to any provision hereof.
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No Certificateholder, solely by virtue of its status as Certificateholder,
shall have any right by virtue or by availing of any provision of this Agreement
to institute any suit, action or proceeding in equity or at law upon or under or
with respect to this Agreement, unless such holder previously shall have given
to the Trustee a written notice of default and of the continuance thereof, as
hereinbefore provided, and unless all of the Holders of Certificates evidencing,
in aggregate, not less than 25% of the Trust Fund shall have made written
request upon the Trustee to institute such action, suit or proceeding in its own
name as Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Trustee, for 60 days after its receipt of
such notice, request and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding; it being understood and intended,
and being expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more holders of Certificates
shall have any right in any manner whatever by virtue or by availing of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, or to enforce any right
under this Agreement, except in the manner herein provided and for the benefit
of all Certificateholders. For the protection and enforcement of the provisions
of this Section 10.3, each and every Certificateholder and the Trustee shall be
entitled to such relief as can be given either at law or in equity.
Section 10.4. GOVERNING LAW; JURISDICTION. THIS AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF
THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 10.5. NOTICES. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered at or mailed by certified or registered mail, return receipt requested
(a) in the case of the Depositor, to ABN AMRO Mortgage Corporation, 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, 26 Broadway, 10th Floor, New York, New York 10004-1064,
Attention: Residential Mortgage Surveillance Group, 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: George Massim, 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
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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.
102
<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/
----------------------------------
Its
----------------------------------
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, as Trustee
By /s/
----------------------------------
Its
----------------------------------
LASALLE HOME MORTGAGE CORPORATION,
as Servicer
By /s/
----------------------------------
Its
----------------------------------
<PAGE>
STATE OF ___________ )
: ss.:
COUNTY OF _________ )
On ________________, 199__ before me, ____________________________,
personally appeared _______________________, a ___________________ of ABN AMRO
Mortgage Corporation, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to
the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of which
the person(s) acted, executed the instrument.
WITNESS my hand and official seal
Signature ____________________________ (Seal)
<PAGE>
STATE OF _________ )
: ss.:
COUNTY OF ________ )
On the ___ of ______, 199__ before me, personally appeared
_______________ known to me to be ____________ of _________________________,
one of the corporations that executed the within instrument and also known
to me to be the person who executed it on behalf of said corporation, and
acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
______________________________
Notary Public
[NOTARIAL SEAL]
<PAGE>
STATE OF _________ )
: ss.:
COUNTY OF ________ )
On this ___ day of ______, 199__, before me, personally appeared
__________, known to me to be ____________ of _____________________________,
one of the corporations that executed the within instrument and also known to
me to be the person who executed it on behalf of said corporation, and
acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
______________________________
Notary Public
[NOTARIAL SEAL]
<PAGE>
EXHIBIT A
FORMS OF CERTIFICATES
A-1
<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 August [26],
1998. 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 1998-3
Portion of the Class A-1 Principal Balance as of the Cut-Off Date
evidenced by this Certificate:
Class A-1 Remittance Rate: 6.75%
Cut-Off Date: August 1, 1998
First Distribution Date: September [25], 1998
Last Scheduled Distribution Date: September [25], 2028
Class A-1 Principal Balance as of the Cut-Off Date:
$_________________________
________________
Registered Owner Certificate No.__
A-1-1
<PAGE>
[OID LEGEND
This certificate was issued on [August 26, 1998] 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 August [26],
1998. The rate at which interest is payable as of the Issue Date with
respect to this Certificate is 7.00% 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 1998-3
Portion of the Class A-2 Principal Balance as of the Cut-Off Date
evidenced by this Certificate:
Class A-2 Remittance Rate: 7.00%
Cut-Off Date: August 1, 1998
First Distribution Date: September [25], 1998
Last Scheduled Distribution Date: September [25], 2028
Class A-2 Principal Balance as of the Cut-Off Date:
$____________________
___________________
Registered Owner Certificate No.__
A-2-1
<PAGE>
[OID LEGEND
This certificate was issued on [August 26, 1998] 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 August [26],
1998. 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 1998-3
Portion of the Class A-3 Principal Balance as of the Cut-Off Date
evidenced by this Certificate:
Class A-3 Remittance Rate: 6.75%
Cut-Off Date: August 1, 1998
First Distribution Date: September [25], 1998
Last Scheduled Distribution Date: September [25], 2028
Class A-3 Principal Balance as of the Cut-Off Date:
$____________________
____________________
Registered Owner Certificate No.__
A-3-1
<PAGE>
[OID LEGEND
This certificate was issued on [August 26, 1998] 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 August [26]
, 1998. 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 1998-3
Portion of the Class A-4 Principal Balance as of the Cut-Off Date
evidenced by this Certificate:
Class A-4 Remittance Rate: 6.75%
Cut-Off Date: August 1, 1998
First Distribution Date: September [25], 1998
Last Scheduled Distribution Date: September [25], 2028
Class A-4 Principal Balance as of the Cut-Off Date:
$____________________
____________________
Registered Owner Certificate No.__
A-4-1
<PAGE>
[OID LEGEND
This certificate was issued on [August 26, 1998] 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 August [26],
1998. 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 1998-3
Portion of the Class A-5 Principal Balance as of the Cut-Off Date
evidenced by this Certificate:
Class A-5 Remittance Rate: 6.75%
Cut-Off Date: August 1, 1998
First Distribution Date: September [25], 1998
Last Scheduled Distribution Date: September [25], 2028
Class A-5 Principal Balance as of the Cut-Off Date:
$____________________
_____________________
Registered Owner Certificate No.__
A-5-1
<PAGE>
[OID LEGEND
This certificate was issued on [August 26, 1998] 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 August [26],
1998. 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 1998-3
Portion of the Class A-6 Principal Balance as of the Cut-Off Date
evidenced by this Certificate:
Class A-6 Remittance Rate: 0.00%
$________________________________________________________________________
Cut-Off Date: August 1, 1998
First Distribution Date: September [25], 1998
Last Scheduled Distribution Date: September [25], 2028
Class A-6 Principal Balance as of the Cut-Off Date:
$____________________
_________________
Registered Owner Certificate No.__
A-6-1
<PAGE>
[OID LEGEND
This certificate was issued on [August 26, 1998] 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-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 August [26],
1998. 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 1998-3 Portion of the Class A-X Notional
Amount as of the Cut-Off Date
evidenced by this Certificate:
Class A-X Remittance Rate: 6.75% $_________________________________
applied to the Class A-X Notional
Amount
Cut-Off Date: August 1, 1998
First Distribution Date: September [25],
1998
Last Scheduled Distribution Date:
September [25], 2028
A-7-1
<PAGE>
Class A-X Principal Balance as of
the Cut-Off Date:
$____________________
Class A-X Notional Amount as of
the Cut-Off Date:
$____________________
________________
Registered Owner Certificate No.__
A-7-2
<PAGE>
[OID LEGEND
This certificate was issued on [August 26, 1998] 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-7-3
<PAGE>
Exhibit A-8
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 August [26],
1998. 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 1998-3
Portion of the Class A-P Principal Balance as of the Cut-Off Date
evidenced by this Certificate:
Class A-P Remittance Rate: 0.00%
$________________________________________________________________________
Cut-Off Date: August 1, 1998
First Distribution Date: September [25], 1998
Last Scheduled Distribution Date: September [25], 2028
Class A-P Principal Balance as of the Cut-Off Date:
$____________________
___________________
Registered Owner Certificate No.__
A-8-1
<PAGE>
[OID LEGEND
This certificate was issued on [August 26, 1998] 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
[Reserved.]
A-9-1
<PAGE>
Exhibit A-10
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
August [26], 1998.
[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 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 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 1998-3
Portion of the Class M Principal Balance as of the Cut-Off Date
evidenced by this Certificate:
$
A-10-1
<PAGE>
Class M Remittance Rate: 6.75%
Cut-Off Date: August 1, 1998
First Distribution Date: September [25], 1998
Last Scheduled Distribution Date: September [25], 2028
Class M Principal Balance as of the Cut-Off Date:
$____________________
___________________
Registered Owner Certificate No.__
A-10-2
<PAGE>
[OID LEGEND
This certificate was issued on [August 26, 1998] 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-10-3
<PAGE>
Exhibit A-11
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 "Code"). The issue date (the "Issue Date") of this Certificate is
August [26], 1998.
[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 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-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 1998-3
Portion of the Class B-1 Principal Balance as of the Cut-Off Date
evidenced by this Certificate:
$
A-11-1
<PAGE>
Class B-1 Remittance Rate: 6.75%
Cut-Off Date: August 1, 1998
First Distribution Date: September [25], 1998
Last Scheduled Distribution Date: September [25], 2028
Class B-1 Principal Balance as of the Cut-Off Date:
$____________________
___________________
Registered Owner Certificate No.__
A-11-12
<PAGE>
[OID LEGEND
This certificate was issued on [August 26, 1998] 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-11-3
<PAGE>
Exhibit A-12
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 "Code"). The issue date (the "Issue Date") of this Certificate is
August [26], 1998.
[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" 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-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 1998-3
Portion of the Class B-2 Principal Balance as of the Cut-Off Date
evidenced by this Certificate:
$
A-12-1
<PAGE>
Class B-2 Remittance Rate: 6.75%
Cut-Off Date: August 1, 1998
First Distribution Date: September [25], 1998
Last Scheduled Distribution Date: September [25], 2028
Class B-2 Principal Balance as of the Cut-Off Date:
$____________________
_____________________
Registered Owner Certificate No.__
A-12-2
<PAGE>
[OID LEGEND
This certificate was issued on [August 26, 1998] 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-12-3
<PAGE>
Exhibit A-13
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
August [26], 1998.
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 1998-3
Portion of the Class B-3 Principal Balance as of the Cut-Off Date
evidenced by this Certificate:
$
Class B-3 Remittance Rate: 6.75%
Cut-Off Date: August 1, 1998
First Distribution Date: September [25], 1998
Last Scheduled Distribution Date: September [25], 2028
A-13-1
<PAGE>
Class B-3 Principal Balance as of the Cut-Off Date:
$____________________
______________________
Registered Owner Certificate No.__
A-13-2
<PAGE>
[OID LEGEND
This certificate was issued on [August 26, 1998] 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-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 August [26],
1998.
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 1998-3
Portion of the Class B-4 Principal Balance as of the Cut-Off Date
evidenced by this Certificate:
$
Class B-4 Remittance Rate: 6.75%
Cut-Off Date: August 1, 1998
First Distribution Date: September [25], 1998
Last Scheduled Distribution Date: September [25], 2028
A-14-1
<PAGE>
Class B-4 Principal Balance as of the Cut-Off Date:
$____________________
__________________
Registered Owner Certificate No.___
A-14-2
<PAGE>
[OID LEGEND
This certificate was issued on [August 26, 1998] 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-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 August [26],
1998.
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 1998-3
Portion of the Class B-5 Principal Balance as of the Cut-Off Date
evidenced by this Certificate:
$
Class B-5 Remittance Rate: 6.75%
Cut-Off Date: August 1, 1998
First Distribution Date: September [25], 1998
Last Scheduled Distribution Date: September [25], 2028
A-15-1
<PAGE>
Class B-5 Principal Balance as of the Cut-Off Date:
$____________________
__________________
Registered Owner Certificate No.___
A-15-2
<PAGE>
[OID LEGEND
This certificate was issued on [August 26, 1998] 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 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.
B-1
<PAGE>
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 1998-3 Percentage Interest evidenced by
this Class R Certificate in the
distributions to be made with
respect to the Class R
Certificate: ____%
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: August 1, 1998
First Distribution Date: September
[25], 1998
Last Scheduled Distribution Date:
September [25], 2028
Class R Principal Balance as of the
Cut-Off Date:
$____________________
__________________
Registered Owner Certificate No.___
B-2
<PAGE>
EXHIBIT C
[RESERVED]
C-1
<PAGE>
EXHIBIT D
SCHEDULE OF MORTGAGE LOANS
A copy of the Mortgage Loan Schedule may be obtained by contacting the
Registrant.
D-1
<PAGE>
EXHIBIT E
FIELDS OF MORTGAGE 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 NATIONAL BANK, AS CERTIFICATE REGISTRAR
135 SOUTH LASALLE STREET, SUITE 1625
CHICAGO, ILLINOIS 60674-4107
ATTN: ABN AMRO SERIES 1998-3]
Re: Purchase of ABN AMRO Mortgage Corporation Mortgage Pass-Through
Certificates Series 1998-3, 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 NATIONAL BANK, AS CERTIFICATE REGISTRAR
135 SOUTH LASALLE STREET, SUITE 1625
CHICAGO, ILLINOIS 60674-4107
ATTN: ABN AMRO SERIES 1998-3]
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 1998-3 (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 August 1, 1998, 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 1998-3.
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;
G-1
<PAGE>
(b) The Purchaser is acquiring the Purchased Certificates for its own
account as principal and not with a view to the distribution thereof, in whole
or in part;
(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.
G-2
<PAGE>
(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 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 1998-3
(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 a
"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:
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<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 NATIONAL BANK, AS CERTIFICATE REGISTRAR
135 SOUTH LASALLE STREET, SUITE 1625
CHICAGO, ILLINOIS 60674-4107
ATTN: ABN AMRO SERIES 1998-3]
RE: ABN AMRO MORTGAGE CORPORATION MORTGAGE PASS-THROUGH
CERTIFICATES, SERIES 1998-3 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 1998-3, Class R (the "Certificate"), pursuant to Section
5.1 of the Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of August 1, 1998 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.
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<PAGE>
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 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 any 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.
J-2
<PAGE>
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.
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-named 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.
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<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:
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-2
<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
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<PAGE>
the same Percentage Interest set forth hereinabove will be issued to the
designated transferee or transferees.
No transfer of a Certificate will be made unless such transfer is exempt
from or is made in accordance with the registration requirements of the
Securities Act of 1933, as amended (the "Securities Act") and any applicable
state securities laws. No transfer, sale, pledge or other disposition of a
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
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<PAGE>
so consents prior to each such transfer. Such transfers shall be deemed to
have complied with the requirements of Section 5.1(f) of the Pooling
Agreement. The Holder of a Certificate desiring to effect such transfer does
hereby agree to indemnify the Trustee, and the Certificate Registrar, the
Depositor, and the Certificate Registrar against any liability that may
result if transfer is not made in accordance with the Pooling Agreement.
The Certificates are issuable only as registered Certificates without
coupons in Authorized Denominations specified in the Pooling Agreement. As
provided in the Pooling Agreement and subject to certain limitations therein set
forth, Certificates are exchangeable for new Certificates of Authorized
Denominations evidencing the same aggregate interest in the portion of the
Available Distribution Amount distributable on this Class of Certificate, as
requested by the Holder surrendering the same.
A reasonable service charge may be made for any such registration of
transfer or exchange, and the Trustee or the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
The Depositor, the Certificate Registrar, the Certificate Administrator,
the Servicer, the Trustee and any agent of any of them may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and neither the Depositor, the Certificate Registrar, the Certificate
Administrator, the Servicer, the Trustee nor any such agent shall be affected
by notice to the contrary.
The respective obligations and responsibilities of the Servicer and the
Trustee created under the Pooling Agreement (other than the obligation to make
payments to Certificateholders as set forth therein) shall terminate upon the
earlier of (i) the later of the final payment or other liquidation (or any
Advance with respect thereto) of the last Loan remaining in the Trust Fund and
the disposition of all property acquired in respect of any Loan or (ii) the
purchase by the Class R Certificateholder of all Loans at a price established
pursuant to the Pooling Agreement; PROVIDED, HOWEVER, that in no event shall the
trust created hereby continue beyond 21 years from the death of the survivor of
certain persons identified in the Pooling Agreement.
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<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 interest social security or other identifying number of
assignee.)
the within Mortgage Pass-Through Certificate and hereby irrevocably constitute
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.
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<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 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
Securities Act of 1933, as amended (the "1993 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 August
1, 1998 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.
(c) The Buyer has received and reviewed the Private Placement
Memorandum dated as of August [26], 1998 relating to the Rule 144A Securities
and has been furnished with all
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<PAGE>
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 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
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<PAGE>
Responsible Officer of the Buyer stating that the Buyer is an insurance
company using assets of a "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 subdivisions, or
any agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees, or (b) employee
benefit plans within the meaning of Title I of the Employee Retirement
Income Security Act of 1974, but is not a trust fund that includes as
participants individual retirement accounts or H.R. 10 plans.
3. The term "SECURITIES" as used herein DOES NOT INCLUDE (i)
securities of issuers that are affiliated with the Buyer, (ii) securities
that are part of an unsold allotment to or subscription by the Buyer, if the
Buyer is a dealer, (iii) bank deposit notes and certificates of deposit, (iv)
loan participations, (v) repurchase agreements, (vi) securities owned but
subject to a repurchase agreement and (vii) currency, interest rate and
commodity swaps.
4. For purposes of determining the aggregate amount of securities
owned and/or 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
L-1-2
<PAGE>
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 is a majority owned subsidiary of the other).
4. The term "SECURITIES" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) bank deposit notes and
certificates of deposit, (iii) loan participations, (iv) repurchase
agreements, (v) securities owned but subject to a repurchase agreement and
(vi) currency, interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that each of
the parties to which this certification is made are relying and will continue
to rely on the statements made herein
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<PAGE>
because one or more sales to the Buyer will be in reliance on Rule 144A. In
addition, the Buyer will only purchase for the Buyer's own account.
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
[RESERVED]
0-1
<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
FORM OF SPECIAL SERVICING AND COLLATERAL FUND AGREEMENT
This SPECIAL SERVICING AND COLLATERAL FUND AGREEMENT (the
"Agreement") is made and entered into as of [DATE], between LaSalle Home
Mortgage Corporation (the "Depositor") and ____________________________ (the
"Purchaser").
PRELIMINARY STATEMENT
_________________________ (the "Owner") is the holder of the entire
interest in ABN AMRO Mortgage Corporation Multi-Class Mortgage Pass-Through
Certificates, Series 1998-3 (the "Certificates"). The Certificates were
issued pursuant to a Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement") among ABN AMRO Mortgage Corporation, as depositor, as
servicer thereunder (the "Servicer") and Chase Bank of Texas, National
Association, as trustee (the "Trustee").
The Owner intends to resell all of the Certificates directly to the
Purchaser on or promptly after the date hereof.
In connection with such sale, the parties hereto have agreed that
the Depositor, as Servicer, will engage in certain special servicing
procedures relating to foreclosures for benefit of the Purchaser, and that
the Purchaser will deposit funds in a collateral fund to cover any losses
attributable to such procedures as well as all advances and costs in
connection therewith, as set forth herein.
In consideration of the mutual agreements herein contained, the
receipt and sufficiency of which are hereby acknowledged, the Depositor and
the Purchaser agree to the following:
ARTICLE I.
DEFINITIONS
Section 1.01. DEFINED TERMS.
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
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BUSINESS DAY: Any day other than (i) a Saturday or a Sunday or
(ii) a day on which banking institutions in the State of New York are
required or authorized by law or executive order to be closed.
COLLATERAL FUND: The fund established and maintained pursuant to
Section 3.01 hereof.
COLLATERAL FUND PERMITTED INVESTMENTS: Either: (i) obligations
of, or obligations fully guaranteed as to principal and interest by, the
United States, or any agency or instrumentality thereof, provided such
obligations are backed by the full faith and credit of the United States,
(ii) a money market fund rated in the highest rating category by a nationally
recognized rating agency selected by the Depositor, (iii) cash, (iv) mortgage
pass-through certificates issued or guaranteed by GNMA, FNMA or FHLMC, (v)
commercial paper (including both non-interest bearing discount obligations
and interest bearing obligations payable on demand or on a specified date),
the issuer of which may be an affiliate of the Depositor, having at the time
of such investment a rating of at least A-1 by Standard and Poor's
Corporation ("S&P") or at least P-1 by Moody's Investors Service, Inc.
("Moody's") and (vi) demand and time deposits in, certificates of deposit of,
any depository institution or trust company (which may be an affiliate of the
Depositor) incorporated under the laws of the United States of America or any
state thereof and subject to supervision and examination by federal and/or
state banking authorities, so long as at the time of such investment either
(x) the long-term debt obligations of such depository institution or trust
company have a rating of at least Aa2 by Moody's or AA by S&P or (y) the
certificate of deposit or other unsecured short-term debt obligations of such
depository institution or trust company have a rating of at least P-1 by
Moody's or A-1 by S&P and, for each of the preceding clauses (i), (iv), (v)
and (vi), the maturity thereof shall be not later than the earlier to occur
of (A) 30 days from the date of the related investment and (B) the next
succeeding Distribution Date.
COMMENCEMENT OF FORECLOSURE: The first official action required
under local law in order to commence foreclosure proceedings or to schedule a
trustee's sale under a deed of trust, including (i) in the case of a
mortgage, any filing or service of process necessary to commence an action to
foreclose, or (ii) in the case of a deed of trust, the posting, publishing,
filing or delivery of a notice of sale, but not including in either case (x)
any notice of default, notice of intent to foreclose or sell or any other
action prerequisite to the actions specified in (i) or (ii) above and upon
the consent of the Purchaser which will be deemed given unless expressly
withheld within two Business Days of notification, (y) the acceptance of a
deed-in-lieu of foreclosure (whether in connection with a sale of the related
property or otherwise) or (z) initiation and completion of a short pay-off.
CURRENT APPRAISAL: With respect to any Loan as to which the
Purchaser has made an Election to Delay Foreclosure, an appraisal of the
related Mortgaged Property obtained by the Purchaser at its expense from an
appraiser (which shall not be an affiliate of the Purchaser) acceptable to
the Depositor as nearly contemporaneously as practicable to the time of the
Purchaser's election, prepared based on the Depositor's customary
requirements for such appraisals.
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ELECTION TO DELAY FORECLOSURE: Any election by the Purchaser to
delay the Commencement of Foreclosure, made in accordance with Section
2.02(b).
ELECTION TO FORECLOSE: Any election by the Purchaser to proceed
with the commencement of Foreclosure, made in accordance with Section 2.03(a).
REQUIRED COLLATERAL FUND BALANCE: As of any date of determination,
an amount equal to the aggregate of all amounts previously required to be
deposited in the Collateral Fund pursuant to Section 2.02(d) (after
adjustment for all withdrawals and deposits pursuant to Section 2.02(e)) and
Section 2.03(b) (after adjustment for all withdrawals and deposits pursuant
to Section 2.03(c)) and Section 3.02 to be reduced by all withdrawals
therefrom pursuant to Section 2.02(g) and Section 2.03(d).
Section 1.02. DEFINITIONS INCORPORATED BY REFERENCE.
All capitalized terms not otherwise defined in this Agreement shall
have the meanings assigned in the Pooling and Servicing Agreement.
ARTICLE II.
SPECIAL SERVICING PROCEDURES
Section 2.01. REPORTS AND NOTICES.
(a) In connection with the performance of its duties
under the Pooling and Servicing Agreement relating to the realization upon
defaulted Loans, the Depositor, as Servicer, shall provide to the Purchaser
the following notices and reports:
(b) Within five Business Days after each Distribution
Date (or included in or with the monthly statement to Certificateholders
pursuant to the Pooling and Servicing Agreement), the Depositor shall provide
to the Purchaser a report indicating for the Trust the number of Loans that
are (A) thirty days, (B) sixty days, (C) ninety days or more delinquent or
(D) in foreclosure, and indicating for each such Loan the outstanding
principal balance.
(c) Prior to the Commencement of Foreclosure in
connection with any Loan, the Depositor shall provide the Purchaser with a
notice (sent by telecopier) of such proposed and imminent foreclosure,
stating the loan number and the aggregate amount owing under the Loan.
(d) If requested by the Purchaser, the Depositor shall
make its servicing personnel available (during their normal business hours)
to respond to reasonable inquiries by the Purchaser in connection with any
Loan identified in a report under subsection (a)(i)(B), (a)(i)(C), (a)(i)(D)
or (a)(ii) which has been given to the Purchaser; provided, that (1) the
Depositor shall only be required to provide information that is readily
accessible to its servicing personnel and is non-
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confidential and (2) the Depositor shall not be required to provide any
written information under this subsection.
(e) In addition to the foregoing, the Depositor shall
provide to the Purchaser such information as the Purchaser may reasonably
request concerning each Loan that is at least sixty days delinquent and each
Loan which has become real estate owned, through the final liquidation
thereof; provided that the Depositor shall only be required to provide
information that is readily accessible to its servicing personnel and is
non-confidential.
(f) With respect to all Loans which are serviced at any
time by the Depositor through a Subservicer, the Depositor shall be entitled
to rely for all purposes hereunder, including for purposes of fulfilling its
reporting obligations under this Section 2.01 on the accuracy and
completeness of any information provided to it by the applicable Subservicer.
Section 2.02. PURCHASER'S ELECTION TO DELAY FORECLOSURE
PROCEEDINGS.
(a) The Purchaser directs the Depositor that in the
event that the Depositor does not receive written notice of the Purchaser's
election pursuant to subsection (b) below within 24 hours (exclusive of any
intervening non-Business Days) of transmission of the notice provided by the
Depositor under Section 2.01(a)(ii), subject to extension as set forth in
Section 2.02(b), the Depositor shall proceed with the Commencement of
Foreclosure in respect of such Loan in accordance with its normal foreclosure
policies without further notice to the Purchaser. Any foreclosure that has
been initiated may be discontinued (i) without notice to the Purchaser, if
the Loan has been brought current or if a refinancing or prepayment occurs
with respect to the Loan (including by means of a short payoff approved by
the Depositor) (ii) with notice to the Purchaser if the Depositor has reached
the terms of a forbearance agreement with the borrower. In such latter case
the Depositor may complete such forbearance agreement unless instructed
otherwise by the Purchaser within one Business Day of notification.
(b) In connection with any Loan with respect to which a
notice under Section 2.01(a)(ii) has been given to the Purchaser, the
Purchaser may elect, for reasonable cause as determined by the Purchaser, to
instruct the Depositor to delay the Commencement of Foreclosure until such
term as the Purchaser determines that the Depositor may proceed with the
Commencement of Foreclosure. Such election must be evidenced by written
notice received within 24 hours (exclusive of any intervening non-Business
Days) of transmission of the notice provided by the Depositor under Section
2.01(a)(ii). Such 24 hour period shall be extended for no longer than an
additional four Business Days after the receipt of the information if the
Purchaser requests additional information related to such foreclosure;
provided, however that the Purchaser will have at least one Business Day to
respond to any requested additional information. Any such additional
information shall (i) not be confidential in nature and (ii) be obtainable by
the Depositor from existing reports, certificates or statements or otherwise
be readily accessible to its servicing personnel. The Purchaser agrees that
it has no right to deal with the mortgagor. If the Depositor's normal
foreclosure policy includes acceptance of a deed-in-lieu of foreclosure or
short payoff, the Purchaser will be notified and given one Business Day to
respond.
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(c) With respect to any Loan as to which the Purchaser
has made an Election to Delay Foreclosure, the Purchaser shall obtain a
Current Appraisal as soon as practicable, and shall provide the Depositor
with a copy of such Current Appraisal.
(d) Within two Business Days of making any Election to
Delay Foreclosure, the Purchaser shall remit by wire transfer to the
Depositor, for deposit in the Collateral Fund, an amount, as calculated by
the Depositor, equal to the sum of (i) 125% of the greater of the outstanding
Principal Balance of the Loan and the value shown in the Current Appraisal
referred to in subsection (c) above (or, if such Current Appraisal has not
yet been obtained, the Depositor's estimate thereof, in which case the
required deposit under this subsection shall be adjusted upon obtaining of
such Current Appraisal), and (ii) three months' interest on the Loan at the
applicable Mortgage Rate. If any Election to Delay Foreclosure extends for a
period in excess of three months (such excess period being referred to herein
as the "Excess Period"), the Purchaser shall remit by wire transfer in
advance to the Depositor for deposit in the Collateral Fund the amount, as
calculated by the Depositor, equal to interest on the Loan at the applicable
Mortgage Rate for the Excess Period. The terms of this Agreement shall no
longer apply to the servicing of any Loan upon the failure of the Purchaser
to deposit the above amounts relating to the Loan within two Business Days of
the Election to Delay Foreclosure.
(e) With respect to any Loan as to which the Purchaser
has made an Election to Delay Foreclosure, the Depositor may withdraw from
the Collateral Fund from time to time amounts necessary to reimburse the
Depositor for all Advances and Liquidation Expenses thereafter made by the
Depositor as Servicer in accordance with the Pooling and Servicing Agreement.
To the extent that the amount of any such Liquidation Expense is determined
by the Depositor based on estimated costs, and the actual costs are
subsequently determined to be higher, the Depositor may withdraw the
additional amount from the Collateral Fund. In the event that the Loan is
brought current by the Mortgagor and the foreclosure action is discontinued,
the amounts so withdrawn from the Collateral Fund shall be redeposited
therein as and to the extent that reimbursement therefor from amounts paid by
the Mortgagor is not prohibited pursuant to the Pooling and Servicing
Agreement. Except as provided in the preceding sentence, amounts withdrawn
from the Collateral Fund to cover Advances and Liquidation Expenses shall not
be redeposited therein or otherwise reimbursed to the Purchaser. If and when
any such Loan is brought current by the Mortgagor, all amounts remaining in
the Collateral Fund in respect of such (after adjustment for all withdrawals
and deposits pursuant to this subsection) shall be released to the Purchaser.
(f) With respect to any Loan as to which the Purchaser
has made an Election to Delay Foreclosure, the Depositor shall continue to
service the Loan in accordance with its customary procedures (other than the
delay in Commencement of Foreclosure as provided herein). If and when the
Purchaser shall notify the Depositor that it believes that it is appropriate
to do so, the Depositor shall proceed with the Commencement of Foreclosure.
In any event, if the Loan is not brought current by the mortgagor by the time
the loan becomes 6 months delinquent, the Purchaser's election shall no
longer be effective and at the Purchaser's option, either (i) the Purchaser
shall purchase the Loan from the Trust Fund at a purchase price equal to the
fair market value as
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shown on the Current Appraisal, to be paid by (x) applying any balance in the
Collateral Fund to such purchase price, and (y) to the extent of any
deficiency, by wire transfer of immediately available funds to the Depositor
or Trustee; or (ii) the Depositor shall proceed with the Commencement of
Foreclosure.
(g) Upon the occurrence of a liquidation with respect to
any Loan as to which the Purchaser made an Election to Delay Foreclosure and
as to which the Depositor proceeded with the Commencement of Foreclosure in
accordance with subsection (f) above, the Depositor shall calculate the
amount, if any, by which the value shown on the Current Appraisal obtained
under subsection (c) exceeds the actual sales price obtained for the related
Mortgaged Property (net of Liquidation Expenses and accrued interest related
to the extended foreclosure period), and the Depositor shall withdraw the
amount of such excess from the Collateral Fund, shall remit the same to the
Trust Fund and in its capacity as Servicer shall apply such amount as
additional Liquidation Proceeds pursuant to the Pooling and Servicing
Agreement. After making such withdrawal, all amounts remaining in the
Collateral Fund in respect of such Loan (after adjustment for all withdrawals
and deposits pursuant to subsection (e)) shall be released to the Purchaser.
Section 2.03. PURCHASER'S ELECTION TO COMMENCE FORECLOSURE
PROCEEDINGS.
(a) In connection with any Loan identified in a report
under Section 2.01(a)(i)(B), the Purchaser may elect, for reasonable cause as
determined by the Purchaser, to instruct the Depositor to proceed with the
Commencement of Foreclosure as soon as practicable. Such election must be
evidenced by written notice received by the Depositor by 5:00 p.m., New York
City time, on the third Business Day following the delivery of such report
under Section 2.01(a)(i).
(b) Within two Business Days of making any Election to
Foreclose, the Purchaser shall remit to the Depositor, for deposit in the
Collateral Fund, an amount, as calculated by the Depositor, equal to 125% of
the current Principal Balance of the Loan and three months' interest on the
Loan at the applicable Mortgage Rate. If and when any such Loan is brought
current by the Mortgagor, all amounts in the Collateral Fund in respect of
such Loan shall be released to the Purchaser. The terms of this Agreement
shall no longer apply to the servicing of any Loan upon the failure of the
Purchaser to deposit the above amounts relating to the Loans within two
Business Days at the Election to Foreclose.
(c) With respect to any Loan as to which the Purchaser
has made an Election to Foreclose, the Depositor shall continue to service
the Loan in accordance with its customary procedures (other than to proceed
with the Commencement of Foreclosure as provided herein). In connection
therewith, the Depositor shall have the same rights to make withdrawals for
Advances and Liquidation Expenses from the Collateral Fund as are provided
under Section 2.02(e), and the Depositor shall make reimbursements thereto to
the limited extent provided under such subsection. The Depositor shall not
be required to proceed with the Commencement of Foreclosure if (i) the same
is stayed as a result of the Mortgagor's bankruptcy or is otherwise barred by
applicable law, or to the extent that all legal conditions precedent thereto
have not yet been complied
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with or (ii) the Depositor believes there is a breach of representation or
warranties by the Depositor, which may result in a repurchase or substitution
of such Loan, or (iii) the Depositor reasonably believes the Mortgaged
Property may be contaminated with or affected by hazardous wastes or
hazardous substances (and the Depositor supplies the Purchaser with
information supporting such belief). The Depositor will repurchase or
substitute a Loan pursuant to the preceding clause (ii) within the time
period specified in the Pooling and Servicing Agreement. Any foreclosure
that has been initiated may be discontinued (i) without notice to the
Purchaser if the Loan has been brought current or if a refinancing or
prepayment occurs with respect to the Loan (including by means of a short
payoff approved by the Depositor), or (ii) with notice to the Purchaser if
the Depositor has reached the terms of a forbearance agreement unless
instructed otherwise by the Purchaser within two Business Days of
notification.
(d) Upon the occurrence of a liquidation with respect to
any Loan as to which the Purchaser made an Election to Foreclose and as to
which the Depositor proceeded with the Commencement of Foreclosure in
accordance with subsection (c) above, the Depositor shall calculate the
amount, if any, by which the Principal Balance of the Loan at the time of
liquidation (plus all unreimbursed Advances and Liquidation Expenses in
connection therewith other than those paid from the Collateral Fund) exceeds
the actual sales price obtained for the related Mortgaged Property, and the
Depositor shall withdraw the amount of such excess from the Collateral Fund,
shall remit the same to the Trust Fund and in its capacity as Servicer shall
apply such amount as additional Liquidation Proceeds pursuant to the Pooling
and Servicing Agreement. After making such withdrawal, all amounts remaining
in the Collateral Fund (after adjustment for all withdrawals and deposits
pursuant to subsection (c)) in respect of such Loan shall be released to the
Purchaser.
Section 2.04. TERMINATION.
(a) With respect to all Loans included in the Trust
Fund, the Purchaser's rights to make any Election to Delay Foreclosure or any
Election to Foreclose and the Depositor's obligations under Section 2.01
shall terminate (i) at such time as the Certificate Principal Balance of the
Certificates has been reduced to zero, (ii) if the greater of (x) 43% (or
such lower or higher percentages that represents the Depositor's actual
historical loss experience with respect to the Loans in the related pool) of
the aggregate principal balance of all Loans that are in foreclosure or are
more than 90 days delinquent on a contractual basis and REO properties or if
the aggregate amount that the Depositor estimates will be required to be
withdrawn from the Collateral Fund with respect to Loans as to which the
Purchaser has made an Election to Delay Foreclosure or an Election to
Foreclose exceeds (z) the Outstanding Certificate Principal Balance of the
Certificates, or (iii) upon any transfer by the Purchaser of any interest
(other than the minority interest therein, but only if the transferee
provides written acknowledgment to the Depositor of the Purchaser's right
hereunder and that such transferee will have no rights hereunder) in the
Certificates (whether or not such transfer is registered under the Pooling
and Servicing Agreement), including any such transfer in connection with a
termination of the Trust Fund. Except as set forth above, this Agreement and
the respective rights, obligations and responsibilities of the Purchaser and
the Depositor hereunder shall terminate upon the later to occur of (i) the
final liquidation of the last Loan as to which the Purchaser made
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any Election to Delay Foreclosure or any Election to Foreclose and the
withdrawal of all remaining amounts in the Collateral Fund as provided herein
and (ii) ten (10) Business Day's notice.
(b) Purchaser's rights pursuant to Section 2.02 or 2.03
of this Agreement shall terminate with respect to a Loan as to which the
Purchaser has exercised its rights under Section 2.02 or 2.03 hereof, upon
Purchaser's failure to deposit any amounts required pursuant to Section
2.02(d) or 2.03(b).
(c) Neither the Servicer nor any of its directors,
officers, employees or agents shall be under any liability for any action
taken or for refraining from the taking of any action in good faith pursuant
to this Agreement, or for errors in judgment; provided, however, that this
provision shall not protect the Servicer or any such Person against any
liability which would otherwise be imposed by reason of willful misfeasance,
bad faith or gross negligence in the performance of duties or by reason of
reckless disregard of obligations and duties hereunder. The Servicer and any
director, officer, employee or agent thereof may rely in good faith on any
document of any kind prima facie properly executed and submitted by an Person
respecting any matters arising hereunder.
ARTICLE III.
COLLATERAL FUND; SECURITY INTEREST
Section 3.01. COLLATERAL FUND.
Upon receipt from the Purchaser of the initial amount required to
be deposited in the Collateral Fund pursuant to Article 11, the Depositor
shall establish and maintain with itself as a segregated account on its books
and records an account (the "Collateral Fund"), entitled "LaSalle Home
Mortgage Corporation, as Servicer, for the benefit of registered holders of
ABN AMRO Mortgage Corporation Multi-Class Mortgage Pass-Through Certificates,
Series 1998-3." Amounts in the Collateral Fund shall continue to be the
property of the Purchaser, subject to the first priority security interest
granted hereunder for the benefit of the Certificateholders, until withdrawn
from the Collateral Fund pursuant to Section 2.02 or 2.03 hereof.
Upon the termination of this Agreement and the liquidation of all
Loans as to which the Purchaser has made any Election to Delay Foreclosure or
any Election to Foreclose pursuant to Section 2.04 hereof, the Depositor
shall distribute to the Purchaser all amounts remaining in the Collateral
Fund together with any investment earnings thereon.
In no event shall the Purchaser (i) take or cause the Trustee or
the Depositor to take any action that could cause any REMIC established under
the Trust Agreement to fail to qualify as a REMIC or cause the imposition on
any such REMIC of any "prohibited transaction" or "prohibited contribution"
taxes or (ii) cause the Trustee or the Depositor to fail to take any action
necessary to maintain the status of any such REMIC as a REMIC.
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Section 3.02. COLLATERAL FUND PERMITTED INVESTMENTS.
The Depositor shall, at the written direction of the Purchaser
invest the funds in the Collateral Fund in Collateral Fund Permitted
Investments. Such direction shall not be changed more frequently than
quarterly. In the absence of any direction, the Depositor shall select such
investments in accordance with the definition of Collateral Fund Permitted
Investments in its discretion.
All income and gain realized from any investment as well as any
interest earned on deposits in the Collateral Fund (net of any losses on such
investments) and any payments of principal made in respect of any Collateral
Fund Permitted Investment shall be deposited in the Collateral Fund upon
receipt. All costs and realized losses associated with the purchase and sale
of Collateral Fund Permitted Investments shall be borne by the Purchaser and
the amount of net realized losses shall be deposited by the Purchaser in the
Collateral Fund. The Depositor shall periodically (but not more frequently
than monthly) distribute to the Purchaser upon request an amount of cash, to
the extent cash is available therefor in the Collateral Fund, equal to the
amount by which the balance of the Collateral Fund, after giving effect to
all other distributions to be made from the Collateral Fund on such date,
exceeds the Required Collateral Fund Balance. Any amounts so distributed
shall be released from the lien and security interest of this Agreement.
Section 3.03. GRANT OF SECURITY INTEREST.
The Purchaser grants to the Depositor and the Trustee for the
benefit of the Certificateholders a security interest in and lien on all of
the Purchaser's right, title and interest, whether now owned or hereafter
acquired, in and to: (1) the Collateral Fund, (2) all amounts deposited in
the Collateral Fund and Collateral Fund Permitted Investments in which such
amounts are invested (and the distributions and proceeds of such investments)
and (3) all cash and non-cash proceeds of any of the foregoing, including
proceeds of the voluntary or involuntary conversion thereof (all of the
foregoing collectively, the "Collateral").
The Purchaser acknowledges the lien on and security interest in the
Collateral for the benefit of the Certificateholders. The Purchaser shall
take all actions requested by the Depositor or the Trustee as may be
reasonably necessary to perfect the security interest created under this
Agreement in the Collateral and cause it to be prior to all other security
interests and liens, including the execution and delivery to the Depositor
for filing of appropriate financing statements in accordance with applicable
law. The Depositor shall file appropriate continuation statements, or
appoint an agent on its behalf to file such statements, in accordance with
applicable law.
Section 3.04. COLLATERAL SHORTFALLS.
In the event that amounts on deposit in the Collateral Fund at any
time are insufficient to cover any withdrawals therefrom that the Depositor
or the Trustee is then entitled to make hereunder, the Purchaser shall be
obligated to pay such amounts to the Depositor or the Trustee
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immediately upon demand. Such obligation shall constitute a general corporate
obligation of the Purchaser.
ARTICLE IV.
MISCELLANEOUS PROVISIONS
Section 4.01. AMENDMENT.
This Agreement may be amended from time to time by the Depositor
and the Purchaser by written agreement signed by the Depositor and the
Purchaser.
Section 4.02. COUNTERPARTS.
This Agreement may be executed simultaneously in any number of
counterparts, each of which counterparts shall be deemed to be an original,
and such counterparts shall constitute but one and the same instrument.
Section 4.03. GOVERNING LAW.
This Agreement shall be construed in accordance with the laws of
the State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws.
Section 4.04. NOTICES.
All demands, notices and direction hereunder shall be in writing or
by telecopy and shall be deemed effective upon receipt to:
(a) in the case of the Depositor,
LaSalle Home Mortgage Corporation
4242 North Harlem Avenue
Norridge, Illinois 60634
Attn:_____________________________
Phone:____________________________
or such other address as may hereafter be furnished in writing by the
Depositor, or
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(b) in the case of the Purchaser, with respect to
notices pursuant to Section 2.01,
[Purchaser]
[Address]
Attn:____________________________
Phone:___________________________
Fax:_____________________________
with respect to all other notices pursuant to this
Agreement,
_________________________________
[Address]
Attn:____________________________
Phone:___________________________
Fax:_____________________________
or such other address as may hereafter be furnished in writing by the
Purchaser.
Section 4.05. SEVERABILITY OF PROVISIONS.
If any one or more of the covenants, agreements, provisions or
terms of this Agreement shall be for any reason whatsoever, including
regulatory, held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement.
Section 4.06. SUCCESSORS AND ASSIGNS.
The provisions of this Agreement shall be binding upon and inure to
the benefit of the respective successors and assigns of the parties hereto,
and all such provisions shall inure to the benefit of the Certificateholders;
provided, however, that the rights under this Agreement cannot be assigned by
the Purchaser without the consent of the Depositor.
Section 4.07. ARTICLE AND SECTION HEADINGS.
The article and section headings herein are for convenience of
reference only, and shall not limit or otherwise affect the meaning hereof.
Section 4.08. CONFIDENTIALITY.
The Purchaser agrees that all information supplied by or on behalf
of the Depositor pursuant to Sections 2.01 or 2.02, including individual
account information, is the property of the Depositor and the Purchaser
agrees to hold such information confidential and not to disclose such
information.
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IN WITNESS WHEREOF, the Depositor and the Purchaser have caused
their names to be signed hereto by their respective officers thereunto duly
authorized, all as of the day and year first above written.
LASALLE HOME MORTGAGE CORPORATION
By:____________________________________________
Name:__________________________________________
Title:_________________________________________
_______________________________________________
By:____________________________________________
Name:__________________________________________
Title:_________________________________________
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MORTGAGE LOAN PURCHASE AGREEMENT
Mortgage Loan Purchase Agreement (the "AGREEMENT"), dated as of
August 26, 1998, between Standard Federal Bank (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 $332,842,023 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
August 26, 1998 (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
<PAGE>
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.
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
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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 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.
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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 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
Federal Savings Bank under the laws of the United States;
(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;
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<PAGE>
(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;
(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;
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(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 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 taxes,
governmental assessments and insurance premiums 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
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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 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, a leasehold 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) 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 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;
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(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;
(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; and
(t) each Mortgage Loan is a "qualified mortgage" within the
meaning of Section 860G of the Internal Revenue Code of 1986.
It is understood and agreed that the representations and
warranties set forth in this SECTION 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, (ii) be accruing
interest at a rate of interest at least equal to that of the defected
-8-
<PAGE>
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 13 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;
-9-
<PAGE>
(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:
-10-
<PAGE>
(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
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<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 Standard Federal Bank, 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 - Director - 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,
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<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.
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<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.
Standard Federal Bank,
as Seller
By: /s/
--------------------------------
Name:
-------------------------------
Title:
-------------------------------
Mortgage Loan Purchase Agreement
<PAGE>
ABN AMRO Mortgage Corporation,
as Purchaser
By: /s/
--------------------------------
Name:
-------------------------------
Title:
-------------------------------
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;
(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 Mortgaged Property is located, if
available;
(xiv) the Mortgage Loan Group; and
(xv) 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 1998-3 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) 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
(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 Mortgage has been dispatched to the appropriate
public recording official for recordation or (b) 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;
(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
<PAGE>
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 mortgage 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
________ __, 1998
Standard Federal Bank
2600 West Big Beaver Road
Troy, Michigan 48084
Dear Ladies and Gentlemen:
Pursuant to the Mortgage Loan Purchase Agreement dated as of August 26,
1998 (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> <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 1998-3, 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 1998-3:
<PAGE>
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 one week prior to Servicing
Mortgage Loan servicing documents transfer date
pertaining to each loan
5. Provide lost mortgage note affidavits, one week prior to funding
certified 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:
-----------------------------
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<PAGE>
EXHIBIT B
FORM OF ASSIGNMENT
Standard Federal Bank, a federal savings bank (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: _____________, 1998 Standard Federal Bank
By:
---------------------------------
Name:
------------------------------
Title:
-----------------------------
-2-
<PAGE>
ACKNOWLEDGED ON __________ __, 1998
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 ____________, 1998.
__________________________________
Notary Public
My commission expires:____________
<PAGE>
EXHIBIT C
FORM OF OFFICER'S CERTIFICATE
Standard Federal Bank
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 Standard Federal Bank ("Standard Federal"), a
federal savings bank, and further certify as follows:
1. Attached hereto as EXHIBIT "A" is a true and correct copy of the
charter of Standard Federal. There has been no amendment or other document
filed affecting the charter as of the date of this certification of Standard
Federal, and no such amendment has been authorized.
2. Attached hereto as EXHIBIT "B" is a true and correct copy of the
by-laws of Standard Federal as in full force and effect as of the date of
this certification.
3. No proceedings looking toward merger, consolidation, liquidation, or
dissolution of Standard Federal are pending or contemplated.
4. Each person who, as an officer or representative of Standard Federal,
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 __________ __, 199_, between Standard
Federal, 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 Standard Federal's Board of Directors, which were duly
adopted as of _____ __, 1998, 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 Thrift Supervision as of __________, 199_. A current Good
Standing Certificate has been requested from the Office of Thrift Supervision
and will be supplied when it is received.
7. Standard Federal 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 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,
<PAGE>
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: __________ __, 199_
Standard Federal Bank
By:
---------------------------------
Name:
------------------------------
Title:
-----------------------------
-2-
<PAGE>
I, ____________________, [ASSISTANT SECRETARY] of Standard Federal Bank, a
federal savings bank, hereby certify that ____________________ is the duly
elected, qualified and acting ____________________ of Standard Federal Bank and
that the signature appearing on the preceding page is his genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Date: __________ __, 199_
Standard Federal Bank
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)]
__________ __, 1998
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 Standard Federal Bank, a federal savings bank
("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 August 26, 1998 (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 reviewed. We have also assumed that all
documents, agreements and instruments have been
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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 federal savings banks, (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
agreement or instrument to which Seller is now a party or by which it is bound,
or constitute a
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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,
Standard Federal Bank
By: ____________________
Title: General Counsel
