EXHIBIT 99.1
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Execution Copy
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BOND SECURITIZATION, L.L.C.,
as Depositor
and
AMERICAN GENERAL FINANCE CORPORATION,
as Master Servicer
and
SECOND STREET FUNDING CORPORATION,
as Seller
and
U.S. Bank National Association,
as Trustee
and
BANK ONE, N.A.,
as Trust Administrator
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POOLING AND SERVICING AGREEMENT
Dated as of May 1, 2003
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Mortgage Loan Asset-Backed Pass-Through Certificates
Series 2003-1
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Table of Contents
Page
----
ARTICLE I.
Definitions
Section 1.01 Definitions...............................................2
Section 1.02 Interest Calculations....................................22
Section 1.03 Determination of LIBOR...................................22
ARTICLE II.
Conveyance of Mortgage Loans; Original Issuance of Certificates; Tax Treatment
Section 2.01 Conveyance of Mortgage Loans.............................23
Section 2.02 Acceptance by Trustee....................................26
Section 2.03 Representations and Warranties Regarding the Seller
and the Master Servicer..................................26
Section 2.04 Representations and Warranties of the Seller
Regarding the Mortgage Loans.............................28
Section 2.05 Representations and Warranties of the Depositor..........30
Section 2.06 Substitution of Mortgage Loans...........................31
Section 2.07 Execution and Authentication of Certificates.............32
Section 2.08 REMIC Matters............................................33
ARTICLE III.
Administration and Servicing of Mortgage Loans
Section 3.01 The Master Servicer......................................33
Section 3.02 Collection of Certain Mortgage Loan Payments.............35
Section 3.03 Withdrawals from the Collection Account..................37
Section 3.04 Maintenance of Hazard Insurance; Property Protection
Expenses.................................................37
Section 3.05 Maintenance of Mortgage Impairment Insurance.............38
Section 3.06 Management and Realization Upon Defaulted Mortgage
Loans....................................................38
Section 3.07 Trustee and Trust Administrator to Cooperate.............40
Section 3.08 Servicing Compensation; Payment of Certain Expenses
by Master Servicer.......................................41
Section 3.09 Annual Statement as to Compliance........................41
Section 3.10 Annual Servicing Report..................................41
Section 3.11 Access to Certain Documentation and Information
Regarding the Mortgage Loans.............................45
Section 3.12 Reports of Foreclosures and Abandonments of
Mortgaged Properties, Returns Relating to Mortgage
Interest Received from Individuals and Returns
Relating to Cancellation of Indebtedness.................42
Section 3.13 Enforcement..............................................42
Section 3.14 Assumption Agreements....................................42
Section 3.15 Payment of Taxes, Insurance and Other Charges............43
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Section 3.16 Optional Purchase of Defaulted Mortgage Loans............43
Section 3.17 Acquisition by Trust of Defaulted Mortgage Loans.........44
ARTICLE IV.
Payments and Statements to Certificateholders; Rights of Certificateholders
Section 4.01 Distributions............................................44
Section 4.02 Allocation of Losses.....................................46
Section 4.03 Statements...............................................47
Section 4.04 Distribution Account.....................................49
Section 4.05 Investment of Accounts...................................50
Section 4.06 Distribution of Net WAC Carryover; Net WAC Carryover
Reserve Fund.............................................51
ARTICLE V.
The Certificates
Section 5.01 The Certificates.........................................52
Section 5.02 Registration of Transfer and Exchange of
Certificates.............................................53
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates........57
Section 5.04 Persons Deemed Owners....................................58
Section 5.05 Appointment of Paying Agent..............................58
ARTICLE VI.
The Seller, the Master Servicer and the Depositor
Section 6.01 Liability of the Seller, the Master Servicer and the
Depositor................................................58
Section 6.02 Merger or Consolidation of, or Assumption of the
Obligations of, the Seller, the Master Servicer or
the Depositor............................................59
Section 6.03 Limitation on Liability of the Master Servicer and
Others...................................................59
Section 6.04 Master Servicer Not to Resign............................60
Section 6.05 Delegation of Duties.....................................60
Section 6.06 Indemnification of the Trust by the Master Servicer......60
Section 6.07 Reports to the Commission................................61
ARTICLE VII.
Default
Section 7.01 Events of Default........................................64
Section 7.02 Trust Administrator to Act; Appointment of Successor.....66
Section 7.03 Waiver of Defaults.......................................66
Section 7.04 Notification to Certificateholders.......................67
ARTICLE VIII.
The Trustee
Section 8.01 Duties of Trustee........................................67
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Section 8.02 Certain Matters Affecting the Trustee....................69
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans....70
Section 8.04 Trustee May Own Certificates.............................71
Section 8.05 Master Servicer to Pay Trustee Fees and Expenses.........71
Section 8.06 Eligibility Requirements for Trustee.....................71
Section 8.07 Resignation or Removal of Trustee........................71
Section 8.08 Successor Trustee........................................72
Section 8.09 Merger or Consolidation of Trustee.......................72
Section 8.10 Appointment of Co-Trustee or Separate Trustee............72
ARTICLE IX.
The Trust Administrator
Section 9.01 Duties of Trust Administrator............................74
Section 9.02 Certain Matters Affecting the Trust Administrator........76
Section 9.03 Trust Administrator Not Liable for Certificates or
Mortgage Loans...........................................77
Section 9.04 Trust Administrator May Own Certificates.................78
Section 9.05 Master Servicer to Pay Trust Administrator Fees and
Expenses.................................................78
Section 9.06 Eligibility Requirements for Trust Administrator.........78
Section 9.07 Resignation or Removal of Trust Administrator............79
Section 9.08 Successor Trust Administrator............................79
Section 9.09 Merger or Consolidation of Trust Administrator...........80
Section 9.10 Appointment of Co-Trust Administrator or Separate
Trust Administrator......................................80
Section 9.11 Limitation of Liability..................................82
Section 9.12 Trust Administrator May Enforce Claims Without
Possession of Certificates; Inspection...................82
Section 9.13 Reports to the Commission................................82
Section 9.14 Tax Matters..............................................83
ARTICLE X.
Termination
Section 10.01 Termination.............................................85
Section 10.02 Additional Termination Requirements.....................87
ARTICLE XI.
Miscellaneous Provisions
Section 11.01 Amendment...............................................87
Section 11.02 Recordation of Agreement................................89
Section 11.03 Limitation on Rights of Certificateholders..............89
Section 11.04 Governing Law...........................................90
Section 11.05 Notices.................................................90
Section 11.06 Severability of Provisions..............................91
Section 11.07 Assignment..............................................91
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Section 11.08 Certificates Nonassessable and Fully Paid...............91
Section 11.09 Third-Party Beneficiaries...............................91
Section 11.10 Counterparts............................................91
Section 11.11 Effect of Headings and Table of Contents................91
EXHIBIT A-1 FORM OF CLASS A CERTIFICATE...........................A-1-1
EXHIBIT A-2 FORM OF CLASS M CERTIFICATE...........................A-2-1
EXHIBIT A-3 FORM OF CLASS R CERTIFICATE...........................A-3-1
EXHIBIT B MORTGAGE LOAN SCHEDULE..................................B-1
EXHIBIT C MONTHLY INFORMATION DELIVERED TO TRUST
ADMINISTRATOR...........................................C-1
EXHIBIT D [RESERVED]..............................................D-1
EXHIBIT E FORM OF REQUEST FOR RELEASE.............................E-1
EXHIBIT F [RESERVED]..............................................F-1
EXHIBIT G FORM OF REPORTING LETTER................................G-1
EXHIBIT H CERTIFICATION AS TO MORTGAGE FILE
(OTHER THAN ASSIGNMENTS)................................H-1
EXHIBIT I TRANSFER AFFIDAVIT......................................I-1
EXHIBIT J-1 FORM OF TRANSFEROR REPRESENTATION LETTER..............J-1-1
EXHIBIT J-2 FORM OF TRANSFEROR CERTIFICATE........................J-2-1
EXHIBIT K FORM OF CERTIFICATION TO BE PROVIDED BY THE TRUST.......K-1
EXHIBIT L FORM OF CERTIFICATION TO BE PROVIDED WITH FORM 10-K.....L-1
EXHIBIT M FORM OF INVESTOR REPRESENTATION LETTER..................M-1
EXHIBIT N FORM OF RULE 144A INVESTMENT REPRESENTATION.............N-1
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This Pooling and Servicing Agreement, dated as of May 1, 2003, among
Bond Securitization, L.L.C., as Depositor (the "Depositor"), Second Street
Funding Corporation, as Seller (in such capacity, the "Seller"), American
General Finance Corporation, as Master Servicer (in such capacity, the "Master
Servicer"), U.S. Bank National Association, as Trustee (the "Trustee"), and
Bank One, N.A., as Trust Administrator (the "Trust Administrator").
In consideration of the mutual agreements herein contained, the parties
hereto agree as follows:
PRELIMINARY STATEMENT
The Depositor is the owner of the Trust that is hereby conveyed to the
Trustee in return for the Certificates. The Certificates will represent the
entire beneficial ownership in the Trust. The Trustee will elect to treat the
Trust (excluding the Net WAC Carryover Reserve Fund) for federal income tax
purposes as a single REMIC. The Regular Certificates (other than the right of
the Holders of the Class A-1 Certificates to receive distributions of Net WAC
Carryover payments from the Net WAC Carryover Reserve Fund) will represent the
"regular interests" in the REMIC and the Class R Certificates will represent
that single "residual interest" in the REMIC. The "latest possible maturity
date" for federal income tax purposes of all interests created hereby will be
the Final Scheduled Distribution Date.
The following table sets forth characteristics of the Certificates,
together with the minimum denominations and integral multiples in excess
thereof in which such Classes shall be issuable (except that one Certificate
of each Class of Certificates may be issued in a different amount and, in
addition, one Class R Certificate representing the Tax Matters Person
Certificate may be issued in a different amount):
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Class Original Class Certificate Minimum Integral
Certificate Rate Denomination Multiples in
Principal Excess of
Balance (1) Minimum
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Class A-1 $146,500,000 (2) $25,000 $1
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Class A-2 $34,000,000 2.54% $25,000 $1
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Class A-3 $44,820,000 4.03%(3) $25,000 $1
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Class M-1 $16,190,000 4.26%(3) $25,000 $1
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Class M-2 $15,550,000 4.69%(3) $25,000 $1
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Class R $1 N/A N/A N/A
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(1) The Original Class Certificate Principal Balance of each Class of
Regular Certificates is subject to a variance of 5%.
(2) For each Distribution Date, the per annum Certificate Rate on the
Class A-1 Certificates will be equal to the lesser of (a) LIBOR plus 0.12%,
and (b) the Net WAC Cap.
(3) On the first Distribution Date after the date on which the Master
Servicer may exercise its option to terminate the Trust, the Certificate Rate
on the Class A-3 Certificates, the Class M-1 Certificates and the Class M-2
Certificates will increase by 0.50%.
Article I.
Definitions
Section 1.01 Definitions. Whenever used in this Agreement, the following words
and phrases, unless the context otherwise requires, shall have the meanings
specified in this Article.
Accounts: Collectively, the Collection Account and the Distribution
Account.
Affiliate: With respect to any Person, any other Person controlling,
controlled by or under common control with such Person. For purposes of this
definition, "control" means the power to direct the management and policies of
a Person, directly or indirectly, whether through ownership of voting
securities, by contract or otherwise and "controlling" and "controlled" shall
have meanings correlative to the foregoing.
AGFC: American General Finance Corporation.
Agreement: This Pooling and Servicing Agreement and all amendments
hereof and supplements and exhibits hereto.
Appraised Value: The appraised value of the Mortgaged Property based
upon the appraisal made by or for the Originators at the time of the
origination of the related Mortgage Loan.
Assignment Event: The 15th day following the day on which the senior,
unsecured long-term debt rating of AGFC is less than "Baa3" by ▇▇▇▇▇'▇ or
"BBB-" by S&P.
Assignment of Mortgage: With respect to any Mortgage, an assignment,
notice of transfer or equivalent instrument, in recordable form, sufficient
under the laws of the jurisdiction in which the related Mortgaged Property is
located to reflect the sale of the Mortgage to the Trustee, which assignment,
notice of transfer or equivalent instrument may be in the form of one or more
blanket assignments covering the Mortgage Loans secured by Mortgaged
Properties located in the same jurisdiction.
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Available Funds: As to any Distribution Date, the sum of (A) the sum of
all amounts described in clauses (i) through (vii) inclusive, of Section
3.02(b) received by the Master Servicer (including any amounts paid by the
Master Servicer and the Seller and excluding (a) any amounts not required to
be deposited in the Accounts pursuant to Section 3.02(b) during the related
Due Period and (b) any amounts paid to the Master Servicer, Trustee or Trust
Administrator or withdrawn by the Trust Administrator pursuant to Sections
3.03(ii), (iii), (iv), (v), (vi), (vii) and (viii) in respect of the Mortgage
Loans) during the related Due Period and deposited into the Accounts and (B)
any Termination Price with respect to the Mortgage Loans deposited to the
Distribution Account pursuant to Section 10.01(a). No amount included in this
definition by virtue of being described by any component of the definition
thereof shall be included twice by virtue of also being described by any other
component or otherwise.
Bankruptcy Code: Title 11 of the United States Code, as amended.
BIF: The Bank Insurance Fund, as from time to time constituted, created
under the Financial Institutions Reform, Recovery and Enhancement Act of 1989,
or, if at any time after the execution of this Agreement the Bank Insurance
Fund is not existing and performing duties now assigned to it, the body
performing such duties on such date.
Book-Entry Certificate: The Offered Certificates registered in the name
of the Depository or its nominee, ownership of which is reflected on the books
of the Depository or on the books of a Person maintaining an account with such
Depository (directly or as an indirect participant in accordance with the
rules of such Depository).
Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a
day on which banking institutions in the States of New York, Indiana or the
state in which the Corporate Trust Office is located are required or
authorized by law or executive order to be closed.
Certificate: Any Class A Certificate, Class M Certificate or Class R
Certificate.
Certificate Owner: The Person who is the beneficial owner of a
Book-Entry Certificate.
Certificate Principal Balance: With respect to any Certificate of any
Class of Offered Certificates, the portion of the Class Principal Balance of
such Class represented by such Certificate equal to the product of the
Percentage Interest evidenced by such Certificate and the Class Principal
Balance of such Class.
Certificate Rate: For any interest bearing Class of Certificates, the
per annum rate set forth or described in the Preliminary Statement.
Certificate Register and Certificate Registrar: The register maintained
and the registrar appointed pursuant to Section 5.02.
Certificateholder or Holder: The Person in whose name a Certificate is
registered in the Certificate Register, except that, solely for the purpose of
giving any consent, direction, waiver
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or request pursuant to this Agreement, (x) any Certificates registered in the
name of the Depositor, the Seller, the Master Servicer or any Person actually
known to a Responsible Officer of the Trust Administrator to be an Affiliate
of the Depositor, the Seller or the Master Servicer and (y) any Certificates
for which the Depositor, the Seller, the Master Servicer or any Person
actually known to a Responsible Officer of the Trust Administrator to be an
Affiliate of the Depositor, the Seller or the Master Servicer is the
Certificate Owner or Holder shall be deemed not to be outstanding (unless to
the actual knowledge of a Responsible Officer of the Trust Administrator (i)
the Depositor, the Seller or the Master Servicer or such Affiliate is acting
as trustee or nominee for a Person who is not an Affiliate of the Depositor,
the Seller or the Master Servicer and who makes the voting decision with
respect to such Class of Certificates or (ii) the Depositor, the Seller or the
Master Servicer or such Affiliate is the Certificate Owner or Holder of all
the Certificates of a Class, but only with respect to the Class as to which
the Depositor, the Seller or the Master Servicer or such Affiliate owns all
the Certificates) and the Percentage Interest evidenced thereby shall not be
taken into account in determining whether the requisite amount of Percentage
Interests necessary to effect any such consent, direction, waiver or request
has been obtained.
Civil Relief Act: The Soldiers' and Sailors' Civil Relief Act of 1940,
as amended.
Civil Relief Act Interest Shortfall: With respect to any Distribution
Date, for any Mortgage Loan as to which there has been a reduction in the
amount of interest collectible thereon for the most recently ended Due Period
as a result of the application of the Civil Relief Act, the amount by which
(i) interest collectible on such Mortgage Loan during such Due Period is less
than (ii) one month's interest on the Principal Balance of such Mortgage Loan
at the Net Loan Rate for such Mortgage Loan before giving effect to the
application of the Civil Relief Act.
Class: All Certificates bearing the same class designation as set forth
above.
Class A Certificate: Any Certificate executed and authenticated by the
Trust Administrator on behalf of the Trust and substantially in the form
attached hereto as Exhibit A pursuant to Section 5.01.
Class A Certificateholder: A Holder of a Class A Certificate.
Class A Percentage: Means 65.50%.
Class A Principal Distribution: With respect to any Distribution Date
prior to the Stepdown Date or with respect to which a Trigger Event has
occurred, the Principal Distribution Amount. With respect to any Distribution
Date on or after the Stepdown Date, to the extent that a Trigger Event has not
occurred, the excess of the aggregate Class Principal Balance for the Class A
Certificates immediately prior to the Distribution Date over the lesser of:
(a) the Class A Percentage of the aggregate Principal Balance of
the Mortgage Loans on the last day of the related Due Period
(after giving effect to principal payments received during the
related Due Period); and
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(b) the aggregate Principal Balance of the Mortgage Loans on the
last day of the related Due Period (after giving effect to
principal payments received during the related Due Period) less
the Overcollateralization Floor.
Class M Certificate: Any Certificate executed and authenticated by the
Trust Administrator on behalf of the Trust and substantially in the form
attached hereto as Exhibit A pursuant to Section 5.01.
Class M Certificateholder: A Holder of a Class M Certificate.
Class M-1 Percentage: Means 78.00%.
Class M-1 Principal Distribution: With respect to any Distribution Date
prior to the Stepdown Date or with respect to which a Trigger Event has
occurred, zero. With respect to any Distribution Date on or after the Stepdown
Date, to the extent that a Trigger Event has not occurred, the excess of the
sum of the aggregate Class Principal Balance for the Class A Certificates
after giving effect to the Class A Principal Distribution and the Class
Principal Balance for the Class M-1 Certificates immediately prior to the
Distribution Date over the lesser of:
(a) the Class M-1 Percentage of the aggregate Principal Balance of
the Mortgage Loans on the last day of the related Due Period
(after giving effect to principal payments received during the
related Due Period); and
(b) the aggregate Principal Balance of the Mortgage Loans on the
last day of the related Due Period (after giving effect to
principal payments received during the related Due Period) less
the Overcollateralization Floor.
Class M-2 Percentage: Means 90.00%.
Class M-2 Principal Distribution: With respect to any Distribution Date
prior to the Stepdown Date or with respect to which a Trigger Event has
occurred, zero. With respect to any Distribution Date on or after the Stepdown
Date, to the extent that a Trigger Event has not occurred, the excess of the
sum of the aggregate Class Principal Balance for the Class A Certificates
after giving effect to the Class A Principal Distribution, the Class Principal
Balance for the Class M-1 Certificates after giving effect to the Class M-1
Principal Distribution and the Class Principal Balance for the Class M-2
Certificates immediately prior to the Distribution Date over the lesser of:
(a) the Class M-2 Percentage of the aggregate Principal Balance of
the Mortgage Loans on the last day of the related Due Period
(after giving effect to principal payments received during the
related Due Period); and
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(b) the aggregate Principal Balance of the Mortgage Loans on the
last day of the related Due Period (after giving effect to
principal payments received during the related Due Period) less
the Overcollateralization Floor.
Class Principal Distribution: With respect to any Distribution Date,
the Class A Principal Distribution, Class M-1 Principal Distribution or the
Class M-2 Principal Distribution, as applicable.
Class Interest Carryover Shortfall: The excess of the related Class
Monthly Interest Distribution Amount for the preceding Distribution Date over
the amount in respect of interest that was actually distributed to that Class
on the preceding Distribution Date plus one month's interest on the excess, to
the extent permitted by law, at the related Certificate Rate.
Class Monthly Accrued Interest: With respect to any Distribution Date
and any Class of Certificates, one month's interest at the related Certificate
Rate on the related Class Principal Balance immediately prior to the
Distribution Date.
Class Monthly Interest Distribution Amount: With respect to any
Distribution Date and any Class of Certificates, the sum of (a) the related
Class Monthly Accrued Interest and (b) any related Class Interest Carryover
Shortfall for any prior Distribution Date, minus (c) the related Class' pro
rata share (based on the related Class Monthly Accrued Interest) of the
Non-Collectible Interest Shortfall for such Distribution Date.
Class Principal Balance: As of any date of determination, the Original
Class Certificate Principal Balance reduced by the all distributions of
principal made with respect thereto pursuant to Section 4.01 and all Realized
Losses allocated thereto pursuant to Section 4.02.
Class R Certificate: Any Certificate executed and authenticated by the
Trust Administrator on behalf of the Trust and substantially in the form
attached hereto as Exhibit A-3 pursuant to Section 5.01.
Closing Date: May 28, 2003.
Code: The Internal Revenue Code of 1986, as the same may be amended from
time to time (or any successor statute thereto).
Collection Account: The custodial account or accounts created and
maintained pursuant to Section 3.02(b). The Collection Account shall be an
Eligible Account.
Commission: The Securities and Exchange Commission.
Corporate Trust Office: The office of the Trustee or the Trust
Administrator which at any particular time its corporate business shall be
administered, which office, in the case of the Trustee on the Closing Date is
located at ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ and in the
case of the Trust Administrator, on the Closing Date is located at Bank ▇▇▇
▇▇▇▇▇,
▇
▇▇▇▇▇ ▇▇▇-▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ Attn: Corporate Trustee; American
General Mortgage Loan Trust 2003-1.
Cumulative Loss Event: With respect to any Distribution Date, if the
fraction, expressed as a percentage, obtained by dividing (x) the aggregate
amount of cumulative Realized Losses incurred on the Mortgage Loans from the
Cut-Off Date through the last day of the related Due Period by (y) the
aggregate Principal Balance of the Mortgage Loans as of the Cut-Off Date,
exceeds the applicable percentages described below with respect to such
Distribution Date:
Distribution Date Percentage
------------------- ---------------------------------------------
June 2006 - May 2007 1.75% for the first month, plus an additional
1/12th of 1.75% for each month thereafter.
June 2007 - May 2008 3.50% for the first month, plus an additional
1/12th of 1.00% for each month thereafter
June 2008 - May 2009 4.50% for the first month, plus an additional
1/12th of 1.00% for each month thereafter
June 2009 and thereafter 5.50%
Curtailment: With respect to a Mortgage Loan, any payment of principal
received during a Due Period as part of a payment that is in excess of the
amount of the Monthly Payment due for such Due Period and which is not
intended to satisfy the Mortgage Loan in full, nor is intended to cure a
delinquency or to be applied for subsequent Monthly Payments as and when the
same come due pursuant to directions from the Mortgagor to such effect.
Cut-Off Date: The commencement of business on May 1, 2003.
Cut-Off Date Pool Principal Balance: $259,009,662.15, which equals, as
of the Closing Date, the Pool Principal Balance.
Cut-Off Date Principal Balance: With respect to any Mortgage Loan, the
unpaid Principal Balance thereof as of the Cut-Off Date (or as of the
applicable date of substitution with respect to an Eligible Substitute
Mortgage Loan pursuant to Section 2.02, 2.04 or 2.06).
Debt Service Reduction: As to any Mortgage Loan and any Determination
Date, the excess of (i) the installment of principal and interest due on the
related Due Date under the terms of such Mortgage Loan over (ii) the amount of
the monthly payment of principal and/or interest required to be paid by the
Mortgagor as established by a court of competent jurisdiction
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(pursuant to an order which has become final and nonappealable) as a result of
a proceeding initiated by or against the related Mortgagor under the
Bankruptcy Code.
Defective Mortgage Loan: Any Mortgage Loan subject to repurchase or
substitution by the Originators or the Seller pursuant to Section 2.02, 2.04
or 2.06.
Deficient Valuation: With respect to any Mortgage Loan, a valuation of
the related Mortgaged Property by a court of competent jurisdiction in a
proceeding under the United States Bankruptcy Code in an amount less than the
then outstanding indebtedness under the Mortgage Loan, or that results in a
permanent forgiveness of principal.
Definitive Certificates: As defined in Section 5.02(c).
Delinquency Amount: With respect to any Due Period, the sum, without
duplication, of the aggregate Principal Balance of the Mortgage Loans that are
(1) 60 or more days delinquent (pursuant to the Master Servicer's collection
policies), (2) in foreclosure, (3) REO Properties, and (4) discharged due to
bankruptcy each as of the last day of such Due Period.
Delinquency Event: With respect to any Distribution Date, if the 60+
Delinquency Percentage (Rolling Three Month) exceeds 40% of the Senior Credit
Enhancement Percentage.
Deposit Event: The lowering of AGFC's short-term debt rating below "P-1"
by Moody's or "A-1" by S&P.
Depositor: Bond Securitization, L.L.C., a Delaware limited liability
company, or any successor thereto.
Depository: The initial Depository shall be The Depository Trust
Company, the nominee of which is Cede & Co., as the registered Holder of the
Class A Certificates evidencing $225,320,000, in initial aggregate principal
amount of such Certificates, the Class M-1 Certificates evidencing
$16,190,000, in initial aggregate principal amount of such Certificates and
the Class M-2 Certificates evidencing $15,550,000, in initial aggregate
principal amount of such Certificates. The Depository shall at all times be a
"clearing corporation" as defined in Section 8-102(3) of the UCC of the State
of New York.
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Determination Date: With respect to any Distribution Date, the 18th day
of the month in which such Distribution Date occurs (or if such day is not a
Business Day, the Business Day immediately succeeding such eighteenth day).
Disqualified Organization: Any of the following: (i) the United States,
any State or any political subdivision thereof, any foreign government,
international organization, or any agency
8
or instrumentality of any of the foregoing; (ii) any organization (except
certain farmers' cooperatives described in Section 521 of the Code) that 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 on unrelated business
income); (iii) rural electric and telephone cooperatives described in Section
1381 of the Code; or (iv) any other Person so designated by the Trust
Administrator or the Tax Matters Person based upon an Opinion of Counsel that
the holding of a Class R Certificate by such Person may cause the Trust or any
Person having an ownership interest in any Class of Certificates, other than
such Person, to incur a liability for any federal tax imposed under the Code
that would not otherwise be imposed but for the Transfer of an ownership
interest in a Class R Certificate to such Person. The terms "United States",
"State" and "international organization" shall have the meanings set forth in
Section 7701 of the Code or successor provisions.
Disqualified Partnership: Any domestic entity classified as a
partnership under the Code if any of its beneficial owners are Non-United
States Tax Persons.
Distribution Account: The account established by the Trust Administrator
pursuant to Section 4.04. The Distribution Account shall be an Eligible
Account.
Distribution Date: The 25th day of each month or, if such day is not a
Business Day, then the next Business Day, beginning in June 2003.
Due Date: As to any Mortgage Loan, the day of the month on which the
Monthly Payment is due from the Mortgagor exclusive of any days of grace.
Due Period: With respect to each Distribution Date, the calendar month
preceding the month in which such Distribution Date occurs.
Eligible Account: An account (i) maintained with a depository
institution whose debt obligations at the time of any deposit in the account
have the highest short-term debt rating by the Rating Agencies, (ii) the
deposits in which are fully insured by either the Savings Association
Insurance Fund or the Bank Insurance Fund of the FDIC or (iii) otherwise
acceptable to each Rating Agency without reduction or withdrawal of their then
current ratings of the Certificates, as evidenced by a letter from each Rating
Agency to the Trust Administrator.
Eligible Investments: One or more of the following :
(i) direct obligations of, or obligations fully guaranteed as to
timely payment of principal and interest by, the United States or
any agency or instrumentality of the United States, provided that
the obligations are backed by the full faith and credit of the
United States;
(ii) repurchase agreements on obligations specified in the prior
clause maturing not more than three months from the date of
acquisition, provided that the short-term unsecured debt
obligations of the party agreeing to repurchase the
9
obligations are at the time rated by each Rating Agency in its
highest short-term rating category;
(iii) certificates of deposit, time deposits and bankers'
acceptances, which shall each have an original maturity of not
more than 90 days and, in the case of bankers' acceptances, shall
in no event have an original maturity of more than 365 days, of
any U.S. depository institution or trust company incorporated
under the laws of the United States or any state of the United
States and subject to supervision and examination by either
federal or state banking authorities, provided that the unsecured
short-term debt obligations of that depository institution or
trust company at the date of acquisition have been rated by each
of the Rating Agencies in its highest unsecured short-term debt
rating category;
(iv) commercial paper, having original maturities of not more than
90 days, of any corporation incorporated under the laws of the
United States or any state of the United States which on the date
of acquisition has been rated by the Rating Agencies in their
highest short-term rating categories;
(v) short term investment funds sponsored by any trust company or
bank incorporated under the laws of the United States or any state
of the United States which on the date of acquisition has been
rated by the Rating Agencies in their respective highest rating
category of long term unsecured debt;
(vi) interests in any money market fund which at the date of
acquisition of the interests in the fund and throughout the time
that the interest is held in the fund has the rating specified by
each Rating Agency; and
(vii) other obligations or securities that are acceptable to each
Rating Agency as an Eligible Investment and will not result in a
reduction in the then current rating of the Certificates, as
evidenced by a letter to that effect from each Rating Agency and
with respect to which the Master Servicer has received
confirmation that, for tax purposes, the investment complies with
the last clause of this definition;
provided that no instrument shall evidence either the right to receive:
(a) only interest with respect to the obligations underlying the
instrument, or
(b) both principal and interest payments derived from obligations
underlying the instrument and the interest and principal payments
with respect to the instrument provided a yield to maturity at par
greater than 120% of the yield to maturity at par of the
underlying obligations; and
10
provided, further, that no instrument described may be purchased at a
price greater than par if the instrument may be prepaid or called at a price
less than its purchase price prior to its stated maturity.
Eligible Substitute Mortgage Loan: A Mortgage Loan substituted by the
Originators for a Defective Mortgage Loan which must, on the date of such
substitution, (i) have an outstanding Principal Balance (or in the case of a
substitution of more than one Mortgage Loan for a Defective Mortgage Loan, an
aggregate Principal Balance), not in excess of and not more than 5% less than
the Principal Balance of the Defective Mortgage Loan; (ii) have a Loan Rate
not less than the Loan Rate of the Defective Mortgage Loan and not more than
1% in excess of the Loan Rate of such Defective Mortgage Loan; (iii) have a
Mortgage of the same level of priority as the Mortgage relating to the
Defective Mortgage Loan at the time such Mortgage was transferred to the
Trust; (iv) have a remaining term to maturity not more than 6 months earlier
and not later than the remaining term to maturity of the Defective Mortgage
Loan; (v) comply with each representation and warranty set forth in Section
2.04 (deemed to be made as of the date of substitution), including
representations and warranties set forth in Section 2.04(b); (vi) have an
original Loan-to-Value Ratio not greater than that of the Defective Mortgage
Loan; and (vii) be of the same type of Mortgaged Property as the Defective
Mortgage Loan or a detached single family residence. More than one Eligible
Substitute Mortgage Loan may be substituted for a Defective Mortgage Loan if
such Eligible Substitute Mortgage Loans meet the foregoing attributes in the
aggregate.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
Event of Default: As defined in Section 7.01.
Excess Spread: With respect to any Distribution Date, the positive
excess, if any, of (a) the Interest Remittance Amount for the Distribution
Date over (b) the aggregate Class Monthly Interest Distribution Amount for
each class of Offered Certificates for such Distribution Date.
Exchange Act: The Securities Exchange Act of 1934, as amended.
FDIC: The Federal Deposit Insurance Corporation or any successor
thereto.
Final Scheduled Distribution Date: With respect to the Certificates, the
Distribution Date in April 2033.
Foreclosure Profits: With respect to a Liquidated Mortgage Loan, the
amount, if any, by which (i) the aggregate of its Net Liquidation Proceeds
exceeds (ii) the related Principal Balance (plus accrued and unpaid interest
thereon at the applicable Loan Rate from the date interest was last paid
through the date of receipt of the final Liquidation Proceeds) of such
Liquidated Mortgage Loan immediately prior to the final recovery of its
Liquidation Proceeds.
Insurance Proceeds: Proceeds paid by any insurer pursuant to any
insurance policy covering a Mortgage Loan or Mortgaged Property, net of any
component thereof (i) covering any
11
expenses incurred by or on behalf of the Master Servicer in connection with
obtaining such proceeds, (ii) applied to the restoration or repair of the
related Mortgaged Property, or (iii) released to the Mortgagor in accordance
with the Master Servicer's normal servicing procedures.
Interest Period: With respect to each Distribution Date, and the
Certificates other than the Class A-1 Certificates, the period from the first
day of the calendar month preceding the month of the Distribution Date through
the last day of such preceding calendar month. Interest in respect of any
Distribution Date will accrue on the Certificates other than the Class A-1
Certificates during each interest period on the basis of a 360-day year
consisting of twelve 30-day months. With respect to each Distribution Date,
and the Class A-1 Certificates, the period from and including the previous
Distribution Date (or the Closing Date in the case of the first Distribution
Date) through the last day preceding the related Distribution Date. Interest
in respect of any Distribution Date will accrue on the Class A-1 Certificates
during each interest period on the basis of the actual number of days elapsed
in the related interest period and a year consisting of 360 days.
Interest Remittance Amount: With respect to any Distribution Date, that
portion of Available Funds for such Distribution Date that represents interest
received on the Mortgage Loans during the related Due Period.
LIBOR: With respect to any Distribution Date, the arithmetic mean of the
London interbank offered rate quotations for one-month U.S. Dollar deposits,
expressed on a per annum basis in accordance with Section 1.03 herein.
LIBOR Business Day: Any day other than (i) a Saturday or a Sunday or
(ii) a day on which banking institutions in London, England are required or
authorized by law to be closed.
LIBOR Rate Adjustment Date: With respect to each Distribution Date, the
second LIBOR Business Day immediately preceding the commencement of the
related Interest Period.
Liquidated Mortgage Loan: As to any Distribution Date, any Mortgage Loan
in respect of which the Master Servicer has determined, in accordance with the
servicing procedures specified herein, as of the end of the related Due
Period, that all Liquidation Proceeds which it expects to recover with respect
to the liquidation of the Mortgage Loan or disposition of the related REO
Property have been recovered.
Liquidation Proceeds: Proceeds (including Insurance Proceeds) received
in connection with the liquidation of any Mortgage Loan or related REO
Property, whether through trustee's sale, foreclosure sale or otherwise
(including rental income).
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
original principal balance of such Mortgage Loan, divided by the Appraised
Value or the related purchase price for the related Mortgaged Property, if the
Appraised Value is not available.
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Loan Rate: With respect to any Mortgage Loan as of any day, the per
annum rate of interest applicable under the related Mortgage Note to the
calculation of interest for such day on the Principal Balance.
Lost Note Affidavit: The lost note affidavit signed by the Originators,
the Seller or the Depositor.
Majority Certificateholder: The Holder or Holders of a Class of
Certificates evidencing Percentage Interests in excess of 51%.
Master Servicer: American General Finance Corporation, an Indiana
corporation, or any successor thereto or any successor hereunder.
Monthly Payment: The scheduled monthly payment of principal and/or
interest required to be made by a Mortgagor on the related Mortgage Loan.
Monthly Report: As defined in Section 4.03.
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc., or its successors in interest.
Mortgage: The mortgage, deed of trust or other instrument creating a
first or second lien on an estate in fee simple interest in real property
securing a Mortgage Loan.
Mortgage File: The mortgage documents listed in Section 2.01 pertaining
to a particular Mortgage Loan and any additional documents required to be
added to the Mortgage File pursuant to this Agreement.
Mortgage Loan Purchase Agreement: The mortgage loan purchase agreement,
dated May 9, 2003, among the Originators and the Seller.
Mortgage Loan Schedule: With respect to any date, the schedule of
Mortgage Loans constituting assets of the Trust. The Mortgage Loan Schedule is
the schedule set forth herein as Exhibit B, which schedule sets forth as to
each Mortgage Loan: (i) the Cut-Off Date Principal Balance, (ii) the account
number, (iii) the original Principal Balance, (iv) the Loan Rate, (v) property
state, (vi) property zip code, (vii) property type and (viii) Loan-to-Value
Ratio. The Mortgage Loan Schedule will be amended from time to time to reflect
the substitution of an Eligible Substitute Mortgage Loan for a Defective
Mortgage Loan from time to time hereunder.
Mortgage Loans: The mortgage loans that are transferred and assigned to
the Trustee on behalf of the Trust pursuant to Sections 2.01 and 2.06,
together with the Related Documents, exclusive of Mortgage Loans that are
transferred to the Originators or the Seller, from time to time pursuant to
Sections 2.02 and 2.06, as from time to time are held as a part of the Trust,
such mortgage loans originally so held being identified in the Mortgage Loan
Schedule delivered on the Closing Date.
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Mortgage Note: With respect to a Mortgage Loan, the note or other
evidence of indebtedness pursuant to which the related Mortgagor agrees to pay
the indebtedness evidenced thereby which is secured by the related Mortgage.
Mortgaged Property: The underlying property, including real property and
improvements thereon, securing a Mortgage Loan.
Mortgagor: The obligor or obligors under a Mortgage Note.
Net Liquidation Proceeds: With respect to any Liquidated Mortgage Loan,
Liquidation Proceeds net of unreimbursed Servicing Fees with respect thereto.
Net Loan Rate: With respect to any Mortgage Loan as to any day, the Loan
Rate less the sum of the Servicing Fee Rate and the Trust Administrator Fee
Rate.
Net WAC Cap: With respect to any Distribution Date, the product of (i)
the weighted average of the Net Loan Rate on the Mortgage Loans as of the
calendar month immediately preceding the month in which such Distribution Date
occurs, weighted on the basis of the Principal Balances thereof as of the
beginning of the related Due Period, and (ii) a fraction equal to 30 divided
by the actual number of days in the related Interest Period.
Net WAC Carryover: With respect to the Class A-1 Certificates and any
Distribution Date, the sum of (a) the aggregate amount of Net WAC Shortfalls
on such Distribution Date which is not covered on such Distribution Date by
payments from the Net WAC Carryover Reserve Fund, (b) any related Net WAC
Carryover remaining unpaid from previous Distribution Dates, and (c) one
month's interest on the amount in clause (b) (based on the number of days in
the related Interest Period) at the applicable Certificate Rate without regard
to the Net WAC Cap.
Net WAC Carryover Reserve Fund: An "outside reserve fund" within the
meaning of Treasury regulation Section 1.860G-2(h), which is not an asset of
any REMIC, ownership of which is evidenced by the Class R Certificate and
which is established and maintained pursuant to Section 4.06 herein.
Net WAC Carryover Reserve Fund Deposit: An amount equal to $5,000, which
the Trust Administrator shall deposit into the Trust pursuant to Section 4.06
herein.
Net WAC Carryover Reserve Fund Residual Right: The right to distribution
from the Net WAC Carryover Reserve Fund as described in Section 4.06 herein.
Net WAC Shortfall: With respect to the Class A-1 Certificates and any
Distribution Date for which the Certificate Rate for such Certificates is
based on the Net WAC Cap, the excess, if any, of (i) the related Class Monthly
Accrued Interest for such Distribution Date, calculated at the applicable
Certificate Rate without regard to the Net WAC Cap over (ii) the related Class
Monthly Accrued Interest for such Distribution Date.
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Non-Collectible Interest Shortfall: With respect to any Distribution
Date, Civil Relief Act Interest Shortfalls and Prepayment Interest Shortfalls,
if any, for that Distribution Date.
Non-United States Tax Person: Any Person other than a United States Tax
Person.
Offered Certificate: The Class A Certificates and Class M Certificates.
Officer's Certificate: A certificate signed by the President, an
Executive Vice President, a Senior Vice President, a Vice President, the
Treasurer, Assistant Treasurer, the Secretary, an Assistant Secretary,
Comptroller or any other authorized officer of the Master Servicer or the
Seller, as the case may be, and delivered to the Trust Administrator.
Opinion of Counsel: A written opinion of counsel reasonably acceptable
to the Trust Administrator, who may be in-house counsel for the Master
Servicer, Seller or their Affiliates (except that any opinion relating to the
status of the Trust for federal tax purposes must be an opinion of independent
outside counsel) and who, in the case of opinions delivered to each of the
Rating Agencies, is reasonably acceptable to each of them.
Original Class Certificate Principal Balance: With respect to the Class
A-1 Certificates, $146,500,000. With respect to the Class A-2 Certificates,
$34,000,000. With respect to the Class A-3 Certificates, $44,820,000. With
respect to the Class M-1 Certificates, $16,190,000. With respect to the Class
M-2 Certificates, $15,550,000.
Originators: American General Financial Services, Inc. (DE), American
General Financial Services, Inc. (IN), American General Financial Services,
Inc. (TX), American General Financial Services, Inc. (OH), American General
Financial Services, Inc. (TN), American General Consumer Discount Company (PA)
and American General Home Equity, Inc. (DE).
Outstanding Class Interest Carryover Shortfall: With respect to any
Class of Certificates and any Distribution Date, the amount of Class Interest
Carryover Shortfall for such Distribution Date plus one month's interest
thereon, at the related Certificate Rate, to the extent permitted by law.
Overcollateralization Amount: As to any Distribution Date, the excess if
any, of (a) the aggregate Principal Balance of the Mortgage Loans as of the
last day of the related Due Period over (b) the aggregate Class Principal
Balance of the Certificates, after taking into account distributions of
principal to be made on that Distribution Date.
Overcollateralization Deficiency Amount: With respect to any
Distribution Date, the amount, if any, by which the Target
Overcollateralization Amount exceeds the Overcollateralization Amount on such
Distribution Date (after giving effect to distributions in respect of the
Principal Remittance Amount on such Distribution Date).
Overcollateralization Floor: 0.50% of the Cut-Off Date Pool Principal
Balance.
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Overcollateralization Release Amount: With respect to any Distribution
Date, the lesser of (x) the Principal Remittance Amount for such Distribution
Date and (y) the excess, if any, of (i) the Overcollateralization Amount for
such Distribution Date (assuming 100% of the Principal Remittance Amount is
applied as a principal payment on such Distribution Date) over (ii) the Target
Overcollateralization Amount for such Distribution Date.
Ownership Interest: As to any Class R Certificate, any interest in such
Certificate as the Holder thereof and any other interest therein, whether
direct or indirect, legal or beneficial, as owner or as pledgee.
Paying Agent: Any paying agent appointed pursuant to Section 5.05.
Percentage Interest: As to any Certificates, the percentage obtained by
dividing the initial Certificate Principal Balance of such Certificate by the
Original Class Certificate Principal Balance of the Class of which such
Certificate is part.
Permitted Transferee: Any Transferee of a Class R Certificate other than
(a) a Disqualified Organization, (b) any Person as to whom, as determined by
the Trust Administrator (based upon an Opinion of Counsel, obtained at the
request of the Trust Administrator at the expense of such Person or the Person
seeking to Transfer a Class R Certificate, supporting such determination), the
Transfer of a Class R Certificate may cause the REMIC to fail to qualify as a
REMIC at any time that any Certificate is outstanding, (c) a Non-United States
Tax Person, or (d) a Disqualified Partnership.
Person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, limited liability company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
Pool Principal Balance: With respect to any date, the aggregate of the
Principal Balances of all Mortgage Loans as of such date.
Prepayment Interest Shortfall: With respect to any Distribution Date,
for each Mortgage Loan that was the subject during the related Due Period of a
Principal Prepayment, Curtailment or a Monthly Payment received prior to the
related Due Date, an amount equal to the excess, if any, of (i) 30 days'
interest on the Principal Balance of such Mortgage Loan at the Loan Rate (or
at such lower rate as may be in effect for such Mortgage Loan pursuant to
application of the Civil Relief Act or as reduced by any Debt Service
Reduction) minus the Servicing Fee and Trust Administrator Fee for such
Mortgage Loan over (ii) the amount of interest actually remitted by the
Mortgagor in connection with such Principal Prepayment, Curtailment or a
Monthly Payment received prior to the related Due Date less the Servicing Fee
and Trust Administrator Fee for such Mortgage Loan in such month.
Principal Balance: As to any Mortgage Loan and any day, the related
Cut-Off Date Principal Balance, minus (i) all collections or other proceeds
applied as recovery of principal credited against the principal balance of any
such Mortgage Loan, (ii) any Deficient Valuation,
16
and (iii) any principal reduction resulting from a modification by the Master
Servicer as permitted hereunder.
Principal Distribution Amount: With respect to any Distribution Date,
the excess of (a) the Principal Remittance Amount for such Distribution Date
over (b) the Overcollateralization Release Amount, if any, for such
Distribution Date plus the lesser of (x) Excess Spread and (y) the
Overcollateralization Deficiency Amount.
Principal Prepayment: Any payment or other recovery of principal on a
Mortgage Loan equal to the outstanding Principal Balance thereof, received in
advance of the final scheduled Due Date which is intended to satisfy a
Mortgage Loan in full.
Principal Remittance Amount: For any Distribution Date, the sum of (a)
the principal portion of all Monthly Payments on the Mortgage Loans made
during the related Due Period. (b) the principal portion of all proceeds of
the repurchase of a Mortgage Loan (or, in the case of a substitution, certain
amounts representing a Substitution Adjustment) as required by this Agreement
during the related Due Period and (c) the principal portion of all other
unscheduled collections received during the related Due Period.
Purchase Agreement: The purchase agreement, dated May 28, 2003, between
the Seller, as seller, and the Depositor, as purchaser, with respect to the
Mortgage Loans.
Purchase Price: As to any Mortgage Loan purchased from the Trust on any
date pursuant to Section 2.02, 2.04 or 3.16 an amount equal to the sum of (i)
the unpaid Principal Balance thereof as of the date of purchase, (ii) the
greater of (a) all unpaid accrued interest thereon to the end of the Due
Period preceding the Distribution Date on which such Purchase Price is
included in Available Funds and (b) 30 days' interest thereon, computed at the
applicable Loan Rate; (iii) if the Master Servicer is not an Affiliate of the
Originators, expenses reasonably incurred or to be incurred by the Master
Servicer, the Trust Administrator or the Trustee in respect of the breach or
defect giving rise to the purchase obligation, and (iv) with respect to any
Mortgage Loan repurchased due to a breach of the representations and
warranties set forth in Section 2.04(a)(i) herein, any costs and damages
incurred by the Trust in connection with such breach.
Purchaser: The Depositor in its capacity as purchaser under the
Purchase Agreement.
Rating Agency: Any statistical credit rating agency, or its successor,
that rated the Certificates at the request of the Depositor at the time of the
initial issuance of the Certificates. If such agency or a successor is no
longer in existence, "Rating Agency" shall be such statistical credit rating
agency, or other comparable Person, designated by the Depositor, notice of
which designation shall be given to the Trust Administrator. References herein
to the highest short term unsecured rating category of a Rating Agency shall
mean "A-1" or better in the case of S&P and "P-1" or better in the case of
Moody's and in the case of any other Rating Agency shall mean such equivalent
ratings. References herein to the highest long-term rating category of a
17
Rating Agency shall mean "AAA" in the case of S&P and "Aaa" in the case of
Moody's and in the case of any other Rating Agency, such equivalent rating.
Realized Loss: The amount determined by the Master Servicer and
evidenced by an Officers' Certificate delivered to the Trust Administrator, in
connection with any Mortgage Loan equal to:
o for any Liquidated Mortgage Loan, the excess of its Principal Balance plus
interest at a rate equal to the related Loan Rate from the Due Date as to
which interest was last paid up to the first Due Date after the liquidation
over any proceeds received in connection with the liquidation, after
application of all withdrawals permitted to be made by the Master Servicer
from the Collection Account for the Mortgage Loan;
o for any Mortgage Loan that has become the subject of a Deficient Valuation,
the amount of any principal reduction; or
o the amount of any reduction by the Master Servicer to the Principal Balance
of the Mortgage Loan pursuant to any modification permitted herein.
Record Date: With respect to each Distribution Date and any Class of
Certificates other than the Class A-1 Certificates (other than the first
Distribution Date), the last Business Day of the month immediately preceding
the month in which the related Distribution Date occurs. With respect to the
first Distribution Date and any Class of Certificates other than the Class A-1
Certificates, the Closing Date. With respect to each Distribution Date and the
Class A-1 Certificates the day prior to the related Distribution Date.
Regular Certificates: The Certificates other than the Class R
Certificates.
Related Documents: As defined in Section 2.01.
Released Mortgaged Property Proceeds: As to any Mortgage Loan, proceeds
received by the Master Servicer in connection with (a) a taking of an entire
Mortgaged Property by exercise of the power of eminent domain or condemnation
or (b) any release of part of the Mortgaged Property from the lien of the
related Mortgage, whether by partial condemnation, sale or otherwise, which
are not released to the Mortgagor in accordance with applicable law, mortgage
servicing standards the Master Servicer would use in servicing mortgage loans
for its own account and this Agreement.
Remaining Excess Spread: With respect to any Distribution Date, the
positive excess, if any, of (a) Available Funds for the Distribution Date over
(b) the sum for that Distribution Date of (i) the aggregate Class Monthly
Interest Distribution Amount for each Class of Offered Certificates and (ii)
the aggregate of the Class A Principal Distribution, Class M-1 Principal
Distribution and Class M-2 Principal Distribution.
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REMIC: A "real estate mortgage investment conduit" as defined in Section
860D of the Code.
REMIC Provisions: The provisions of the federal income tax law relating
to REMICs, which appear at Sections 860A through 860G of Subchapter M of
Chapter 1 of the Code, and related provisions, and proposed, temporary and
final Treasury regulations and any published rulings, notices and
announcements promulgated thereunder, as the foregoing may be in effect from
time to time.
REO Property: A Mortgaged Property that is acquired by the Master
Servicer on behalf of the Trust Administrator in foreclosure or by deed in
lieu of foreclosure.
Responsible Officer: When used with respect to the Trustee or Trust
Administrator, any officer of the Trustee or Trust Administrator within the
Corporate Trust Office of the Trustee or Trust Administrator including any
vice president or assistant vice president, assistant treasurer, assistant
secretary, senior trust officer or trust officer or, with respect to a
particular corporate trust 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 Seller or the Master
Servicer, the President or any Vice President, Treasurer or Assistant
Treasurer or any Secretary or Assistant Secretary or any other authorized
officer of the Seller or the Master Servicer.
SAIF: The Savings Association Insurance Fund, as from time to time
constituted, created under the Financial Institutions Reform, Recovery and
Enhancement Act of 1989 or, if at any time after the execution of this
Agreement the Savings Association Insurance Fund is not existing and
performing duties now assigned to it, the body performing such duties on such
date.
S&P: Standard & Poor's Ratings Services, or its successors in interest.
Securities Act: The Securities Act of 1933, as amended.
Seller: Second Street Funding Corporation, a Delaware corporation, or
any successor thereto, as seller under the Purchase Agreement.
Senior Credit Enhancement Percentage: For the Class A Certificates and
any Distribution Date, the percentage obtained by dividing (x) the sum of the
aggregate Class Principal Balance of the Class M Certificates and the
Overcollateralization Amount by (y) the aggregate Principal Balance of the
Mortgage Loans, calculated after taking into account payments of principal on
the Mortgage Loans received during the related Due Period and before taking
into account distributions of principal on the Certificates to the
Certificateholders then entitled to distributions of principal on that
Distribution Date.
Servicing Certificate: A certificate completed and executed by a
Responsible Officer on behalf of the Master Servicer.
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Servicing Fee: As to each Distribution Date and each Mortgage Loan, the
fee payable to the Master Servicer as provided herein, which is calculated as
an amount equal to the product of 1/12th of the Servicing Fee Rate and the
Principal Balance thereof at the beginning of the related Due Period.
Servicing Fee Rate: 0.50% per annum.
60+ Delinquency Percentage (Rolling Three Month): With respect to any
Distribution Date, the average of the percentage equivalents of the fractions
determined for each of the three immediately preceding Due Periods, the
numerator of each of which is equal to the Delinquency Amount for such Due
Period, and the denominator of each of which is the aggregate Principal
Balance of the Mortgage Loans as of the end of such Due Period.
Startup Day: The Closing Date.
Stepdown Date: The earliest to occur of (i) the Distribution Date on
which the aggregate Class Principal Balance of the Class A Certificates has
been reduced to zero and (ii) the later to occur of (a) the Distribution Date
in June 2006 and (b) the first Distribution Date on which the Senior Credit
Enhancement Percentage for the Class A Certificates is greater than or equal
to 34.50%.
Substitution Adjustment: As to any date on which a substitution occurs
pursuant to Section 2.06, the sum of (a) the excess of (i) the aggregate
Principal Balance of all Defective Mortgage Loans to be replaced by Eligible
Substitute Mortgage Loans (after application of principal payments received on
or before the date of substitution of any Eligible Substitute Mortgage Loans
as of the date of substitution), over (ii) the aggregate Principal Balance of
such Eligible Substitute Mortgage Loans and (b) with respect to any Mortgage
Loan substituted due to a breach of the representations or warranties set
forth in Section 2.04(a)(i), any costs and damages incurred by the Trust in
connection with such breach.
Supplemental Mortgage Loan Schedule: As defined in Section 2.06(b).
Target Overcollateralization Amount: As to any Distribution Date prior
to the Stepdown Date, or with respect to which a Trigger Event is in effect,
5.00% of the Cut-Off Date Pool Principal Balance. After the Stepdown Date,
unless a Trigger Event is in effect, the greater of (i) 10.00% of the Pool
Principal Balance as of the last day of the related Due Period and (ii) the
Overcollateralization Floor, provided if a Trigger Event has occurred, the
Target Overcollateralization Amount will not be reduced.
Tax Matters Person: With respect to the REMIC, the Person designated as
the "tax matters person" of the REMIC in the manner provided under Treasury
regulation section 1.860F-4(d) and Treasury regulation section
301.6231(a)(7)-1, which Person shall be the Seller.
Tax Matters Person Certificate: The Class R Certificate with a
Denomination of $1.00.
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Transferee: Any Person who is acquiring, by Transfer, any ownership
interest in a Certificate.
Transfer: Any direct or indirect transfer, sale, pledge, hypothecation,
or other form of assignment of any ownership interest in a Certificate.
Transfer Affidavit: The affidavit referred to in Section 5.02(e).
Transfer Date: The Closing Date, or with respect to an Eligible
Substitute Mortgage Loan, the date of substitution.
Transferor: Any Person who is disposing of, by Transfer, any
Certificate.
Transferor Interest: The interest in the Trust that is not represented
by the Class A Certificates and the Class M Certificates.
Trigger Event: A Trigger Event occurs on a Distribution Date if a
Delinquency Event or a Cumulative Loss Event has occurred and is continuing on
such Distribution Date.
Trust: The trust created by this Agreement which shall be entitled
"American General Mortgage Loan Trust 2003-1," the corpus of which consists of
the Mortgage Loans, such assets as shall from time to time be deposited in the
Collection Account and the Distribution Account in accordance with this
Agreement, property that secured a Mortgage Loan and that has become REO
Property, certain hazard insurance policies maintained by the Mortgagors or
the Master Servicer in respect of the Mortgage Loans and an assignment of the
Depositor's rights under the Purchase Agreement and all proceeds of each of
the foregoing.
Trust Administrator: Bank One, N.A. in its capacity as trust
administrator hereunder, or any successor trust administrator appointed as
herein provided.
Trust Administrator Fee: As to each Distribution Date, the fee payable
to the Trust Administrator in respect of its obligations under this Agreement
which is calculated as an amount equal to the product of 1/12th of the Trust
Administrator Fee Rate and the Pool Balance as of the beginning of the related
Due Period.
Trust Administrator Fee Rate: With respect to each Mortgage Loan,
0.0156% per annum.
Trustee: U.S. Bank National Association in its capacity as trustee
hereunder, or any successor trustee appointed as herein provided.
Trustee Fee: The fee owed to the Trustee in respect of its obligations
under this Agreement as set forth in a fee letter agreement between the
Trustee and the Trust Administrator.
UCC: The Uniform Commercial Code, as amended from time to time, as in
effect in any specified jurisdiction.
21
United States Tax 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 state or the District of Columbia, or an
estate 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,
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
persons have the authority to control all substantial decisions of the trust
(or to the extent provided in the Treasury regulations, if the trust was in
existence on August 20, 1996 and elected to be treated as a United States
person), all within the meaning of Section 7701(a) (30) of the Code.
Voting Rights: The portion of the aggregate voting rights of all the
Certificates evidenced by a Certificate. At all times during the term of this
Agreement, the Voting Rights shall be allocated among Holders of the Regular
Certificates in proportion to the Original Class Certificate Principal
Balances of their respective Classes. Voting Rights allocated to a Class of
Certificates shall be allocated among the Certificates of each such Class in
accordance with their respective Percentage Interests. The Holders of the
Class R Certificates shall have no Voting Rights.
Section 1.02 Interest Calculations. All calculations of interest that are made
in respect of the Principal Balance of a simple interest mortgage loan shall
be made on the basis of a 360-day year and the actual number of days elapsed.
The Certificate Rate for the Regular Certificates other than the Class A-1
Certificates shall be calculated on the basis of a 360-day year consisting of
twelve 30-day months. The Certificate Rate for the Class A-1 Certificates
shall be calculated on the basis of the actual number of days elapsed in the
related Interest Period and a year consisting of 360 days. The calculation of
the Servicing Fee, and Trust Administrator Fee shall be made on the basis of a
360-day year consisting of twelve 30-day months. All dollar amounts calculated
hereunder shall be rounded to the nearest ▇▇▇▇▇ with one-half of one ▇▇▇▇▇
being rounded down.
Section 1.03 Determination of LIBOR. LIBOR applicable to the calculation of
the Certificate Rate on the Class A-1 Certificates for any Interest Period
will be determined on each LIBOR Rate Adjustment Date. On each LIBOR Rate
Adjustment Date, LIBOR shall be established by the Trust Administrator and, as
to any Interest Period, will equal the rate for one month United States dollar
deposits that appears on the Telerate Screen Page 3750 as of 11:00 a.m.,
London time, on such LIBOR Rate Adjustment Date. "Telerate Screen Page 3750"
means the display designated as page 3750 on the Moneyline Telerate Service
(or such other page as may replace page 3750 on that service for the purpose
of displaying London interbank offered rates of major banks). If such rate
does not appear on such page (or such other page as may replace that page on
that service, or if such service is no longer offered, LIBOR shall be so
established by use of such other service for displaying LIBOR or comparable
rates as may be selected by the Trust Administrator after consultation with
the Master Servicer), the rate will be the Reference Bank Rate. The "Reference
Bank Rate" will be determined on the basis of the rates at which deposits in
U.S. Dollars are offered by the reference banks (which shall be any three
major banks that are engaged in transactions in the London interbank market,
selected by the Trust Administrator
22
after consultation with the Master Servicer) as of 11:00 a.m., London time, on
the LIBOR Rate Adjustment Date to prime banks in the London interbank market
for a period of one month in amounts approximately equal to the Class
Principal Balance of the Class A-1 Certificates then outstanding. The Trust
Administrator will request the principal London office of each of the
reference banks to provide a quotation of its rate. If at least two such
quotations are provided, the rate will be the arithmetic mean of the
quotations rounded up to the next multiple of 1/16%. If on such date fewer
than two quotations are provided as requested, the rate will be the arithmetic
mean of the rates quoted by one or more major banks in New York City, selected
by the Trust Administrator after consultation with the Master Servicer, as of
11:00 a.m., New York City time, on such date for loans in U.S. Dollars to
leading European banks for a period of one month in amounts approximately
equal to the Class Principal Balance of the Class A-1 Certificates then
outstanding. If no such quotations can be obtained, the rate will be LIBOR for
the prior Distribution Date. The establishment of LIBOR by the Trust
Administrator on any LIBOR Rate Adjustment Date and the Trust Administrator's
subsequent calculation of the Certificate Rate applicable to the Class A-1
Certificates for the relevant Interest Period, in the absence of manifest
error, will be final and binding. Promptly following each LIBOR Rate
Adjustment Date the Trust Administrator shall supply the Master Servicer with
the results of its determination of LIBOR on such date. Furthermore, the Trust
Administrator will supply to any Certificateholder so requesting by telephone
the Certificate Rate on the Class A-1 Certificates for the current and the
immediately preceding Interest Period.
Article II.
Conveyance of Mortgage Loans;
Original Issuance of Certificates;
Tax Treatment
Section 2.01 Conveyance of Mortgage Loans; Assignment Event. The Depositor,
concurrently with the execution and delivery of this Agreement, does hereby
transfer, assign, sell, set over and otherwise convey to the Trustee for the
benefit of the Certificateholders without recourse (subject to Sections 2.02
and 2.04) (i) all of its right, title and interest in and to each Mortgage
Loan, including the Cut-Off Date Principal Balance, and all collections in
respect of interest and principal received on or after the Cut-Off Date; (ii)
property which secured such Mortgage Loan and which has been acquired by
foreclosure or deed in lieu of foreclosure; (iii) all of its right, title and
interest to the Net WAC Carryover Reserve Fund, (iv) its interest in any
insurance policies in respect of the Mortgage Loans; (v) all proceeds of any
of the foregoing; and (vi) the Depositor's rights under the Purchase Agreement
with respect to the representations and warranties of the Seller thereunder
together with all rights of the Depositor to require the Originators to cure
any breach thereof or to repurchase or substitute for any affected Mortgage
Loan in accordance with the Purchase Agreement.
On or prior to the Closing Date the Originators shall deliver to the
Trust Administrator the Mortgage Loan Schedule in computer readable format.
Within 60 days of an Assignment
23
Event, the Originators shall deliver to the Trust Administrator, the following
documents or instruments with respect to each Mortgage Loan (the "Related
Documents"):
(i) the original Mortgage Note, endorsed in blank, with all
intervening endorsements showing a complete chain of title from
the Originator of such Mortgage Loan to the Trustee or a copy of
such original Mortgage Note with an accompanying Lost Note
Affidavit;
(ii) the original Mortgage, with evidence of recording thereon,
provided that if the original Mortgage has been delivered for
recording to the appropriate public recording office of the
jurisdiction in which the Mortgaged Property is located but has
not yet been returned to the Originator by such recording office,
the Originator shall deliver to the Trust Administrator a
certified true copy of such original Mortgage to be so certified
by the applicable originator, together with a certificate of the
Originator certifying that such original Mortgage has been so
delivered to such recording office; in all such instances, the
Originator shall deliver or cause to be delivered the original
recorded Mortgage to the Trust Administrator promptly upon receipt
of the original recorded Mortgage; provided that an Assignment
Event shall have occurred;
(iii) the original Assignment of Mortgage, from the Originator in blank
or to "U.S. Bank National Association, as Trustee for American
General Mortgage Loan Trust 2003-1," which assignment shall be in
form and substance acceptable for recording;
(iv) the original attorney's opinion of title or the original policy of
title insurance, provided that if any such original policy of
title insurance has not yet been received by the Originator, the
Originator shall deliver to the Trust Administrator a copy of such
policy or a title insurance binder or commitment for the issuance
of such policy;
(v) originals of all intervening assignments of Mortgage, with
evidence of recording thereon, showing a complete chain of title
from the Originator to the Seller, provided that if any such
original intervening assignment of Mortgage has been delivered for
recording to the appropriate public recording office of the
jurisdiction in which the Mortgaged Property is located but has
not yet been returned to the Seller by such recording office, the
Seller shall deliver to the Trust Administrator a certified true
copy of such original assignment of Mortgage to be so certified by
the applicable originator, together with a certificate of the
Seller certifying that such original assignment of Mortgage has
been so delivered to such recording office; in all such instances,
the Seller shall deliver or cause to be delivered any such
original assignments to the Trust Administrator promptly upon
receipt thereof, provided that an Assignment Event shall have
occurred; and
(vi) originals of all assumption and modification agreements, if any.
24
Except as herein provided, the Originators shall, as custodians and for
the benefit of the Seller, the Depositor, the Trustee, the Trust Administrator
and the Certificateholders, be entitled to maintain possession of the
foregoing documents and instruments described above and shall not be required
to deliver any of them to the Trust Administrator. In the event, however, that
possession of any such documents or instruments is required by any Person
(including the Trust Administrator) acting as successor Master Servicer
pursuant to Section 7.02 in order to carry out the duties of the Master
Servicer hereunder, then such successor Master Servicer shall be entitled to
request delivery, at the expense of the previous Master Servicer, of such
documents or instruments by the previous Master Servicer and to retain such
documents or instruments for servicing purposes; provided that the Trust
Administrator or such successor Master Servicer shall maintain such documents
at such offices as may be required by any regulatory body having jurisdiction
over such Mortgage Loans.
The Trust Administrator agrees, for the benefit of Certificateholders,
within 90 days following the receipt of the Mortgage Files after an Assignment
Event, to certify (in the form of Exhibit H) to the Seller, the Depositor and
the Master Servicer that it has reviewed each Mortgage File and that, as to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Mortgage Loan paid in full or any Mortgage Loan specifically identified in the
certification as not covered by such certification), (i) all documents
constituting part of such Mortgage File required to be delivered to it
pursuant to paragraphs (i) - (vi) of Section 2.01 are in its possession, (ii)
such documents have been reviewed by it, appear to be what they purport to be
and relate to such Mortgage Loan, (iii) based on its examination and only as
to the foregoing, the information set forth in the Mortgage Loan Schedule
which corresponds to items (ii), (iii) and (iv) of the definition of "Mortgage
Loan Schedule" accurately reflects information set forth in the Mortgage File.
If within such 90-day period, the Trust Administrator finds any document
constituting a part of the Mortgage File not to have been executed or received
or to be unrelated to the Mortgage Loans identified in said Mortgage Loan
Schedule or, if in the course of its review, the Trust Administrator
determines that such Mortgage File is otherwise defective in any material
respect, the Trust Administrator shall notify the parties, and the related
Originator shall have a period of 90 days after such notice (subject to
Section 2.02) within which to correct or cure any such defect or to purchase
such Mortgage Loan at the related Purchase Price or substitute on Eligible
Substitute Mortgage Loan therefor pursuant to Section 2.06.
The Trust Administrator shall have no responsibility for reviewing any
Mortgage File except as expressly provided in this Section 2.01. In reviewing
any Mortgage File pursuant to this Section, the Trust Administrator shall have
no responsibility for determining whether any document is valid and binding,
whether the text of any assignment or endorsement is in proper or recordable
form (except, if applicable, to determine if the Trustee is the assignee or
endorsee), whether any document has been recorded in accordance with the
requirements of any applicable jurisdiction, or whether a blanket assignment
is permitted in any applicable jurisdiction, whether any Person executing any
document is authorized to do so or whether any signature thereon is
25
genuine, but shall only be required to determine whether a document has been
executed, that it appears to be what it purports to be, and, where applicable,
that it purports to be recorded.
Within 90 days of an Assignment Event, each Originator shall, at its
expense, record an Assignment of Mortgage in favor of the Trustee (which may
be a blanket assignment if permitted by applicable law) in the appropriate
real property or other records and endorse the original Mortgage Note with
respect to each of the Mortgage Loans being serviced by the Master Servicer to
"Pay to the order of ____________ without recourse" with all intervening
endorsements showing a complete chain of title from the originator of such
Mortgage Loan to the Trustee. The Trust Administrator is hereby appointed as
the attorney-in-fact of the Originators with the power (subject to Section
8.03) to prepare, execute and record Assignments of Mortgages in the event
that the Originators fail to do so on a timely basis as provided in this
paragraph. In lieu of recording an Assignment of Mortgage, the Originator may
(i) deliver to the Trustee an Opinion of Counsel addressed to the Trustee to
the effect that recording is not required to make the assignment effective
against the parties to the Mortgage or subsequent purchasers or encumbrancers
of the Mortgaged Property or (ii) provide the Trustee with evidence in writing
that non-recordation will not result in a reduction of the then-current
ratings assigned to the Offered Certificates.
Section 2.02 Acceptance by Trustee. The Trustee hereby acknowledges the sale
and assignment of the Mortgage Loans. If an Originator is given notice of an
omission or defect under Section 2.01 and if the related Originator does not
correct or cure such omission or defect within the 60-day period following
such notice, the Originator shall purchase the related Mortgage Loan from the
Trust or substitute an Eligible Substitute Mortgage Loan for such Mortgage
Loan prior to the next succeeding Distribution Date in the month following the
month in which such 60-day period expired at the Purchase Price of such
Mortgage Loan or in accordance with Section 2.06, as applicable (provided that
a substitution will only be permitted if such 90-day period expires prior to
the second anniversary of the Closing Date). The Purchase Price for the
purchased Mortgage Loan which is purchased as described in the preceding
sentence shall be deposited in the Distribution Account no later than the
Business Day prior to the next succeeding Distribution Date after such
obligation arises; provided that, upon receipt by the Trust Administrator of
written notification of such deposit signed by an officer of the Originator,
the Trust Administrator shall release to the Originator the related Mortgage
File (if the Trust Administrator holds the Mortgage File following an
Assignment Event) and the Trust Administrator shall execute and deliver such
instruments of transfer or assignment, prepared by and at the expense of the
Originator, in each case without recourse, representation or warranty as shall
be necessary to vest in the Originators or their designee any Mortgage Loan
released pursuant hereto. It is understood and agreed that the obligation of
an Originator to purchase any Mortgage Loan sold by such Originator or
substitute an Eligible Substitute Mortgage Loan for such Mortgage Loan sold by
such Originator as to which a material defect in, or omission of, a
constituent document exists shall constitute the sole remedy against such
Originator respecting such defect or omission available to the
Certificateholders or the Trust Administrator on behalf of Certificateholders.
26
The Master Servicer, promptly following the transfer of (i) a Defective
Mortgage Loan from or (ii) an Eligible Substitute Mortgage Loan to the Trust
pursuant to this Section 2.02 and Section 2.06, as the case may be, shall
amend the Mortgage Loan Schedule and deliver a copy of such amended Schedule
to the Trust Administrator and make appropriate entries in its general account
records to reflect such transfer and the addition of any Eligible Substitute
Mortgage Loan, if applicable.
Section 2.03 Representations and Warranties Regarding the Seller and the
Master Servicer. The Seller and the Master Servicer each represent and warrant
each as to itself that, as of the Transfer Date:
(a) Organization and Good Standing of the Seller and Master Servicer. It
is a corporation duly organized, validly existing and in good
standing under the laws of the State of its incorporation and has,
in all material respects, full power and authority to own its
properties and conduct its business as such properties are
presently owned and such business is presently conducted, and to
execute, deliver and perform its obligations under this Agreement
and when this Agreement has been executed and delivered, this
Agreement will constitute the legal, valid and binding obligation
of the it enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency or similar
laws affecting the enforcement of creditors' rights generally and
by the availability of equitable remedies (whether in a proceeding
at law or in equity).
(b) Due Qualification. The Master Servicer is duly qualified to do
business and is in good standing as a foreign corporation (or is
exempt from such requirements) and has obtained all necessary
licenses and approvals, in each jurisdiction in which failure to
so qualify or to obtain such licenses and approvals would render
any Mortgage File relating to any Mortgage Loan unenforceable by
it, the Purchaser, the Trust or the Trust Administrator and would
have a material adverse effect on its business, properties, assets
or condition (financial or other).
(c) Due Authorization. The execution, delivery and performance of this
Agreement and any other document or instrument delivered pursuant
hereto or thereto and the consummation of the transactions
provided for in this Agreement have been duly authorized by all
necessary corporate action on the part of the Seller and the
Master Servicer.
(d) No Conflict. The Seller's and the Master Servicer's execution and
delivery of this Agreement, the performance of the transactions
contemplated by this Agreement, and the fulfillment of the terms
of this Agreement applicable to it will not violate any existing
law or regulation or any order or decree of any court applicable
to the Seller and the Master Servicer or any provision of the
certificate of incorporation or bylaws of the Seller and the
Master Servicer, or constitute (with or without notice or lapse of
time or both) a material default under, any contract, agreement,
mortgage, deed of trust, or other instrument to which it is a
party or by which it or any of its properties are bound.
27
(e) Governmental Authorization. Other than the filing of the financing
statements required hereunder, no authorization or approval or
other action by, and no notice to or filing with, any governmental
authority or regulatory body is required for the due execution and
delivery by the Seller or the Master Servicer of this Agreement to
which it is a party and the performance of its' obligations
hereunder and thereunder.
(f) No Proceedings. There are no proceedings or investigations pending
or, to the best of the Seller's and the Master Servicer's
knowledge, threatened against the Seller or the Master Servicer,
before any court, regulatory body, administrative agency or other
tribunal or governmental instrumentality (i) asserting the
invalidity of this Agreement, (ii) seeking to prevent the
consummation of any of the transactions contemplated by this
Agreement, (iii) seeking any determination or ruling that, in its
judgment, has a reasonable likelihood of resulting in a material
adverse effect on the transactions contemplated by this Agreement,
(iv) seeking any determination or ruling that would materially and
adversely affect the validity or enforcement of this Agreement or
(v) seeking to affect adversely the income tax attributes of the
related Trust under United States Federal, New York or Indiana
income tax systems.
(g) All Consents. All authorizations, consents, orders or approvals of
any court or other governmental authority required to be obtained
by the Seller or the Master Servicer in connection with the
execution and delivery of this Agreement and the performance of
the transactions contemplated by this Agreement have been
obtained.
(h) Chief Executive Office. The Seller's chief executive office is
located within the State of Indiana.
(i) Jurisdiction of Organization. The Seller's and the Master
Servicer's sole jurisdiction of organization and organizational
identification number, if any, is accurately set forth opposite
its name in Sections 4.1 (l) and (m) of the Purchase Agreement.
(j) Material Adverse Effect. Since December 31, 2002, no event has
occurred that would have a material adverse effect on the
transactions contemplated by this Agreement.
(k) Ownership of the Seller. American General Finance, Inc. owns,
directly or indirectly, 100% of the issued and outstanding capital
stock of the Seller.
(l) Not an Investment Company. The Seller is not an "investment
company" within the meaning of the Investment Company Act of 1940,
as amended, or any successor statute.
The representations and warranties set forth in this Section 2.03 shall
survive the transfer and assignment of the Mortgage Loans to the Trust. Upon
discovery of a breach of any of the foregoing representations and warranties,
which materially and adversely affects the interest of the Certificateholders,
the Person discovering such breach shall give prompt written notice to the
other parties. Within 90 days of its discovery or its receipt of notice of
breach or, with the prior written consent of a Responsible Officer of the
Trust Administrator, such longer period specified
28
in such consent, the Seller or the Master Servicer, as appropriate, shall cure
such breach in all material respects.
Section 2.04 Representations and Warranties Regarding the Mortgage Loans. (a)
The Seller represents and warrants to the Trust and the Trustee on behalf of
the Certificateholders as follows as of the Transfer Date:
(i) Each Mortgage Loan, at origination, complied in all material
respects with applicable local, state and federal laws, including,
without limitation, usury, equal credit opportunity, predatory and
abusive lending laws, real estate settlement procedures,
truth-in-lending and disclosure laws;
(ii) None of the Mortgage Loans are "High Cost Home Loans" or "Covered
Home Loans" within the meaning of The Georgia Fair Lending Act, as
amended;
(iii) None of the Mortgage Loans originated in the state of New York are
subject to Section 6-128 of the administrative code of The City of
New York; and
(iv) No Mortgage Loan is a "high cost" loan as defined under any
Federal, State or local laws applicable to such Mortgage Loan at
the time of its origination.
With respect to the representations and warranties set forth in this
Section that are made to the best of the Seller's knowledge or as to which the
Seller has no knowledge, if it is discovered by the Purchaser, the Seller, the
Master Servicer, the Trust Administrator or the Trustee that the substance of
such representation and warranty is inaccurate and such inaccuracy materially
and adversely affects the value of the related Mortgage Loan then,
notwithstanding the Seller's lack of knowledge with respect to the substance
of such representation and warranty being inaccurate at the time the
representation or warranty was made, such inaccuracy shall be deemed a breach
of the applicable representation or warranty and the Seller shall cure such
breach, repurchase the related Mortgage Loan at the Purchase Price or
substitute an Eligible Substitute Mortgage Loan therefor pursuant to Section
2.06 hereof. In addition, the Seller agrees to indemnify the Trust in
connection with any losses arising out of a breach of the Seller's
representations and warranties in paragraph (i) above.
It is understood and agreed that the representations and warranties set
forth in this Section 2.04 shall survive the conveyance of the Mortgage Loans
and the delivery of the respective Mortgage Files to the Trust Administrator
and the termination of the rights and obligations of the Master Servicer
pursuant to Section 6.04 or 7.01. Upon discovery by the Depositor, the Seller,
the Master Servicer, the Trust Administrator or the Trustee of a breach of any
of the foregoing representations and warranties, without regard to any
limitation set forth therein concerning the knowledge of the Seller as to the
facts stated therein, which materially and adversely affects the value of the
related Mortgage Loan or the interests of the Trust or the Certificateholders
in such Mortgage Loan, the party discovering such breach shall give prompt
written notice to the other
29
parties. Within 90 days of the earlier of its discovery or its receipt of
notice of such breach, the Seller shall use all reasonable efforts to cure
such breach in all material respects or shall purchase such Mortgage Loan from
the Trust or substitute an Eligible Substitute Mortgage Loan as provided in
Section 2.06 for such Mortgage Loan (provided that a substitution will only be
permitted if such 90-day period expires prior to the second anniversary of the
Closing Date). Any such purchase by the Seller shall be at the Purchase Price
and in each case shall be accomplished in the manner set forth in Section
2.02. It is understood and agreed that the obligation of the Seller to cure,
substitute or purchase any Mortgage Loan (as well as indemnify the Trust, if
applicable) as to which such a breach has occurred and is continuing shall
constitute the sole remedies against the Seller respecting such breach
available to Certificateholders or the Trust Administrator on behalf of
Certificateholders.
(b) The Seller hereby assigns to the Trustee for the benefit of the
Certificateholders all of its right, title and interest in respect of the
Mortgage Loan Purchase Agreement. In addition, the Originators will agree in a
separate agreement to make the same representations and warranties to the
Trustee for the benefit of the Certificateholders as the Originators made in
the Mortgage Loan Purchase Agreement, along with any remedies provided
thereunder for any breach of such representations and warranties. Such
remedies may be enforced by the Trust Administrator on behalf of the
Certificateholders. It is understood and agreed that the obligation of the
Originators to cure, substitute or purchase any Mortgage Loan pursuant to that
agreement as to which such a breach has occurred and is continuing shall
constitute the sole remedies against the Originators respecting such breach
available to Certificateholders or the Trust Administrator on behalf of
Certificateholders.
Section 2.05 Representations and Warranties of the Depositor. The Depositor
represents and warrants to the Trust and the Trustee on behalf of the
Certificateholders as follows:
(i) This Agreement constitutes a legal, valid and binding obligation
of the Depositor, enforceable against the Depositor in accordance
with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect affecting the
enforcement of creditors' rights in general and except as such
enforceability may be limited by general principles of equity
(whether considered in a proceeding at law or in equity);
(ii) Immediately prior to the sale and assignment by the Depositor to
the Trustee on behalf of the Trust of each Mortgage Loan, the
Depositor had good and equitable title to each Mortgage Loan
(insofar as such title was conveyed to it by the Seller) subject
to no prior lien, claim, participation interest, mortgage,
security interest, pledge, charge or other encumbrance or other
interest of any nature;
(iii) As of the Closing Date, the Depositor has transferred all right,
title and interest in the Mortgage Loans to the Trustee on behalf
of the Trust;
30
(iv) The Depositor has not transferred the Mortgage Loans to the
Trustee on behalf of the Trust with any intent to hinder, delay or
defraud any of its creditors;
(v) The Depositor has been duly incorporated and is validly existing
as a limited liability company in good standing under the laws of
Delaware, with full power and authority to own its assets and
conduct its business as presently being conducted;
(vi) The Depositor is not in violation of its certificate of formation
or its limited liability company agreement or in default in the
performance or observance of any material obligation, agreement,
covenant or condition contained in any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to which
the Depositor is a party or by which it or its properties may be
bound, which default might result in any material adverse changes
in the financial condition, earnings, affairs or business of the
Depositor or which might materially and adversely affect the
properties or assets, taken as a whole, of the Depositor;
(vii) The execution, delivery and performance of this Agreement by the
Depositor, and the consummation of the transactions contemplated
thereby, do not and will not result in a material breach or
violation of any of the terms or provisions of, or, to the
knowledge of the Depositor, constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Depositor is a party or by
which the Depositor is bound or to which any of the property or
assets of the Depositor is subject, nor will such actions result
in any violation of the provisions of the certificate of formation
or limited liability company agreement of the Depositor or, to the
best of the Depositor's knowledge without independent
investigation, any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the
Depositor or any of its properties or assets (except for such
conflicts, breaches, violations and defaults as would not have a
material adverse effect on the ability of the Depositor to perform
its obligations under this Agreement);
(viii) To the best of the Depositor's knowledge without any independent
investigation, no consent, approval, authorization, order,
registration or qualification of or with any court or governmental
agency or body of the United States or any other jurisdiction is
required for the issuance of the Certificates, or the consummation
by the Depositor of the other transactions contemplated by this
Agreement, except such consents, approvals, authorizations,
registrations or qualifications as (a) may be required under State
securities or Blue Sky laws, (b) have been previously obtained or
(c) the failure of which to obtain would not have a material
adverse effect on the performance by the Depositor of its
obligations under, or the validity or enforceability of, this
Agreement; and
(ix) There are no actions, proceedings or investigations pending before
or, to the Depositor's knowledge, threatened by any court,
administrative agency or other tribunal to which the Depositor is
a party or of which any of its properties is the subject: (a)
which if
31
determined adversely to the Depositor would have a material
adverse effect on the business, results of operations or financial
condition of the Depositor; (b) asserting the invalidity of this
Agreement or the Certificates; (c) seeking to prevent the issuance
of the Certificates or the consummation by the Depositor of any of
the transactions contemplated by this Agreement, as the case may
be; or (d) which might materially and adversely affect the
performance by the Depositor of its obligations under, or the
validity or enforceability of, this Agreement.
Section 2.06 Substitution of Mortgage Loans. (a) Prior to the Distribution
Date which is directly after the date on which the Seller or the Originators
would otherwise be required to repurchase a Mortgage Loan under Section 2.02
or 2.04, the Seller or the Originators, as applicable, may deliver to the
Trust Administrator one or more Eligible Substitute Mortgage Loans in
substitution for any one or more of the Defective Mortgage Loans which the
Seller or the Originators would otherwise be required to repurchase pursuant
to Sections 2.02 or 2.04. In connection with any such substitution, the Seller
or the Originators, as applicable, shall calculate the Substitution
Adjustment, if any, and shall deposit such amount to the Distribution Account
on or before the Business Day prior to the Distribution Date in the month
succeeding the calendar month during which the related Mortgage Loan became
required to be purchased or replaced hereunder.
(b) The Seller or the Originators shall notify the Master Servicer, the
Depositor and the Trust Administrator in writing on the
Determination Date prior to the related Distribution Date which is
directly after the date on which the Seller or the related
Originator, as applicable, would otherwise be required to
repurchase such Mortgage Loan pursuant to Section 2.02 or 2.04
(the "Substitution Date") of its intention to effect a
substitution under this Section 2.06. On such Substitution Date,
the Seller or the related Originator, as applicable, shall deliver
to the Trust Administrator: (1) the Eligible Substitute Mortgage
Loans to be substituted for the Defective Mortgage Loans, (2) a
list of the Defective Mortgage Loans to be substituted for by such
Eligible Substitute Mortgage Loans, (3) an Officer's Certificate
(A) stating that all conditions precedent to such substitution
specified in subsection (a) have been satisfied and attaching as
an exhibit a supplemental Mortgage Loan schedule (the
"Supplemental Mortgage Loan Schedule") setting forth the same type
of information as appears on the Mortgage Loan Schedule and
representing as to the accuracy thereof and (B) confirming that
the representations and warranties contained in Section 2.04 are
true and correct in all material respects with respect to the
Eligible Substitute Mortgage Loans on and as of such Determination
Date, provided that remedies for the inaccuracy of such
representations are limited as set forth in Sections 2.02, 2.04
and this Section 2.06, and (4) a certificate stating that cash in
the amount of the related Substitution Adjustment, if any, has
been deposited to the Distribution Account. Upon receipt of the
foregoing, the Trust Administrator shall release such Defective
Mortgage Loan to the Seller or related Originator, as applicable,
without recourse, representation or warranty.
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(c) Concurrently with the satisfaction of the conditions set forth in
Sections 2.06(a) and (b) above and the transfer of such Eligible
Substitute Mortgage Loans to the Trust Administrator on behalf of
the Trust pursuant to Section 2.06(a), Exhibit B to this Agreement
shall be deemed to be amended to exclude all Mortgage Loans being
replaced by such Eligible Substitute Mortgage Loans and to include
the information set forth on the Supplemental Mortgage Loan
Schedule with respect to such Eligible Substitute Mortgage Loans,
and all references in this Agreement to Mortgage Loans shall
include such Eligible Substitute Mortgage Loans and be deemed to
be made on or after the related Substitution Date, as the case may
be, as to such Eligible Substitute Mortgage Loans.
Section 2.07 Execution and Authentication of Certificates. The Trust
Administrator on behalf of the Trust shall cause to be executed, authenticated
and delivered on the Closing Date to or upon the order of the Depositor, in
exchange for the Mortgage Loans, concurrently with the sale, assignment and
conveyance to the Trustee on behalf of the Trust of the Mortgage Loans, the
Certificates in authorized denominations which, together with the Transferor
Interest evidences the ownership of the entire Trust.
Section 2.08 REMIC Matters. The Preliminary Statement sets forth the
designations and "latest possible maturity date" for federal income tax
purposes of all interests created hereby. The "Startup Day" for purposes of
the REMIC Provisions shall be the Closing Date. The "tax matters person" with
respect to the REMIC hereunder shall be the Seller and the Seller shall hold
the Tax Matters Person Certificate. The REMIC's fiscal year shall be the
calendar year.
Article III.
Administration and Servicing
of Mortgage Loans
Section 3.01 The Master Servicer. (a) The Master Servicer, as independent
contract Master Servicer, shall service and administer the Mortgage Loans and
shall have full power and authority, acting alone, to do any and all things in
connection with such servicing and administration which the Master Servicer
may deem necessary or desirable and consistent with the terms of this
Agreement. The Master Servicer may enter into subservicing agreements for any
servicing and administration of Mortgage Loans with any institution which (i)
is in compliance with the laws of each state necessary to enable it to perform
its obligations under such subservicing agreement and (ii) is an affiliate of
the Master Servicer.
(b) Notwithstanding any subservicing agreement or any of the
provisions of this Agreement relating to agreements or
arrangements between the Master Servicer and a subservicer or
reference to actions taken through a subservicer or otherwise, the
Master Servicer shall remain obligated and primarily liable for
the servicing and administering of the Mortgage Loans in
accordance with the provisions of this Agreement without
diminution of such obligation or liability by virtue of such
subservicing agreements or arrangements or by
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virtue of indemnification from the subservicer and to the same
extent and under the same terms and conditions as if the Master
Servicer alone were servicing and administering the Mortgage
Loans. For purposes of this Agreement, the Master Servicer shall
be deemed to have received payments on Mortgage Loans when the
subservicer has received such payments. The Master Servicer shall
be entitled to enter into any agreement with a subservicer for
indemnification of the Master Servicer by such subservicer, and
nothing contained in this Agreement shall be deemed to limit or
modify such indemnification.
(c) Any subservicing agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving
a subservicer in its capacity as such and not as an originator
shall be deemed to be between the subservicer and the Master
Servicer alone, and the Trust Administrator, the Trustee and
Certificateholders shall not be deemed parties thereto and shall
have no claims, rights, obligations, duties or liabilities with
respect to the subservicer except as set forth in Section 3.01(e).
The Master Servicer shall be solely liable for all fees owed by it
to any subservicer irrespective of whether the Master Servicer's
compensation pursuant to this Agreement is sufficient to pay such
fees.
(d) In the event the Master Servicer shall for any reason no longer be
the Master Servicer (including by reason of an Event of Default),
the Trust Administrator or its designee shall thereupon assume all
of the rights and obligations of the Master Servicer under each
subservicing agreement that the Master Servicer may have entered
into, unless the Trust Administrator or designee elects to
terminate any subservicing agreement. Any fee payable in
connection with such a termination will be payable by the outgoing
Master Servicer. If the Trust Administrator does not terminate a
subservicing agreement, the Trust Administrator, its designee or
the successor Master Servicer for the Trust Administrator shall be
deemed to have assumed all of the Master Servicer's interest
therein and to have replaced the Master Servicer as a party to
each subservicing agreement to the same extent as if the
subservicing agreements had been assigned to the assuming party,
except that the Master Servicer shall not thereby be relieved of
any liability or obligations under the subservicing agreements
with regard to events that occurred prior to the date the Master
Servicer ceased to be the Master Servicer hereunder. The Master
Servicer, at its expense and without right of reimbursement
therefor, shall, upon the request of the Trust Administrator,
deliver to the assuming party all documents and records and afford
the assuming party reasonable access (to the extent practicable)
to the computer systems, electronic files and personnel as they
relate to each subservicing agreement and the Mortgage Loans then
being serviced and an accounting of amounts collected and held by
it and otherwise use its best efforts to effect the orderly and
efficient transfer of the subservicing agreements to the assuming
party.
(e) Consistent with the terms of this Agreement, the Master Servicer
may waive, modify or vary any term of any Mortgage Loan or consent
to the postponement of strict compliance with any such term or in
any manner grant indulgence to any Mortgagor if in the Master
Servicer's good faith determination such waiver, modification,
postponement or indulgence is not materially adverse to the
interests of the Certificateholders, provided,
34
however, that the Master Servicer shall not make or permit any
modification, waiver, or amendment of any Mortgage Loan which
would cause the REMIC created hereunder to fail to qualify as a
REMIC or result in the imposition of any tax under Section 860F(a)
or Section 860G(d) of the Code. Without limiting the generality of
the foregoing, the Master Servicer shall continue, and is hereby
authorized and empowered to execute and deliver on behalf of the
Trustee and each Certificateholder, all instruments of
satisfaction or cancellation, or of partial or full release,
discharge and all other comparable instruments with respect to the
Mortgage Loans and with respect to the Mortgaged Properties. If
reasonably required by the Master Servicer, the Trustee and the
Trust Administrator shall furnish the Master Servicer with limited
powers of attorney and other documents necessary or appropriate to
enable the Master Servicer to carry out its servicing and
administrative duties under this Agreement.
Notwithstanding anything to the contrary contained herein, the Master
Servicer, in servicing and administering the Mortgage Loans, shall employ or
cause to be employed procedures (including collection, foreclosure and REO
Property management procedures) and exercise the same care that it customarily
employs and exercises in servicing and administering mortgage loans for its
own account, in accordance with accepted mortgage servicing practices of
prudent lending institutions servicing mortgage loans similar to the Mortgage
Loans and giving due consideration to the Certificateholders' reliance on the
Master Servicer.
(f) On and after such time as the Trust Administrator receives the
written resignation of, or notice of the removal of, the Master
Servicer from its rights and obligations under this Agreement, and
with respect to resignation pursuant to Section 6.04, after
receipt by the Trust Administrator of the Opinion of Counsel
required pursuant to Section 6.04, the Trust Administrator or its
designee shall assume all of the rights and obligations of the
Master Servicer, subject to Section 7.02. The Master Servicer
shall, upon request of the Trust Administrator but at the expense
of the Master Servicer, deliver to the Trust Administrator all
documents and records relating to the Mortgage Loans and an
accounting of amounts collected and held by the Master Servicer
and otherwise use its best efforts to effect the orderly and
efficient transfer of servicing rights and obligations to the
assuming party which may include reasonable on site access to the
computer systems, electronic files and personnel of the Master
Servicer during normal business hours.
(g) The Master Servicer shall keep in force during the term of this
Agreement a policy or policies of insurance covering errors and
omissions for failure in the performance of the Master Servicer's
obligations under this Agreement, which policy or policies shall
be in such form and amount that would meet the requirements of
▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac if it were the purchaser of the Mortgage
Loans, unless the Master Servicer has obtained a waiver of such
requirements from ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac. The Master Servicer
shall also maintain a fidelity bond in the form and amount that
would meet the requirements of ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, unless
the Master Servicer has obtained a waiver of such requirements
from ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac. The Master Servicer shall provide
the
35
Trust Administrator (upon its reasonable request) with copies of
any such insurance policies and fidelity bond. The Master Servicer
shall be deemed to have complied with this provision if an
Affiliate of the Master Servicer has such errors and omissions and
fidelity bond coverage and, by the terms of such insurance policy
or fidelity bond, the coverage afforded thereunder extends to the
Master Servicer. Any such errors and omissions policy and fidelity
bond shall by its terms not be cancelable without thirty days'
prior written notice to the Trust Administrator. The Master
Servicer shall also cause each subservicer to maintain a
comparable policy of insurance covering errors and omissions and a
fidelity bond meeting such requirements.
Section 3.02 Collection of Certain Mortgage Loan Payments. (a) The Master
Servicer shall make reasonable efforts to collect all payments called for
under the terms and provisions of the Mortgage Loans and shall, to the extent
such procedures shall be consistent with this Agreement, follow such
collection procedures as it follows with respect to mortgage loans in its
servicing portfolio comparable to the Mortgage Loans. Consistent with the
foregoing, and without limiting the generality of the foregoing, the Master
Servicer may in its discretion (i) waive any prepayment penalty or late
payment charge or any assumption fees or other fees which may be collected in
the ordinary course of servicing such Mortgage Loan and (ii) arrange with a
Mortgagor a schedule for the payment of interest due and unpaid; provided that
such arrangement is consistent with the Master Servicer's policies with
respect to the mortgage loans it owns or services.
(b) If a Deposit Event has occurred, the Master Servicer shall
establish and maintain a separate trust account (the "Collection
Account") titled "Bank One, N.A., as Trust Administrator, of
American General Mortgage Loan Trust 2003-1, Collection Account."
The Collection Account shall be an Eligible Account with an
independent financial institution. No later than 12:00 noon New
York time one Business Day prior to each Distribution Date (unless
a Deposit Event has occurred), the Master Servicer shall deposit
into the Distribution Account (or, if a Deposit Event has
occurred, the Master Servicer shall deposit into the Collection
Account , within two Business Days following receipt thereof) the
following payments and collections received or made by it with
respect to each Mortgage Loan (without duplication):
(i) all payments received on or after the Cut-Off Date on
account of principal on the Mortgage Loans and all Principal
Prepayments and Curtailments collected on and after the
Cut-Off Date;
(ii) all payments received on or after the Cut-Off Date on
account of interest on the Mortgage Loans;
(iii) all Net Liquidation Proceeds net of related Foreclosure
Profits;
(iv) all Insurance Proceeds;
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(v) any amounts payable in connection with the repurchase of any
Mortgage Loan and the amount of any Substitution Adjustment
pursuant to Sections 2.02, 2.04 and 2.06;
(vi) all Released Mortgaged Property Proceeds; and
(vii) any amount required to be deposited in the Accounts pursuant
to Sections 3.06 or 4.05(e);
provided, however, that with respect to each Due Period, the Master
Servicer shall be permitted to retain from payments in respect of interest on
the Mortgage Loans, the Servicing Fee for such Due Period. The foregoing
requirements respecting deposits to the Accounts are exclusive, it being
understood that, without limiting the generality of the foregoing, the Master
Servicer need not deposit in the Accounts amounts representing Foreclosure
Profits, fees (including annual fees) or late charge penalties payable by
Mortgagors, prepayment charges or amounts received by the Master Servicer for
the accounts of Mortgagors for application toward the payment of taxes,
insurance premiums, assessments and similar items.
(c) All funds in the Collection Account shall be invested as provided
in Section 4.05.
Section 3.03 Withdrawals from the Collection Account. The Trust Administrator
shall withdraw or cause to be withdrawn funds from the Collection Account for
the following purposes:
(i) one Business Day prior to each Distribution Date, to deposit
the portion of Available Funds then in the Collection
Account to the Distribution Account;
(ii) to reimburse the Master Servicer for any accrued and unpaid
Servicing Fees;
(iii) to withdraw any amount received from a Mortgagor that is
recoverable and sought to be recovered as a voidable
preference by a trustee in bankruptcy pursuant to the United
States Bankruptcy Code in accordance with a final,
nonappealable order of a court having competent
jurisdiction;
(iv) subject to Section 4.05 hereof, to make investments in
Eligible Investments and to pay to the Master Servicer
interest earned in respect of Eligible Investments or on
funds deposited in the Collection Account;
(v) to withdraw any funds deposited in the Collection Account
that were not required to be deposited therein or were
deposited therein in error and to pay such funds to the
appropriate Person after written notice of such error is
received and verified by the Trust Administrator;
(vi) to pay the Master Servicer servicing compensation pursuant
to Section 3.08 to the extent not retained or paid pursuant
to Section 3.02(b);
37
(vii) to withdraw funds necessary for the conservation, operation,
management, maintenance and disposition of REO Property
pursuant to Section 3.06 to the extent not advanced by the
Master Servicer; and
(viii) to clear and terminate the Collection Account upon the
termination of this Agreement and to pay any amounts
remaining therein to the Transferor.
Section 3.04 Maintenance of Hazard Insurance; Property Protection Expenses.
The Master Servicer shall cause to be maintained for each Mortgage Loan a
blanket policy providing fire and hazard insurance naming the Master Servicer
or any subservicer as loss payee thereunder providing coverage in an amount
which is at least equal to the lesser of (i) the maximum insurable value of
the improvements securing each Mortgage Loan from time to time and (ii) the
Principal Balance owing on each Mortgage Loan. The Master Servicer shall also
maintain on property acquired upon foreclosure, or by deed in lieu of
foreclosure, hazard insurance with extended coverage in an amount which is at
least equal to the lesser of (i) the maximum insurable value from time to time
of the improvements which are a part of such property and (ii) the Principal
Balance owing on such Mortgage Loan. Amounts collected by the Master Servicer
under any such policies in connection with the Mortgage Loans, together with
the deductible amounts which are applicable pursuant to the terms of such
policy, shall be deposited in the Collection Account to the extent called for
by Section 3.02. In cases in which any Mortgaged Property (including any
property acquired upon foreclosure by deed in lieu of foreclosure) is located
in a federally designated flood area, the hazard insurance to be maintained
for the related Mortgage Loan shall include flood insurance to the extent such
flood insurance is available and the Master Servicer has determined such
insurance to be necessary in accordance with accepted second mortgage loan
servicing standards. All flood insurance shall be in amounts equal to the
lesser of (i) the Principal Balance owing on the Mortgage Loan and (ii) the
maximum amount of insurance available under the National Flood Insurance Act
of 1968.
Section 3.05 Maintenance of Mortgage Impairment Insurance. In the event that
the Master Servicer shall obtain and maintain a blanket policy consistent with
prudent industry standards with an insurer having a General Policy rating of
A.VIII or better in Best's Key Rating Guide, insuring against fire and hazards
of extended coverage on all of the Mortgage Loans, then, to the extent such
policy names the Master Servicer or its designee as loss payee and provides
coverage in an amount equal to the aggregate unpaid principal balance on the
Mortgage Loans without co-insurance, and otherwise complies with the
requirements of Section 3.04, the Master Servicer shall be deemed conclusively
to have satisfied its obligations with respect to fire and hazard insurance
coverage under Section 3.04, it being understood and agreed that such blanket
policy may contain a deductible clause, in which case the Master Servicer
shall, in the event that there shall not have been maintained on the related
Mortgaged Property a policy complying with Section 3.04, and there shall have
been a loss which would have been covered by such policy, deposit in the
Collection Account the difference, if any, between the amount that would have
been payable under a policy complying with Section 3.04 and the amount paid
under such blanket policy. Upon the request of the Trust Administrator, the
Master Servicer shall cause to be delivered to the Trust Administrator, as the
case may be, a certified true copy of such policy.
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In connection with its activities as administrator and Master Servicer of the
Mortgage Loans, the Master Servicer agrees to prepare and present, on behalf
of itself, the Trust Administrator and Certificateholders, claims under any
such policy in a timely fashion in accordance with the terms of such policy.
Section 3.06 Management and Realization Upon Defaulted Mortgage Loans. The
Master Servicer shall have the discretion to sell, modify or foreclose on a
defaulted Mortgage Loan, consistent with the servicing standard in Section
3.01 hereof, provided that the course of action so chosen is likely, in the
Master Servicer's judgment, to result in the greatest recovery of value to the
Certificateholders (i.e., receipt of Liquidation Proceeds) on a net present
value basis. The Master Servicer shall manage, conserve, protect and operate
each REO Property for the Certificateholders solely for the purpose of its
prudent and prompt disposition and sale.
Should the Master Servicer attempt to sell a defaulted Mortgage Loan
(based on its view that such sale will result in the recovery of greatest
value), but receives no acceptable bid or offer from a third party for a price
deemed by the Master Servicer (in its sole judgment) to approximate or exceed
such Mortgage Loan's current fair value, the Master Servicer may elect at its
sole discretion to terminate or suspend its efforts to sell such defaulted
Mortgage Loan, and instead choose to modify the Mortgage Loan in accordance
with Section 3.01(e) hereof or foreclose upon the defaulted Mortgage Loan as
described herein. However, a suspension of efforts to sell a defaulted
Mortgage Loan shall not prevent the Master Servicer from resuming its
solicitation of bids from third parties to purchase such Mortgage Loan at a
later date if, in the Master Servicer's judgment, a sale at that time is
expected to lead to the maximization of Liquidation Proceeds.
The Master Servicer shall, either itself or through an agent selected by
the Master Servicer, manage, conserve, protect and operate the REO Property in
the same manner that it manages, conserves, protects and operates other
foreclosed property for its own account, and in the same manner that similar
property in the same locality as the REO Property is managed. The Master
Servicer shall attempt to sell the same (and may temporarily rent the same) on
such terms and conditions as the Master Servicer deems to be in the best
interest of the Certificateholders.
If a Deposit Event has occurred, the Master Servicer shall cause to be
deposited, within two Business Days of receipt thereof or if a Deposit Event
has not occurred, the Master Servicer shall cause to be deposited one Business
Day prior to the related Distribution Date, in the Collection Account, all
revenues received with respect to the related REO Property and shall retain,
or cause the Trust Administrator to withdraw therefrom, funds necessary for
the proper operation, management and maintenance of the REO Property and the
fees of any managing agent acting on behalf of the Master Servicer.
The disposition of REO Property shall be carried out by the Master
Servicer for cash at such price, and upon such terms and conditions, as the
Master Servicer deems to be in the best interest of the Certificateholders
and, as soon as practicable thereafter, the expenses of such sale shall be
paid. The cash proceeds of sale of the REO Property shall be promptly
deposited in the
39
Collection Account in accordance with Section 3.02, net of Foreclosure Profits
and accrued and unpaid Servicing Fees, for distribution to the
Certificateholders in accordance with Section 4.01.
The decision of the Master Servicer to foreclose on a defaulted Mortgage
Loan shall be subject to a determination by the Master Servicer that the
proceeds of such foreclosure would exceed the costs and expenses of bringing
such a proceeding and if such determination cannot be made, the Master
Servicer shall deal with such Mortgage Loan in a manner consistent with the
servicing standard in Section 3.01 hereof.
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 Trust Administrator or its nominee on behalf of
Certificateholders.
If the Master Servicer has actual knowledge that a Mortgaged Property
which the Master Servicer is acquiring in foreclosure or by deed in lieu of
foreclosure is located within a one-mile radius of any site with environmental
or hazardous waste risks known to the Master Servicer, the Master Servicer
will notify the Trust Administrator prior to acquiring the Mortgaged Property.
For the purpose of this Section 3.06, actual knowledge of the Master Servicer
means actual knowledge of a Responsible Officer of the Master Servicer
involved in the servicing of the relevant Mortgage Loan. Actual knowledge of
the Master Servicer does not include knowledge imputable by virtue of the
availability of or accessibility to information relating to environmental or
hazardous waste sites or the locations thereof.
Section 3.07 Trustee and Trust Administrator to Cooperate. Upon any Principal
Prepayment, the Master Servicer is authorized to execute, pursuant to the
authorization contained in Section 3.01(e), an instrument of satisfaction
regarding the related Mortgage, which instrument of satisfaction shall be
recorded by the Master Servicer if required by applicable law and be delivered
to the Person entitled thereto. It is understood and agreed that no expenses
incurred in connection with such instrument of satisfaction or transfer shall
be reimbursed from amounts deposited in the Collection Account. If the Trust
Administrator is holding the Mortgage Files, from time to time and as
appropriate for the servicing or foreclosure of any Mortgage Loan, the Trust
Administrator shall, upon request of the Master Servicer and delivery to the
Trust Administrator of a Request for Release, in the form attached hereto as
Exhibit E, signed by a Responsible Officer, release the related Mortgage File
to the Master Servicer, and the Trustee and the Trust Administrator shall
execute such documents, in the forms provided by the Master Servicer, as shall
be necessary for the prosecution of any such proceedings or the taking of
other servicing actions. Such Request for Release shall obligate the Master
Servicer to return the Mortgage File to the Trust Administrator when the need
therefor by the Master Servicer no longer exists unless the Mortgage Loan
shall be liquidated, in which case, upon receipt of a certificate of a
Responsible Officer similar to that hereinabove specified, the Request for
Release shall be released by the Trust Administrator to the Master Servicer.
In order to facilitate the foreclosure of the Mortgage securing any
Mortgage Loan that is in default following recordation of the related
Assignment of Mortgage in accordance with the
40
provisions hereof, the Trust Administrator shall, if so requested in writing
by the Master Servicer, execute an appropriate assignment in the form provided
to the Trust Administrator by the Master Servicer to assign such Mortgage Loan
for the purpose of collection to the Master Servicer (any such assignment
shall unambiguously indicate that the assignment is for the purpose of
collection only) and, upon such assignment, such assignee for collection will
thereupon bring all required actions in its own name and otherwise enforce the
terms of the Mortgage Loan and deposit or credit the Net Liquidation Proceeds,
exclusive of Foreclosure Profits, received with respect thereto in the
Collection Account. In the event that all delinquent payments due under any
such Mortgage Loan are paid by the Mortgagor and any other defaults are cured
then the assignee for collection shall promptly reassign such Mortgage Loan to
the Trust Administrator and return it to the place where the related Mortgage
File was being maintained.
Section 3.08 Servicing Compensation; Payment of Certain Expenses by Master
Servicer. The Master Servicer shall be entitled to retain the Servicing Fee in
accordance with Section 3.02 as compensation for its services in connection
with servicing the Mortgage Loans. Moreover, additional servicing compensation
in the form of prepayment charges, late payment charges, bad check charges,
modification fees or assumption fees or other receipts not required to be
deposited in the Collection Account, including, without limitation,
Foreclosure Profits and, subject to Section 4.05(e), investment income on the
Collection Account shall be retained by the Master Servicer. The Master
Servicer shall be required to pay all expenses incurred by it in connection
with its activities hereunder (including payment of all other fees and
expenses not expressly stated hereunder to be for the account of the Trust or
the Certificateholders) and shall not be entitled to reimbursement therefor
except as specifically provided herein.
Section 3.09 Annual Statement as to Compliance. The Master Servicer will
deliver to the Trustee and the Trust Administrator, not later than the earlier
of (a) 90 days following the end of the Master Servicer's fiscal year ended
December 31 or (b) such earlier date as may be necessary to allow it to be
included in any filings required to be made by or in connection with the Trust
under the Exchange Act, beginning in 2004 (for the fiscal year ending December
2003), an Officer's Certificate stating that (i) to the best knowledge of such
person, the Master Servicer has fully complied in all material respects with
the provisions of Article III and V, if applicable, (ii) a review of the
activities of the Master Servicer during the preceding fiscal year (or such
shorter period as is applicable in the case of the first report) and of its
performance under this Agreement has been made under such officer's
supervision and (iii) to the best of such officer's knowledge, based on such
review, the Master Servicer has fulfilled all its material obligations under
this Agreement throughout such fiscal year or, if there has been a default in
the fulfillment of any such obligation, specifying each such default known to
such officer and the nature and status thereof. The Master Servicer shall
promptly notify the Depositor, the Trustee, the Trust Administrator and the
Rating Agencies upon any change in the basis on which its fiscal year is
determined.
The Master Servicer shall deliver to the Trustee, the Trust
Administrator, the Depositor and each of the Rating Agencies, promptly after
having obtained knowledge thereof,
41
but in no event later than five Business Days thereafter, written notice by
means of an Officer's Certificate of any event which, with the giving of
notice or the lapse of time or both, would become an Event of Default.
Section 3.10 Annual Servicing Report. Not later than the earlier of (a) 90
days following the end of the Master Servicer's fiscal year ended December 31
or (b) such earlier date as may be necessary to allow it to be included in any
filings required to be made by or in connection with the Trust under the
Exchange Act, beginning in 2004 (for the fiscal year ending 2003), the Master
Servicer, at its expense, shall cause a firm of independent public accountants
to furnish a letter or letters to the Depositor and the Trust Administrator to
the effect that such firm has, with respect to the Master Servicer's overall
servicing operations, examined such operations in accordance with the
requirements of the Uniform Single Attestation Program for Mortgage Bankers,
and stating such firm's conclusions relating thereto.
Section 3.11 Access to Certain Documentation and Information Regarding the
Mortgage Loans. The Master Servicer shall provide to the Trustee, the Trust
Administrator and Certificateholders which are federally insured savings and
loan associations, the Office of Thrift Supervision, the FDIC and the
supervisory agents and examiners of the Office of Thrift Supervision access to
the documentation regarding the Mortgage Loans required by applicable
regulations of the Office of Thrift Supervision and the FDIC (acting as
operator of the SAIF or the BIF), such access being afforded without charge
but only upon reasonable request and during normal business hours at the
offices of the Master Servicer. Nothing in this Section shall derogate from
the obligation of the Master Servicer to observe any applicable law
prohibiting disclosure of information regarding the Mortgagors and the failure
of the Master Servicer to provide access as provided in this Section as a
result of such obligation shall not constitute a breach of this Section.
Section 3.12 Reports of Foreclosures and Abandonments of Mortgaged Properties,
Returns Relating to Mortgage Interest Received from Individuals and Returns
Relating to Cancellation of Indebtedness. The Master Servicer shall make
reports of foreclosures and abandonments of any Mortgaged Property for each
year beginning in 2004. The Master Servicer shall file reports relating to
each instance occurring during the previous calendar year in which the Master
Servicer (i) on behalf of the Trust acquires an interest in any Mortgaged
Property through foreclosure or other comparable conversion in full or partial
satisfaction of a Mortgage Loan or (ii) knows or has reason to know that any
Mortgaged Property has been abandoned. The reports from the Master Servicer
shall be in form and substance sufficient to meet the reporting requirements
imposed by Sections 6050J, 6050H and 6050P of the Code.
Section 3.13 Enforcement. The Master Servicer shall, consistent with customary
servicing procedures, act with respect to the Mortgage Loans in such manner as
will maximize the receipt of principal and interest on such Mortgage Loans and
Liquidation Proceeds with respect to Liquidated Mortgage Loans. The Master
Servicer shall exercise its discretion, consistent with customary servicing
procedures and the terms of this Agreement, with respect to the enforcement of
defaulted Mortgage Loans in such manner as will maximize the receipt of
principal and
42
interest with respect thereto, including but not limited to the sale of such
Mortgage Loan to a third party, the modification of such Mortgage Loan, or
foreclosure upon the related real property and disposition thereof.
Section 3.14 Assumption Agreements. When a Mortgaged Property has been or is
about to be conveyed by the Mortgagor, the Master Servicer shall, to the
extent it has knowledge of such conveyance or prospective conveyance, exercise
its right to accelerate the maturity of the related Mortgage Loan under any
"due-on-sale" clause contained in the related Mortgage or Mortgage Note;
provided, however, that the Master Servicer shall not exercise any such right
if the "due-on-sale" clause, in the reasonable belief of the Master Servicer,
is not enforceable under applicable law. The Master Servicer shall to the
extent it has knowledge of such conveyance or prospective conveyance, be
authorized to enter into an assumption and modification agreement with the
person to whom such property has been or is about to be conveyed, pursuant to
which such person shall become liable under the Mortgage Note and, unless
prohibited by applicable law, the Mortgagor shall remain liable thereon. The
Master Servicer, in accordance with accepted mortgage loan servicing standards
for mortgage loans similar to the Mortgage Loans, is also authorized to enter
into a substitution of liability whereby such person is substituted as
Mortgagor and becomes liable under the Mortgage Note. The Master Servicer
shall notify the Trust Administrator that any such substitution or assumption
agreement has been completed by forwarding to the Trust Administrator the
original of such substitution or assumption agreement, which original shall be
added by the Trust Administrator 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 assumption or substitution agreement entered into pursuant to this
Section, the Master Servicer shall not change the Loan Rate or the Monthly
Payment, defer or forgive the payment of principal or interest, reduce the
outstanding principal amount, extend the final maturity date on such Mortgage
Loan or otherwise modify the Mortgage Loan in such a manner as to constitute a
"significant modification" under the Code or cause the REMIC created hereunder
to fail to qualify as a REMIC under the Code. Any fee collected by the Master
Servicer for consenting to such conveyance or entering into such modification
shall be retained by or paid to the Master Servicer as additional servicing
compensation.
Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Master Servicer shall not be deemed to be in default, breach or
any other violation of its obligations hereunder by reason of any assumption
of a Mortgage Loan by operation of law or any assumption which the Master
Servicer may be restricted by law from preventing, for any reason whatsoever.
Section 3.15 Payment of Taxes, Insurance and Other Charges. With respect to
each Mortgage Loan, the Master Servicer shall not be required to maintain
records relating to payment of taxes or insurance (including hazard
insurance).
Section 3.16 Optional Purchase of Defaulted Mortgage Loans. The Master
Servicer, in its sole discretion, shall have the right, but not an obligation
to elect (by written notice sent to the Trust
43
Administrator) to purchase for its own account from the Trust any Mortgage
Loan which is 90 days or more past due in the manner and at the price
specified in Section 2.02. The Purchase Price for any Mortgage Loan purchased
hereunder shall be deposited in the appropriate Account. The Trust
Administrator, upon written notice of the receipt of such deposit, shall
release or cause to be released to the purchaser of such Mortgage Loan the
related Mortgage File and the Trustee or the Trust Administrator shall execute
and deliver such instruments of transfer or assignment prepared by the
purchaser of such Mortgage Loan, in each case without recourse, as shall be
necessary to vest in the purchaser of such Mortgage Loan any Mortgage Loan
released pursuant hereto and the purchaser of such Mortgage Loan shall succeed
to all the Trust's right, title and interest in and to such Mortgage Loan and
all security and documents related thereto. Such assignment shall be an
assignment outright and not for security. The purchaser of such Mortgage Loan
shall thereupon own such Mortgage Loan, and all security and documents, free
of any further obligation to the Trust Administrator, the Trustee or the
Certificateholders with respect thereto.
Section 3.17 Acquisition by Trust of Defaulted Mortgage Loans. In the event
that the Trust acquires any Mortgage Property in connection with a default or
imminent default on a Mortgage Loan, the Master Servicer shall dispose of such
Mortgage Property prior to three years after its acquisition by the Trust
unless the Trust Administrator shall have been supplied with an Opinion of
Counsel to the effect that the holding by the Trust of such Mortgage Property
subsequent to such three-year period will not result in the imposition of
taxes on "prohibited transactions" of the REMIC hereunder as defined in
section 860F of the Code or cause the REMIC hereunder to fail to qualify as a
REMIC at any time that any Certificate is outstanding, in which case the Trust
may continue to hold such Mortgage Property (subject to any conditions
contained in such Opinion of Counsel). Notwithstanding any other provision of
this Agreement, no Mortgage Property acquired by the Trust shall be rented (or
allowed to continue to be rented) or otherwise used for the production of
income by or on behalf of the Trust in such a manner or pursuant to any terms
that would (i) cause such Mortgage Property to fail to qualify as "foreclosure
property" within the meaning of Section 860G(a)(8) of the Code or (ii) subject
the REMIC hereunder to the imposition of any federal, state or local income
taxes on the income earned from such Mortgage Property under Section 860G of
the Code or otherwise, unless the Master Services has agreed to indemnify the
Trust with respect to the imposition of any such taxes.
Article IV.
Payments and Statements to Certificateholders;
Rights of Certificateholders
Section 4.01 Distributions. (a) (i) On each Distribution Date, from Available
Funds to the extent of the Interest Remittance Amount, the Class Monthly
Interest Distribution Amount for each Class of Certificates will be
distributed by the Trust Administrator to the Class A, Class M-1 and Class M-2
Certificates sequentially, in that order. Distribution of interest among the
Class A-1, Class A-2 and Class A-3 Certificates will be pro rata based on the
related Class Monthly Accrued Interest.
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(ii) On each Distribution Date, from Available Funds after payment
of the Class Monthly Interest Distribution Amount for each Class of
Certificates to the extent of the Principal Distribution Amount, principal
will be distributed by the Trust Administrator to the holders of Offered
Certificates then entitled to distributions of principal in the following
order of priority:
1) sequentially, to the Class A-1, Class A-2 and Class A-3
Certificateholders, in that order, until the respective Class
Principal Balance of each Class is reduced to zero, the lesser
of (a) the excess of Available Funds over the aggregate Class
Monthly Interest Distribution Amount for each Class of
Certificates and (b) the Class A Principal Distribution;
2) to the Class M-1 Certificateholders until the Class Principal
Balance of such Class is reduced to zero, the lesser of (a)
the excess of Available Funds over the aggregate Class Monthly
Interest Distribution Amount for each Class of Certificates
and the Class A Principal Distribution and (b) the Class M-1
Principal Distribution;
3) to the Class M-2 Certificateholders until the Class Principal
Balance of such Class is reduced to zero, the lesser of (a)
the excess of Available Funds over the aggregate Class Monthly
Interest Distribution Amount for each Class of Certificates,
the Class A Principal Distribution and the Class M-1 Principal
Distribution and (b) the Class M-2 Principal Distribution; and
4) any remaining amount to be distributed as described under
Remaining Excess Spread pursuant to clause (iii) below.
(iii) On each Distribution Date the Trust Administrator shall
withdraw from the Distribution Account the Remaining Excess Spread and
distribute it in the following order of priority:
1) sequentially, to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class A-3, Class
M-1 and Class M-2 Certificateholders, in that order, up to any
Realized Losses allocated to the related Class of
Certificates;
2) sequentially, to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class A-3, Class
M-1 and Class M-2 Certificateholders, in that order, the
related Non-Collectible Interest Shortfalls along with
interest thereon at the related Certificate Rate;
3) to make payments, first to the Net WAC Carryover Reserve Fund
to pay to the Class A-1 Certificates the amount of any Net WAC
Carryover, and second to maintain a balance in the Net WAC
Carryover Reserve Fund equal to the Net WAC Carryover Reserve
Fund Deposit;
45
4) to the Master Servicer for reimbursement of any advances made
by the Master Servicer in connection with acquiring insurance
on the mortgage loans; and
5) to the Class R Certificateholders, the balance.
b) Method of Distribution. The Trust Administrator shall make
distributions in respect of a Distribution Date to each
Certificateholder of record on the related Record Date (other than
as provided in Section 9.01 respecting the final distribution), in
the case of Certificateholders, by check or money order mailed to
such Certificateholder at the address appearing in the Certificate
Register, or, upon written request by a Certificateholder
delivered to the Trust Administrator at least five Business Days
prior to such Record Date, by wire transfer to an account with a
banking or financial institution in the United States.
Distributions among Certificateholders shall be made in proportion
to the Percentage Interests evidenced by the Certificates held by
such Certificateholders.
(c) Distributions on Book-Entry Certificates. Each distribution with
respect to a Book-Entry Certificate shall be paid to the
Depository, which shall credit the amount of such distribution to
the accounts of its Depository Participants in accordance with its
normal procedures. Each Depository Participant shall be
responsible for disbursing such distribution to the Certificate
Owners that it represents and to each indirect participating
brokerage firm (a "brokerage firm" or "indirect participating
firm") for which it acts as agent. Each brokerage firm shall be
responsible for disbursing funds to the Certificate Owners that it
represents. All such credits and disbursements with respect to a
Book-Entry Certificate are to be made by the Depository and the
Depository Participants in accordance with the provisions of the
Certificates. None of the Trustee, the Trust Administrator, the
Paying Agent, the Certificate Registrar, the Seller, the Master
Servicer or the Depositor shall have any responsibility therefor
except as otherwise provided by applicable law.
Section 4.02 Allocation of Losses. (a) Realized Losses on the Mortgage Loans
with respect to any Distribution Date shall be allocated by the Trust
Administrator to the Classes of Certificates as follows: any Realized Loss
shall be allocated first, from Remaining Excess Spread for that Distribution
Date; second, by a reduction in the Overcollateralization Amount until reduced
to zero; third, to the Class M-2 Certificates until the Class Principal
Balance thereof is reduced to zero; fourth, to the Class M-1 Certificates
until the Class Principal Balance thereof is reduced to zero; and fifth, to
each Class of Class A Certificates on a pro rata basis.
(b) On each Distribution Date, if the aggregate Class Principal
Balance of all Certificates exceeds the aggregate Principal
Balance of the Mortgage Loans (after giving effect to
distributions of principal and the allocation of all losses to
such Certificates on such Distribution Date), such excess will be
deemed a principal loss and shall be allocated by the Trust
Administrator to each Class of Certificates then outstanding in
the order described in clause (a) above.
46
(c) Any Realized Loss allocated to a Class of Certificates or any
reduction in the Class Principal Balance of a Class of
Certificates pursuant to this Section 4.02 shall be allocated by
the Trust Administrator among the Certificates of such Class in
proportion to their respective Certificate Principal Balances.
(d) Any allocation by the Trust Administrator of Realized Losses to a
Certificate or any reduction in the Certificate Principal Balance
of a Certificate pursuant to Section 4.02(b) shall be accomplished
by reducing the Certificate Principal Balance thereof, immediately
following the distributions made on the related Distribution Date.
No Class of Certificate shall be allocated losses pursuant to this
Section in excess of its then outstanding Class Principal Balance.
An allocation of a Realized Loss on a "pro rata basis" among two
or more Classes of Certificates means an allocation to each of
those Classes of Certificates on the basis of their then
outstanding Class Principal Balances, prior to giving effect to
distributions to be made on that Distribution Date, in the case of
an allocation of the principal portion of a Realized Loss, or
based on the Class Monthly Accrued Interest thereon in respect of
that Distribution Date in the case of allocation of the interest
portion of a Realized Loss.
Section 4.03 Statements. (a) Not later than 12:00 noon, New York time, on each
Determination Date, the Master Servicer shall deliver to the Trust
Administrator a monthly report (the "Monthly Report") in a form and format
mutually agreeable to the Master Servicer and the Trust Administrator
containing the information set forth in Exhibit C hereto as to each Mortgage
Loan as of the end of the preceding Due Period and such other information as
the Trust Administrator shall reasonably require, including, without
limitation, all information necessary to enable the Trust Administrator to
make the payments required by Section 4.01(a). Each Monthly Report shall be an
Officer's Certificate. On the Business Day preceding the Distribution Date,
the Trust Administrator shall make available to the Master Servicer and the
Depositor, by telecopy, with a hard copy thereof to be delivered on such
Distribution Date, a statement (the "Trust Administrator's Remittance Report")
containing the information set forth below with respect to such Distribution
Date:
(i) The Available Funds, the Net WAC Cap and, for the Class A-1
Certificates, the Certificate Rate for the related
Distribution Date;
(ii) The Class Principal Balance, the Pool Principal Balance as
reported in the prior Trust Administrator's Remittance
Report or, in the case of the first Determination Date, the
Original Class Certificate Principal Balance of each Class
and the Cut-Off Date Pool Principal Balance;
(iii) The aggregate amount of collections received on the Mortgage
Loans during the related Due Period, separately stating the
amounts received in respect of principal and interest;
(iv) The number and Principal Balances of all Mortgage Loans that
were the subject of Principal Prepayments during the related
Due Period;
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(v) The amount of all Curtailments that were received during the
Due Period;
(vi) The principal portion of all Monthly Payments received
during the Due Period;
(vii) The interest portion of all Monthly Payments received on the
Mortgage Loans during the Due Period;
(viii) The amount required to be paid by the Originators or the
Seller (reported separately) pursuant to Sections 2.02, 2.04
or 2.06;
(ix) The Class A Principal Distribution, the Class M-1 Principal
Distribution and Class M-2 Principal Distribution for the
related Distribution Date, the portion thereof to be
distributed on each Class of Certificates then entitled to
distributions of principal and the Class Monthly Interest
Distribution Amount for the related Distribution Date to be
distributed on each Class of Certificates;
(x) The amount, if any, of any Net WAC Carryover and the
Outstanding Class Interest Carryover Shortfall for each
Class after giving effect to the distributions to be made on
the related Distribution Date;
(xi) The Class Principal Balance of each Class after giving
effect to the distributions to be made on the related
Distribution Date;
(xii) The weighted average remaining term to maturity of the
Mortgage Loans and the weighted average Loan Rate;
(xiii) The Servicing Fee to be paid to the Master Servicer;
(xiv) The amount of all payments or reimbursements to the Master
Servicer pursuant to Section 3.03;
(xv) The Overcollateralization Amount, the Overcollateralization
Deficiency, the Overcollateralization Release Amount, the
Target Overcollateralization Amount and the Remaining Excess
Spread for such Distribution Date;
(xvi) The number of Mortgage Loans outstanding at the beginning
and at the end of the related Due Period;
(xvii) The Pool Principal Balance as of the end of the Due Period
related to such Distribution Date;
(xviii) The number and aggregate Principal Balance of Mortgage
Loans (w) as to which the Monthly Payment is delinquent for
30-59 days, 60-89 days and 90 or more days, respectively,
(x) that have become REO Properties, in each case as of the
end of the
48
related Due Period, (y) that are in foreclosure
and (z) the Mortgagor of which is the subject of any
bankruptcy or insolvency proceeding;
(xix) The unpaid Principal Balance of all Mortgage Loans that
became Liquidated Mortgage Loans during such Due Period;
(xx) The Net Liquidation Proceeds received during such Due
Period;
(xxi) The book value (within the meaning of 12 C.F.R. ss. 571.13
or comparable provision) of any real estate acquired through
foreclosure or grant of a deed in lieu of foreclosure;
(xxii) Whether a Trigger Event has occurred or is continuing;
(xxiii) Such other information as is required by the Code and
regulations thereunder to be made available to Holders of
the Regular Certificates;
(xxiv) For so long as AGFC is the Master Servicer, the Rating
Agencies ratings of the long-term unsecured debt of the
Master Servicer;
(xxv) The amount of Prepayment Interest Shortfalls for the Due
Period;
(xxvi) The 60+ Delinquency Percentage (Rolling Three Month) as of
such Distribution Date; and
(xxvii) The number and aggregate Principal Balance of all Mortgage
Loans purchased by the Master Servicer pursuant to Section
3.16 for (i) the related Due Period and (ii) for all Due
Periods since the Cut-Off Date.
The Trust Administrator shall make available such report concurrently
with each distribution to the Certificateholders and the Rating Agencies on
the related Distribution Date. The Trust Administrator may fully rely upon and
shall have no liability with respect to information provided by the Master
Servicer.
In the case of information furnished pursuant to subclauses (ii), (ix),
(x) and (xi) above, the amounts shall be expressed in a separate section of
the report as a dollar amount for each Class for each $1,000 original dollar
amount as of the Cut-Off Date.
(b) Within a reasonable period of time after the end of each calendar
year, the Trust Administrator shall furnish to each Person who at
any time during the calendar year was a Certificateholder of a
Regular Certificate, if requested in writing by such Person, such
information as is reasonably necessary to provide to such Person a
statement containing the information set forth in subclause
(xxiii) above, aggregated for such calendar year or applicable
portion thereof during which such Person was a Certificateholder.
Such obligation of the Trust Administrator shall be deemed to have
been satisfied to the extent that substantially comparable
information shall be prepared and furnished by the Trust
49
Administrator to Certificateholders pursuant to any requirements
of the Code as are in force from time to time.
(c) Within a reasonable period of time after the end of each calendar
year, the Trust Administrator shall deliver to each Person who at
any time during the calendar year was a Transferor, if requested
in writing by such Person, such information as is reasonably
necessary to provide to such Person a statement containing the
information provided pursuant to the previous paragraph aggregated
for such calendar year or applicable portion thereof during which
such Person was a Transferor. Such obligation of the Trust
Administrator shall be deemed to have been satisfied to the extent
that substantially comparable information shall be prepared and
furnished to Certificateholders by the Trust Administrator
pursuant to any requirements of the Code as from time to time in
force.
Section 4.04 Distribution Account. The Trust Administrator shall establish a
separate trust account (the "Distribution Account") titled "Bank One, N.A., as
Trust Administrator, of American General Mortgage Loan Trust 2003-1
Distribution Account." The Distribution Account shall be an Eligible Account.
The Trust Administrator shall deposit amounts representing payments on and any
collections in respect of the Mortgage Loans received by it, if any,
immediately following receipt thereof, including, without limitation, all
amounts withdrawn from the Collection Account pursuant to Section 3.03 for
deposit to the Distribution Account as well as any amounts to be deposited
into the Net WAC Carryover Reserve Fund pursuant to Section 4.06. Amounts on
deposit in the Distribution Account shall be held uninvested.
Section 4.05 Investment of Accounts. (a) So long as no Event of Default shall
have occurred and be continuing, and consistent with any requirements of the
Code, all or a portion of any Collection Account held by or in the name of the
Trust Administrator shall be invested and reinvested by the Trust
Administrator, as directed in writing by the Master Servicer, in one or more
Eligible Investments bearing interest or sold at a discount; such direction to
be signed by a Responsible Officer. If an Event of Default shall have occurred
and be continuing or if the Master Servicer does not provide investment
directions, the Trust Administrator shall invest the Collection Account in
Eligible Investments described in paragraphs (v) or (vi) of the definition of
Eligible Investments. No such investment in the Collection Account shall
mature later than the Business Day immediately preceding the next Distribution
Date.
(b) If any amounts are needed for disbursement from the Collection
Account held by the Trust Administrator and sufficient uninvested
funds are not available to make such disbursement, the Trust
Administrator shall cause to be sold or otherwise converted to
cash a sufficient amount of the investments in such Account. No
liquidation of amounts of investments in the Collection Account
will be required prior to maturity unless the proceeds are needed
for disbursements.
(c) The Trust Administrator shall not in any way be held liable for
the selection of Eligible Investments to be purchased or sold
pursuant to this Section 4.05 or by reason of any investment loss
or charge or any insufficiency in the Collection Account held by
or in the
50
name of the Trust Administrator resulting from any investment loss
on any Eligible Investment included therein unless the Trust
Administrator's failure to perform in accordance with this Section
4.05 is the cause of such loss or charge except to the extent that
the Trust Administrator is the obligor and has defaulted thereon.
The Trust Administrator shall have no liability in respect of
losses incurred as a result of the liquidation of any Eligible
Investment prior to its stated maturity or the failure of the
Master Servicer to provide timely written investment direction.
(d) The Trust Administrator shall invest and reinvest funds in the
Collection Account held by or in the name of the Trust
Administrator, to the fullest extent practicable, in such manner
as the Master Servicer shall from time to time direct as set forth
in Section 4.05(a), but only in one or more Eligible Investments.
(e) So long as no Event of Default shall have occurred and be
continuing, all net income and gain realized from investment of,
and all realized earnings on, funds deposited in the Collection
Account shall be for the benefit of the Master Servicer as
servicing compensation (in addition to the Servicing Fee), and
shall be subject to withdrawal on or before the first Business Day
of the month following the month in which such income or gain is
received. The Master Servicer shall deposit in the Collection
Account the amount of any loss incurred in respect of any Eligible
Investment held therein which is in excess of the income and gain
thereon immediately upon realization of such loss from its own
funds, without any right to reimbursement therefor.
Section 4.06 Distribution of Net WAC Carryover; Net WAC Carryover Reserve
Fund.
(a) On the Closing Date, the Trust Administrator shall establish and
maintain in its name, in trust for the benefit of Class A-1 Certificates, the
Net WAC Carryover Reserve Fund. In addition, on the Closing Date, the Trust
Administrator shall deposit into the Net WAC Carryover Reserve Fund the Net
WAC Carryover Reserve Fund Deposit. On each Distribution Date, the Trust
Administrator shall transfer from the Distribution Account to the Net WAC
Carryover Reserve Fund the amounts specified pursuant to Section
4.01(a)(iii)(3). On each Distribution Date, to the extent required, the Trust
Administrator shall make withdrawals from the Net WAC Carryover Reserve Fund
and use the amounts in the Net WAC Carryover Reserve Fund to make
distributions to the Class A-1 Certificates, in an amount equal to the amount
of any Net WAC Carryover on such Certificate, unless the Principal Balance of
the Class A-1 Certificates has been reduced to zero. Any such amounts
transferred shall be treated for federal tax purposes as amounts distributed
by the REMIC to the Class R Certificateholders as transferee thereof. On each
Distribution Date, to the extent that the balance of deposits in the Net WAC
Carryover Reserve Fund is in excess of $5,000 after the distributions
described in the second preceding sentence, the Trust Administrator shall,
based upon the information provided by the Master Servicer, withdraw from the
Net WAC Carryover Reserve Fund (to the extent of funds available on deposit
therein) such amounts in excess of $5,000, if any, and distribute them to the
holder of the Net WAC Carryover Reserve Fund Residual Right.
51
(b) The Net WAC Carryover Reserve Fund shall be an Eligible Account.
Amounts held in the Net WAC Carryover Reserve Fund from time to time shall
continue to constitute assets of the Trust, but not of the REMIC, until
released from the Net WAC Carryover Reserve Fund pursuant to this Section
4.06. The Net WAC Carryover Reserve Fund constitutes an "outside reserve fund"
within the meaning of Treasury Regulation ss. 1.860G-2(h) and is not an asset
of the REMIC. The Class R Certificateholders shall be the owners of the Net
WAC Carryover Reserve Fund, and for all federal tax purposes, amounts
transferred by the REMIC to the Net WAC Carryover Reserve Fund shall be
treated as amounts distributed by the REMIC to the Class R Certificateholders.
The Trust Administrator shall keep records that accurately reflect the funds
on deposit in the Net WAC Carryover Reserve Fund. The Trust Administrator
shall, at the direction of the Master Servicer, invest amounts on deposit in
the Net WAC Carryover Reserve Fund in Eligible Investments. In the absence of
written direction to the Trust Administrator from the Master Servicer, all
funds in the Net WAC Carryover Reserve Fund shall remain uninvested. On each
Distribution Date, the Trust Administrator shall distribute any interest on
the Net WAC Carryover Reserve Fund to the holder of the Net WAC Carryover
Reserve Fund Residual Right.
(c) The holder of the Net WAC Carryover Reserve Fund Residual Right with
respect to the Net WAC Carryover Reserve Fund shall initially be the Seller as
holder of the Class R Certificates, and such Net WAC Carryover Reserve Fund
Residual Right shall at all times be owned by and allocated to Class R
Certificateholders on a pro rata basis. So long as the Seller is the holder of
the Class R Certificates, any amounts payable pursuant to this Section 4.06
shall be payable to the Seller. In the event of a transfer of the ownership in
any of the Class R Certificates by the Seller, the Net WAC Carryover Reserve
Fund Residual Right will be transferred along with such Class R Certificates.
Article V.
The Certificates
Section 5.01 The Certificates. The Class A Certificates shall be substantially
in the form set forth in Exhibit A-1 hereto, and shall, on original issue, be
executed, authenticated and delivered by the Trust Administrator on behalf of
the Trust to or upon the order of the Depositor concurrently with the sale and
assignment to the Trustee of the Trust. The Class A Certificates shall be
initially evidenced by one or more certificates representing a fraction of the
Original Class Certificate Principal Balances with respect thereto and shall
be held in minimum dollar denominations of $25,000 and dollar multiples in
excess thereof, except that one Certificate may be in a different denomination
so that the sum of the denominations of all outstanding Certificates shall
equal the Original Class Certificate Principal Balance. The Class M
Certificates shall be substantially in the form set forth in Exhibit A-2
hereto, and shall, on original issue, be executed, authenticated and delivered
by the Trust Administrator on behalf of the Trust to or upon the order of the
Depositor concurrently with the sale and assignment to the Trustee of the
Trust. The Class M Certificates shall be initially evidenced by one or more
certificates representing a fraction of the Original Class Certificate
Principal Balance and shall
52
be held in minimum dollar denominations of $25,000 and dollar multiples in
excess thereof, except that one Certificate may be in a different denomination
so that the sum of the denominations of all outstanding Certificates shall
equal the aggregate Class Original Certificate Principal Balances of the Class
M Certificates. The Class R Certificates shall be substantially in the form
set forth in Exhibit A-3 hereto, and shall, on original issue, be executed,
authenticated and delivered by the Trust Administrator on behalf of the Trust
to or upon the order of the Depositor concurrently with the sale and
assignment to the Trustee of the Trust. The Class R Certificates shall be
initially evidenced by a certificate representing the entire percentage
interest of that Class as may be required in order to satisfy the requirements
of the Tax Matters Person.
The Certificates shall be executed on behalf of the Trust by manual or
facsimile signature on behalf of the Trust Administrator by a Responsible
Officer. Certificates bearing the manual or facsimile signatures of
individuals who were, at the time when such signatures were affixed,
authorized to sign on behalf of the Trust Administrator shall bind the Trust,
notwithstanding that such individuals or any of them have ceased to be so
authorized prior to the authentication and delivery of such Certificates or
did not hold such offices at the date of such Certificate. No Certificate
shall be entitled to any benefit under this Agreement or be valid for any
purpose, unless such Certificate shall have been manually authenticated by a
Responsible Officer of the Trust Administrator substantially in the form
provided for herein, and such authentication upon any Certificate shall be
conclusive evidence, and the only evidence, that such Certificate has been
duly authenticated and delivered hereunder. All Certificates shall be dated
the date of their authentication. Subject to Section 5.02(c), the Regular
Certificates shall be Book-Entry Certificates. The Transferor Interest shall
not be a Book-Entry Certificate.
Section 5.02 Registration of Transfer and Exchange of Certificates. (a) The
Certificate Registrar shall cause to be kept at the Corporate Trust Office a
Certificate Register in which, subject to such reasonable regulations as it
may prescribe, the Certificate Registrar shall provide for the registration of
Certificates and of transfers and exchanges of Certificates as herein
provided. The Trust Administrator shall initially serve as Certificate
Registrar for the purpose of registering Certificates and transfers and
exchanges of Certificates as herein provided.
Upon surrender for registration of transfer of any Certificate at any
office or agency of the Certificate Registrar maintained for such purpose
pursuant to the foregoing paragraph, the Trust Administrator on behalf of the
Trust shall execute, authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Certificates of the same aggregate
Percentage Interest, subject, with respect of a Class R Certificate, to the
satisfaction of the conditions set forth in paragraph (e) below.
At the option of the Certificateholders, Certificates may be exchanged
for other Certificates in authorized denominations and the same aggregate
Percentage Interests, upon surrender of the Certificates to be exchanged at
any such office or agency. Whenever any Certificates are so surrendered for
exchange, the Trust Administrator shall execute on behalf of the Trust and
authenticate and deliver the Certificates which the Certificateholder making
the exchange is entitled to receive. Every Certificate presented or
surrendered for registration of
53
transfer or exchange shall (if so required by the Trust Administrator or the
Certificate Registrar) be duly endorsed by, or be accompanied by a written
instrument of transfer satisfactory to the Trust Administrator and the
Certificate Registrar duly executed by, the Holder thereof or his attorney
duly authorized in writing.
(b) Except as provided in paragraph (c) below, the Book-Entry
Certificates shall at all times remain registered in the name of
the Depository or its nominee and at all times: (i) registration
of such Certificates may not be transferred by the Trust
Administrator except to another Depository or its nominee; (ii)
the Depository shall maintain book-entry records with respect to
the Certificate Owners and with respect to ownership and transfers
of such Certificates; (iii) ownership and transfers of
registration of such Certificates on the books of the Depository
shall be governed by applicable rules established by the
Depository; (iv) the Depository may collect its usual and
customary fees, charges and expenses from its Depository
Participants; (v) the Trust Administrator shall deal with the
Depository as representative of the Certificate Owners of the
Certificates for purposes of exercising the rights of Holders
under this Agreement, and requests and directions for and votes of
such representative shall not be deemed to be inconsistent if they
are made with respect to different Certificate Owners; and (vi)
the Trust Administrator may rely and shall be fully protected in
relying upon information furnished by the Depository with respect
to its Depository Participants and furnished by the Depository
Participants with respect to indirect participating firms and
Persons shown on the books of such indirect participating firms as
direct or indirect Certificate Owners; and (vii) the direct and
indirect participants of the Depository shall have no rights under
this Agreement under or with respect to any of the Certificates
held on their behalf by the Depository, and the Depository may be
treated by the Trust Administrator and its agents, employees,
officers and directors as the absolute owner of the Certificates
for all purposes whatsoever.
All transfers by Certificate Owners of Book-Entry Certificates shall be
made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owners. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners that it represents or of brokerage firms for which it acts
as agent in accordance with the Depository's normal procedures. The parties
hereto are hereby authorized to execute a Letter of Representations with the
Depository or take such other action as may be necessary or desirable to
register a Book-Entry Certificate to the Depository. In the event of any
conflict between the terms of any such Letter of Representation and this
Agreement, the terms of this Agreement shall control.
(c) If (i) (x) the Depository or the Depositor advises the Trust
Administrator in writing that the Depository is no longer willing
or able to discharge properly its responsibilities as Depository
and (y) the Trust Administrator or the Depositor is unable to
locate a qualified successor, (ii) the Depositor, at its sole
option, with the consent of the Trust Administrator, elects to
terminate the book-entry system through the Depository or (iii)
after the occurrence of an Event of Default, the Certificate
Owners of each Class of
54
Regular Certificates representing Percentage Interests aggregating
not less than 51% advises the Trust Administrator and Depository
through the Depository Participants in writing that the
continuation of a book-entry system through the Depository to the
exclusion of definitive, fully registered certificates (the
"Definitive Certificates") to Certificate Owners is no longer in
the best interests of the Certificate Owners, upon surrender to
the Certificate Registrar of each Class of Regular Certificates by
the Depository, accompanied by registration instructions from the
Depository for registration, the Trust Administrator shall, at the
Depositor's expense, in the case of (ii) above, or the Seller's
expense, in the case of (i) and (iii) above, execute on behalf of
the Trust and authenticate the Definitive Certificates. Neither
the Depositor nor the Trust Administrator 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, the Trustee, the Trust
Administrator, the Certificate Registrar, the Master Servicer, any
Paying Agent and the Depositor shall recognize the Holders of the
Definitive Certificates as Certificateholders hereunder.
(d) No service charge shall be made for any registration of transfer
or exchange of Certificates, but the Certificate Registrar may
require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any
transfer or exchange of Certificates.
(e) Each Person who has or who acquires any Ownership Interest in a
Class R Certificate shall be deemed by the acceptance or
acquisition of such Ownership Interest to have agreed to be bound
by the following provisions, and the rights of each Person
acquiring any Ownership Interest in a Class R Certificate are
expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Class R Certificate shall be a Permitted Transferee and
shall promptly notify the Trust Administrator of any change
or impending change in its status as a Permitted Transferee.
(ii) No Ownership Interest in a Class R Certificate may be
registered on the Closing Date or thereafter transferred,
and the Trust Administrator shall not register the Transfer
of any Class R Certificate unless the Trust Administrator
shall have been furnished with an affidavit (a "Transfer
Affidavit") of the initial owner or the proposed transferee
in the form attached hereto as Exhibit I.
(iii) Each Person holding or acquiring any Ownership Interest in a
Class R Certificate shall agree (A) to obtain a Transfer
Affidavit from any other Person to whom such Person attempts
to Transfer its Ownership Interest in a Class R Certificate,
(B) to obtain a Transfer Affidavit from any Person for whom
such Person is acting as nominee, trustee or agent in
connection with any Transfer of a Class R Certificate and
(C) not to Transfer its Ownership Interest in a Class R
Certificate or to cause the Transfer of an Ownership
Interest in a Class R Certificate to any other Person if it
has actual knowledge that such
55
Person is not a Permitted Transferee as evidenced by its
delivery of a Certificate in the form of Exhibit J-1 at the
time of any such Transfer.
(iv) Any attempted or purported Transfer of any Ownership
Interest in a Class R Certificate in violation of the
provisions of this Section 5.02(e) shall be absolutely null
and void and shall vest no rights in the purported
Transferee. If any purported transferee shall become a
Holder of a Class R Certificate in violation of the
provisions of this Section 5.02(e), then the last preceding
Permitted Transferee shall be restored to all rights as
Holder thereof retroactive to the date of registration of
Transfer of such Class R Certificate. The Trust
Administrator shall be under no liability to any Person for
any registration of Transfer of a Class R Certificate that
is in fact not permitted by this Section 5.02(e) or for
making any payments due on such Certificate to the Holder
thereof or taking any other action with respect to such
Holder under the provisions of this Agreement so long as the
Transfer was registered after receipt of the related
Transfer Affidavit. The Trust Administrator shall be
entitled but not obligated to recover from any Holder of a
Class R Certificate that was in fact not a Permitted
Transferee at the time it became a Holder or, at such
subsequent time as it became other than a Permitted
Transferee, all payments made on such Class R Certificate at
and after either such time. Any such payments so recovered
by the Trust Administrator shall be paid and delivered by
the Trust Administrator to the last preceding Permitted
Transferee of such Certificate.
(v) The Depositor shall use its best efforts to make available,
upon receipt of written request from the Trust
Administrator, all information necessary to compute any tax
imposed under Section 860E(e) of the Code as a result of a
Transfer of an Ownership Interest in a Class R Certificate
to any Holder who is not a Permitted Transferee.
(vi) No transfer, sale, pledge or other disposition of a Class R
Certificate shall be made unless such transfer, sale, pledge
or other disposition is exempt from the registration
requirements of the Securities Act and any applicable state
securities laws or is made in accordance with the Securities
Act and such laws. In the event that a transfer of a Class R
Certificate is to be made either (a)(1) the Trust
Administrator shall require a written Opinion of Counsel
acceptable to and in form and substance satisfactory to the
Trust Administrator and the Depositor that such transfer may
be made pursuant to an exemption, describing the applicable
exemption and the basis therefor, from the Securities Act
and any applicable state securities laws or is being made
pursuant to the Securities Act and any applicable state
securities laws, which Opinion of Counsel shall not be an
expense of the Trust Administrator, the Depositor or the
Master Servicer; provided that such Opinion of Counsel will
not be required in connection with the initial transfer of
any such Certificate by the Depositor or any Affiliate
thereof and (2) the Trust Administrator shall require the
transferee to execute a representation letter, substantially
in the form of Exhibit M hereto, and the Trust Administrator
shall require the transferor to execute a representation
letter, substantially in the form of Exhibit J-2 hereto,
each acceptable to and in form and substance satisfactory to
the Depositor and
56
the Trust Administrator certifying to the Depositor and the
Trust Administrator the facts surrounding such transfer,
which representation letters shall not be an expense of the
Trust Administrator, the Depositor or the Master Servicer;
provided, however, that such representation letters will not
be required in connection with any transfer of any such
Certificate by the Depositor or any Affiliate thereof or (b)
the prospective transferee of such a Certificate shall be
required to provide the Trust Administrator, the Depositor
and the Master Servicer with an investment letter
substantially in the form of Exhibit N attached hereto (or
such other form as the Depositor in its sole discretion
deems acceptable), which investment letter shall not be an
expense of the Trust Administrator, the Depositor or the
Master Servicer, and which investment letter states that,
among other things, such transferee (1) 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 (2) is
aware that the proposed transferor intends to rely on the
exemption from registration requirements under the
Securities Act provided by Rule 144A. The Holder of any such
Certificate desiring to effect any such transfer, sale,
pledge or other disposition shall, and does hereby agree to,
indemnify the Trust Administrator, the Depositor, the Master
Servicer and the Certificate Registrar against any liability
that may result if the transfer, sale, pledge or other
disposition is not so exempt or is not made in accordance
with such federal and state laws.
(vii) No transfer of a Class R Certificate shall be made unless
the Trust Administrator shall have (a) received a
representation from the transferee of such Certificate,
acceptable to and in form and substance satisfactory to the
Trust Administrator and the Depositor (such requirement is
satisfied only by the Trust Administrator's receipt of a
representation letter from the transferee substantially in
the form of Exhibit M hereto), to the effect that such
transferee is not an employee benefit plan or arrangement
subject to Section 406 of ERISA or a plan subject to Section
4975 of the Code or materially similar provisions of
applicable federal, state or local law, nor a person acting
on behalf of any such plan or arrangement nor using the
assets of any such plan or arrangement to effect such
transfer, or (b) a certification of facts and an Opinion of
Counsel which otherwise establish to the reasonable
satisfaction of the Trustee and the Trust Administrator that
such transfer will not result in a non-exempt prohibited
transaction under ERISA, Section 4975 of the Code or similar
law and will not subject the Trustee or the Trust
Administrator to any obligation in addition to these
undertaken in the Pooling and Servicing Agreement.
The restrictions on Transfers of a Class R Certificate set forth in this
Section 5.02(e) shall cease to apply (and the applicable portions of the
legend on a Class R Certificate may be deleted) with respect to Transfers
occurring after delivery to the Trust Administrator of an Opinion of Counsel,
which Opinion of Counsel shall not be an expense of the Trust, the Trustee,
the Trust Administrator, the Seller or the Master Servicer, to the effect that
the elimination of such restrictions will not cause the Trust hereunder to
fail to qualify as a REMIC at any time that the Certificates are outstanding
or result in the imposition of any tax on the Trust, a Certificateholder or
another Person. Each Person holding or acquiring any Ownership Interest in a
Class R
57
Certificate hereby consents to any amendment of this Agreement which,
based on an Opinion of Counsel furnished to the Trust Administrator, is
reasonably necessary (a) to ensure that the record ownership of, or any
beneficial interest in, a Class R Certificate is not transferred, directly or
indirectly, to a Person that is not a Permitted Transferee and (b) to provide
for a means to compel the Transfer of a Class R Certificate which is held by a
Person that is not a Permitted Transferee to a Holder that is a Permitted
Transferee.
All Certificates surrendered for registration of transfer or exchange
shall be cancelled by the Certificate Registrar and disposed of pursuant to
its standard procedures.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates. If (i) any
mutilated Certificate is surrendered to the Certificate Registrar or the
Certificate Registrar receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate and (ii) there is delivered to
the Trust Administrator and the Certificate Registrar such security or
indemnity as may be required by them to save each of them harmless, then, in
the absence of notice to the Trust Administrator or the Certificate Registrar
that such Certificate has been acquired by a bona fide purchaser, the Trust
Administrator shall execute on behalf of the Trust, authenticate and deliver,
in exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like tenor and Percentage Interest. Upon the
issuance of any new Certificate under this Section 5.03, the Trust
Administrator or the Certificate Registrar 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, the Trust Administrator and the Certificate Registrar) in
connection therewith. Any duplicate Certificate issued pursuant to this
Section, shall constitute complete and indefeasible evidence of ownership in
the Trust, as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.
Section 5.04 Persons Deemed Owners. Prior to due presentation of a Certificate
for registration of transfer, the Master Servicer, the Depositor, the Trustee,
the Trust Administrator, the Certificate Registrar, any Paying Agent and any
agent of the Master Servicer, the Depositor, the Certificate Registrar, any
Paying Agent or the Trust Administrator may (subject to Section 4.01(c)) treat
the Person, including a Depository, in whose name any Certificate is
registered as the owner of such Certificate for the purpose of receiving
distributions pursuant to Section 4.01 and for all other purposes whatsoever,
and none of the Master Servicer, the Trust, the Trustee, the Trust
Administrator, the Depositor, the Certificate Registrar, the Paying Agent nor
any agent of any of them shall be affected by notice to the contrary.
Section 5.05 Appointment of Paying Agent. (a) The Paying Agent shall make
distributions to Certificateholders from the Distribution Account pursuant to
Section 4.01 and shall report the amounts of such distributions to the Trust
Administrator. The duties of the Paying Agent may include the obligation (i)
to withdraw funds from the Distribution Account pursuant to Section 4.01 and
for the purpose of making the distributions referred to in Section 4.01 and
(ii) to distribute statements and provide information to Certificateholders as
required hereunder. The Paying Agent hereunder shall at all times be a
corporation duly incorporated and validly existing
58
under the laws of the United States of America or any state thereof,
authorized under such laws to exercise corporate trust powers and subject to
supervision or examination by federal or state authorities. The Paying Agent
shall initially be the Trust Administrator. The Trust Administrator may
appoint a successor to act as Paying Agent, which appointment shall be
reasonably satisfactory to the Depositor.
(b) The Trust Administrator shall cause the Paying Agent (if other
than the Trust Administrator) to execute and deliver to the Trust
Administrator an instrument in which such Paying Agent shall agree
with the Trust Administrator that such Paying Agent shall hold all
sums, if any, held by it for payment to the Certificateholders in
trust for the benefit of the Certificateholders entitled thereto
until such sums shall be paid to such Certificateholders and shall
agree that it shall comply with all requirements of the Code
regarding the withholding of payments in respect of Federal income
taxes due from Certificate Owners and otherwise comply with the
provisions of this Agreement applicable to it.
Article VI.
The Seller, the Master Servicer and the Depositor
Section 6.01 Liability of the Seller, the Master Servicer and the Depositor.
The Seller and the Master Servicer shall be liable in accordance herewith only
to the extent of the obligations specifically imposed upon and undertaken by
the Seller or the Master Servicer, as the case may be, herein. The Depositor
shall be liable in accordance herewith only to the extent of the obligations
specifically imposed upon and undertaken herein by the Depositor.
Section 6.02 Merger or Consolidation of, or Assumption of the Obligations of,
the Seller, the Master Servicer or the Depositor. Any Person into which the
Seller, the Master Servicer or the Depositor may be merged or consolidated, or
any Person resulting from any merger, conversion or consolidation to which the
Seller, the Master Servicer or the Depositor shall be a party, or any Person
succeeding to the business of the Seller, the Master Servicer or the
Depositor, shall be the successor of the Seller, the Master Servicer or the
Depositor, as the case may be, 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; provided, however, that the
successor Master Servicer shall satisfy all the requirements of Section 7.02
with respect to the qualifications of a successor Master Servicer.
Section 6.03 Limitation on Liability of the Master Servicer and Others.
Neither the Master Servicer nor any of the directors or officers or employees
or agents of the Master Servicer shall be under any liability to the Trust or
the Certificateholders for any action taken or for refraining from the taking
of any action by the Master Servicer in good faith pursuant to this Agreement,
or for errors in judgment; provided, however, that this provision shall not
protect the Master Servicer or any such Person against any liability which
would otherwise be imposed by reason of its willful misfeasance, bad faith or
gross negligence in the performance of duties of the Master
59
Servicer or by reason of its reckless disregard of its obligations and duties
of the Master Servicer hereunder. The Master Servicer and any director or
officer or employee or agent of the Master Servicer may rely in good faith on
any document of any kind prima facie properly executed and submitted by any
Person respecting any matters arising hereunder. The Master Servicer and any
director or officer or employee or agent of the Master Servicer shall be
indemnified by the Trust 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
related to any specific Mortgage Loan or Mortgage Loans (except as any such
loss, liability or expense shall be otherwise reimbursable pursuant to this
Agreement) and any loss, liability or expense incurred by reason of its
willful misfeasance, bad faith or negligence in the performance of duties
hereunder or by reason of its reckless disregard of obligations and duties
hereunder. The Master Servicer may 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 reasonable legal expenses and costs of such action and any
liability resulting therefrom shall be expenses, costs and liabilities of the
Trust. The Master Servicer's right to indemnity or reimbursement pursuant to
this Section shall survive any resignation or termination of the Master
Servicer pursuant to Section 6.04 or 7.01 with respect to any losses,
expenses, costs or liabilities arising prior to such resignation or
termination (or arising from events that occurred prior to such resignation or
termination). This paragraph shall apply to the Master Servicer solely in its
capacity as Master Servicer hereunder and in no other capacities.
Section 6.04 Master Servicer Not to Resign. Subject to the provisions of
Section 6.02, the Master Servicer shall not resign from the obligations and
duties hereby imposed on it except (i) upon determination that the performance
of its obligations or 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 or its subsidiaries or Affiliates, the
other activities of the Master Servicer so causing such a conflict being of a
type and nature carried on by the Master Servicer or its subsidiaries or
Affiliates at the date of this Agreement or (ii) upon satisfaction of the
following conditions: (a) the Master Servicer has proposed a successor Master
Servicer to the Trust Administrator in writing and such proposed successor
Master Servicer is reasonably acceptable to the Trust Administrator and the
Trustee; and (b) each Rating Agency shall have delivered a letter to the Trust
Administrator prior to the appointment of the successor Master Servicer
stating that the proposed appointment of such successor Master Servicer as
Master Servicer hereunder will not result in the reduction or withdrawal of
the then current rating of the Regular Certificates; provided, however, that
no such resignation by the Master Servicer shall become effective until such
successor Master Servicer or, in the case of (i) above, the Trust
Administrator shall have assumed the Master Servicer's responsibilities and
obligations hereunder or the Trust Administrator shall have designated a
successor Master Servicer in accordance with Section 7.02. Any such
resignation shall not relieve the Master Servicer of responsibility for any of
the obligations specified in Sections 7.01 and 7.02 as obligations that
survive the resignation or termination of the Master Servicer. Any such
determination permitting the resignation of the Master Servicer pursuant to
clause (i) above shall be evidenced by an Opinion of Counsel to such effect
delivered to the Trust Administrator.
60
Section 6.05 Delegation of Duties. In the ordinary course of business, the
Master Servicer at any time may delegate any of its duties hereunder to any
Person, including any of its Affiliates, who agrees to conduct such duties in
accordance with standards comparable to those set forth in Section 3.01. Such
delegation shall not relieve the Master Servicer of its liabilities and
responsibilities with respect to such duties and shall not constitute a
resignation within the meaning of Section 6.04. The Master Servicer shall
provide the Trust Administrator and the Trustee with written notice prior to
the delegation of any of its duties to any Person or any of the Master
Servicer's Affiliates or their respective successors and assigns (other than
in the case of Section 3.01).
Section 6.06 Indemnification by the Master Servicer and the Seller. The Master
Servicer shall indemnify and hold harmless the Trust, the Trustee and the
Trust Administrator and their officers, directors, agents and employees from
and against any loss, liability, expense, damage or injury suffered or
sustained by reason of the Master Servicer's willful misfeasance, bad faith or
gross negligence in the performance of its activities in servicing or
administering the Mortgage Loans pursuant to this Agreement, including, but
not limited to, any judgment, award, settlement, reasonable fees of counsel of
its selection and other costs or expenses incurred in connection with the
defense of any actual or threatened action, proceeding or claim related to the
Master Servicer's misfeasance, bad faith or gross negligence. Any such
indemnification shall not be payable from the assets of the Trust. The
provisions of this indemnity shall run directly to and be enforceable by an
injured party subject to the limitations hereof. The provisions of this
Section 6.06 shall survive termination of the Agreement or the earlier of the
resignation or removal of the Trustee or Trust Administrator as applicable.
Notwithstanding anything to the contrary contained herein, the Seller (i)
agrees to be liable directly to the injured party for the entire amount and
(ii) shall indemnify and hold harmless the Master Servicer, the Trust, the
Trust Administrator and the Trustee from and against any loss, liability,
expense, damage, claim or injury (including, without limitation, any
prohibited transactions tax imposed on the Trust, but excluding any loss,
liability, expense, damage, claim or injury attributable to a holder of an
Offered Certificate in the capacity as an investor in such Certificates as a
result of defaults on the Mortgage Loans) arising out of or based on the
retention of the Mortgage Loans and Mortgage Files pursuant to this Agreement.
In addition, The Seller covenants and agrees to indemnify the Trustee, the
Trust Administrator and their respective officers, directors, employees and
agents from, and hold each of them harmless against, any and all losses,
liabilities, damages, claims or expenses incurred in connection with any legal
action relating to this Agreement, the Certificates or incurred in connection
with the administration of the Trust, other than with respect to a party, any
loss, liability or expense incurred by reason of willful misfeasance, bad
faith or negligence of such party in the performance of its duties hereunder
or by reason of such party's reckless disregard of obligations and duties
hereunder. The Trustee, the Trust Administrator and any director, officer,
employee or agent of either shall be indemnified, to the extent not paid by
the Seller pursuant to this Section 6.06, by the Trust and held harmless
against any loss, liability or expense (not including expenses, disbursements
and advances incurred or made by the Trustee or the Trust Administrator, in
the ordinary course of the either parties' performance in accordance with the
provisions of this Agreement) incurred by
61
the Trustee or the Trust Administrator arising out of or in connection with
the acceptance or administration of their duties under this Agreement, other
than any loss, liability or expense incurred by reason of willful misfeasance,
bad faith or negligence in the performance by the Trustee or the Trust
Administrator of their duties under this Agreement or by reason of the
reckless disregard of the Trustee's or Trust Administrator's obligations and
duties under this Agreement. This section shall survive termination of this
Agreement or the resignation or removal of any Trustee or Trust Administrator
hereunder.
Section 6.07 Reports to the Commission.
(a) The Trustee, the Trust Administrator and the Master Servicer shall
reasonably cooperate with the Depositor in connection with the
Trust's satisfying the reporting requirements under the Exchange
Act. Without limiting the generality of the foregoing, the Trust
Administrator shall prepare on behalf of the Trust any monthly
Current Reports on Form 8-K (each, a "Monthly Form 8-K") and
Annual Reports on Form 10-K customary for similar securities as
required by the Exchange Act and the rules and regulations of the
Securities and Exchange Commission thereunder, and the Trust
Administrator shall sign (other than any Annual Reports on Form
10-K) and file (via the Securities and Exchange Commission's
Electronic Data Gathering and Retrieval System) such forms on
behalf of the Trust. The Master Servicer shall sign any Annual
Reports on Form 10-K.
(b) Each Monthly Form 8-K shall be filed by the Trust Administrator
within 15 days after each Distribution Date (commencing on the
Distribution Date occurring in June 2003 and ending with the
Distribution Date following the filing of the Form 15 Suspension
Notification as set forth in Section 6.07(h) hereof), including a
copy of the Trust Administrator's Remittance Report for such
Distribution Date as an exhibit thereto. Prior to March 30th of
each year (or such earlier date as may be required by the Exchange
Act and the rules and regulations of the Securities and Exchange
Commission), the Trust Administrator shall file a Form 10-K, in
substance as required by applicable law or applicable Securities
and Exchange Commission staff's interpretations. Such Form 10-K
shall include as exhibits the Master Servicer's annual statement
of compliance described under Section 3.09 and the accountant's
report described under Section 3.10, in each case to the extent
they have been timely delivered to the Trust Administrator. If
they are not so timely delivered, the Trust Administrator shall
file an amended Form 10-K including such documents as exhibits
reasonably promptly after they are delivered to the Trust
Administrator. The Form 10-K shall also include a certification in
the form attached hereto as Exhibit L (the "Certification"), which
shall be signed by the senior officer of the Master Servicer in
charge of servicing.
(c) The Trust Administrator shall sign a certification (in the form
attached hereto as Exhibit K) for the benefit of the Master
Servicer and its officers, directors and Affiliates (provided,
however, that the Trust Administrator shall not undertake an
analysis of the accountant's report attached as an exhibit to the
Form 10-K). No later than the 20th day prior to the latest date on
which the Form 10-K is permitted to be filed, without regard to
62
extension (or if such day is not a Business Day, the immediately
preceding Business Day), the Trust Administrator shall deliver to
the Master Servicer (i) such certification and (ii) a completed
Form 10-K to be executed by the Master Servicer. No later than the
10th day prior to the latest date on which the Form 10-K is
permitted to be filed, without regard to extension (or if such day
is not a Business Day, the immediately preceding Business Day),
the Master Servicer shall deliver the signed Form 10-K and the
signed Certification to be filed to the Trust Administrator. In
addition, the Trust Administrator shall indemnify and hold
harmless the Master Servicer and its officers, directors and
Affiliates from and against any losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related
costs, judgments and other costs and expenses arising out of the
Trust Administrator's failure to deliver the certification (in the
form attached hereto as Exhibit K) pursuant to this Section
6.07(c) or any inaccuracy in such certification, other than any
losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments and other costs
and expenses arising out of the Master Servicer's breach of its
obligations under this Agreement. If the indemnification provided
for herein is unavailable or insufficient to hold harmless the
Master Servicer and its officers, directors and Affiliates, then
the Trust Administrator shall contribute to the amount paid or
payable by the Master Servicer, its officers, directors or
Affiliates as a result of the losses, claims, damages or
liabilities of the Master Servicer, its officers, directors or
Affiliates in such proportion as is appropriate to reflect the
relative fault of the Master Servicer and its officers, directors
and Affiliates on the one hand and the Trust Administrator on the
other.
(d) The Master Servicer shall indemnify and hold harmless the Trust
Administrator and its officers, directors and Affiliates from and
against any losses, damages, penalties, fines, forfeitures,
reasonable and necessary legal fees and related costs, judgments
and other costs and expenses arising out of the Master Servicer's
failure to sign and deliver either the Certification or the Form
10-K within the time frame provided in Section 6.07(c), other than
any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments and other costs
and expenses arising out of the Trust Administrator's breach of
its obligations under this Agreement. If the indemnification
provided for herein is unavailable or insufficient to hold
harmless the Trust Administrator and its officers, directors and
Affiliates, then the Master Servicer shall contribute to the
amount paid or payable by the Trust Administrator, its officers,
directors or Affiliates as a result of the losses, claims, damages
or liabilities of the Trust Administrator, its officers, directors
or Affiliates in such proportion as is appropriate to reflect the
relative fault of the Trust Administrator and its officers,
directors and Affiliates on the one hand and the Master Servicer
on the other.
(e) If the Securities and Exchange Commission issues additional
interpretative guidance or promulgates additional rules or
regulations, or if other changes in applicable law occur, that
would require the reporting arrangements, or the allocation of
responsibilities with respect thereto, described in this Section
6.07, to be conducted differently than as described, the
Depositor, Master Servicer, Trustee and Trust Administrator will
63
reasonably cooperate to amend the provisions of this Section 6.07
in order to comply with such amended reporting requirements and
such amendment of this Section 6.07. Any such amendment shall be
made in accordance with the first paragraph of Section 11.01
without further consent of the Certificateholders and without the
requirement to deliver (i) notice in writing from the Rating
Agencies that such action will not result in the reduction or
withdrawal of the rating of any outstanding Class of Regular
Certificates with respect to which it is a Rating Agency or (ii)
an Opinion of Counsel delivered to the Trust Administrator. Such
amendment may result in the reduction of the reports filed by the
Trust Administrator on behalf of the Trust under the Exchange Act.
Notwithstanding the foregoing, none of the Depositor, Master
Servicer, Trustee or Trust Administrator shall be obligated to
enter into any amendment pursuant to this Section 6.07 that
adversely affects its obligations and immunities under this
Agreement.
(f) In filing any Monthly Form 8-K or Form 10-K, the Trust
Administrator shall not undertake any analysis of, and shall have
no responsibility for, any financial information, accountant's
report, certification or other matter contained therein, except
for computations performed by the Trust Administrator and
reflected in the Trust Administrator's Remittance Report.
(g) Upon any filing with the Securities and Exchange Commission, the
Trust Administrator shall promptly deliver to the Depositor and
the Master Servicer a copy of any such executed report, statement
or information.
(h) Prior to January 30 of the first year in which the Trust
Administrator is able to do so under applicable law, the Trust
Administrator shall file a Form 15 Suspension Notification with
respect to the Trust.
Article VII.
Default
Section 7.01 Events of Default. (a) If any one of the following events
("Events of Default") shall occur and be continuing:
(i) The failure by the Master Servicer to deposit in the
Collection Account, if applicable, or the Distribution
Account any deposit required to be made under the terms of
this Agreement which continues unremedied for a period of
five Business Days after the date upon which written notice
of such failure shall have been given to the Master Servicer
by the Trust Administrator or to the Master Servicer and the
Trust Administrator by any holder of a Certificate;
(ii) The entry against the Master Servicer of a decree or order
by a court or agency or supervisory authority having
jurisdiction in the premises for the appointment of a
trustee, conservator, receiver or liquidator in any
insolvency, conservatorship,
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receivership, readjustment of debt, marshalling of assets
and liabilities or similar proceedings, or for the winding
up or liquidation of its affairs, and the continuance of any
such decree or order unstayed and in effect for a period of
60 consecutive days;
(iii) The Master Servicer shall voluntarily go into liquidation,
consent to the appointment of a conservator or receiver or
liquidator or similar person in any insolvency, readjustment
of debt, marshalling of assets and liabilities or similar
proceedings of or relating to the Master Servicer or of or
relating to all or substantially all of its property; or the
Master Servicer shall admit in writing its inability to pay
its debts generally as they become due, file a petition to
take advantage of any applicable insolvency or
reorganization statute, make an assignment for the benefit
of its creditors or voluntarily suspend payment of its
obligations; or
(iv) Any failure by the Master Servicer to duly observe or
perform in any material respect any other of its covenants
or agreements in this Agreement which, in each case,
materially and adversely affects the interests of the
Certificateholders and continues unremedied for 30 days
after the giving of written notice of the failure to the
Master Servicer by the Trust Administrator, or to the Master
Servicer and the Trust Administrator by any
Certificateholder.
Then, and in each and every such case, so long as an Event of Default
shall not have been remedied within the applicable grace period, in the case
of (i), (ii), (iii), (iv) and (v) above, the Trust Administrator shall, at the
direction of the Holders of Certificates evidencing Percentage Interests
aggregating not less than 51%, of the Voting Rights by notice then given in
writing to the Master Servicer, terminate all of the rights and obligations of
the Master Servicer as Master Servicer under this Agreement. Any notice given
pursuant to this Section to the Master Servicer shall also be given to each
Rating Agency and the Depositor. On or after the receipt by the Master
Servicer of such written notice, all authority and power of the Master
Servicer under this Agreement, whether with respect to the Certificates or the
Mortgage Loans or otherwise, shall pass to and be vested in the Trust
Administrator pursuant to and under this Section; and, without limitation, the
Trust Administrator is hereby authorized and empowered to execute and deliver,
on behalf of the Master Servicer, as attorney-in-fact or otherwise, any and
all documents and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement of each Mortgage
Loan and related documents or otherwise. The Master Servicer agrees to
cooperate with the Trust Administrator in effecting the termination of the
responsibilities and rights of the Master Servicer hereunder, including,
without limitation, the transfer to the Trust Administrator for the
administration by it of all cash amounts that shall at the time be held by the
Master Servicer and to be deposited by it in the Collection Account, or that
have been deposited by the Master Servicer in the Collection Account or
thereafter received by the Master Servicer with respect to the Mortgage Loans.
All reasonable costs and expenses (including attorneys' fees) incurred in
connection with transferring servicing hereunder to a successor Master
Servicer, including transferring the Mortgage Files to the successor Master
Servicer and amending this Agreement to reflect such succession as Master
Servicer pursuant to
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this Section shall be paid by the predecessor Master Servicer (or if the
predecessor Master Servicer is the Trust Administrator, the initial Master
Servicer) upon presentation of reasonable documentation of such costs and
expenses.
(b) Holders of Certificates evidencing Percentage Interests
aggregating not less than 51% of the Voting Rights shall have the
right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trust Administrator, or
exercising any trust or power conferred on the Trust
Administrator, provided, that:
(1) such direction shall not be in conflict with any rule of
law or with this Agreement;
(2) the Trust Administrator may take any other action deemed
proper by the Trust Administrator which is not
inconsistent with such direction; and
(3) the Trust Administrator shall have the right to decline
to follow any such direction if the Trust Administrator
in good faith shall, by a Responsible Officer or Officers
of the Trust Administrator, determine that the proceeding
so directed would involve the Trust Administrator in
personal liability.
Section 7.02 Trust Administrator to Act; Appointment of Successor. (a) On and
after the time the Master Servicer receives a notice of termination pursuant
to Section 7.01 or on or after any resignation pursuant to Section 6.04 (i)
provided, that in the case of Section 6.04(i) the Opinion of Counsel required
by that Section shall have been received, the Trust Administrator shall be the
successor in all respects to the Master Servicer in its capacity as Master
Servicer under this Agreement and the transactions set forth or provided for
herein and shall be subject to all the responsibilities, duties and
liabilities relating thereto placed on the Master Servicer by the terms and
provisions hereof arising on and after its succession. As compensation
therefor, the Trust Administrator shall be entitled to such compensation as
the Master Servicer would have been entitled to hereunder if no such notice of
termination had been given. Notwithstanding the above, (i) if the Trust
Administrator is unwilling to act as successor Master Servicer or (ii) if the
Trust Administrator is legally unable so to act, the Trust Administrator shall
appoint or petition a court of competent jurisdiction to appoint, any
established housing and home finance institution, bank or other mortgage loan
or home equity loan Master Servicer having a net worth of not less than
$50,000,000 as the successor to the Master Servicer hereunder in the
assumption of all or any part of the responsibilities, duties or liabilities
of the Master Servicer hereunder; provided, that the appointment of any such
successor Master Servicer will not result in the qualification, reduction or
withdrawal of the ratings assigned to the Regular Certificates by the Rating
Agencies. Pending appointment of a successor to the Master Servicer hereunder,
unless the Trust Administrator is prohibited by law from so acting, the Trust
Administrator shall act in such capacity as hereinabove provided. In
connection with such appointment and assumption, the successor shall be
entitled to receive compensation out of payments on Mortgage Loans in an
amount equal to the compensation which the Master Servicer would otherwise
have received
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pursuant to Section 3.08 (or such lesser compensation as the Trust
Administrator and such successor shall agree). The appointment of a successor
Master Servicer shall not affect any liability of the predecessor Master
Servicer which may have arisen under this Agreement prior to its termination
as Master Servicer to pay any deductible under an insurance policy pursuant to
Section 3.05 or to indemnify the Trust Administrator pursuant to Section 6.06)
nor shall any successor Master Servicer be liable for any acts or omissions of
the predecessor Master Servicer or for any breach by such Master Servicer of
any of its representations or warranties contained herein or in any related
document or agreement. The Trust Administrator and such successor shall take
such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession.
(b) Any successor, including the Trust Administrator, to the Master
Servicer as Master Servicer shall during the term of its service
as Master Servicer (i) continue to service and administer the
Mortgage Loans for the benefit of Certificateholders, (ii)
maintain in force a policy or policies of insurance covering
errors and omissions in the performance of its obligations as
Master Servicer hereunder and a fidelity bond in respect of its
officers, employees and agents to the same extent as the Master
Servicer is so required pursuant to Section 3.06.
Section 7.03 Waiver of Defaults. Holders of Certificates evidencing Percentage
Interests aggregating not less than 51% of the Voting Rights may, on behalf of
all Certificateholders, waive any events permitting removal of the Master
Servicer as Master Servicer pursuant to this Article VIII, provided, however,
that the Certificateholders may not waive a default in making a required
distribution on a Certificate without the consent of the Holder of such
Certificate. Upon any waiver of a past default, such default shall cease to
exist and any Event of Default arising therefrom shall be deemed to have been
remedied for every purpose of this Agreement. No such waiver shall extend to
any subsequent or other default or impair any right consequent thereto except
to the extent expressly so waived. Notice of any such waiver shall be given by
the Trust Administrator to the Rating Agencies.
Section 7.04 Notification to Certificateholders. Upon any termination or
appointment of a successor to the Master Servicer pursuant to this Article VII
or Section 6.04, the Trust Administrator shall give prompt written notice
thereof to the Certificateholders at their respective addresses appearing in
the Certificate Register and each Rating Agency.
Article VIII.
The Trustee
Section 8.01 Duties of Trustee. The Trustee, prior to the occurrence of an
Event of Default and after the curing or waiver 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. If an Event of Default has
occurred (which has not been cured or waived) of which a Responsible Officer
of the Trustee has actual knowledge, the Trustee shall exercise such of the
rights and
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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.
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
conform to the requirements of this Agreement; provided, however, that the
Trustee shall not be responsible for the accuracy or content of any such
resolution, certificate, statement, opinion, report, document, order or other
instrument. If any such instrument is found not be in the form specified in
this Agreement, on its face, 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 Trust Administrator who will, at the expense of the
party required to furnish such instrument, which expense shall be reasonable
given the scope and nature of the action required, take such further action as
determined necessary by the Trust Administrator.
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 misconduct; provided, however, that:
(i) prior to the occurrence of an Event of Default of which a
Responsible Officer of the Trustee shall have actual
knowledge, and after the curing or waiver of all such Events
of Default which may have occurred, the duties and
obligations of the Trustee shall be determined solely by the
express provisions of this Agreement, the Trustee shall not
be liable except for the performance of such duties and
obligations as are specifically set forth in this Agreement,
no implied covenants or obligations shall be read into this
Agreement against the Trustee and, in the absence of bad
faith on the part of the Trustee, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Trustee and
conforming to the requirements of this Agreement;
(ii) the Trustee shall not be personally liable for an error of
judgment made in good faith by a Responsible Officer of the
Trustee, unless it shall be proved that the Trustee was
negligent in ascertaining or investigating the facts related
thereto;
(iii) the Trustee shall not be personally liable with respect to
any action taken, suffered or omitted to be taken by it in
good faith in accordance with the direction of the Holders
of Certificates evidencing Percentage Interests aggregating
not less than 51% of the Voting Rights 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; and
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(iv) the Trustee shall not be charged with knowledge of any
failure by the Master Servicer to comply with the
obligations of the Master Servicer referred to in clauses
(i) and (ii) of Section 7.01(a) or of an Event of Default
under Sections 7.01(a)(v), of an Assignment Event or of a
Deposit Event unless a Responsible Officer of the Trustee
obtains actual knowledge of such failure or event or the
Trustee receives written notice of such failure or event
from the Master Servicer or the Holders of Certificates
evidencing Percentage Interests aggregating not less than
51%.
The Trustee shall not be required to expend or risk its own funds or
otherwise incur financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the 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 Master Servicer under this Agreement.
Subject to the other provisions of this Agreement and without limiting
the generality of this Section, the Trustee shall have no duty (A) 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 from funds available in the Collection
Account or any other source or (B) to confirm or verify the contents of any
reports or certificates of the Master 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.
Section 8.02 Certain Matters Affecting the Trustee. (a) Except as otherwise
provided in Section 8.01:
(i) the Trustee may request and conclusively rely upon, and
shall be fully protected in acting or refraining from acting
upon, any resolution, Officer's Certificate, certificate of
auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal,
bond or other paper or document reasonably 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 of its selection and
any written advice of such counsel or any Opinion of Counsel
shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such advice
or Opinion of Counsel;
(iii) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Agreement, or to
institute, conduct or defend any litigation hereunder or in
relation hereto, at the request, order or direction of any
of the Certificateholders, pursuant to the provisions of
this Agreement, 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; the right of the Trustee to
perform
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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 any such act; nothing
contained herein shall, however, relieve the Trustee of the
obligations, upon the occurrence of an Event of Default
(which has not been cured or waived) of which a Responsible
Officer has actual knowledge, to exercise such of the rights
and powers vested in it by this Agreement, and to use the
same degree of care and skill in their exercise (unless it
is acting as Master Servicer) as a prudent person would
exercise or use under the circumstances in the conduct of
such person's own affairs;
(iv) 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;
(v) prior to the occurrence of an Event of Default and after the
curing or waiver of all Events of Default which may have
occurred, the Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, bond or
other paper or documents, unless requested in writing to do
so by Holders of Certificates evidencing Percentage
Interests aggregating not less than 51% of the Voting
Rights; provided, however, that if the payment within a
reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of
such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded
to it by the terms of this Agreement, the Trustee may
require reasonable indemnity against such cost, expense or
liability as a condition to such proceeding. Nothing in this
clause (v) shall derogate from the obligation of the Master
Servicer to observe any applicable law prohibiting
disclosure of information regarding the Mortgagors;
(vi) the Trustee shall have no responsibility for any act or
omission of the Trust Administrator, it being understood and
agreed that the Trustee and Trust Administrator are
independent contractors and not agents, partners or joint
venturers.
(vii) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or
by or through agents, attorneys, nominees or a custodian;
(viii) the Trustee shall not be required to give any bond or
surety in respect of the execution of the Trust created
hereby or the powers granted herein; and
(ix) The right of the Trustee to perform any discretionary act
enumerated in this Agreement shall not be construed as a
duty, and the Trustee shall not be answerable for other than
its negligence or willful misconduct in the performance of
such act.
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Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans. The
recitals contained herein and in the Certificates shall be taken as the
statements of the Seller and the Depositor, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this Agreement or of the
Certificates or of any Mortgage Loan or related document. The Trustee shall
not be accountable for the use or application by the Master Servicer or for
the use or application of any funds paid to the Master Servicer in respect of
the Mortgage Loans or deposited in or withdrawn from the Collection Account by
the Master Servicer. The Trustee shall at no time have any responsibility or
liability for or with respect to the legality, validity and enforceability of
any Mortgage or any Mortgage Loan, or the perfection and priority of any
Mortgage or the maintenance of any such perfection and priority, or for or
with respect to the sufficiency of the Trust or its ability to generate the
payments to be distributed to Certificateholders under this Agreement,
including, without limitation: the existence, condition and ownership of any
Mortgaged Property; the existence and enforceability of any hazard insurance
thereon; the validity of the assignment of any Mortgage Loan to the Trustee or
of any intervening assignment; the completeness of any Mortgage Loan; the
performance or enforcement of any Mortgage Loan; the compliance by the
Depositor, the Seller or the Master Servicer with any warranty or
representation made under this Agreement or in any related document or the
accuracy of any such warranty or representation prior to the Trustee's receipt
of notice or other discovery of any non-compliance therewith or any breach
thereof; any investment of monies by or at the direction of the Master
Servicer or any loss resulting therefrom, it being understood that the Trustee
shall remain responsible for any Trust property that it may hold in its
individual capacity; the acts or omissions of any of the Master Servicer, any
Master Servicer or any Mortgagor; any action of the Master Servicer, or any
Master Servicer taken in the name of the Trustee; the failure of the Master
Servicer or any Master Servicer to act or perform any duties required of it as
a third-party independent contractor of the Trustee hereunder; or any action
by the Trustee taken at the instruction of the Master Servicer. 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.
Section 8.04 Trustee May Own Certificates. The Trustee in its individual or
any other capacity may become the owner or pledgee of Certificates with the
same rights as it would have if it were not Trustee and may transact any
banking and trust business with the Seller, the Trust Administrator, the
Master Servicer or the Depositor and their Affiliates.
Section 8.05 Trust Administrator to Pay Trustee Fees. The Trust Administrator
shall pay to the Trustee on each Distribution Date from amounts on deposit in
the Distribution Account, an amount equal to the Trustee Fee.
Section 8.06 Eligibility Requirements for Trustee. The Trustee hereunder shall
at all times be a corporation duly incorporated and validly existing under the
laws of the United States of America or any state thereof, authorized under
such laws to exercise corporate trust powers, have a combined capital and
surplus of at least $50,000,000 and a minimum long-term debt rating of "Baa3"
by ▇▇▇▇▇'▇ and "BBB" by S&P, and be subject to supervision or examination by
federal
71
or state authority. If such corporation 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, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published. The principal office of the Trustee (other than the
initial Trustee) shall be in a state with respect to which an Opinion of
Counsel has been delivered to such Trustee at the time such Trustee is
appointed Trustee to the effect that the Trust will not be a taxable entity
under the laws of such state. In case at any time the Trustee shall cease to
be eligible in accordance with the provisions of this Section, the Trustee
shall resign immediately in the manner and with the effect specified in
Section 8.07.
Section 8.07 Resignation or Removal of Trustee. The Trustee may at any time
resign and be discharged from the trusts hereby created by giving written
notice thereof to the Depositor, the Trust Administrator, the Master Servicer
and each Rating Agency. Upon receiving such notice of resignation, the
Depositor shall promptly appoint a successor Trustee by written instrument,
copies of which instrument shall be delivered to the resigning Trustee and the
successor Trustee; provided, however, that any such successor Trustee shall be
subject to the prior written approval of the Master Servicer. If no successor
Trustee shall have been so appointed and having 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.
If at any time the Trustee shall cease to be eligible in accordance with
the provisions of Section 8.06 and shall fail to resign after written request
therefor by the Depositor or if at any time the Trustee shall be legally
unable to act, or shall be adjudged a bankrupt or insolvent, or a receiver of
the Trustee or of its property shall be appointed, or any public officer shall
take charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation, then the Depositor or
the Master Servicer may remove the Trustee. If the Depositor or the Master
Servicer removes the Trustee under the authority of the immediately preceding
sentence, the Depositor or the Master Servicer shall promptly appoint a
successor Trustee by written instrument, copies of which instrument shall be
delivered to the resigning Trustee and the successor Trustee. If the Master
Servicer fails to appoint a successor Trustee within 30 days after the giving
of such notice of removal to the Trustee, the Trustee being removed may
petition any court of competent jurisdiction for the appointment of a
successor Trustee.
Any resignation or removal of the Trustee and appointment of a successor
Trustee pursuant to any of the provisions of this Section shall not become
effective until acceptance of appointment by the successor Trustee as provided
in Section 8.08.
Section 8.08 Successor Trustee. Any successor Trustee appointed as provided in
Section 8.07 shall execute, acknowledge and deliver to the Depositor, the
Master Servicer and to its predecessor Trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor Trustee shall become effective and such successor
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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. The Depositor,
the Master Servicer and the predecessor Trustee shall execute and deliver such
instruments and do such other things as may reasonably be required for 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 unless at the time of such acceptance such successor Trustee shall be
eligible under the provisions of Section 8.06.
Upon acceptance of appointment by a successor Trustee as provided in
this Section, the Master Servicer shall mail notice of the succession of such
Trustee hereunder to all Holders of Certificates at their addresses as shown
in the Certificate Register and to each Rating Agency. If the Master Servicer
fails to mail such notice within 30 days after acceptance of appointment by
the successor Trustee, the successor Trustee shall cause such notice to be
mailed at the expense of the Master Servicer.
Section 8.09 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 substantially all of the
corporate trust business of the Trustee, shall be the successor of the Trustee
hereunder, provided such corporation shall be eligible under the provisions of
Section 8.06, without the execution or filing of any paper or any further act
on the part of any of the parties hereto.
Section 8.10 Appointment of Co-Trustee or Separate Trustee. Notwithstanding
any other provisions of this Agreement, at any time, for the purpose of
meeting any legal requirements of any jurisdiction in which any part of the
Trust or any Mortgaged Property may at the time be located, the Depositor 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, and to vest in such Person
or Persons, in such capacity and for the benefit of the Certificateholders,
such title to the Trust, or any part thereof, and, subject to the other
provisions of this Section, such powers, duties, obligations, rights and
trusts as the Master Servicer and the Trustee may consider necessary or
desirable. Any such co-trustee or separate trustee shall be subject to the
written approval of the Master Servicer. If the Master Servicer shall not have
joined in such appointment within 15 days after the receipt by it of a request
so to do, or, in the case an Event of Default shall have occurred and be
continuing, the Trustee alone shall have the power to make such appointment.
No co-trustee or separate trustee hereunder shall be required to meet the
terms of eligibility as a successor trustee under Section 8.06 and no notice
to Certificateholders of the appointment of any co-trustee or separate trustee
shall be required under Section 8.08. The Master Servicer shall be responsible
for the fees of any co-trustee or separate trustee appointed hereunder.
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Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) 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 (it being understood that such
separate trustee or co-trustee is not authorized to act
separately without the Trustee joining in such act), except
to the extent that under any law of any jurisdiction in
which any particular act or acts are to be performed
(whether as Trustee hereunder or as successor to the Master
Servicer hereunder), the Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such
rights, powers, duties and obligations (including the
holding of title to the Trust or any portion thereof in any
such jurisdiction) shall be exercised and performed singly
by such separate trustee or co-trustee, but solely at the
direction of the Trustee;
(ii) no trustee hereunder shall be held personally liable by
reason of any act or omission of any other trustee
hereunder; and
(iii) the Master Servicer and the Trustee acting jointly may at
any time accept the resignation of or remove any separate
trustee or co-trustee except that following the occurrence
of an Event of Default, the Trustee acting alone may accept
the resignation or remove any separate trustee or
co-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 VII. 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 and a copy thereof given to the Depositor and the Master Servicer.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its
estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor Trustee.
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Article IX.
The Trust Administrator
Section 9.01 Duties of Trust Administrator. The Trust Administrator, prior to
the occurrence of an Event of Default and after the curing or waiver 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, unless
it is acting as successor Master Servicer in which case it shall use, when
acting in such capacity, the same degree of care and skill required of the
Master Servicer hereunder.
The Trust Administrator, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments
furnished to the Trust Administrator which are specifically required to be
furnished pursuant to any provision of this Agreement, shall examine them to
determine whether they conform to the requirements of this Agreement;
provided, however, that the Trust Administrator shall not be responsible for
the accuracy or content of any such resolution, certificate, statement,
opinion, report, document, order or other instrument. If any such instrument
is found not be in the form specified in this Agreement, on its face, the
Trust Administrator shall take action as it deems appropriate to have the
instrument corrected, and if the instrument is not corrected to the Trust
Administrator's reasonable satisfaction, the Trust Administrator will provide
notice thereof to the Certificateholders and will, at the expense of the party
required to furnish such instrument, which expense shall be reasonable given
the scope and nature of the action required, take such further action as
directed by the Certificateholders.
No provision of this Agreement shall be construed to relieve the Trust
Administrator from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct; provided, however, that:
(i) prior to the occurrence of an Event of Default of which a
Responsible Officer of the Trust Administrator shall have
actual knowledge, and after the curing or waiver of all such
Events of Default which may have occurred, the duties and
obligations of the Trust Administrator shall be determined
solely by the express provisions of this Agreement, the
Trust Administrator 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 Trust Administrator and, in the absence of bad
faith on the part of the Trust Administrator, the Trust
Administrator 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
Trust Administrator and conforming to the requirements of
this Agreement;
(ii) the Trust Administrator shall not be personally liable for
an error of judgment made in good faith by a Responsible
Officer of the Trust Administrator, unless it shall be
proved
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that the Trust Administrator was negligent in ascertaining
or investigating the facts related thereto;
(iii) the Trust Administrator shall not be personally liable with
respect to any action taken, suffered or omitted to be taken
by it in good faith in accordance with the direction of the
Holders of Certificates evidencing Percentage Interests
aggregating not less than 51% of the Voting Rights relating
to the time, method and place of conducting any proceeding
for any remedy available to the Trust Administrator, or
exercising or omitting to exercise any trust or power
conferred upon the Trust Administrator, under this
Agreement; and
(iv) the Trust Administrator shall not be charged with knowledge
of any failure by the Master Servicer to comply with the
obligations of the Master Servicer referred to in clauses
(i) and (ii) of Section 7.01(a) or of an Event of Default
under Sections 7.01(v) or (vi), of an Assignment Event or of
a Deposit Event unless a Responsible Officer of the Trust
Administrator obtains actual knowledge of such failure or
event or the Trust Administrator receives written notice of
such failure or event from the Master Servicer or the
Holders of Certificates evidencing Percentage Interests
aggregating not less than 51% of the Voting Rights.
The Trust Administrator shall not be required to expend or risk its own
funds or otherwise incur financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers, if there
is reasonable ground for believing that the 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 Trust Administrator to perform, or be responsible for the manner
of performance of, any of the obligations of the Master Servicer under this
Agreement, except during such time, if any, as the Trust Administrator shall
be the successor to, and be vested with the rights, duties, powers and
privileges of, the Master Servicer in accordance with the terms of this
Agreement.
Subject to the other provisions of this Agreement and without limiting
the generality of this Section, the Trust Administrator shall have no duty (A)
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 from funds available in
the Collection Account or any other source or (B) to confirm or verify the
contents of any reports or certificates of the Master Servicer delivered to
the Trust Administrator pursuant to this Agreement believed by the Trust
Administrator to be genuine and to have been signed or presented by the proper
party or parties.
Section 9.02 Certain Matters Affecting the Trust Administrator. (a) Except as
otherwise provided in Section 9.01:
(i) the Trust Administrator may request and conclusively rely
upon, and shall be fully protected in acting or refraining
from acting upon, any resolution, Officer's Certificate,
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certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent,
order, appraisal, bond or other paper or document reasonably
believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(ii) the Trust Administrator may consult with counsel of its
selection and any written advice of such counsel or any
Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken or suffered or
omitted by it hereunder in good faith and in accordance with
such advice or Opinion of Counsel;
(iii) the Trust Administrator shall be under no obligation to
exercise any of the rights or powers vested in it by this
Agreement, or to institute, conduct or defend any litigation
hereunder or in relation hereto, at the request, order or
direction of any of the Certificateholders, pursuant to the
provisions of this Agreement, unless such Certificateholders
shall have offered to the Trust Administrator reasonable
security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby; the
right of the Trust Administrator to perform any
discretionary act enumerated in this Agreement shall not be
construed as a duty, and the Trust Administrator shall not
be answerable for other than its negligence or willful
misconduct in the performance of any such act; nothing
contained herein shall, however, relieve the Trust
Administrator of the obligations, upon the occurrence of an
Event of Default (which has not been cured or waived) of
which a Responsible Officer has actual knowledge, to
exercise such of the rights and powers vested in it by this
Agreement;
(iv) the Trust Administrator 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;
(v) prior to the occurrence of an Event of Default and after the
curing or waiver of all Events of Default which may have
occurred, the Trust Administrator shall not be bound to make
any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, bond or
other paper or documents, unless requested in writing to do
so by Holders of Certificates evidencing Percentage
Interests aggregating not less than 51% of the Voting
Rights; provided, however, that if the payment within a
reasonable time to the Trust Administrator of the costs,
expenses or liabilities likely to be incurred by it in the
making of such investigation is, in the opinion of the Trust
Administrator, not reasonably assured to the Trust
Administrator by the security afforded to it by the terms of
this Agreement, the Trust Administrator may require
reasonable indemnity against such cost, expense or liability
as a condition to such proceeding. Nothing in this clause
(v) shall derogate from the obligation of the Master
Servicer to observe any applicable law prohibiting
disclosure of information regarding the Mortgagors;
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(vi) the Trust Administrator shall not be accountable, shall have
no liability and makes no representation as to any acts or
omissions hereunder of the Trustee or the Master Servicer
until such time as the Trust Administrator may be required
to act as Master Servicer pursuant to Section 7.02;
(vii) the Trust Administrator may execute any of the trusts or
powers hereunder or perform any duties hereunder either
directly or by or through agents, attorneys, nominees or a
custodian;
(viii) the Trust Administrator shall not be required to give any
bond or surety in respect of the execution of the Trust
created hereby or the powers granted herein; and (ix) The
right of the Trust Administrator to perform any
discretionary act enumerated in this Agreement shall not be
construed as a duty, and the Trust Administrator shall not
be answerable for other than its negligence or willful
misconduct in the performance of such act.
Section 9.03 Trust Administrator Not Liable for Certificates or Mortgage
Loans. The recitals contained herein and in the Certificates (other than the
authentication of the Trust Administrator on the Certificates) shall be taken
as the statements of the Seller and the Depositor, and the Trust Administrator
assumes no responsibility for the correctness of the same. The Trust
Administrator makes no representations as to the validity or sufficiency of
this Agreement or of the Certificates (other than the signature and
authentication of the Trust Administrator on the Certificates) or of any
Mortgage Loan or related document. The Trust Administrator shall not be
accountable for the use or application by the Master Servicer or for the use
or application of any funds paid to the Master Servicer in respect of the
Mortgage Loans or deposited in or withdrawn from the Collection Account by the
Master Servicer. The Trust Administrator shall at no time have any
responsibility or liability for or with respect to the legality, validity and
enforceability of any Mortgage or any Mortgage Loan, or the perfection and
priority of any Mortgage or the maintenance of any such perfection and
priority, or for or with respect to the sufficiency of the Trust or its
ability to generate the payments to be distributed to Certificateholders under
this Agreement, including, without limitation: the existence, condition and
ownership of any Mortgaged Property; the existence and enforceability of any
hazard insurance thereon (other than the Trust Administrator acting as Master
Servicer if the Trust Administrator shall assume the duties of the Master
Servicer pursuant to Section 7.02); the validity of the assignment of any
Mortgage Loan to the Trust Administrator or of any intervening assignment; the
completeness of any Mortgage Loan; the performance or enforcement of any
Mortgage Loan (other than the Trust Administrator acting as Master Servicer if
the Trust Administrator shall assume the duties of the Master Servicer
pursuant to Section 7.02); the compliance by the Depositor, the Seller or the
Master Servicer with any warranty or representation made under this Agreement
or in any related document or the accuracy of any such warranty or
representation prior to the Trust Administrator's receipt of notice or other
discovery of any non-compliance therewith or any breach thereof; any
investment of monies by or at the direction of the Master Servicer or any loss
resulting therefrom, it being understood that the Trust Administrator shall
remain responsible for
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any Trust property that it may hold in its individual capacity; the acts or
omissions of any of the Master Servicer (other than the Trust Administrator as
Master Servicer if the Trust Administrator shall assume the duties of the
Master Servicer pursuant to Section 7.02), any Master Servicer or any
Mortgagor; any action of the Master Servicer (other than if the Trust
Administrator shall assume the duties of the Master Servicer pursuant to
Section 7.02), or any Master Servicer taken in the name of the Trust
Administrator; the failure of the Master Servicer or any Master Servicer to
act or perform any duties required of it as a third-party independent
contractor of the Trust Administrator hereunder; or any action by the Trust
Administrator taken at the instruction of the Master Servicer (other than if
the Trust Administrator shall assume the duties of the Master Servicer
pursuant to Section 7.02); provided, however, that the foregoing shall not
relieve the Trust Administrator of its obligation to perform its duties under
this Agreement, including, without limitation, the Trust Administrator's duty
to review the Mortgage File pursuant to Section 2.01. The Trust Administrator
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
(unless the Trust Administrator shall have become the successor Master
Servicer).
Section 9.04 Trust Administrator May Own Certificates. The Trust Administrator
in its individual or any other capacity may become the owner or pledgee of
Certificates with the same rights as it would have if it were not Trust
Administrator and may transact any banking and trust business with the Seller,
the Trustee, the Master Servicer or the Depositor and their Affiliates.
Section 9.05 Trust Administrator Fees. The Trust Administrator shall pay to
itself on each Distribution Date from amounts on deposit in the Distribution
Account, an amount equal to the Trust Administrator Fee.
Section 9.06 Eligibility Requirements for Trust Administrator. The Trust
Administrator hereunder shall at all times be a corporation duly incorporated
and validly existing under the laws of the United States of America or any
state thereof, authorized under such laws to exercise corporate trust powers,
have a combined capital and surplus of at least $50,000,000 and a minimum
long-term debt rating of "Baa3" by ▇▇▇▇▇'▇ and "BBB" by S&P, and be subject to
supervision or examination by federal or state authority. If such corporation
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, the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published. The principal office of the
Trust Administrator (other than the initial Trust Administrator) shall be in a
state with respect to which an Opinion of Counsel has been delivered to such
Trust Administrator at the time such Trust Administrator is appointed Trust
Administrator to the effect that the Trust will not be a taxable entity under
the laws of such state. In case at any time the Trust Administrator shall
cease to be eligible in accordance with the provisions of this Section, the
Trust Administrator shall resign immediately in the manner and with the effect
specified in Section 9.07.
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Section 9.07 Resignation or Removal of Trust Administrator. The Trust
Administrator may at any time resign and be discharged from the trusts hereby
created by giving written notice thereof to the Depositor, the Trustee, the
Master Servicer and each Rating Agency. Upon receiving such notice of
resignation, the Depositor shall promptly appoint a successor Trust
Administrator by written instrument, copies of which instrument shall be
delivered to the resigning Trust Administrator and the successor Trust
Administrator; provided, however, that any such successor Trust Administrator
shall be subject to the prior written approval of the Master Servicer. If no
successor Trust Administrator shall have been so appointed and having accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning Trust Administrator may petition any court of competent jurisdiction
for the appointment of a successor Trust Administrator.
If at any time the Trust Administrator shall cease to be eligible in
accordance with the provisions of Section 9.06 and shall fail to resign after
written request therefor by the Depositor or if at any time the Trust
Administrator shall be legally unable to act, or shall be adjudged a bankrupt
or insolvent, or a receiver of the Trust Administrator or of its property
shall be appointed, or any public officer shall take charge or control of the
Trust Administrator or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then the Depositor or the Master
Servicer may remove the Trust Administrator. If the Depositor or the Master
Servicer removes the Trust Administrator under the authority of the
immediately preceding sentence, the Depositor or the Master Servicer shall
promptly appoint a successor Trust Administrator by written instrument, copies
of which instrument shall be delivered to the resigning Trust Administrator
and the successor Trust Administrator. If the Master Servicer fails to appoint
a successor Trust Administrator within 30 days after the giving of such notice
of removal to the Trust Administrator, the Trust Administrator being removed
may petition any court of competent jurisdiction for the appointment of a
successor Trust Administrator.
Any resignation or removal of the Trust Administrator and appointment of
a successor Trust Administrator pursuant to any of the provisions of this
Section shall not become effective until acceptance of appointment by the
successor Trust Administrator as provided in Section 9.08.
Section 9.08 Successor Trust Administrator. Any successor Trust Administrator
appointed as provided in Section 9.07 shall execute, acknowledge and deliver
to the Depositor, the Master Servicer and to its predecessor Trust
Administrator an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the predecessor Trust Administrator
shall become effective and such successor Trust Administrator, 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 Trust Administrator. The Depositor, the
Master Servicer and the predecessor Trust Administrator shall execute and
deliver such instruments and do such other things as may reasonably be
required for fully and certainly vesting and confirming in the successor Trust
Administrator all such rights, powers, duties and obligations.
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No successor Trust Administrator shall accept appointment as provided in
this Section unless at the time of such acceptance such successor Trust
Administrator shall be eligible under the provisions of Section 9.06.
Upon acceptance of appointment by a successor Trust Administrator as
provided in this Section, the Master Servicer shall mail notice of the
succession of such Trust Administrator hereunder to all Holders of
Certificates at their addresses as shown in the Certificate Register and to
each Rating Agency. If the Master Servicer fails to mail such notice within 30
days after acceptance of appointment by the successor Trust Administrator, the
successor Trust Administrator shall cause such notice to be mailed at the
expense of the Master Servicer.
Section 9.09 Merger or Consolidation of Trust Administrator. Any Person into
which the Trust Administrator 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 Trust Administrator shall be a party, or any Person
succeeding to substantially all of the corporate trust business of the Trust
Administrator, shall be the successor of the Trust Administrator hereunder,
provided such corporation shall be eligible under the provisions of Section
9.06, without the execution or filing of any paper or any further act on the
part of any of the parties hereto.
Section 9.10 Appointment of Co-Trust Administrator or Separate Trust
Administrator. Notwithstanding any other provisions of this Agreement, at any
time, for the purpose of meeting any legal requirements of any jurisdiction in
which any part of the Trust or any Mortgaged Property may at the time be
located, the Depositor and the Trust Administrator acting jointly shall have
the power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trust Administrator to act as co-trust administrator
or co-trust administrators, jointly with the Trust Administrator, or separate
trust administrator or separate trust administrators, of all or any part of
the Trust, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders, such title to the Trust, or any part
thereof, and, subject to the other provisions of this Section, such powers,
duties, obligations, rights and trusts as the Master Servicer and the Trust
Administrator may consider necessary or desirable. Any such co-trust
administrator or separate trust administrator shall be subject to the written
approval of the Master Servicer. If the Master Servicer shall not have joined
in such appointment within 15 days after the receipt by it of a request so to
do, or, in the case an Event of Default shall have occurred and be continuing,
the Trust Administrator alone shall have the power to make such appointment.
No co-Trust Administrator or separate trust administrator hereunder shall be
required to meet the terms of eligibility as a successor trust administrator
under Section 9.06 and no notice to Certificateholders of the appointment of
any co-trust administrator or separate trust administrator shall be required
under Section 9.08. The Master Servicer shall be responsible for the fees of
any co-trust administrator or separate trust administrator appointed
hereunder.
Every separate trustee and co-trust administrator shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
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(i) all rights, powers, duties and obligations conferred or
imposed upon the Trust Administrator shall be conferred or
imposed upon and exercised or performed by the Trust
Administrator and such separate trust administrator or
co-trust administrator jointly (it being understood that
such separate trust administrator or co-trust administrator
is not authorized to act separately without the Trust
Administrator joining in such act), except to the extent
that under any law of any jurisdiction in which any
particular act or acts are to be performed (whether as Trust
Administrator hereunder or as successor to the Master
Servicer hereunder), the Trust Administrator 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 or any portion
thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trust administrator or
co-trust administrator, but solely at the direction of the
Trust Administrator;
(ii) no trust administrator hereunder shall be held personally
liable by reason of any act or omission of any other trust
administrator hereunder; and
(iii) the Master Servicer and the Trust Administrator acting
jointly may at any time accept the resignation of or remove
any separate trust administrator or co-trust administrator
except that following the occurrence of an Event of Default,
the Trust Administrator acting alone may accept the
resignation or remove any separate trust administrator or
co-trust administrator.
Any notice, request or other writing given to the Trust Administrator
shall be deemed to have been given to each of the then separate trust
administrators and co-trust administrators, as effectively as if given to each
of them. Every instrument appointing any separate trust administrator or
co-trust administrator shall refer to this Agreement and the conditions of
this Article IX. Each separate trust administrator and co-trust administrator,
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 Trust Administrator 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 Trust Administrator. Every such instrument shall
be filed with the Trust Administrator and a copy thereof given to the
Depositor and the Master Servicer.
Any separate trust administrator or co-trust administrator may, at any
time, constitute the Trust Administrator, its agent or attorney-in-fact, with
full power and authority, to the extent not prohibited by law, to do any
lawful act under or in respect of this Agreement on its behalf and in its
name. If any separate trust administrator or co-trust administrator 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
Trust Administrator, to the extent permitted by law, without the appointment
of a new or successor Trust Administrator.
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Section 9.11 Limitation of Liability. The Certificates are executed by the
Trust Administrator, not in its individual capacity but solely as Trust
Administrator of the Trust, in the exercise of the powers and authority
conferred and vested in it by this Agreement. Each of the undertakings and
agreements made on the part of the Trust Administrator in the Certificates is
made and intended not as a personal undertaking or agreement by the Trust
Administrator but is made and intended for the purpose of binding only the
Trust.
Section 9.12 Trust Administrator May Enforce Claims Without Possession of
Certificates; Inspection. (a) All rights of action and claims under this
Agreement or the Certificates may be prosecuted and enforced by the Trust
Administrator without the possession of any of the Certificates or the
production thereof in any proceeding relating thereto, and such proceeding
instituted by the Trust Administrator shall be brought in its own name or in
its capacity as Trust Administrator. Any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses and
disbursements of the Trust Administrator, its agents and counsel, be for the
ratable benefit of the Certificateholders in respect of which such judgment
has been recovered.
(b) The Trust Administrator shall afford the Seller, the Depositor,
the Trustee the Master Servicer and each Certificateholder upon
reasonable notice during normal business hours, access to all
records maintained by the Trust Administrator in respect of its
duties hereunder and access to officers of the Trust Administrator
responsible for performing such duties. Upon request, the Trust
Administrator shall furnish the Depositor, the Master Servicer,
the Trustee and any requesting Certificateholder with its most
recent financial statements. The Trust Administrator shall
cooperate fully with the Seller, the Master Servicer, the
Depositor and such Certificateholder and shall make available to
the Seller, the Master Servicer, the Depositor and such
Certificateholder for review and copying, at such party's sole
cost and expense, such books, documents or records as may be
requested with respect to the Trust Administrator's duties
hereunder. The Seller, the Depositor, the Master Servicer, the
Trustee and the Certificateholders shall not have any
responsibility or liability for any action or failure to act by
the Trust Administrator and are not obligated to supervise the
performance of the Trust Administrator under this Agreement or
otherwise.
Section 9.13 Reports to the Commission. Following the filing of Form 15 as set
forth in Section 6.07, the Trust Administrator will submit a certificate
addressed to an officer of the Depositor certifying that all filings under the
Exchange Act have been made and shall attach a copy of acceptance slips for
such filings. On the Closing Date, the Depositor shall provide the Trust
Administrator with a letter at closing, substantially in the form attached
hereto as Exhibit G, instructing the Trust Administrator, as filing agent, to
comply with the reporting obligations for the Trust under the Exchange Act.
Section 9.14 Tax Matters. (A) It is intended that the assets with respect to
which the REMIC election pertaining to the Trust is to be made, as set forth
in the Preliminary Statement, shall constitute, and that the conduct of
matters relating to such assets shall be such as to qualify such
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assets as, a "real estate mortgage investment conduit" as defined in and in
accordance with the REMIC Provisions. In furtherance of such intention, the
Master Servicer covenants and agrees that it shall act as agent (and the
Master Servicer is hereby appointed to act as agent) on behalf of the REMIC
and that in such capacity it shall: (a) prepare and file, or cause to be
prepared and filed, in a timely manner, a U.S. Real Estate Mortgage Investment
Conduit Income Tax Return (Form 1066 or any successor form adopted by the
Internal Revenue Service) and prepare and file or cause to be prepared and
filed with the Internal Revenue Service and applicable state or local tax
authorities, income tax or information returns for each taxable year with
respect to the REMIC, containing such information and at the times and in the
manner as may be required by the Code or state or local tax laws, regulations,
or rules, and furnish or cause to be furnished to the Holders of the Class R
Certificates, the schedules, statements or information at such times and in
such manner as may be required thereby; (b) within thirty days of the Closing
Date, furnish or cause to be furnished to the Internal Revenue Service, on
Form 8811 or as otherwise may be required by the Code, the name, title,
address, and telephone number of the person that the holders of the
Certificates may contact for tax information relating thereto, together with
such additional information as may be required by such Form, and update such
information at the time or times in the manner required by the Code; (c) make
or cause to be made an election that such assets be treated as a REMIC on the
federal tax return for its first taxable year (and, if necessary, under
applicable state law); (d) provide information necessary for the computation
of tax imposed on the transfer of a Class R Certificate to a Person that is
not a Permitted Transferee, or an agent (including a broker, nominee or other
middleman) of a non-Permitted Transferee, or a pass-through entity in which a
non-Permitted Transferee is the record holder of an interest (the reasonable
cost of computing and furnishing such information may be charged to the Person
liable for such tax); (e) to the extent that they are under its control,
conduct matters relating to such assets at all times that any Certificates are
outstanding so as to maintain the status as a REMIC under the REMIC
Provisions; (f) not knowingly or intentionally take any action or omit to take
any action that would cause the termination of the REMIC status; (g) maintain
records relating to the REMIC, including but not limited to the income,
expenses, assets and liabilities thereof and the fair market value and
adjusted basis of the assets determined at such intervals as may be required
by the Code, as may be necessary to prepare the foregoing returns, schedules,
statements or information; and (h) as and when necessary and appropriate,
represent the REMIC in any administrative or judicial proceedings relating to
an examination or audit by any governmental taxing authority, request an
administrative adjustment as to any taxable year of the REMIC, enter into
settlement agreements with any governmental taxing agency, extend any statute
of limitations relating to any tax item of the REMIC, and otherwise act on
behalf of the REMIC in relation to any tax matter or controversy involving it.
(B) The Trust Administrator covenants and agrees that it shall (a)
prepare and forward, or cause to be prepared and forwarded, to the
Certificateholders and to the Internal Revenue Service and, if necessary,
state tax authorities, all information returns with respect to the Holders of
the Regular Certificates (including, but not limited to Form 1099-INT) and
reports as and when required to be provided to them in accordance with the
REMIC Provisions, including without limitation, the calculation of any
original issue discount using the prepayment assumption supplied pursuant to
the next paragraph, (b) provide information necessary for the
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computation of tax imposed on the transfer of a Class R Certificate to a
Person that is not a Permitted Transferee, or an agent (including a broker,
nominee or other middleman) of a non-Permitted Transferee, or a pass-through
entity in which a non-Permitted Transferee is the record holder of an interest
(the reasonable cost of computing and furnishing such information may be
charged to the Person liable for such tax); (c) to the extent that they are
under its control, conduct matters relating to such assets at all times that
any Certificates are outstanding so as to maintain the status as a REMIC under
the REMIC Provisions; (d) not knowingly or intentionally take any action or
omit to take any action that would cause the termination of the REMIC status;
(e) pay from funds available from the Trust the amount of any federal or state
tax, including prohibited transaction taxes, imposed on the REMIC prior to its
termination when and as the same shall be due and payable (but such obligation
shall not prevent the Master Servicer or Trust Administrator or any other
appropriate Person from contesting any such tax in appropriate proceedings and
shall not prevent the Master Servicer or Trust Administrator from withholding
payment of such tax, if permitted by law, pending the outcome of such
proceedings); (f) ensure that federal, state or local income tax or
information returns shall be signed by the Trust Administrator or such other
person as may be required to sign such returns by the Code or state or local
laws, regulations or rules; (g) maintain records relating to the REMIC,
including but not limited to the income, expenses, assets and liabilities
thereof and the fair market value and adjusted basis of the assets determined
at such intervals as may be required by the Code, as may be necessary to
prepare the foregoing returns, schedules, statements or information; (h) when
necessary and appropriate, assist the Master Servicer in representing the
REMIC in any administrative or judicial proceedings relating to an examination
or audit by any governmental taxing authority, request an administrative
adjustment as to any taxable year of the REMIC, enter into settlement
agreements with any governmental taxing agency, extend any statute of
limitations relating to any tax item of the REMIC, and otherwise act on behalf
of the REMIC in relation to any tax matter or controversy involving it; and
(i) monitor the REMIC to avoid prohibited transactions, as defined in Section
860F of the Code, and avoid transfers to disqualified organizations, as
defined in Section 860 E(e)(5) of the Code.
(C) In order to enable the Trust Administrator or Master Servicer to
perform its duties as set forth herein, the Depositor shall provide, or cause
to be provided, to the Trust Administrator or Master Servicer within ten (10)
days after the Closing Date all information or data that the Trust
Administrator or Master Servicer requests in writing and 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 of the Certificates and the Mortgage
Loans. Thereafter, the Depositor shall provide to the Trust Administrator or
Master Servicer promptly upon written request therefor, any such additional
information or data that the Trust Administrator or Master Servicer may, from
time to time, reasonably request in order to enable the Trust Administrator or
Master Servicer to perform its duties as set forth herein. The Depositor
hereby indemnifies the Trust Administrator or Master Servicer for any losses,
liabilities, damages, claims or expenses of the Trust Administrator or Master
Servicer arising from any errors or miscalculations of the Trust Administrator
or Master
85
Servicer that result from any failure of the Depositor to provide, or to cause
to be provided, accurate information or data to the Trust Administrator or
Master Servicer on a timely basis.
(D) In the event that any tax is imposed on "prohibited transactions" of
the REMIC as defined in Section 860F(a)(2) of the Code, on the "net income
from foreclosure property" of the REMIC as defined in Section 860G(c) of the
Code, on any contribution to the REMIC after the Startup Day pursuant to
Section 860G(d) of the Code, or any other tax is imposed, if not paid as
otherwise provided for herein, such tax shall be paid by (i) the Trust
Administrator, if any such other tax arises out of or results from a breach by
the Trust Administrator of any of its obligations under this Agreement, (ii)
the Master Servicer, if such tax arises out of or results from a breach by the
Master Servicer or Seller of any of their obligations under this Agreement,
(iii) the Seller, if any such tax arises out of or results from the Seller's
obligation to repurchase a Mortgage Loan pursuant to this Agreement or (iv) in
all other cases, or in the event that the Trust Administrator, the Master
Servicer or the Seller fails to honor its obligations under the preceding
clauses (i),(ii) or (iii), any such tax will be paid with amounts otherwise to
be distributed to the Certificateholders.
Article X.
Termination
Section 10.01 Termination. (a) The respective obligations and responsibilities
of the Seller, the Master Servicer, the Depositor, the Trust Administrator and
the Trustee created hereby (other than the obligation of the Trust
Administrator to make certain payments to Certificateholders after the final
Distribution Date and the obligation of the Master Servicer to send certain
notices as hereinafter set forth and all other obligations which pursuant to
this Agreement survive the termination hereof) shall terminate upon notice to
the Trust Administrator by the Master Servicer of the earliest of (i) the
Distribution Date on which the aggregate Class Principal Balance of the
Regular Certificates has been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the optional
purchase by the Master Servicer of the Mortgage Loans as described below and
(iv) the Distribution Date in April 2034. Notwithstanding the foregoing, 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 ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, the late ambassador of the United States to the Court of St. James's,
living on the date hereof.
The Master Servicer may, at its option, terminate this Agreement on any
date on which the Pool Principal Balance is less than 10% of the Cut-Off Date
Pool Principal Balance, by purchasing, on the next succeeding Distribution
Date, all of the outstanding Mortgage Loans and REO Properties at a price
equal to the sum of (i) 100% of the unpaid Principal Balance of each Mortgage
Loan (other than any Mortgage Loan as to which REO Property has been acquired
and whose fair market value is included pursuant to clause (ii) below) and
(ii) the fair market value of such REO Property (as determined by the Master
Servicer as of the close of business on the third Business Day next preceding
the date upon which notice of any such termination is
86
furnished to Certificateholders pursuant to Section 10.01(b) hereof), plus one
month's interest at the related Loan Rate on the Principal Balance of each
Mortgage Loan (including any Mortgage Loan as to which REO Property has been
acquired) (the "Termination Price").
In connection with any such purchase pursuant to the preceding
paragraph, the Master Servicer shall deposit in the Distribution Account all
amounts then on deposit in the Collection Account, which deposit shall be
deemed to have occurred immediately preceding such purchase.
Any such purchase shall be accomplished by deposit into the Distribution
Account on the day prior to such Distribution Date of the Termination Price.
(b) Notice of any termination, specifying the Distribution Date (which
shall be a date that would otherwise be a Distribution Date) upon
which the Certificateholders may surrender their Certificates to
the Trust Administrator for payment of the final distribution and
cancellation, shall be given promptly by the Trust Administrator
and by letter to Certificateholders mailed not earlier than the
15th day and not later than the 25th day of the month next
preceding the month of such final distribution specifying (i) the
Distribution Date upon which final distribution of the
Certificates will be made upon presentation and surrender of
Certificates at the office or agency of the Trust Administrator
therein designated, (ii) the amount of any such final distribution
and (iii) that the Record Date otherwise applicable to such
Distribution Date is not applicable, distributions being made only
upon presentation and surrender of the Certificates at the office
or agency of the Trust Administrator therein specified.
(c) Upon presentation and surrender of the Certificates, the Trust
Administrator shall cause to be distributed to the holders of
Certificates on the Distribution Date for such final distribution,
in proportion to the Percentage Interests of their respective
Certificates and to the extent that funds are available for such
purpose, an amount equal to the amount required to be distributed
to holders of Certificates pursuant to Section 4.01 for such
Distribution Date.
(d) In the event that all of the Certificateholders shall not
surrender their Certificates for final payment and cancellation on
or before such final Distribution Date, the Trust Administrator
shall promptly following such date cause all funds in the
Distribution Account not distributed in final distribution to
Certificateholders to be withdrawn therefrom and credited to the
remaining Certificateholders by depositing such funds in a
separate escrow account for the benefit of such Certificateholders
and the Master Servicer (if the Master Servicer has exercised its
right to purchase the Mortgage Loans) or the Trust Administrator
(in any other case) 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 nine months after the second notice all the
Certificates shall not have been surrendered for cancellation, the
Transferor shall be entitled to all unclaimed funds and other
assets which remain subject hereto and the
87
Trust Administrator upon transfer of such funds shall be
discharged of any responsibility for such funds and the
Certificateholders shall look to the Transferor for payment.
Section 10.02 Additional Termination Requirements.
In the event the Master Servicer exercises its purchase option as
provided in Section 10.01 the Trust shall be terminated in accordance with the
following additional requirements, unless the Trust Administrator has been
supplied with an Opinion of Counsel, at the expense of the Master Servicer, to
the effect that the failure to comply with the requirements of this Section
10.02 will not (i) result in the imposition of taxes on "prohibited
transactions" on the REMIC as defined in Section 860F of the Code, or (ii)
cause the Trust to fail to qualify as a REMIC at any time that any
Certificates are outstanding:
(1) Within 90 days prior to the final Distribution Date set
forth in the notice given by the Master Servicer under Section 10.01,
the Master Servicer shall prepare and adopt a plan of complete
liquidation within the meaning of Section 860F(a)(4) of the Code; and
(2) Within 90 days after the time of adoption of such a plan
of complete liquidation, the Trust Administrator shall sell all of the
assets of the Trust to the Master Servicer for cash in accordance with
Section 10.01.
The Master Servicer as agent for the REMIC hereby agrees to adopt and
sign such a plan of complete liquidation. By their acceptance of the
Certificates, the Holders thereof hereby authorize the Master Servicer to
prepare, sign and adopt a plan of complete liquidation.
Article XI.
Miscellaneous Provisions
Section 11.01 Amendment. This Agreement may be amended from time to time by
the Seller, the Master Servicer, the Depositor, the Trust Administrator and
the Trustee, in each case without the consent of any of the
Certificateholders, (i) to cure any ambiguity, (ii) to correct any defective
provisions or to correct or supplement any provisions herein that may be
inconsistent with any other provisions herein, (iii) to add to the duties of
the Master Servicer, (iv) to add any other provisions with respect to matters
or questions arising under this Agreement which shall not be inconsistent with
the provisions of this Agreement, or (v) to add or amend any provisions of
this Agreement as required by any Rating Agency or any other nationally
recognized statistical rating agency in order to maintain or improve any
rating of the Certificates (it being understood that, after obtaining the
ratings in effect on the Closing Date, neither the Trustee, the Trust
Administrator, the Seller, the Depositor nor the Master Servicer is obligated
to obtain, maintain or improve any such rating); provided, however, that as
evidenced by an Opinion of Counsel (a copy of which shall be delivered to the
Trust Administrator) (at the expense of the requesting party) in each case
such action shall not, adversely affect in any material respect the
88
interest of any Certificateholder; and provided, further, that the amendment
shall not be deemed to adversely affect in any material respect the interests
of the Certificateholders and no Opinion of Counsel to that effect shall be
required if the Person requesting the amendment obtains a letter from each
Rating Agency stating that the amendment would not result in the downgrading
or withdrawal of the respective ratings then assigned to the Certificates. The
Trustee, the Trust Administrator, the Depositor and the Master Servicer also
may at any time and from time to time amend this Agreement without the consent
of the Certificateholders to modify, eliminate or add to any of its provisions
to such extent as shall be necessary or helpful to maintain the qualification
of the Trust as a REMIC under the Code or to avoid or minimize the risk of the
imposition of any tax on the REMIC pursuant to the Code that would be a claim
at any time prior to the final redemption of the Certificates, provided that
the Trust Administrator has been provided an Opinion of Counsel, which opinion
shall be an expense of the party requesting such opinion but in any case shall
not be an expense of the Trust Administrator or the Trust, to the effect that
such action is necessary or helpful to maintain such qualification or to avoid
or minimize the risk of the imposition of such a tax.
This Agreement also may be amended from time to time by the Seller, the
Depositor, the Trustee, Trust Administrator and the Master Servicer, in each
case with the consent of the Holders of Certificates, evidencing Percentage
Interests aggregating not less than 51% in Percentage Interests of each Class
which is affected, for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Certificateholders; provided,
however, that no such amendment shall (i) reduce in any manner the amount of,
or delay the timing of, payments on the Certificates which are required to be
made on any Certificate without the consent of the Holder of such Certificate
or (ii) reduce the aforesaid percentage required to consent to any such
amendment, without the consent of the Holders of all Certificates then
outstanding.
Prior to the execution of any such amendment, the Trust Administrator
shall furnish written notification prepared by the Master Servicer of the
substance of such amendment to each Rating Agency. In addition, promptly after
the execution of any such amendment made with the consent of the
Certificateholders, the Trust Administrator shall furnish written notification
prepared by the Master Servicer of the substance of such amendment to each
Certificateholder.
It shall not be necessary for the consent of Certificateholders under
this Section to approve the particular form of any proposed amendment or
consent, 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 requirements as the Trust Administrator may prescribe.
Notwithstanding any contrary provision of this Agreement, the Trustee
and the Trust Administrator shall not consent to any amendment to this
Agreement unless it shall have first received an Opinion of Counsel, which
opinion shall not be an expense of the Trustee or the Trust Administrator or
the Trust, to the effect that such amendment will not cause the imposition
89
of any tax on the Trust or the Certificateholders or cause the Trust to fail to
qualify as a REMIC at any time that any Certificates are outstanding.
Section 11.02 Recordation of Agreement. This Agreement 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
Trust Administrator, but only upon written direction of Holders of
Certificates evidencing Percentage Interests aggregating at least 51%
accompanied by an Opinion of Counsel to the effect that such recordation
materially and beneficially affects the interests of Certificateholders. The
Certificateholders requesting such recordation shall bear all costs and
expenses of such recordation. The Trust Administrator shall have no obligation
to ascertain whether such recordation so affects the interests of the
Certificateholders.
Section 11.03 Limitation on Rights of Certificateholders. The death or
incapacity of any Certificateholder shall not operate to terminate this
Agreement or the Trust, nor entitle such Certificateholder's legal
representatives or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a partition or winding up of the
Trust, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.
No Certificateholder shall have any right to vote (except as provided in
Sections 7.01, 8.01, 8.02, 9.01, 9.02 and 11.01) or in any manner otherwise
control the operation and management of the Trust, or the obligations of the
parties hereto, nor shall anything herein set forth, or contained in the terms
of the Certificates, be construed so as to constitute the Certificateholders
from time to time as partners or members of an association; nor shall any
Certificateholder be under any liability to any third person by reason of any
action taken by the parties to this Agreement pursuant to any provision
hereof.
No Certificateholder shall have any right by virtue or by availing
itself of any provisions 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 Trust
Administrator a written notice of default and of the continuance thereof, as
hereinbefore provided, and unless also the Holders of Certificates evidencing
Percentage Interests aggregating not less than 51% of the Voting Rights shall
have made written request upon the Trust Administrator to institute such
action, suit or proceeding in its own name as Trust Administrator hereunder
and shall have offered to the Trust Administrator such reasonable indemnity as
it may require against the costs, expenses and liabilities to be incurred
therein or thereby, and the Trust Administrator, 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 Trust Administrator, that no one or more
Holders of Certificates shall have any right in any manner whatever by virtue
or by availing itself or themselves of any provisions of this Agreement to
affect, disturb or prejudice the rights of the Holders of any other of the
Certificates, or to obtain or seek to obtain priority over or preference to
any other such
90
Holder, or to enforce any right under this Agreement, except in the manner
herein provided and for the equal, ratable and common benefit of all
Certificateholders. For the protection and enforcement of the provisions of
this Section, each and every Certificateholder and the Trust Administrator
shall be entitled to such relief as can be given either at law or in equity.
Section 11.04 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
Section 11.05 Notices. (a) 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 mail, return receipt requested, to (a) in
the case of the Depositor, ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇,
Attention: ▇▇▇▇ ▇▇▇▇▇▇ (b) in the case of the Seller and the Master Servicer,
▇▇▇ ▇.▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Attn: Treasurer, (c) in the
case of the Trustee, to the Corporate Trust Office, (d) in the case of the
Trust Administrator, to the Corporate Trust Office, (e) in the case of
▇▇▇▇▇'▇, Home Mortgage Loan Monitoring Group, 4th Floor, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, and (f) in the case of S&P, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Residential Mortgage Group or, as to each party, at
such other address as shall be designated by such party in a written notice to
each other party. 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 so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given, whether or not the Certificateholder
receives such notice. Any notice or other document required to be delivered or
mailed by the Trust Administrator to any Rating Agency shall be given on a
best efforts basis and only as a matter of courtesy and accommodation and the
Trust Administrator shall have no liability for failure to deliver such notice
or document to any Rating Agency.
(b) Notice to the Rating Agencies. The Trust Administrator and the
Master Servicer shall each be obligated to use its best efforts
promptly to provide notice, at the expense of the Master Servicer,
to the Rating Agencies with respect to each of the following of
which a Responsible Officer of the Trust Administrator or Master
Servicer, as the case may be, has actual knowledge:
(i) Any material change or amendment to this Agreement;
(ii) The occurrence of any Event of Default that has not been
cured or waived;
(iii) The resignation or termination of the Master Servicer, the
Trust Administrator or the Trustee;
(iv) The final payment to Holders of the Certificates of any
Class; and
(v) Any change in the location of any Account.
91
(c) In addition, (i) the Trust Administrator shall promptly furnish to
each Rating Agency copies of the following:
(A) Each annual report to Certificateholders described in
Section 4.03; and
(B) Each Monthly Report described in Section 4.03.
Any such notice pursuant to this Section shall be in writing and shall
be deemed to have been duly given if personally delivered or mailed by first
class mail, postage prepaid, or by express delivery service to the addresses
specified above for each such Rating Agency.
Section 11.06 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.
Section 11.07 Assignment. Notwithstanding anything to the contrary contained
herein, except as provided in Sections 6.02, 6.04 and 6.05 (or 3.01), this
Agreement may not be assigned by the Depositor or the Master Servicer without
the prior written consent of Holders of the Certificates evidencing Percentage
Interests aggregating not less than 66-2/3% of the Voting Rights.
Section 11.08 Certificates Nonassessable and Fully Paid. The parties agree
that the Certificateholders shall not be personally liable for obligations of
the Trust, that the beneficial ownership interests represented by the
Certificates shall be nonassessable for any losses or expenses of the Trust or
for any reason whatsoever, and that the Certificates upon execution,
authentication and delivery thereof by the Trust Administrator pursuant to
Section 5.01 and 5.02 are and shall be deemed fully paid.
Section 11.09 Third-Party Beneficiaries. This Agreement will inure to the
benefit of and be binding upon the parties hereto, the Certificateholders, the
Certificate Owners and their respective successors and permitted assigns.
Except as otherwise provided in this Agreement, no other person will have any
right or obligation hereunder.
Section 11.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same
instrument.
Section 11.11 Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
92
IN WITNESS WHEREOF, the Seller, the Master Servicer, the Trust
Administrator, the Depositor and the Trustee have caused this Agreement to be
duly executed by their respective officers all as of the day and year first
above written.
BOND SECURITIZATION, L.L.C.,
as Depositor
By /s/ ▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
AMERICAN GENERAL FINANCE CORPORATION,
as Master Servicer
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President and Treasurer
SECOND STREET FUNDING CORPORATION,
as Seller
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President and Treasurer
U.S. Bank National Association,
as Trustee
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
93
BANK ONE, N.A.
as Trust Administrator
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
94
State of )
) ss.:
County of )
On the [ ]th day of [ ] before me, a notary public in and for the State of
______________, personally appeared ______________, known to me who, being by
me duly sworn, did depose and say that he is the _________________ of [ ], a [
], one of the parties that executed the foregoing instrument; that it was
signed by order of the Board of Directors of said company; and that he signed
his name thereto by like order.
______________________________
Notary Public
[Notarial Seal]
95
State of )
) ss.:
County of )
On the [ ]th day of [ ] before me, a notary public in and for the
State of ______________, personally appeared ______________, known to me who,
being by me duly sworn, did depose and say that he is the _________________ of
[ ], a [ ], one of the parties that executed the
foregoing instrument; that it was signed by order of the Board of Directors of
said company; and that he signed his name thereto by like order.
______________________________
Notary Public
[Notarial Seal]
96
State of )
) ss.:
County of )
On the [ ]th day of [ ] before me, a notary public in and for the
State of ______________, personally appeared ______________, known to me who,
being by me duly sworn, did depose and say that he is the _________________ of
[ ], a [ ], one of the parties that executed the
foregoing instrument; that it was signed by order of the Board of Directors of
said company; and that he signed his name thereto by like order.
______________________________
Notary Public
[Notarial Seal]
97
State of )
) ss.:
County of )
On the [ ]th day of [ ] before me, a notary public in and for the
State of ______________, personally appeared ______________, known to me who,
being by me duly sworn, did depose and say that he is the _________________ of
[ ], a [ ], one of the parties that executed the
foregoing instrument; that it was signed by order of the Board of Directors of
said company; and that he signed his name thereto by like order.
______________________________
Notary Public
[Notarial Seal]
▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
) ss.:
County of New York )
On the [ ]th day of [ ] before me, a notary public in and for the
State of New York, personally appeared ______________, known to me who, being
by me duly sworn, did depose and say that he is the _________________ of [ ],
a [New York] banking corporation, one of the parties that executed the
foregoing instrument; that it was signed by order of the Board of Directors of
said company; and that he signed his name thereto by like order.
______________________________
Notary Public
[Notarial Seal]
99
EXHIBIT A-1
FORM OF CLASS A CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986.
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUST
ADMINISTRATOR OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN 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.]
Certificate No. :
Cut-Off Date : May 1, 2003
First Distribution Date : June 25, 2003
Original Class Certificate Principal
Balance : $
Certificate Principal
Balance : $
Certificate Rate: : [__%]
CUSIP : []
Class : A
A-1-1
AMERICAN GENERAL MORTGAGE LOAN TRUST 2003-1
Asset-Backed Pass-Through Certificates, Series 2003-1
Class A
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to a Trust
consisting of closed-end fixed rate mortgage loans (the "Mortgage
Loans")
Bond Securitization, L.L.C., as Depositor
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Principal Balance of this
Certificate at any time may be less than the Certificate Principal Balance set
forth on the face hereof, as described herein. This Certificate does not
evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Seller, the Master Servicer, the Trust Administrator or the
Trustee referred to below or any of their respective affiliates. Neither this
Class A Certificate nor the Mortgage Loans are guaranteed or insured by any
governmental agency or instrumentality.
This certifies that [___________] is the registered owner of the
Percentage Interest evidenced by this Class A Certificate (obtained by
dividing the initial Certificate Principal Balance of this Certificate by the
Original Class Certificate Principal Balance) in certain monthly distributions
with respect to a Trust consisting primarily of the Mortgage Loans deposited
by Bond Securitization, L.L.C. (the "Depositor"). The Trust was created
pursuant to a Pooling and Servicing Agreement dated as of the Cut-Off Date
specified above (the "Agreement") among the Depositor, Second Street Funding
Corporation, as Seller (in such capacity, the "Seller"), American General
Finance Corporation, as Master Servicer (in such capacity, "Master Servicer"),
Bank One, N.A., as Trust Administrator (the "Trust Administrator") and U.S.
Bank National Association, as Trustee (the "Trustee"). To the extent not
defined herein, the capitalized terms used herein have the meanings assigned
in the Agreement. This Class A Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Class A Certificate by virtue of the acceptance hereof assents
and by which such Holder is bound.
Reference is hereby made to the further provisions of this Class A
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
This Class A Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized officer of the Trust Administrator.
A-1-2
IN WITNESS WHEREOF, the Trust Administrator has caused this
Certificate to be duly executed.
Dated: [ ]
BANK ONE, N.A.,
as Trust Administrator
By ________________________
This is one of the Class A Certificates
referenced in the within-mentioned Agreement
By ________________________________
Authorized Officer of
Bank One, N.A., as Trust Administrator
A-1-3
[Reverse of Class A Certificate]
AMERICAN GENERAL MORTGAGE LOAN TRUST 2003-1
Asset-Backed Pass-Through Certificates,
Series 2003-1
This Certificate is one of a duly authorized issue of Certificates
designated as American General Mortgage Loan Trust 2003-1, Asset-Backed
Pass-Through Certificates, Series 2003-1 (herein collectively called the
"Certificates"), and representing a beneficial ownership interest in the Trust
created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account
for payment hereunder and that the Trust Administrator is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee and the Trust Administrator.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business
on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to
be distributed to Holders of Certificates of the Class to which this
Certificate belongs on such Distribution Date pursuant to the Agreement. The
Record Date applicable to each Distribution Date and any Class of Certificates
other than the Class A-1 Certificates (other than the first Distribution
Date), is the last Business Day of the month immediately preceding the month
in which the related Distribution Date occurs. With respect to the first
Distribution Date and any Class of Certificates other than the Class A-1
Certificates, the Closing Date. With respect to each Distribution Date and the
Class A-1 Certificates the Record Date is the day prior to the related
Distribution Date.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or, upon the request of a Certificateholder owning Class
A Certificates having denominations aggregating at least $1,000,000
Certificate Principal Balance, by wire transfer or otherwise, as set forth in
the Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office or agency of the Trust Administrator specified in the notice to
Certificateholders of such final distribution.
A-1-4
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Seller, Trustee and the Trust
Administrator and the rights of the Certificateholders under the Agreement at
any time by the Depositor, the Seller, the Master Servicer, the Trust
Administrator and the Trustee with the consent of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected
by such amendment, as specified in the Agreement. 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 therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The 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 Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trust Administrator upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trust
Administrator in New York accompanied by a written instrument of transfer in
form satisfactory to the Trust Administrator and the Certificate Registrar
duly executed by the holder hereof or such holder's attorney duly authorized
in writing, and thereupon one or more new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage Interest
in the Trust will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trust Administrator may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
The Depositor, the Seller, the Master Servicer, the Trust Administrator
and the Trustee and any agent of the Depositor, the Seller, the Master
Servicer, the Trustee or the Trust Administrator may treat the Person in whose
name this Certificate is registered as the owner hereof for all purposes, and
neither the Depositor, the Trust Administrator nor any such agent shall be
affected by any notice to the contrary.
On any Distribution Date following the date at which the Pool Principal
Balance is less than 10% of the Cut-Off Date Pool Principal Balance, the
Master Servicer will have the option to repurchase, in whole, from the Trust
the Mortgage Loans and REO Properties at a purchase price determined as
provided in the Agreement. In the event that no such optional termination
occurs, the obligations and responsibilities created by the Agreement will
terminate upon the earliest of (i) the Distribution Date on which the
aggregate Class Principal Balance of the Regular Certificates has been reduced
to zero, (ii) the final payment or other liquidation of the last
A-1-5
Mortgage Loan in the Trust and (iii) the Distribution Date in April 2034. In
no event, however, will the trust created by the Agreement continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
living at the date of the Agreement of a certain person named in the
Agreement.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall
be deemed inconsistent with that meaning.
A-1-6
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________
________________________________________________________________________
________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust.
I (We) further direct the Trust Administrator to issue a new Certificate
of a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address: ________________________________________
________________________________________________________________________.
Dated: _____________
________________________________________________
Signature by or on behalf of assignor
A-1-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _______________________________________________
for the account of _____________________________________________________,
account number _________, or, if mailed by check, to____________________
________________________________________________________________________
Applicable statements should be mailed to_______________________________
________________________________________________________________________.
This information is provided by ________________________________________,
the assignee named above, or ___________________________________________,
as its agent.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF CLASS M CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE
OF 1986.
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUST
ADMINISTRATOR OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN 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.]
THIS CERTIFICATE IS SUBORDINATE TO ONE OR MORE OTHER CLASSES OF
CERTIFICATES AS AND TO THE EXTENT SET FORTH IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
Certificate No. : [ ]
Cut-Off Date : May 1, 2003
First Distribution Date : June 25, 2003
Original Certificate Principal
Balance : $
Certificate Principal
Balance : $
Certificate Rate: : [ ]%
CUSIP : [ ]
Class : M
A-2-1
AMERICAN GENERAL MORTGAGE LOAN TRUST 2003-1
Asset-Backed Pass-Through Certificates, Series 2003-1
Class M
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to a Trust
consisting of closed-end fixed rate mortgage loans (the "Mortgage
Loans")
Bond Securitization, L.L.C., as Depositor
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Principal Balance of this Class M
Certificate at any time may be less than the Certificate Principal Balance set
forth on the face hereof, as described herein. This Class M Certificate does
not evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Seller, the Master Servicer, the Trust Administrator or the
Trustee referred to below or any of their respective affiliates. Neither this
Class M Certificate nor the Mortgage Loans are guaranteed or insured by any
governmental agency or instrumentality.
This certifies that [____________] is the registered owner of the
Percentage Interest evidenced by this Class M Certificate (obtained by
dividing the initial Certificate Principal Balance of this Class M Certificate
by the Certificate Principal Balance) in certain monthly distributions with
respect to a Trust consisting primarily of the Mortgage Loans deposited by
Bond Securitization, L.L.C. (the "Depositor"). The Trust was created pursuant
to a Pooling and Servicing Agreement dated as of the Cut-Off Date specified
above (the "Agreement") among the Depositor, Second Street Funding
Corporation, as Seller (in such capacity, the "Seller"), American General
Finance Corporation, as Master Servicer (in such capacity, "Master Servicer"),
Bank One, N.A., as Trust Administrator (the "Trust Administrator") and U.S.
Bank National Association, as Trustee (the "Trustee"). To the extent not
defined herein, the capitalized terms used herein have the meanings assigned
in the Agreement. This Class M Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Class M Certificate by virtue of the acceptance hereof assents
and by which such Holder is bound.
Reference is hereby made to the further provisions of this Class M
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
This Class M Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized officer of the Trust Administrator.
A-2-2
IN WITNESS WHEREOF, the Trust Administrator has caused this
Certificate to be duly executed.
Dated: May 28, 2003
BANK ONE, N.A.,
as Trust Administrator
By ________________________
This is one of the Class M Certificates
referenced in the within-mentioned Agreement
By ________________________________
Authorized Officer of
Bank One, N.A., as Trust Administrator
A-2-3
[Reverse of Class M Certificate]
AMERICAN GENERAL MORTGAGE LOAN TRUST 2003-1
Asset-Backed Pass-Through Certificates,
Series 2003-1
This Certificate is one of a duly authorized issue of Certificates
designated as American General Mortgage Loan Trust 2003-1, Asset-Backed
Pass-Through Certificates, Series 2003-1 (herein collectively called the
"Certificates"), and representing a beneficial ownership interest in the Trust
created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account
for payment hereunder and that the Trust Administrator is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee and the Trust Administrator.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business
on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to
be distributed to Holders of Certificates of the Class to which this
Certificate belongs on such Distribution Date pursuant to the Agreement. The
Record Date applicable to each Distribution Date is the last Business Day of
the month preceding the month of such Distribution Date.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or, upon the request of a Certificateholder owning Class
M Certificates having denominations aggregating at least $1,000,000, by wire
transfer or otherwise, as set forth in the Agreement. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the office or agency of the Trust
Administrator specified in the notice to Certificateholders of such final
distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the Trust Administrator and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Trust Administrator and
the Trustee with the consent of Holders of the requisite percentage of the
A-2-4
Percentage Interests of each Class of Certificates affected by such amendment,
as specified in the Agreement. 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 therefor or in lieu hereof whether or not notation of
such consent is made upon this Certificate. The 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 Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trust Administrator upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trust
Administrator in New York accompanied by a written instrument of transfer in
form satisfactory to the Trust Administrator and the Certificate Registrar
duly executed by the holder hereof or such holder's attorney duly authorized
in writing, and thereupon one or more new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage Interest
in the Trust will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trust Administrator may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
The Depositor, the Seller, the Trust Administrator and the Trustee and
any agent of the Depositor or the Trust Administrator may treat the Person in
whose name this Certificate is registered as the owner hereof for all
purposes, and neither the Depositor, the Trust Administrator nor any such
agent shall be affected by any notice to the contrary.
On any Distribution Date following the date at which the Pool Principal
Balance is less than 10% of the Cut-Off Date Pool Principal Balance, the
Master Servicer will have the option to repurchase, in whole, from the Trust
the Mortgage Loans at a purchase price determined as provided in the
Agreement. In the event that no such optional termination occurs, the
obligations and responsibilities created by the Agreement will terminate upon
the earliest of (i) the Distribution Date on which the aggregate Class
Principal Balance of the Regular Certificates has been reduced to zero, (ii)
the final payment or other liquidation of the last Mortgage Loan in the Trust
and (iii) the Distribution Date in April 2034. In no event, however, will the
trust created by the Agreement continue beyond the expiration of 21 years from
the death of the last survivor of the descendants living at the date of the
Agreement of a certain person named in the Agreement.
A-2-5
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall
be deemed inconsistent with that meaning.
A-2-6
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________
________________________________________________________________________
________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust.
I (We) further direct the Trust Administrator to issue a new Certificate
of a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address: ________________________________________
________________________________________________________________________.
Dated: _____________
________________________________________________
Signature by or on behalf of assignor
A-2-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _______________________________________________
for the account of _____________________________________________________,
account number _________, or, if mailed by check, to____________________
________________________________________________________________________
Applicable statements should be mailed to_______________________________
________________________________________________________________________.
This information is provided by ________________________________________,
the assignee named above, or ___________________________________________,
as its agent.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF CLASS R CERTIFICATE
This is one of a series of pass-through certificates
(collectively, the "Certificates"), issued in multiple classes (each, a
"Class"), which series of Certificates evidences the entire beneficial
ownership interest in a trust (the "Trust") consisting primarily of certain
multifamily mortgage loans (the "Mortgage Loans"), such pool being formed and
sold by
AMERICAN GENERAL FINANCE CORPORATION AND
BOND SECURITIZATION L.L.C.
Certificate No. [ ] Initial percentage interest evidenced by
this Certificate as of the Closing Date: [ ]%
Cut-Off Date: May 1, 2003
CUSIP: [ ]
A-3-1
THIS CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR THE SECURITIES
LAWS OF ANY STATE. ANY RESALE, PLEDGE, TRANSFER OR OTHER DISPOSITION OF THIS
CERTIFICATE OR ANY INTEREST HEREIN WITHOUT SUCH REGISTRATION OR QUALIFICATION
MAY BE MADE ONLY IN A TRANSACTION WHICH DOES NOT REQUIRE SUCH REGISTRATION OR
QUALIFICATION AND WHICH IS IN ACCORDANCE WITH THE PROVISIONS OF SECTION
5.02(e) OF THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
IN THE EVENT THAT A TRANSFER OF THIS CERTIFICATE IS TO BE MADE,
EITHER (A)(1) THE TRUST ADMINISTRATOR SHALL REQUIRE A WRITTEN OPINION OF
COUNSEL ACCEPTABLE TO AND IN FORM AND SUBSTANCE SATISFACTORY TO THE TRUST
ADMINISTRATOR AND THE DEPOSITOR THAT SUCH TRANSFER MAY BE MADE PURSUANT TO AN
EXEMPTION, DESCRIBING THE APPLICABLE EXEMPTION AND THE BASIS THEREFOR, FROM
THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR IS BEING MADE
PURSUANT TO THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS, WHICH
OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUST ADMINISTRATOR, THE
DEPOSITOR OR THE MASTER SERVICER; PROVIDED THAT SUCH OPINION OF COUNSEL WILL
NOT BE REQUIRED IN CONNECTION WITH THE INITIAL TRANSFER OF ANY SUCH
CERTIFICATE BY THE DEPOSITOR OR ANY AFFILIATE THEREOF AND (2) THE TRUST
ADMINISTRATOR SHALL REQUIRE THE TRANSFEREE TO EXECUTE A REPRESENTATION LETTER
AND THE TRUST ADMINISTRATOR SHALL REQUIRE THE TRANSFEROR TO EXECUTE A
REPRESENTATION LETTER, EACH IN THE FORM SET FORTH IN THE POOLING AND SERVICING
AGREEMENT AND IN SUBSTANCE SATISFACTORY TO THE DEPOSITOR AND THE TRUST
ADMINISTRATOR CERTIFYING TO THE DEPOSITOR AND THE TRUST ADMINISTRATOR THE
FACTS SURROUNDING SUCH TRANSFER, WHICH REPRESENTATION LETTERS SHALL NOT BE AN
EXPENSE OF THE TRUST ADMINISTRATOR, THE DEPOSITOR OR THE MASTER SERVICER;
PROVIDED, HOWEVER, THAT SUCH REPRESENTATION LETTERS WILL NOT BE REQUIRED IN
CONNECTION WITH ANY TRANSFER OF ANY SUCH CERTIFICATE BY THE DEPOSITOR OR ANY
AFFILIATE THEREOF, OR (B) THE PROSPECTIVE TRANSFEREE OF SUCH A CERTIFICATE
SHALL BE REQUIRED TO PROVIDE THE TRUST ADMINISTRATOR, THE DEPOSITOR AND THE
MASTER SERVICER WITH AN INVESTMENT LETTER, WHICH INVESTMENT LETTER SHALL NOT
BE AN EXPENSE OF THE TRUST ADMINISTRATOR, THE DEPOSITOR OR THE MASTER
SERVICER, AND WHICH INVESTMENT LETTER STATES THAT, AMONG OTHER THINGS, SUCH
TRANSFEREE (1) 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 (2) IS AWARE THAT THE
PROPOSED TRANSFEROR INTENDS TO RELY ON THE EXEMPTION FROM REGISTRATION
REQUIREMENTS UNDER THE SECURITIES ACT
A-3-2
PROVIDED BY RULE 144A. THE HOLDER OF ANY SUCH CERTIFICATE DESIRING TO EFFECT
ANY SUCH TRANSFER, SALE, PLEDGE OR OTHER DISPOSITION SHALL, AND DOES HEREBY
AGREE TO, INDEMNIFY THE TRUST ADMINISTRATOR, THE DEPOSITOR, THE MASTER
SERVICER AND THE CERTIFICATE REGISTRAR AGAINST ANY LIABILITY THAT MAY RESULT
IF THE TRANSFER, SALE, PLEDGE OR OTHER DISPOSITION IS NOT SO EXEMPT OR IS NOT
MADE IN ACCORDANCE WITH SUCH FEDERAL AND STATE LAWS.
EACH PURCHASER OF THIS CERTIFICATE IS HEREBY NOTIFIED THAT THE
TRANSFEROR IS RELYING ON THE EXEMPTION FROM SUCH REGISTRATION PROVIDED BY RULE
144A.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE
UNLESS THE CERTIFICATE REGISTRAR HAS RECEIVED FROM THE PROSPECTIVE TRANSFEREE
ONE OF THE FOLLOWING: (A) A CERTIFICATION TO THE EFFECT THAT SUCH PROSPECTIVE
TRANSFEREE IS NOT A PLAN AND IS NOT DIRECTLY OR INDIRECTLY PURCHASING SUCH
CERTIFICATE OR INTEREST THEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS
TRUSTEE OF, OR WITH ASSETS OF A PLAN; OR (B) A CERTIFICATION OF FACTS AND AN
OPINION OF COUNSEL WHICH OTHERWISE ESTABLISH TO THE REASONABLE SATISFACTION OF
THE TRUSTEE AND THE TRUST ADMINISTRATOR THAT SUCH TRANSFER WILL NOT RESULT IN
A NON-EXEMPT PROHIBITED TRANSACTION UNDER ERISA, SECTION 4975 OF THE CODE OR
SIMILAR LAW AND WILL NOT SUBJECT THE TRUSTEE OR THE TRUST ADMINISTRATOR TO ANY
OBLIGATION IN ADDITION TO THESE UNDERTAKEN IN THE POOLING AND SERVICING
AGREEMENT.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST
IN THE DEPOSITOR, THE SELLER, THE MASTER SERVICER, THE TRUSTEE, THE TRUST
ADMINISTRATOR OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THE CERTIFICATES
NOR THE UNDERLYING MORTGAGE LOANS ARE INSURED OR GUARANTEED BY ANY
GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
THIS CERTIFICATE IS SUBORDINATE TO ONE OR MORE OTHER CLASSES OF
CERTIFICATES AS AND TO THE EXTENT SET FORTH IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
EVIDENCES THE "RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT"
(A "REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
OF THE INTERNAL REVENUE CODE. CONSEQUENTLY, THE TRANSFER OF THIS CERTIFICATE
IS ALSO SUBJECT TO THE ADDITIONAL TAX RELATED TRANSFER RESTRICTIONS DESCRIBED
HEREIN. IF ANY PERSON BECOMES THE REGISTERED HOLDER OF
A-3-3
THIS CERTIFICATE IN VIOLATION OF SUCH TRANSFER RESTRICTIONS, SUCH REGISTRATION
SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON
SHALL BE DEEMED NOT TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER OR
UNDER THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN, INCLUDING, BUT
NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE
MASTER SERVICER AND THE TRUST ADMINISTRATOR THAT (1) SUCH TRANSFEREE IS NOT
(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 IN
SECTION 511 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 HEREIN REFERRED TO AS A "DISQUALIFIED ORGANIZATION", (2) NO PURPOSE OF
SUCH TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX AND (3) SUCH
TRANSFEREE SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO THE FINANCIAL
CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE
CERTIFICATE REGISTER OR ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS
CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN AGENT OF A DISQUALIFIED
ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE ON 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 THIS
CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE SHALL BE DEEMED TO HAVE
CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH.
THE HOLDER OF THIS CERTIFICATE, BY ACCEPTANCE HEREOF, IS DEEMED TO
HAVE AGREED TO CONSENT TO ACT AS "TAX MATTERS PERSON" OF THE REMIC AND TO THE
APPOINTMENT OF THE TRUST ADMINISTRATOR AS ATTORNEY-IN-FACT AND AGENT FOR THE
TAX MATTERS PERSON OR AS OTHERWISE PROVIDED IN THE POOLING AND SERVICING
AGREEMENT TO PERFORM THE FUNCTIONS OF A "TAX MATTERS PARTNER" FOR PURPOSES OF
SUBCHAPTER C OF CHAPTER 63 OF SUBTITLE F OF THE CODE.
This certifies that [_____________] is the registered owner of the
interest evidenced by this Certificate (as specified above) in that certain
beneficial ownership interest in the Trust evidenced by all the Class R
Certificates. The Class R Certificateholder is not entitled
A-3-4
to interest or principal distributions. The Class R Certificateholders will be
entitled to receive the proceeds of the remaining assets of the REMIC, if any,
on the final Distribution Date for the Certificates, after distributions in
respect of any accrued but unpaid interest on the Certificates and after
distributions in reduction of principal balance have reduced the principal
balances of the Certificates to zero. It is not anticipated that there will be
any assets remaining in the REMIC or Trust on the final Distribution Date
following the distributions on the Regular Certificates. The Trust was
created, and the Mortgage Loans are to be serviced, pursuant to the Pooling
and Servicing Agreement, dated as of May 1, 2003 (the "Pooling and Servicing
Agreement"), by and among Bond Securitization, L.L.C., as Depositor, American
General Finance Corporation, as Master Servicer, Second Street Funding
Corporation, as Seller, U.S. Bank National Association, as Trustee, and Bank
One, N.A., as Trust Administrator. The Holder of this Certificate, by virtue
of the acceptance hereof, assents to the terms, provisions and conditions of
the Pooling and Servicing Agreement and is bound thereby. To the extent not
defined herein, capitalized terms used herein shall have the respective
meanings assigned thereto in the Pooling and Servicing Agreement.
This Certificate represents the "residual interest" in a "real
estate mortgage investment conduit," as those terms are defined, respectively,
in Sections 860G(a)(2) and 860D of the Code.
The Trust Administrator makes no representation or warranty as to
any of the statements contained herein or the validity or sufficiency of the
Certificates or the Mortgage Loans and has executed this Certificate in its
limited capacity as Trust Administrator under the Pooling and Servicing
Agreement.
Pursuant to the terms of the Pooling and Servicing Agreement, a
distribution will be made on the 25th day of each month or, if such 25th day
is not a Business Day then the first Business Day following such Distribution
Date (the "Distribution Date"), commencing on the first Distribution Date
specified on the face hereof, to the Person in whose name this Certificate is
registered at the close of business on the applicable Record Date in an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amount required to be distributed to Holders of Certificates of the
Class to which this Certificate belongs on such Distribution Date pursuant to
the Pooling and Servicing Agreement. The Record Date applicable to each
Distribution Date and any Class of Certificates other than the Class A-1
Certificates (other than the first Distribution Date), is the last Business
Day of the month immediately preceding the month in which the related
Distribution Date occurs. With respect to each Distribution Date and the Class
A-1 Certificates the Record Date is the day prior to the related Distribution
Date.
Distributions on this Certificate shall be made by check or money
order mailed to the address of the person entitled thereto as it appears on
the Certificate Register. The final distribution on each Certificate will be
made by wire transfer or otherwise, as set forth in the Pooling and Servicing
Agreement, but only upon presentment and surrender of such Certificate
A-3-5
at the office or agency of the Trust Administrator specified in the notice to
Certificateholders of such final distribution.
The Certificates are limited in right of distribution to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Pooling and Servicing Agreement. As
provided in the Pooling and Servicing Agreement, withdrawals from the various
accounts established under the Pooling and Servicing Agreement may be made
from time to time for purposes other than, and, in certain cases, prior to,
distributions to Certificateholders.
Any distribution to the Holder of this Certificate is binding on
such Holder and all future Holders of this Certificate and any Certificate
issued upon the transfer hereof or in exchange herefor or in lieu hereof
whether or not notation of such distribution is made upon this Certificate.
This Certificate does not purport to summarize the Pooling and
Servicing Agreement, and reference is made to the Pooling and Servicing
Agreement for the interests, rights, benefits, obligations and duties
evidenced hereby, and the limitations thereon, and the rights, duties and
immunities of the Trust Administrator.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, the transfer of this Certificate is
registrable in the Certificate Register of the Trust Administrator upon
surrender of this Certificate for registration of transfer at the office or
agency maintained by the Trust Administrator in New York accompanied by a
written instrument of transfer in form satisfactory to the Trust Administrator
and the Certificate Registrar duly executed by the holder hereof or such
holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust will be issued to the
designated transferee or transferees.
Prior to due presentation of this Certificate for registration of
transfer, the Depositor, the Master Servicer, the Trustee, the Trust
Administrator, the Certificate Registrar, any Paying Agent 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 none of the Depositor, the Master
Servicer, the Trustee, the Trust Administrator, the Certificate Registrar, any
Paying Agent or any agent of any of them shall be affected by notice to the
contrary.
No transfer, sale, pledge or other disposition of this Certificate
or any interest herein shall be made unless that transfer, sale, pledge or
other disposition is exempt from the registration and/or qualification
requirements of the Securities Act and any applicable state securities laws,
or is otherwise made in accordance with the Securities Act and such state
securities laws.
A-3-6
If a transfer of this Certificate is to be made without
registration under the Securities Act, then (except under limited
circumstances specified in the Pooling and Servicing Agreement) the
Certificate Registrar shall refuse to register such transfer unless it
receives (and, upon receipt, may conclusively rely upon) a Transfer Affidavit
of the initial owner or the proposed transferee in the form attached as
Exhibit I to the Pooling and Servicing Agreement. Each Person holding or
acquiring any Ownership Interest in a Class R Certificate shall be a Permitted
Transferee and shall promptly notify the Trust Administrator of any change or
impending change in its status as a Permitted Transferee.
None of the Depositor, the Trust Administrator the Trustee, or the
Certificate Registrar is obligated to register or qualify the Class R
Certificates under the Securities Act or any other securities law or to take
any action not otherwise required under this Agreement to permit the transfer
of any Certificate or interest therein without registration or qualification.
Any Certificateholder desiring to effect a transfer, sale, pledge or other
disposition of any Certificate or interest therein shall, and does hereby
agree to, indemnify the Depositors, the Trustee, the Trust Administrator, the
Master Servicer, and the Certificate Registrar against any liability that may
result if such transfer, sale, pledge or other disposition is not exempt from
the registration and/or qualification requirements of the Securities Act and
any applicable state securities laws or is not made in accordance with such
federal and state laws and Section 5.02 of the Pooling and Servicing
Agreement.
No transfer of a Class R Certificate or any interest therein shall
be made (A) to any employee benefit plan or other retirement arrangement,
including individual retirement accounts and annuities, ▇▇▇▇▇ plans and
collective investment funds and separate accounts in which such plans,
accounts or arrangements are invested, including insurance company general
accounts, that is subject to Section 406 or 407 of ERISA or Section 4975 the
Code or any materially similar provisions ("Similar Law") of applicable
federal, state or local law (each, a "Plan"), or (B) to any Person who is
directly or indirectly purchasing such Class R Certificate or interest therein
on behalf of, as named fiduciary of, as trustee of, or with assets of a Plan,
unless the purchase and holding of such Class R Certificate or interest
therein by the prospective Transferee will not result in a non-exempt
prohibited transaction under ERISA, Section 4975 of the Code or Similar Law
and will not subject the Trustee or the Trust Administrator to any obligation
in addition to those undertaken in the Pooling and Servicing Agreement or
would result in the imposition of an excise tax under Section 4975 of the Code
or Similar Law. Except in connection with the initial issuance of the Class R
Certificates, the Certificate Registrar shall refuse to register the transfer
of a Definitive Certificate unless it has received from the prospective
Transferee one of the following: (i) a certification to the effect that such
prospective Transferee is not a Plan and is not directly or indirectly
purchasing such Certificate or interest therein on behalf of, as named
fiduciary of, as trustee of, or with assets of a Plan; or (ii) a certification
of facts and an Opinion of Counsel which otherwise establish to the reasonable
satisfaction of the Trustee and the Trust Administrator that such transfer
will not result in a non-exempt prohibited transaction under ERISA, Section
4975 of the Code or Similar Law and will not subject the Trustee or the Trust
Administrator to any obligation in addition to these undertaken in the Pooling
and Servicing Agreement. If any Transferee of a Class R Certificate
A-3-7
or any interest therein does not, in connection with the subject transfer,
deliver to the Certificate Registrar a certification and/or Opinion of Counsel
as required by the preceding sentence, then such Transferee shall be deemed to
have represented and warranted that either: (i) such Transferee is not a Plan
and is not directly or indirectly purchasing such Class R Certificate or
interest therein on behalf of, as named fiduciary of, as trustee of, or with
assets of a Plan; or (ii) the purchase and continued holding of such Class R
Certificate or interest therein by such Transferee will not result in a
non-exempt prohibited transaction under ERISA, Section 4975 of the Code or
Similar Law and will not subject the Trustee or the Trust Administrator to any
obligation in addition to these undertaken in the Pooling and Servicing
Agreement.
Each Person who has or who acquires any percentage interest in
this Certificate shall be deemed by its acceptance or acquisition of such
percentage interest to have agreed to be bound by the provisions of Section
5.02 of the Pooling and Servicing Agreement and, if any purported Transferee
shall become a Holder of this Certificate in violation of the provisions of
such Section 5.02(e), to have irrevocably authorized the Trust Administrator
under clause (iv) of such Section 5.02(e) to deliver payments to a Person
other than such Person. Each Person holding or acquiring any percentage
interest in this Certificate must be a Permitted Transferee and shall promptly
notify the Trust Administrator of any change or impending change in its status
as a Permitted Transferee.
Each Person holding or acquiring any percentage interest in this
Certificate shall agree (x) to require a Transfer Affidavit from any other
Person to whom such Person attempts to transfer its percentage interest herein
and (y) not to transfer its percentage interest herein unless it provides to
the Certificate Registrar a certificate substantially in the form attached as
Exhibit J-1 to the Pooling and Servicing Agreement stating that it has no
actual knowledge that such other Person is not a Permitted Transferee.
The Pooling and Servicing Agreement permits, with certain
exceptions therein provided, the amendment thereof and the modification of the
rights and obligations of the Seller, the Master Servicer, the Seller, Trustee
and the Trust Administrator and the rights of the Certificateholders under the
Pooling and Servicing Agreement at any time by the Depositor, the Seller, the
Master Servicer, the Trust Administrator and the Trustee with the consent of
Holders of the requisite percentage of the Percentage Interests of each Class
of Certificates affected by such amendment, as specified in the Pooling and
Servicing Agreement. 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 therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Pooling and Servicing Agreement also permits
the amendment thereof, in certain limited circumstances, without the consent
of the Holders of any of the Certificates.
A "Permitted Transferee" is any Transferee of a Class R
Certificate other than (a) a Disqualified Organization, (b) any Person as to
whom, as determined by the Trust Administrator (based upon an Opinion of
Counsel, obtained at the request of the Trust Administrator at the expense of
such Person or the Person seeking to Transfer a Class R
A-3-8
Certificate, supporting such determination), the Transfer of a Class R
Certificate may cause the REMIC to fail to qualify as a REMIC at any time that
any Certificate is outstanding, (c) a Non-United States Tax Person, or (d) a
Disqualified Partnership.
The obligations created by the Pooling and Servicing Agreement
shall terminate immediately following the occurrence of the last action
required to be taken by the Trust Administrator pursuant to Article X of the
Pooling and Servicing Agreement. In no event, however, will the trust created
by the Pooling and Servicing Agreement continue beyond the expiration of 21
years from the death of the last survivor of the descendants of ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, the late ambassador of the United States to the United Kingdom,
living on the date hereof.
Unless the Certificate of Authentication on this Certificate has
been executed by the Trust Administrator or on its behalf by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Pooling and Servicing Agreement or be valid
for any purpose.
A-3-9
IN WITNESS WHEREOF, the Trust Administrator has caused this Certificate
to be duly executed.
Dated: May 28, 2003
BANK ONE, N.A.,
as Trust Administrator
By ________________________
This the Class R Certificate
referenced in the within-mentioned Agreement
By ________________________________
Authorized Officer of
Bank One, N.A., as Trust Administrator
A-3-10
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________
________________________________________________________________________
________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust.
I (We) further direct the Trust Administrator to issue a new Certificate
of a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address: ________________________________________
________________________________________________________________________.
Dated: _____________
________________________________________________
Signature by or on behalf of assignor
A-3-11
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _______________________________________________
for the account of _____________________________________________________,
account number _________, or, if mailed by check, to____________________
________________________________________________________________________
Applicable statements should be mailed to_______________________________
________________________________________________________________________.
This information is provided by ________________________________________,
the assignee named above, or ___________________________________________,
as its agent.
A-3-12
EXHIBIT B
MORTGAGE LOAN SCHEDULE
B-1
EXHIBIT C
MONTHLY INFORMATION DELIVERED TO TRUST ADMINISTRATOR
C-1
EXHIBIT D
[RESERVED]
D-1
EXHIBIT E
FORM OF REQUEST FOR RELEASE
[DATE]
[Address] [Address] [Address]
Re: American General Mortgage Loan Trust 2003-1
Asset-Backed Pass-Through Certificates, Series 2003-1
-----------------------------------------------------
Ladies and Gentlemen:
In connection with the administration of the Mortgage Loans held by you
as Trust Administrator under the Pooling and Servicing Agreement dated as of
May 1, 2003, among Bond Securitization, L.L.C., as depositor (the
"Depositor"), Second Street Funding Corporation, as seller (in such capacity,
the "Seller"), American General Finance Corporation, as Master Servicer (in
such capacity, the "Master Servicer"), Bank One, N.A. as trust administrator
(the "Trust Administrator") and U.S. Bank National Association, as trustee
(the "Trustee") (the "Agreement"), we hereby request a release of the Mortgage
File held by you as Trust Administrator with respect to the following
described Mortgage Loan for the reason indicated below.
Loan No.:
------- ------------
Reason for requesting file:
--------------------------
______ a. Mortgage Loan paid in full. (The Master Servicer hereby
certifies that all amounts received in connection with the payment
in full of the Mortgage Loan which are required to be deposited in
the Collection Account pursuant to Section 3.02 of the Agreement
have been so deposited).
______ b. Retransfer of Mortgage Loan. (The Master Servicer hereby
certifies that the Substitution Adjustment has been deposited in
the Collection Account pursuant to the Agreement.)
______ c. The Mortgage Loan is being foreclosed.
______ d. The Mortgage Loan is being re-financed by another depository
institution. (The Master Servicer hereby certifies that all
amounts received in connection with the payment in full of the
Mortgage Loan which are required to be deposited in
E-1
the Collection Account pursuant to Section 3.02 of the Agreement
have been so deposited).
______ e. Other (Describe).
The undersigned acknowledges that the above Mortgage File will be held
by the undersigned in accordance with the provisions of the Agreement and will
promptly be returned to the Trust Administrator when the need therefor by the
Master Servicer no longer exists unless the Mortgage Loan has been liquidated.
Capitalized terms used herein shall have the meanings ascribed to them
in the Agreement.
AMERICAN GENERAL FINANCE CORPORATION,
as Master Servicer
By
-------------------------------
Name:
Title:
E-2
EXHIBIT F
[RESERVED]
F-1
EXHIBIT G
FORM OF LETTER REGARDING REPORTING OBLIGATIONS
UNDER THE EXCHANGE ACT
[DATE]
[Address] [Address] [Address]
Re: American General Mortgage Loan Trust 2003-1,
Mortgage Loan Asset-Backed Pass-Through Certificates,
Series 2003-1
------------------------------------------
Ladies and Gentlemen:
Pursuant to and in reference to Section 9.13 of the Pooling and
Servicing Agreement dated as of May 1, 2003 relating to the above referenced
Certificates, please note the following:
(a) CIK Number for American General Mortgage Loan Trust 2003-1(the
"Trust"): ______________.
(b) CCC for the Trust should be applied for at your earliest
convenience and reported to our attention.
In order to comply with the reporting obligations for the Trust under
the Securities and Exchange Act of 1934, as amended (the "Exchange Act"), the
Trust Administrator must file within 15 days following each Distribution Date
a copy of the report distributed by the Trust Administrator to the
Certificateholders in a current report on Form 8-K. Such reports provide all
current information ordinarily of interest to the Certificateholders. The
Trust Administrator must also report on a current report on Form 8-K any
significant occurrences during the reporting period that would be reportable
under Item 1, Item 2, Item 4 and Item 5. In addition, the Trust Administrator
should cause the filing of an annual report on Form 10-K within 90 days
following the end of the Trust's fiscal year containing the following
information:
G-1
Part I, Item 3. A description of any material pending litigation;
Part I, Item 4. A description of any submission matters to vote of
Certificateholders;
Part II, Item 5. A statement of the number of Certificateholders and
the principal market, if any, in which the
Certificates trade;
Part II, Item 9. A statement as to any changes in or disagreements
with the independent public accounts for the Trust;
Part IV, Item 14. A copy of the annual certificate of compliance by an
officer of the Master Servicer and the audit of the
Master Servicer by the independent accounting firm.
Promptly after filing the Form 10-K, the Trust Administrator should file a
Form 15 if required as set forth in Section 6.07 of the Pooling and Servicing
Agreement, deregistering the Trust and terminating the reporting obligations
under the Exchange Act. All filings must be made through the ▇▇▇▇▇ System and
all acceptance slips from the filings should be saved as they will be needed
for the annual certificate.
[ ]
By: ________________________
Name:
Title:
G-2
EXHIBIT H
FORM OF CERTIFICATE AS TO MORTGAGE FILE (OTHER THAN ASSIGNMENTS)
[DATE]
[Address]
[Address]
[Address]
[Address]
[Address]
[Address]
[Address]
[Address]
[Address]
[Address]
[Address]
[Address]
Re: American General Mortgage Loan Trust 2003-1,
Mortgage Loan Asset-Backed Pass-Through Certificates,
Series 2003-1
------------------------------------------
Ladies and Gentlemen:
In accordance with the provisions of Section 2.01 of the Pooling and
Servicing Agreement, dated as of May 1, 2003 (the "Pooling Agreement"), among
Second Street Funding Corporation, as seller, American General Finance
Corporation, as Master Servicer, Bond Securitization, L.L.C. as depositor,
Bank One, N.A., as trust administrator and U.S. Bank National Association as
Trustee, the undersigned, as Trust Administrator, hereby certifies that it has
reviewed each Mortgage File delivered to it and that with respect to each
Mortgage Loan listed on the Mortgage Loan Schedule (other than any Mortgage
Loan paid in full listed on Annex I hereto):
(i) all documents constituting part of each such Mortgage File required
to be delivered pursuant to paragraphs (i) through (iv) of Section
2.01(a) of the Pooling Agreement are in our possession;
H-1
(ii) each document described in clause (i) above has been reviewed by us
and appears to be what it purports to be and relates to such Mortgage
Loan;
(iii) based on our examination and only as to the foregoing, the
information set forth in the Mortgage Loan Schedule which corresponds
to items (ii), (iii) and (iv) of the definition of Mortgage Loan
Schedule accurately reflects information set forth in the Mortgage
File.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling Agreement.
Bank One, N.A., as Trust Administrator
By:_____________________________
H-2
EXHIBIT I
TRANSFER AFFIDAVIT
American General
Mortgage Loan Asset-Backed Pass-Through Certificates
Series 2003-1
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as follows:
1. The undersigned is an officer of ________________, the proposed
Transferee of an Ownership Interest in a Class R Certificate (the
"Certificate") issued pursuant to the Pooling and Servicing Agreement, (the
"Agreement"), relating to the above-referenced Series, by and among Bond
Securitization, L.L.C., as depositor (the "Depositor"), American General
Finance Corporation, as master servicer, Bank One, N.A., as Trust
Administrator and U.S. Bank National Association, as Trustee. Capitalized
terms used, but not defined herein, shall have the meanings ascribed to such
terms in the Agreement. The Transferee has authorized the undersigned to make
this affidavit on behalf of the Transferee.
2. The Transferee is, as of the date hereof, and will be, as of the date
of the Transfer, a Permitted Transferee. The Transferee is acquiring its
Ownership Interest in the Certificate for its own account.
3. The Transferee has been advised of, and understands that (i) a tax
will be imposed on Transfers of the Certificate to Persons that is a
Disqualified Organization; (ii) such tax will be imposed on the transferor,
or, if such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is a Disqualified Organization, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability
for the tax if the subsequent Transferee furnished to such Person an affidavit
that such subsequent Transferee is not a Disqualified Organization and, at the
time of Transfer, such Person does not have actual knowledge that the
affidavit is false.
4. The Transferee has been advised of, and understands that a tax will
be imposed on a "pass-through entity" holding the Certificate if at any time
during the taxable year of the pass-through entity a Person that is a
Disqualified Organization is the record holder of an interest in such entity.
The Transferee understands that such tax will not be imposed for any period
with respect to which the record holder furnishes to the pass-through entity
an affidavit that such record holder is not a Disqualified Organization and
the pass-through entity does not have actual
I-1
knowledge that such affidavit is false. (For this purpose, a "pass-through
entity" includes a regulated investment company, a real estate investment
trust or common Trust, a partnership, trust or estate, and certain
cooperatives and, except as may be provided in Treasury Regulations, persons
holding interests in pass-through entities as a nominee for another Person.)
5. The Transferee has reviewed the provisions of Section 5.02(e) of the
Agreement and understands the legal consequences of the acquisition of an
Ownership Interest in the Certificate including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding the
Transfer and mandatory sales. The Transferee expressly agrees to be bound by
and to abide by the provisions of Section 5.02(e) of the Agreement and the
restrictions noted on the face of the Certificate. The Transferee understands
and agrees that any breach of any of the representations included herein shall
render the Transfer to the Transferee contemplated hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit from any Person
to whom the Transferee attempts to Transfer its Ownership Interest in the
Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trust Administrator a certificate
substantially in the form set forth as Exhibit J to the Agreement (a
"Transferor Certificate") to the effect that such Transferee has no actual
knowledge that the Person to which the Transfer is to be made is not a
Permitted Transferee.
7. The Transferee does not have the intention to impede the assessment
or collection of any tax legally required to be paid with respect to the
Certificate.
8. The Transferee's taxpayer identification number is _________________.
9. The Transferee is a U.S. Person as defined in Code Section
7701(a)(30).
10. The Transferee is aware that the Certificate may be a "noneconomic
residual interest" 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, unless no significant purpose of the transfer was to
impede the assessment or collection of tax.
* * *
I-2
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by
its duly authorized officer and its corporate seal to be hereunto affixed,
duly attested, this ___ day of ____________, 20__.
---------------------------------
PRINT NAME OF TRANSFEREE
By:
---------------------------
Name:
Title:
[Corporate Seal]
ATTEST:
------------------------------
[Assistant] Secretary
Personally appeared before me the above-named _________, known or proved
to me to be the same person who executed the foregoing instrument and to be
the ___________________ of the Transferee, and acknowledged that he executed
the same as his free act and deed and the free act and deed of the Transferee.
Subscribed and sworn before me this ____ day of ______________, 20__.
---------------------------------
NOTARY PUBLIC
My Commission expires the ___
day of ____________, 20__.
I-3
EXHIBIT J-1
FORM OF TRANSFEROR CERTIFICATE
--------------------------
Date
Bond Securitization L.L.C.
[Address]
Attention:
Bank One, N.A.
[Address]
Attention:
Re: American General Mortgage Loan Asset-Backed
Pass-Through Certificates - Series 2003-1
Ladies and Gentlemen:
In connection with our disposition of the above Certificates we certify
that to the extent we are disposing of a Class R Certificate, we have no
knowledge the Transferee is not a Permitted Transferee.
Very truly yours,
---------------------------------
Print Name of Transferor
By:---------------------------------
Authorized Officer
J-1-1
EXHIBIT J-2
FORM OF TRANSFEROR REPRESENTATION LETTER
__________, 20___
Bond Securitization, L.L.C.,
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Bank One, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
Attention: American General Mortgage Loan Trust 2003-1
Re: Mortgage Loan Asset-Backed Pass-Through Certificates,
Series 2003-1, [Class R Certificate]
----------------------------------------------
Ladies and Gentlemen:
In connection with the sale by _______________ (the "Seller") to
____________ (the "Purchaser") of a Class R Certificate (the "Certificates"),
issued pursuant to the Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"), dated as of May 1, 2003 among Second Street Funding
Corporation, as seller, Bond Securitization, L.L.C., as depositor (the
"Company"), American General Finance Corporation, as master servicer, Bank
One, N.A., as trust administrator (the "Trust Administrator") and U.S. Bank
National Association, as trustee (the "Trustee"). The Seller hereby certifies,
represents and warrants to, and covenants with, the Company and the Trust
Administrator that:
Neither the Seller nor anyone acting on its behalf has (a)
offered, pledged, sold, disposed of or otherwise transferred any Certificate,
any interest in any Certificate or any other similar security to any person in
any manner, (b) has solicited any offer to buy or to accept a pledge,
disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c)
has otherwise approached or negotiated with respect to any Certificate, any
interest in any Certificate or any other similar security with any person in
any manner, (d) has made any general solicitation by means of general
advertising or in any other manner, or (e) has taken any other action, that
(as to any of (a) through (e) above) would constitute a distribution of the
Certificates under the Securities Act of 1933 (the "Act"), that would render
the disposition of any Certificate a violation of Section 5 of the Act or any
state securities law, or that would require registration or qualification
pursuant thereto. The Seller will not act, in any manner set forth in the
foregoing sentence with respect to any Certificate. The Seller has not and
will not sell or otherwise transfer any of the Certificates, except in
compliance with the provisions of the Pooling and Servicing Agreement.
J-2-1
Very truly yours,
------------------------------------
(Seller)
By: ________________________________
Name:_______________________________
Title:______________________________
J-2-2
EXHIBIT K
Form of Certification to be Provided by the
Trust Administrator
AMERICAN GENERAL MORTGAGE LOAN TRUST 2003-1, MORTGAGE
LOAN ASSET-BACKED PASS-THROUGH CERTIFICATES, SERIES 2003-1
Reference is made to the Pooling and Servicing Agreement, dated as
of May 1, 2003 (the "Pooling Agreement"), by and among Bank One, N.A. (the
"Trust Administrator"), U.S. Bank National Association, as trustee, Second
Street Funding Corporation, as seller, American General Finance Corporation,
as master servicer (the "Master Servicer") and Bond Securitization, L.L.C., as
depositor. The Trust Administrator hereby certifies to the Master Servicer and
its officers, directors and affiliates, and with the knowledge and intent that
they will rely upon this certification, that:
1. The Trust Administrator has reviewed the annual report on Form 10-K for
the calendar year [____], and all reports on Form 8-K containing the
Trust Administrator's Remittance Report filed in respect of periods
included in the year covered by that annual report, relating to the
above-referenced trust;
2. The distribution information in the Trust Administrator's Remittance
Reports contained in all Monthly Form 8-K's included in the year
covered by the annual report on Form 10-K for the calendar year [___],
taken as a whole, does not contain any untrue statement of a material
fact or omit to state a material fact required by the Pooling Agreement
to be included therein and necessary to make the statements made, in
light of the circumstances under which such statements were made, not
misleading as of the last day of the period covered by that annual
report; and
3. The distribution information required to be provided to the Trust
Administrator by the Master Servicer under the Pooling Agreement for
inclusion in these reports is included in these reports.
BANK ONE, N.A., as Trust Administrator
By:
-----------------------------------
Name:
Title:
K-1
EXHIBIT L
Form of Certification to be Provided with Form 10-K
AMERICAN GENERAL MORTGAGE LOAN TRUST 2003-1, MORTGAGE
LOAN ASSET-BACKED PASS-THROUGH CERTIFICATES, SERIES 2003-1
I, [identify the certifying individual], certify that:
1. I have reviewed this annual report on Form 10-K, and all reports on Form
8-K containing a copy of the Trust Administrator's Remittance Report as
set forth in the Pooling and Servicing Agreement, dated as of May 1,
2003 (the "Pooling Agreement"), by and among Bank One, N.A. (the "Trust
Administrator"), U.S. Bank National Association, as trustee, Second
Street Funding Corporation, as seller, American General Finance
Corporation, as master servicer (the "Master Servicer") and Bond
Securitization, L.L.C., as depositor, filed in respect of periods
included in the year covered by this annual report, of the American
General Mortgage Loan Trust 2003-1 (the "Trust");
2. Based on my knowledge, the information in these reports, taken as a
whole, does not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements made, in light
of the circumstances under which such statements were made, not
misleading as of the last day of the period covered by this annual
report;
3. Based on my knowledge, the distribution or servicing information
required to be provided to the Trust Administrator by the Master
Servicer under the Pooling Agreement for inclusion in these reports is
included in these reports;
4. I am responsible for reviewing the activities performed by the Master
Servicer under the Pooling Agreement and based upon my knowledge and the
annual compliance review required under the Pooling Agreement, and
except as disclosed in the reports, the Master Servicer has fulfilled
its obligations under the Pooling Agreement; and
5. The reports disclose all significant deficiencies relating to the Master
Servicer's compliance with the minimum servicing standards based upon
the report provided by an independent public accountant, after
conducting a review in compliance with the Uniform Single Attestation
Program for Mortgage Bankers or similar procedure, as set forth in the
Pooling Agreement, that is included in these reports.
In giving the certifications above, I have reasonably relied on information
provided to me by the following unaffiliated parties: Bank One, N.A.
By:
----------------------------------
Name:
Title:
L-1
EXHIBIT M
FORM OF INVESTOR REPRESENTATION LETTER
_________________, 20___
Bond Securitization, L.L.C.,
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Bank One, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
American General Finance Corporation
▇▇▇ ▇.▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: American General Series ____-____
RE: Mortgage Loan Asset-Backed Pass-Through Certificates,
Series ___-___, [Class R-]
-------------------------------------------
Ladies and Gentlemen:
_______________________ (the "Purchaser") intends to purchase from
__________________ (the "Seller") $_____________ Certificate Principal Balance
of Mortgage Loan Asset-Backed Pass-Through Certificates, Series ____-___,
Class ____ (the "Certificates"), issued pursuant to the Pooling and Servicing
Agreement (the "Pooling and Servicing Agreement"), dated as of May 1, 2003
among Bond Securitization, L.L.C., as seller (the "Company"), American General
Finance Corporation, as master servicer (the "Master Servicer"), Bank One,
N.A., as trust administrator (the "Trust Administrator") and U.S. Bank
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 Purchaser hereby certifies, represents and warrants
to, and covenants with, the Company, the Trust Administrator and the Master
Servicer that:
1. The Purchaser understands that (a) the Certificates have
not been and will not be registered or qualified under the
Securities Act of 1933, as amended (the "Act") or any state
securities law, (b) the Company is not required to so register or
qualify the Certificates, (c) the Certificates may be resold only
if registered and qualified pursuant to the provisions of the Act
or any state securities law, or if an exemption from such
registration and qualification is
M-1
available, (d) the Pooling and Servicing Agreement contains
restrictions regarding the transfer of the Certificates and (e)
the Certificates will bear a legend to the foregoing effect.
2. The Purchaser is acquiring the Certificates for its own
account for investment only and not with a view to or for sale in
connection with any distribution thereof in any manner that would
violate the Act or any applicable state securities laws.
3. The Purchaser is (a) a substantial, sophisticated
institutional investor having such knowledge and experience in
financial and business matters, and, in particular, in such
matters related to securities similar to the Certificates, such
that it is capable of evaluating the merits and risks of
investment in the Certificates, (b) able to bear the economic
risks of such an investment and (c) an institutional "accredited
investor" within the meaning of Rule 501 (a) promulgated pursuant
to the Act.
4. The Purchaser has been furnished with, and has had an
opportunity to review (a) [a copy of the Private Placement
Memorandum, dated ________________, 20___, relating to the
Certificates (b)] a copy of the Pooling and Servicing Agreement
and [b] [c] such other information concerning the Certificates,
the Mortgage Loans and the Company as has been requested by the
Purchaser from the Company or the Seller and is relevant to the
Purchaser's decision to purchase the Certificates. The Purchaser
has had any questions arising from such review answered by the
Company or the Seller to the satisfaction of the Purchaser. [If
the Purchaser did not purchase the Certificates from the Seller in
connection with the initial distribution of the Certificates and
was provided with a copy of the Private Placement Memorandum (the
"Memorandum") relating to the original sale (the "Original Sale")
of the Certificates by the Company, the Purchaser acknowledges
that such Memorandum was provided to it by the Seller, that the
Memorandum was prepared by the Company solely for use in
connection with the Original Sale and the Company did not
participate in or facilitate in any way the purchase of the
Certificates by the Purchaser from the Seller, and the Purchaser
agrees that it will look solely to the Seller and not to the
Company with respect to any damage, liability, claim or expense
arising out of, resulting from or in connection with (a) error or
omission, or alleged error or omission, contained in the
Memorandum, or (b) any information, development or event arising
after the date of the Memorandum.]
5. The Purchaser has not and will not nor has it authorized
or will it authorize any person to (a) offer, pledge, sell,
dispose of or otherwise transfer any Certificate, any interest in
any Certificate or any other similar security to any person in any
manner, (b) solicit any offer to buy or to accept a pledge,
disposition of other transfer of any Certificate, any interest in
any Certificate or
M-2
any other similar security from any person in any manner, (c)
otherwise approach or negotiate with respect to any Certificate,
any interest in any Certificate or any other similar security with
any person in any manner, (d) make any general solicitation by
means of general advertising or in any other manner or (e) take
any other action, that (as to any of (a) through (e) above) would
constitute a distribution of any Certificate under the Act, that
would render the disposition of any Certificate a violation of
Section 5 of the Act or any state securities law, or that would
require registration or qualification pursuant thereto. The
Purchaser will not sell or otherwise transfer any of the
Certificates, except in compliance with the provisions of the
Pooling and Servicing Agreement.
6. The Purchaser
(a) is not 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 Internal Revenue Code of 1986, as amended (a
"Plan"), or any other person (including an investment manager, a
named fiduciary or a trustee of any Plan) acting, directly or
indirectly, on behalf of or purchasing any Certificate with "plan
assets" of any Plan within the meaning of the Department of Labor
("DOL") regulation at 29 C.F.R. ss.2510.3-101; or
(b) will provide a certification of facts and an
Opinion of Counsel which otherwise establish to the reasonable
satisfaction of the Trustee and the Trust Administrator that such
transfer will not result in a non-exempt prohibited transaction
under ERISA, Section 4975 of the Code or similar law and will not
subject the Trustee or the Trust Administrator to any obligation
in addition to these undertaken in the Pooling and Servicing
Agreement.
In addition, the Purchaser hereby certifies, represents and warrants to,
and covenants with, the Company, the Trustee and the Master Servicer that the
Purchaser will not transfer such Certificates to any Plan or person unless
such Plan or person meets the requirements set forth in either 6(a) or (b)
above.
Very truly yours,
------------------------------------
By: ________________________________
Name:_______________________________
Title:______________________________
M-3
EXHIBIT N
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 "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, 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 ▇▇▇▇ ▇▇▇.
2. The Buyer warrants and represents to, and covenants with,
the Seller, the Trust Administrator and the Master Servicer (as defined in the
Pooling and Servicing Agreement (the "Agreement"), dated as of May 1, 2003
among Second Street Funding Corporation, as Seller, American General Finance
Corporation, as Master Servicer, Bond Securitization, L.L.C., as depositor,
Bank One, N.A., as trust administrator and U.S. Bank National Association, as
trustee, pursuant to Section 5.02 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.
N-1
(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 been furnished with all information
regarding the Rule 144A Securities that it has requested from the
Seller, the Trustee 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 completed either
of the forms of certification to that effect attached hereto as Annex 1
or Annex 2. 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.
[3. The Buyer
(a) is not 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
Internal Revenue Code of 1986, as amended (a "Plan"), or any other
person (including an investment manager, a named fiduciary or a trustee
of any Plan) acting, directly or indirectly, on behalf of or purchasing
any Certificate with "plan assets" of any Plan within the meaning of the
Department of Labor ("DOL") regulation at 29 C.F.R. ss. 2510.3-101; or
(b) is an insurance company, the source of funds to be used
by it to purchase the Certificates is an "insurance company general
account" (within the meaning of DOL 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.]
N-2
4. 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 Buyer
By: ________________________________ By:__________________________________
Name: Name:
Title: Title:
Taxpayer Identification Taxpayer Identification:
No._________________________________ No:__________________________________
Date:_______________________________ Date:________________________________
N-3
ANNEX 1 TO EXHIBIT N
--------------------
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 $__________ 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.
__ 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.
Annex-1-1
__ 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 Title I of the Employee Retirement Income Security Act
of 1974.
__ 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 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.
Annex-1-2
_________ _________ Will the Buyer be purchasing the Rule 144A
Yes No Securities only for the Buyer's own account?
6. If the answer to the foregoing question is "no", the Buyer
agrees that, in connection with any purchase of securities sold to the Buyer
for the account of a third party (including any separate account) in reliance
on Rule 144A, the Buyer will only purchase for the account of a third party
that at the time is a "qualified institutional buyer" within the meaning of
Rule 144A. In addition, the Buyer agrees that the Buyer will not purchase
securities for a third party unless the Buyer has obtained a current
representation letter from such third party or taken other appropriate steps
contemplated by Rule 144A to conclude that such third party independently
meets the definition of "qualified institutional buyer" set forth in Rule
144A.
7. The Buyer will notify each of the parties to which this
certification is made of any changes in the information and conclusions
herein. Until such notice is given, the Buyer's purchase of Rule 144A
Securities will constitute a reaffirmation of this certification as of the
date of such purchase.
____________________________________
Print Name of Buyer
By: ________________________________
Name:
Title:
Date:_______________________________
Annex-1-3
ANNEX 2 TO EXHIBIT N
--------------------
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 part of a Family of
Investment Companies (as defined below), is such an officer of 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.
Annex-2-1
5. The Buyer is familiar with Rule 144A and understands that
each of the parties to which this certification is made are relying and will
continue to rely on the statements made herein because one or more sales to
the Buyer will be 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:_________________________
IF AN ADVISER:
____________________________________
Print Name of Buyer
Date:_______________________________
Annex-2-2
