Exhibit 4.3
Form of Pooling and Servicing Agreement
Exhibit No. 4.3
FINANCE AMERICA SECURITIES, LLC,
as Depositor
[ ],
as Servicer
and
[ ],
as Trustee
POOLING AND SERVICING AGREEMENT
Dated as of [ ]
----------
Mortgage Loan Trust [ ]
Pass-Through Certificates
Table of Contents
Page
----
ARTICLE I
DEFINITIONS
Section 1.01. Definitions: ...................................................2
Section 1.02. Provisions of General Application. ............................28
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. Conveyance of Mortgage Loans; Special Deposit; Priority
and Subordination of Ownership Interests ....................29
Section 2.02. Possession of Mortgage Files; Access to Mortgage Files. .......30
Section 2.03. Delivery of Mortgage Loan Documents [and the Certificate
Insurance Policy] ...........................................31
Section 2.04. Acceptance by Trustee of the Trust Fund; Certain
Substitutions; Certification by Trustee .....................33
Section 2.05. Execution of Certificates. ....................................34
Section 2.06. Further Action Evidencing Assignment. .........................35
Section 2.07. Conveyance of the Subsequent Mortgage Loans. ..................35
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01. Representations of the Servicer. ..............................35
Section 3.02. Representations, Warranties and Covenants of the Depositor. ...36
Section 3.03. Purchase And Substitution. ....................................38
ARTICLE IV
THE CERTIFICATES
Section 4.01. The Certificates. .............................................39
Section 4.02. Registration of Transfer and Exchange of Certificates. ........39
Section 4.03. Mutilated, Destroyed, Lost or Stolen Certificates. ............44
Section 4.04. Persons Deemed Owners. ........................................45
ARTICLE V
ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS
Section 5.01. Appointment of the Servicer. ..................................45
Section 5.02. Subservicers. .................................................46
Section 5.03. Collection of Certain Mortgage Loan Payments;
Collection Account ..........................................48
Section 5.04. Permitted Withdrawals from the Collection Account. ............50
Section 5.05. Payment of Taxes, Insurance and Other Charges. ................51
Section 5.06. Maintenance Of Casualty Insurance. ............................51
Section 5.07. Maintenance of Mortgage Impairment Insurance Policy. ..........52
Section 5.08. Fidelity Bond; Errors and Omissions Policy. ...................52
Section 5.09. Collection of Taxes, Assessments and Other Items;
Servicing Account ...........................................53
Section 5.10. Periodic Filings With The Securities And Exchange
Commission; Additional Information ..........................53
Section 5.11. Enforcement of Due-on-Sale Clauses; Assumption Agreements. ....53
Section 5.12. Realization Upon Defaulted Mortgage Loans. ....................54
Section 5.13. Trustee to Cooperate; Release of Mortgage Files. ..............55
Section 5.14. Servicing Fee; Servicing Compensation. ........................57
Section 5.15. Reports to the Trustee and the Depositor; Collection
Account Statements ..........................................57
Section 5.16. Annual Statement as to Compliance. ............................57
Section 5.17. Annual Independent Public Accountants' Servicing Report. ......58
Section 5.18. Purchase of Defaulted Mortgage Loans. .........................58
Section 5.19. Reports to be Provided by the Servicer. .......................59
Section 5.20. Adjustment of Servicing Compensation In Respect of
Prepaid Mortgage Loans 59
Section 5.21. Periodic Advances. ............................................59
Section 5.22. Inspections. ..................................................60
Section 5.23. Maintenance of Corporate Existence and Licenses; Merger
or Consolidation of the Servicer ............................60
Section 5.24. Assignment of Agreement by Servicer; Servicer Not to Resign. ..61
Section 5.25. Information Reports to be Filed by the Servicer. ..............61
Section 5.26. [Reserved].....................................................61
Section 5.27. Waiver of Prepayment Premiums. ................................61
Section 5.28. Adjustable Rate Mortgage Loans. ...............................61
Section 5.29. [Notices of Material Events.] .................................62
Section 5.30. [Purchase of Receivables upon Breach.] ........................62
ARTICLE VI
DISTRIBUTIONS AND PAYMENTS
Section 6.01. Establishment of Certificate Accounts; Deposits to the
Certificate Accounts ........................................63
Section 6.02. Permitted Withdrawals from the Certificate Account. ...........63
Section 6.03. Collection of Money. ..........................................64
Section 6.04. [The Certificate Insurance Policy.] ...........................64
Section 6.05. Distributions. ................................................66
Section 6.06. Investment of Accounts. .......................................69
Section 6.07. Reports by Trustee. ...........................................69
Section 6.08. Additional Reports by Trustee. ................................73
Section 6.09. Compensating Interest. ........................................73
Section 6.10. [Effect of Payments by the Certificate Insurer; Subrogation]. .73
Section 6.11. Allocation of Realized Losses. ................................74
Section 6.12. Pre-Funding Account. ..........................................74
Section 6.13. Capitalized Interest Account. .................................74
Section 6.14. Determination of LIBOR. .......................................74
Section 6.15. The Basis Risk Reserve Fund. ..................................75
ARTICLE VII
DEFAULT
Section 7.01. Events of Default. ............................................76
Section 7.02. Trustee to Act; Appointment of Successor. .....................78
Section 7.03. Waiver of Defaults. ...........................................81
Section 7.04. [Mortgage Loans, Trust Fund and Accounts Held for Benefit
of the Certificate Insurer] .................................81
Section 7.05. [Rights of the Certificate Insurer to Exercise Rights
of Certificateholders] .....................................81
Section 7.06. [Trustee to Act Solely with Consent of the
Certificate Insurer] .......................................81
ARTICLE VIII
TERMINATION
Section 8.01. Termination. ..................................................82
Section 8.02. Additional Termination Requirements. ..........................83
ARTICLE IX
CONCERNING THE TRUSTEE
Section 9.01. Duties of Trustee. ............................................84
Section 9.02. Certain Matters Affecting the Trustee. ........................85
Section 9.03. Trustee Not Liable for Certificates or Mortgage Loans. ........86
Section 9.04. Trustee May Own Certificates. .................................86
Section 9.05. Payment of Trustee's Fees. ....................................86
Section 9.06. Eligibility Requirements for Trustee. .........................87
Section 9.07. Resignation and Removal of the Trustee. .......................87
Section 9.08. Successor Trustee. ............................................88
Section 9.09. Merger or Consolidation of Trustee. ...........................89
Section 9.10. Appointment of Co-Trustee or Separate Trustee. ................89
Section 9.11. Appointment of Custodians. ....................................90
Section 9.12. Appointment of Agent. .........................................90
ARTICLE X
REMIC PROVISIONS
Section 10.01. REMIC Administration. ........................................91
Section 10.02. Prohibited Transactions and Activities. ......................94
Section 10.03. Trustee and Servicer Indemnification. ........................94
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Limitation on Liability of the Depositor and the Servicer. ...94
Section 11.02. Acts of Certificateholders. ..................................96
Section 11.03. Amendment. ...................................................97
Section 11.04. Recordation of Agreement. ....................................98
Section 11.05. Notices. .....................................................98
Section 11.06. Severability of Provisions. ..................................98
Section 11.07. Counterparts. ................................................99
Section 11.08. Successors and Assigns. ......................................99
Section 11.09. Headings. ....................................................99
Section 11.10. [Certificate Insurer Default]. ...............................99
Section 11.11. Third Party Beneficiary. .....................................99
Section 11.12. Intent of the Parties. .......................................99
Section 11.13. Notice to Rating Agencies.....................................99
Section 11.14. Governing Law. ..............................................100
Section 11.15. Appointment of Agent. .......................................100
EXHIBITS
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Exhibit A [Certificate Insurance Policy]
Exhibit B-1 Forms of Regular Certificates
Exhibit B-2 Form of Residual Certificate
Exhibit C Mortgage File
Exhibit D Mortgage Loan Schedule
Exhibit E Acknowledgment of Receipt
Exhibit F Initial Certification
Exhibit G Final Certification
Exhibit H Request For Release of Documents
Exhibit I Form of Residual Transfer Affidavit And Agreement
Exhibit J Form of Residual Transferor Certificate
Exhibit K Form of ERISA Affidavit
Exhibit L Form of Liquidation Report
Exhibit M Certificate Re: Prepaid Loans
Exhibit N Subsequent Transfer Instrument
Exhibit O Form of Investor Representation Letter
Exhibit P Form of Transferor Representation Letter
Exhibit Q Form of Rule 144A Investment Representation
Exhibit R Premium Exhibit
POOLING AND SERVICING AGREEMENT, dated as of [ ], by and among Finance
America Securities, LLC, a Delaware limited liability company, in its capacity
as depositor (the "Depositor"), [ ], a [ ] corporation, in its capacity as
servicer (the "Servicer"), and [ ], a [ ], in its capacity as trustee (the
"Trustee").
PRELIMINARY STATEMENT:
The Depositor intends to sell certificates (collectively, the
"Certificates"), to be issued hereunder in the classes listed below (each, a
"Class"), which in the aggregate will evidence the entire beneficial ownership
interest in the Trust Fund (as defined herein), consisting of the Mortgage Loans
and certain other assets specified herein. As provided herein, the Trustee will
make an election to treat the assets of the Trust Fund (other than the Basis
Risk Reserve Fund) as a real estate mortgage investment conduit (a "REMIC") for
federal income tax purposes. The Regular Certificates (as defined herein) will
represent ownership of "regular interests" in the REMIC, and the Class R
Certificates will constitute the sole Class of "residual interest" in the REMIC
for purposes of the REMIC Provisions (as defined herein) under federal income
tax law.
The following table sets forth the Class designation, Interest Rate,
initial Class Principal Amount (or Class Notional Amount) (each as defined
herein), and minimum denominations for each Class of Certificates constituting
the interests in the Trust Fund created hereunder.
INITIAL CLASS
PRINCIPAL INTEREST MINIMUM
CLASS AMOUNT RATE DENOMINATION
----- ------------- -------- ------------
A........................ $ (1) $[25,000]
M1....................... (2) [25,000]
M2....................... (3) [25,000]
B........................ (4) [25,000]
R........................ (5) (5) (6)
----------
(1) The Interest Rate with respect to any Distribution Date for the Class A
Certificates is the per annum rate equal to the lesser of (i) LIBOR plus [
]% and (ii) the Net Funds Cap for such date; PROVIDED, that if the
[Residual Certificateholder] does not exercise its option to purchase the
Mortgage Loans and other property of the Trust Fund pursuant to Section
8.01(b) on the Distribution Date on which it is first entitled to do so,
then with respect to each subsequent Distribution Date the per annum rate
calculated pursuant to clause (i) above shall be LIBOR plus [ ]%.
(2) The Interest Rate with respect to any Distribution Date for the Class M1
Certificates is the per annum rate equal to the lesser of (i) LIBOR plus [
]% and (ii) the Net Funds Cap for such date; PROVIDED, that if the
[Residual Certificateholder] does not exercise its option to purchase the
Mortgage Loans and other property of the Trust Fund pursuant to Section
8.01(b) on the Distribution Date on which it is first entitled to do so,
then with respect to each subsequent Distribution Date the per annum rate
calculated pursuant to clause (i) above shall be LIBOR plus [ ]%.
(3) The Interest Rate with respect to any Distribution Date for the Class M2
Certificates is the per annum rate equal to the lesser of (i) LIBOR plus [
]% and (ii) the Net Funds Cap for such date; PROVIDED, that if the
[Residual Certificateholder] does not exercise its option to purchase the
Mortgage Loans and other property of the Trust Fund pursuant to Section
8.01(b) on the Distribution Date on which it is first entitled to do so,
then with respect to each subsequent Distribution Date the per annum rate
calculated pursuant to clause (i) above shall be LIBOR plus [ ]%.
(4) The Interest Rate with respect to any Distribution Date for the Class B
Certificates is the per annum rate equal to the lesser of (i) LIBOR plus [
]% and (ii) the Net Funds Cap for such date; PROVIDED, that if the
[Residual Certificateholder] does not exercise its option to purchase the
Mortgage Loans and other property of the Trust Fund pursuant to Section
8.01(b) on the Distribution Date on which it is first entitled to do so,
then with respect to each subsequent Distribution Date the per annum rate
calculated pursuant to clause (i) above shall be LIBOR plus [ ]%.
(5) The Class R Certificate will be issued without a Class Principal Amount and
will not bear interest.
(6) The Class R Certificate will be issued as a single Certificate evidencing
the entire Percentage Interest in such Class.
The Mortgage Loans (as defined herein) have an aggregate Principal
Balance (as defined herein) as of the Cut-off Date equal to $[ ].
In consideration of the mutual agreements herein contained, the
Depositor, the Servicer and the Trustee agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions: Whenever used herein, the following words
and phrases, unless the context otherwise requires, shall have the following
meanings.
Accepted Servicing Practices: The Servicer's normal servicing
practices, which in all material respects will conform to the mortgage servicing
practices of prudent mortgage lending institutions which service for their own
and others' account mortgage loans of the same type as the Mortgage Loans in the
jurisdictions in which the related Mortgaged Properties are located, which are
exercised with prudent and reasonable care and which give due consideration to
the Certificateholders' [and the Certificate Insurer's] reliance on the
Servicer.
Account: Any Eligible Account established pursuant to Sections 5.03,
5.09, 6.01, 6.04, 6.12, 6.13 or 6.15 hereof.
Accrual Period: With respect to any Distribution Date and any Class of
LIBOR Certificates, the one-month period beginning on the immediately preceding
Distribution Date (or on the Closing Date, in the case of the first Accrual
Period) and ending on the day immediately preceding the related Distribution
Date. With respect to any Distribution date and any other Class of Certificates,
the calendar month immediately preceding the month in which such Distribution
Date occurs.
Act: The Securities Act of 1933, as amended.
Addition Notice:
Adjustable Rate Mortgage Loan: Any Mortgage Loan as to which the
related Mortgage Note provides for the adjustment of the Mortgage Rate
applicable thereto.
Adjusted Net Mortgage Rate:
Adverse REMIC Event: As defined in Section 10.01(f).
Affiliate: With respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
Agreement: This Pooling and Servicing Agreement, including the
Exhibits hereto, and all amendments hereof and supplements hereto.
Applied Loss Amount: With respect to any Distribution Date, the
amount, if any, by which (x) the aggregate Certificate Principal Amount of the
Certificates after giving effect to distributions on such date, but before
giving effect to any application of the Applied Loss Amount with respect to such
date, exceeds (y) the Total Loan Balance for such date.
Appraised Value: As to any Mortgaged Property, the lesser of (i) the
appraised value of such Mortgaged Property based upon the appraisal made at the
time of the origination of the related Mortgage Loan, and (ii) the sales price
of the Mortgaged Property at such time of origination, except in the case of a
Mortgaged Property securing a refinanced or modified Mortgage Loan as to which
it is the lesser of the appraised value determined above or the appraised value
determined in an appraisal at the time of refinancing or modification, as the
case may be.
Assignment Of Mortgage: With respect to each Mortgage Loan, an
assignment of the Mortgage, notice of transfer or equivalent instrument, in
recordable form, sufficient under the laws of the jurisdiction wherein the
related Mortgaged Property is located to reflect of record the sale of the
Mortgage to the Trustee for the benefit of the Certificateholders [and the
Certificate Insurer].
Authorized Denomination: With respect to each Class of Certificates,
the applicable minimum denomination specified in the Preliminary Statement
hereto.
Balloon Mortgage Loan: Any Mortgage Loan having an original term to
maturity that is shorter than its amortization schedule, and a final Monthly
Payment that is disproportionately large in comparison to other Monthly
Payments.
Balloon Payment: The final scheduled payment under the terms of a
Balloon Mortgage Loan.
Basis Risk Reserve Fund: A fund created as part of the Trust Fund
pursuant to Section 6.15 of this Agreement but which is not an asset of any
REMIC.
Basis Risk Shortfall: With respect to any Distribution Date and any
Class of Certificates other than the Residual Certificates, the amount by which
the Interest Rate applicable to such Certificate for such date, determined
without regard to the Net Funds Cap for such date but subject to the Net Maximum
Interest Rate, exceeds such Net Funds Cap.
Blanket Mortgage: The mortgage or mortgages encumbering a Cooperative
Property.
Book-Entry Certificates: Beneficial interests in Certificates
designated as "Book-Entry Certificates" in this Agreement, ownership and
transfers of which shall be evidenced or made through book entries by the
Depository; provided, that after the occurrence of a condition whereupon
book-entry registration and transfer are no longer permitted and Definitive
Certificates are to be issued to Certificateholders, such Book-Entry
Certificates shall no longer be "Book-Entry Certificates." As of the Closing
Date, the following Classes of Certificates constitute Book-Entry Certificates:
[Class A, Class M1, Class M2 and Class B].
Business Day: Any day other than (a) a Saturday or Sunday [(b) a day
on which the Certificate Insurer is closed or] or (b) a day on which banking
institutions in the State of New York, the State of [ ] or (if other than New
York) the city in which the Trustee's Corporate Trust Division is located are
authorized or obligated by law or executive order to be closed.
Capitalized Interest Account:
Capitalized Interest Amount:
Carryforward Interest: With respect to any Distribution Date and each
Class of Certificates, the sum of (i) the amount, if any, by which (x) the sum
of (A) Current Interest for such Class for the immediately preceding
Distribution Date and (B) any unpaid Carryforward Interest for such Class for
such immediately preceding Distribution Date exceeds (y) the amount distributed
in respect of interest on such Class on such immediately preceding Distribution
Date, and (ii) interest on such amount for the related Accrual Period at the
applicable Interest Rate.
Certificate: Any certificate of a Class identified in the Preliminary
Statement hereto executed by the Trustee on behalf of the Trust Fund and
authenticated by the Trustee in substantially the forms attached hereto as
Exhibits B-1 and B-2.
Certificate Account: The account established in accordance with
Section 6.01(a) hereof and maintained by the Trustee, in the name of "[ ], as
Trustee of Finance America Securities, LLC Mortgage Loan Trust [ ] under the
Pooling and Servicing Agreement dated as of [ ] ."
Certificateholder or Holder: The Person in whose name a Certificate is
registered in the Certificate Register, solely for the purposes of giving any
consent (except any consent required to be obtained pursuant to Section 11.03),
waiver, request or demand pursuant to this Agreement, any Certificate registered
in the name of the Depositor or the Servicer or any Affiliate thereof shall be
deemed not to be outstanding and the rights to which it is entitled shall not be
taken into account in determining whether the requisite percentage of rights
necessary to effect any such consent has been obtained, except as otherwise
provided in Section 11.03. The Trustee shall be entitled to rely upon a
certification of the Depositor or the Servicer in determining whether any
Certificates are registered in the name of a respective Affiliate. [Any
Certificates on which payments are made under the Certificate Insurance Policy
shall be deemed to be outstanding and held by the Certificate Insurer to the
extent of such payment.]
[Certificate Insurance Payments Account: The Certificate Insurance
Payments Account established in accordance with Section 6.04(c) hereof and
maintained by the Trustee.]
[Certificate Insurance Policy: The Certificate Guaranty Insurance
Policy No. [ ], dated the Closing Date, and any endorsements thereto, issued by
the Certificate Insurer for the benefit of Holders of the Insured Certificates,
a copy of which is attached hereto as Exhibit A.]
[Certificate Insurer: [ ], a [ ] organized and created under the laws
of the State of [ ], and any successors thereto.]
[Certificate Insurer Default: Any failure by the Certificate Insurer
to make a payment required under the Certificate Insurance Policy in accordance
with its terms, which failure continues unremedied for five Business Days.]
Certificate Principal Amount: With respect to any Certificate other
than any Notional Certificate or Residual Certificate, the initial Certificate
Principal Amount thereof, less the amount of all principal distributions
previously made with respect to such Certificate and any Applied Loss Amount
previously allocated to such Certificate. The Notional and Residual Certificates
are issued without Certificate Principal Amounts.
Certificate Register: As described in Section 4.02(a).
Certificate Registrar:
Class: All Certificates having the same class designation.
[Class B Principal Distribution Amount: With respect to any
Distribution Date, the amount, if any, by which (x) the sum of (i) the aggregate
Certificate Principal Amount of the Class A, Class M1 and Class M2 Certificates,
in each case after giving effect to distributions on such Distribution Date, and
(ii) the Class Principal Amount of the Class B Certificates immediately prior to
such Distribution Date exceeds (y) the lesser of (i) the product of (A) if a
Cumulative Loss Trigger Event has not occurred with respect to such date, [ ]%,
and if a Cumulative Loss Trigger Event has occurred with respect to such date, [
]%, and (B) the Total Loan Balance for such Distribution Date and (ii) the
amount, if any, by which the Total Loan Balance for such Distribution Date
exceeds $[ ].]
[Class M1 Principal Distribution Amount: With respect to any
Distribution Date, the amount, if any, by which (x) the sum of (i) the Class
Principal Amount of the Class A Certificates after giving effect to
distributions on that Distribution Date, and (ii) the Class Principal Amount of
the Class M1 Certificates immediately prior to such Distribution Date exceeds
(y) the lesser of (i) the product of (A) if a Cumulative Loss Trigger Event has
not occurred with respect to such date, [ ]%, and if a Cumulative Loss Trigger
Event has occurred with respect to such date, [ ]%, and (B) the Total Loan
Balance for such Distribution Date and (ii) the amount, if any, by which the
Total Loan Balance for such Distribution Date exceeds $[ ].]
[Class M2 Principal Distribution Amount: With respect to any
Distribution Date, the amount, if any, by which (x) the sum of (i) the aggregate
Certificate Principal Amount of the Class A and Class M1 Certificates, in each
case after giving effect to distributions on that Distribution Date, and (ii)
the Class Principal Amount of the Class M2 Certificates immediately prior to
such Distribution Date exceeds (y) the lesser of (i) the product of (A) if a
Cumulative Loss Trigger Event has not occurred with respect to such date, [ ]%,
and if a Cumulative Loss Trigger Event has occurred with respect to such date, [
]% and (B) the Total Loan Balance for such Distribution Date and (ii) the
amount, if any, by which the Total Loan Balance for such Distribution Date
exceeds $[ ].]
Class Notional Amount:
Class Principal Amount: With respect to each Class of Certificates
other than the Residual Certificates and any Class of Notional Certificates, the
aggregate of the Certificate Principal Amounts of all Certificates of such Class
at the date of determination.
Closing Date:
Code: The Internal Revenue Code of 1986, as amended, and as it may be
further amended from time to time, any successor statutes thereto, and
applicable U.S. Department of Treasury regulations issued pursuant thereto in
temporary or final form.
Collection Account: The account established in accordance with Section
5.03(b) hereof and maintained by the Servicer, in the name of "[ ], as Trustee
of Finance America Securities, LLC Mortgage Loan Trust [ ] under the Pooling and
Servicing Agreement dated as of [ ]".
Compensating Interest: As defined in Section 6.09.
Cooperative Corporation: The entity that holds title (fee or an
acceptable leasehold estate) to the real property and improvements constituting
the Cooperative Property and which governs the Cooperative Property, which
Cooperative Corporation must qualify as a Cooperative Housing Corporation under
Section 216 of the Code.
Cooperative Loan: Any Mortgage Loan secured by Cooperative Shares and
a Proprietary Lease.
Cooperative Loan Documents: With respect to any Cooperative Loan, (i)
the Cooperative Shares, together with a stock power in blank; (ii) the original
executed Security Agreement and the assignment of the Security Agreement
endorsed in blank; (iii) the original executed Proprietary Lease and the
assignment of the Proprietary Lease endorsed in blank; (iv) the original
executed Recognition Agreement and the assignment of the Recognition Agreement
(or a blanket assignment of all Recognition Agreements) endorsed in blank; (v)
the executed UCC-1 financing statement with evidence of recording thereon, which
has been filed in all places required to perfect the security interest in the
Cooperative Shares and the Proprietary Lease; and (vi) executed UCC-3 financing
statements (or copies thereof) or other appropriate UCC financing statements
required by state law, evidencing a complete and unbroken line from the
mortgagee to the Trustee with evidence of recording thereon (or in a form
suitable for recordation).
Cooperative Property: The real property and improvements owned by the
Cooperative Corporation, that includes the allocation of individual dwelling
units to the holders of the Cooperative Shares of the Cooperative Corporation.
Cooperative Shares: Shares issued by a Cooperative Corporation.
Cooperative Unit: A single family dwelling located in a Cooperative
Property.
Corporate Trust Division: The principal office of the Trustee, at
which its corporate trust business shall be administered, which office at the
date of execution of this Agreement is located at [ ].
Cumulative Loss Percentage: With respect to any Distribution Date, the
aggregate of all Realized Losses from the Cut-off Date through the close of the
Due Period immediately preceding such Distribution Date, expressed as a
percentage of the Cut-off Date Loan Balance.
Cumulative Loss Trigger Event: A Cumulative Loss Trigger Event will
have occurred with respect to any Distribution Date if (a) the Cumulative Loss
Percentage for such Distribution Date is greater than (b) the Targeted
Cumulative Loss Percentage for such Distribution Date.
Current Interest: With respect to each Class of Certificates and any
Distribution Date, (a) the aggregate amount of interest accrued at the
applicable Interest Rate during the related Accrual Period on the Class
Principal Amount or Class Notional Amount of such Class immediately prior to
such Distribution Date, on the basis of a 360-day year and the actual number of
days in such Accrual Period, MINUS (b) any Relief Act Shortfall for such date.
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.
Custodial Agreement: Any custodial agreement entered into by the
Trustee and a Custodian pursuant to the terms of this Agreement.
Custodian: As defined in Section 2.02(c).
Cut-off Date:
Cut-off Date Loan Balance: The Total Loan Balance as of the Cut-off
Date.
[DCR: Duff & Xxxxxx Credit Rating Co., or its successor in interest.]
Deferred Amount: With respect to any Distribution Date and each [Class
B] Certificate, the aggregate of Applied Loss Amounts previously applied in
reduction of the Certificate Principal Amount thereof, less any amounts
previously reimbursed in respect thereof.
[Deficiency Amount: With respect to any Distribution Date, the amount,
if any, by which (a) the sum of (i) Current Interest for the Senior Certificates
for such date and (ii) if the Senior Enhancement Percentage is zero, the
Subordination Deficit for such date, exceeds (b) the Available Funds for such
date.]
Deficient Valuation: With respect to any Mortgage Loan, a valuation of
the related Mortgaged Property by a court of competent jurisdiction in an amount
less than the then outstanding principal balance of the Mortgage Loan, which
valuation results from a proceeding initiated under the United States Bankruptcy
Code.
Deleted Mortgage Loan: A Mortgage Loan replaced by or to be replaced
by a Qualified Substitute Mortgage Loan.
Delinquency Rate: With respect to any Due Period, the fraction,
expressed as a percentage, the numerator of which is the aggregate outstanding
principal balance of all Mortgage Loans 60 or more days Delinquent, all Mortgage
Loans in foreclosure and all REO Mortgage Loans as of the close of business on
the last day of such Due Period, and the denominator of which is the Total Loan
Balance for the related Distribution Date.
Delinquent: A Mortgage Loan is "delinquent" if any payment due thereon
is not made by the close of business on the day such payment is scheduled to be
due. A Mortgage Loan is "30 days delinquent" if such payment has not been
received by the close of business on the corresponding day of the month
immediately succeeding the month in which such payment was due, or, if there is
no such corresponding day (e.g., as when a 30-day month follows a 31- day month
in which a payment was due on the 31st day of such month) then on the last day
of such immediately succeeding month. Similarly for "60 days delinquent," "90
days delinquent" and so on.
[Delinquency Trigger Event: A Delinquency Trigger Event will have
occurred with respect to any Distribution Date if the Three Month Delinquency
Rate for such Distribution Date equals or exceeds [ ]% of the Senior Enhancement
Percentage for such Distribution Date.]
Depositor: Finance America Securities, LLC, a Delaware limited
liability company, and any successor thereto.
Depository: The Depository Trust Company, 00 Xxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000 and any successor Depository hereafter named. The nominee of the
initial Depository for purposes of registering those Certificates that are to be
Book-Entry Certificates is Cede & Co. The Depository shall at all times be a
"clearing corporation" as defined in Section 8-102(3) of the Uniform Commercial
Code of the State of New York and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Securities Exchange Act of 1934, as amended.
Determination Date: The close of business on the [15th] day of each
month, or if such [15th] day is not a Business Day, the immediately preceding
Business Day.
Direct Participant: Any broker-dealer, bank or other financial
institution for which the Depository holds Book Entry Certificates from time to
time as a securities depositary.
Disqualified Non-United States Person: A transferee of a Class R
Certificate other than a person that (i) is not a Non-United States Person or
(ii) is a Non-United States Person that holds a Class R Certificate in
connection with the conduct of a trade or business within the United States and
has furnished the transferor and the Trustee with an effective Internal Revenue
Service Form 4224 or (iii) is a Non-United States Person that has delivered to
both the transferor and the Trustee an opinion of a nationally recognized tax
counsel to the effect that the transfer of a Class R Certificate to it is in
accordance with the requirements of the Code and the regulations promulgated
thereunder and that such transfer of a Class R Certificate will not be
disregarded for federal income tax purposes.
Disqualified Organization: Any of (i) the United States, any State or
political subdivision thereof, any possession of the United States, or any
agency or instrumentality of any of the foregoing (other than an instrumentality
which is a corporation if all of its activities are subject to tax and, except
for the FHLMC, a majority of its board of directors is not selected by such
governmental unit), (ii) any foreign government, any international organization,
or any agency or instrumentality of any of the foregoing, (iii) any organization
(other than certain farmers' cooperatives described in Section 521 of the Code)
which is exempt from the tax imposed by Chapter 1 of the Code (unless such
organization is subject to the tax imposed by Section 511 of the Code on
unrelated business taxable income), or rural electric and telephone cooperatives
described in Section 1381(a)(2)(C) of the Code and (iv) any other Person so
designated by the Trustee based upon an Opinion of Counsel provided to the
Trustee [and the Certificate Insurer] that the holding of an ownership interest
in a Class R Certificate by such Person may cause the REMIC or any Person having
an ownership interest in any Class of Certificates (other than such Person) to
incur liability for any federal tax imposed under the Code that would not
otherwise be imposed but for the transfer of an ownership interest in the 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.
Distribution Date: The [25th] day of any month or if such [25th] day
is not a Business Day, the first Business Day immediately following, commencing
in [ ].
Due Date: The first day of each calendar month.
Due Period: With respect to each Distribution Date, the period
beginning on the opening of business on the second day of the calendar month
preceding the calendar month in which such Distribution Date occurs, and ending
at the close of business on the first day of the calendar month in which such
Distribution Date occurs.
Eligible Account: Either (A) a segregated account or accounts
maintained with an institution (which may include the Trustee, provided such
institution otherwise meets these requirements) whose deposits are insured by
the FDIC, the unsecured and uncollateralized debt obligations of which
institution shall be rated [AA] (or the equivalent) or better by each Rating
Agency and in the highest short term rating category by each Rating Agency, and
which is (i) a federal savings and loan association duly organized, validly
existing and in good standing under the federal banking laws, (ii) an
institution (including the Trustee) duly organized, validly existing and in good
standing under the applicable banking laws of any state, (iii) a national
banking association duly organized, validly existing and in good standing under
the federal banking laws, (iv) a principal subsidiary of a bank holding company,
or (v) approved in writing by [the Certificate Insurer and] each Rating Agency
or (B) a segregated trust account or accounts maintained in the trust department
of a federal or state chartered depository institution, acting in its fiduciary
capacity.
ERISA: As defined in Section 4.02(m) hereof.
ERISA-Restricted Certificate: Any [Class M1, Class M2 or Class B]
Certificate.
Event Of Default: One or more of the events described in Section 7.01
hereof.
[Extra Principal Distribution Amount: With respect to any Distribution
Date, the lesser of (a) Monthly Excess Interest, if any, for such date and (b)
the Overcollateralization Deficiency, if any, for such date.]
FDIC: The Federal Deposit Insurance Corporation and any successor
thereto.
FHLMC: The Federal Home Loan Mortgage Corporation and any successor
thereto.
FNMA: Xxxxxx Mae and any successor thereto.
[Fitch: Fitch ICBA, Inc., or its successor in interest.]
Fixed Rate Mortgage Loan: Any Mortgage Loan as to which the related
Mortgage Note provides for a fixed Mortgage Rate.
GAAP: Generally accepted accounting principles.
Index: The index specified in the related Mortgage Note for
calculation of the Mortgage Rate thereof.
Indirect Participant: Any financial institution for whom any Direct
Participant holds an interest in a Book-Entry Certificate.
Initial Capitalized Interest Amount:
Initial LIBOR Rate:
Initial Mortgage Loan:
[Insurance Agreement: The Insurance Agreement dated as of [ ] among
the Certificate Insurer, the Originator, the Seller, the Depositor, the Servicer
and the Trustee, as such agreement may be amended or supplemented in accordance
with the provisions thereof.]
Insurance Policy: Any standard hazard insurance policy, flood
insurance policy, earthquake insurance policy or title insurance policy relating
to a Mortgage Loan or a Mortgaged Property.
Insurance Proceeds: Proceeds paid by any insurer pursuant to any
insurance policy covering a Mortgage Loan to the extent such proceeds are not
applied to the restoration of the related Mortgaged Property or released to the
related Mortgagor in accordance with Accepted Servicing Practices. ["Insurance
Proceeds" do not include "Insured Payments."]
[Insured Certificate: Any [Class A] Certificate.]
[Insured Certificateholder: Any Holder of a [Class A] Certificate.]
[Insured Payment: As defined in the Certificate Insurance Policy.]
Interest Rate: With respect to each Class of Certificates and any
Distribution Date, the applicable per annum rate set forth or described in the
Preliminary Statement hereto.
Interest Remittance Amount: With respect to any Distribution Date, the
sum of (i) all interest collected (other than Payaheads) or advanced in respect
of Monthly Payments on the Mortgage Loans during the related Due Period, LESS
(x) the related Servicing Fees to the extent provided in this Agreement and (y)
unreimbursed Periodic Advances and, without duplication, Nonrecoverable Advances
due to the Servicer or the Trustee with respect to the Mortgage Loans, to the
extent allocable to interest and to the extent provided in this Agreement, (ii)
any Compensating Interest paid by the Servicer with respect to such Distribution
Date, (iii) the portion of the Loan Purchase Price paid for any Mortgage Loan
that was purchased from the Trust Fund during the related Prepayment Period, to
the extent allocable to interest, (iv) the portion of any Substitution
Adjustment paid with respect to the Mortgage Loans during the related Prepayment
Period allocable to interest, (v) all Net Liquidation Proceeds, Insurance
Proceeds, Net REO Proceeds, Released Mortgaged Property Proceeds and other
recoveries collected with respect to such Mortgage Loans during the related
Prepayment Period, to the extent allocable to interest, and (vi) any amounts
paid by the Servicer and the Trustee in respect of investment losses on amounts
on deposit in the Collection Account and the Certificate Account. The Interest
Remittance Amount does not include Prepayment Premiums.
Junior Mortgage Loan: Any Mortgage Loan secured by a junior lien on
the related Mortgaged Property.
[Late Payment Rate: As defined in the Insurance Agreement.]
LIBOR: With respect to each Accrual Period, the per annum rate
determined pursuant to Section 6.14 on the basis of London interbank offered
rate quotations for one-month Eurodollar deposits, as such quotations may appear
on the display designated as page 3750 on the Dow Xxxxx Telerate Service (or
such other page as may replace such page on that service for the purpose of
displaying London interbank offered quotations of major banks).
LIBOR Certificate: Any [Class A, Class M1, Class M2 or Class B]
Certificate.
LIBOR Determination Date: The second London Business Day preceding the
commencement of each Accrual Period.
Liquidated Mortgage Loan: A Mortgage Loan with respect to which the
related Mortgaged Property has been acquired, liquidated or foreclosed and with
respect to which the Servicer determines, in accordance with Accepted Servicing
Practices, that all Liquidation Proceeds which it expects to recover have been
recovered or that the cost of obtaining any additional recoveries therefrom
would exceed the amount of such recoveries.
Liquidation Expenses: Expenses incurred by the Servicer in connection
with the liquidation of any defaulted Mortgage Loan or property acquired in
respect thereof (including, without limitation, legal fees and expenses,
committee or referee fees, and, if applicable, brokerage commissions and
conveyance taxes), any unreimbursed amount expended by the Servicer pursuant to
Sections 5.05, 5.06 and 5.12 respecting the related Mortgage Loan and any
unreimbursed expenditures for real property taxes or for property restoration or
preservation of the related Mortgaged Property. Liquidation Expenses shall not
include any previously incurred expenses in respect of an REO Mortgage Loan
which have been netted against related REO Proceeds.
Liquidation Proceeds: Amounts received by the Servicer (including
Insurance Proceeds) in connection with the liquidation of defaulted Mortgage
Loans or property acquired in respect thereof, whether through foreclosure, sale
or otherwise, including payments in connection with such Mortgage Loans received
from the Mortgagor, other than amounts required to be paid to the Mortgagor
pursuant to the terms of the applicable Mortgage or to be applied otherwise
pursuant to law.
Loan Purchase Price: With respect to any Mortgage Loan purchased from
the Trust Fund pursuant to this Agreement or the Purchase Agreement, the sum of
(i) the outstanding principal balance of such Mortgage Loan as of the date of
purchase, (ii) all interest accrued thereon and unpaid to the end of the Due
Period during which such purchase occurs, (iii) the amount of any Servicing
Advances remaining unreimbursed with respect to such Mortgage Loan and (iv) the
amount of any Servicing Advances reimbursed other than from collections or other
recoveries in respect of such Mortgage Loan.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
fraction, expressed as a percentage, the numerator of which is the principal
balance of such Mortgage Loan, as of the date of origination of the Mortgage
Loan, DIVIDED BY the Appraised Value of the related Mortgaged Property.
London Business Day: Any day on which banks are open for dealing in
foreign currency and exchange in London, England and New York City.
Maintenance: With respect to any Cooperative Unit, the rent or fee
paid by the Mortgagor to the Cooperative Corporation pursuant to the Proprietary
Lease.
Majority Certificateholders: The Holder or Holders of Certificates
evidencing Percentage Interests in excess of 51% of each Class outstanding.
[Monthly Excess Cashflow: With respect to any Distribution Date, the
sum of (x) Monthly Excess Interest, if any, for such date and (y) the
Overcollateralization Release Amount, if any, for such date.]
[Monthly Excess Interest: With respect to any Distribution Date, the
amount of any Interest Remittance Amount remaining after application pursuant to
[clauses FIRST through FIFTH of Section 6.05(b)(i)] on such date.]
Monthly Payment: As to any Mortgage Loan (including any REO Mortgage
Loan) and any Due Date, the scheduled payment of principal and interest due
thereon for such Due Date (after adjustment for Deficient Valuations occurring
prior to such Due Date but before any adjustment to such amortization schedule
by reason of any bankruptcy, other than Deficient Valuations or similar
proceeding or any moratorium or similar waiver or grace period).
[Moody's: Xxxxx'x Investors Service, or its successor in interest.]
Mortgage: The mortgage, deed of trust or other instrument creating a
lien on the Mortgaged Property.
Mortgage File: The mortgage documents listed in Exhibit C attached
hereto pertaining to a particular Mortgage Loan and any additional documents
required to be added to the Mortgage File pursuant to this Agreement; provided
that whenever the term "Mortgage File" is used to refer to documents actually
received by the Trustee or the Custodian on behalf of the Trustee, such term
shall not be deemed to include such additional documents required to be added
unless they are actually so added.
Mortgage Impairment Insurance Policy: As defined in Section 5.07.
Mortgage Loan: An individual mortgage loan that is assigned and
transferred to the Trustee pursuant to this Agreement and identified on Exhibit
D hereto, together with the rights and obligations of a holder thereof and
payments thereon and proceeds therefrom (other than payments of interest that
accrued on each Mortgage Loan up to and including the Due Date therefor
occurring on or prior to the Cut-off Date), the Mortgage Loans originally
subject to this Agreement being identified on the Mortgage Loan Schedule. As
applicable, Mortgage Loan shall be deemed to refer to the related REO Property.
Mortgage Loan Schedule: The list of the Mortgage Loans transferred to
the Trustee or the Custodian on behalf of the Trustee on or before the Closing
Date or Subsequent Transfer Date as part of the Trust Fund and attached hereto
as Exhibit D and delivered in computer readable format, which list shall set
forth at a minimum the following information as to each Mortgage Loan:
(i) last name of Mortgagor;
(ii) the Mortgage Loan identifying number;
(iii) the city, state and zip code of the Mortgaged Property;
(iv) the type of property;
(v) the current Monthly Payment as of the Cut-off Date;
(vi) the original number of months to maturity;
(vii) the scheduled maturity date;
(viii) the Principal Balance as of the Cut-off Date (with respect
to an Initial Mortgage Loan) or subsequent Cut-off Date (with respect
to a Subsequent Mortgage Loan);
(ix) the Loan-to-Value Ratio at origination;
(x) the Mortgage Rate as of the date of origination;
(xi) the Mortgage Rate as of the Cut-off Date (with respect to an
Initial Mortgage Loan) or Subsequent Cut-off Date (with respect to a
Subsequent Mortgage Loan);
(xii) the Appraised Value;
(xiii) the stated purpose of the loan at origination;
(xiv) the type of occupancy at origination;
(xv) the documentation type;
(xvi) the loan classification; and
(xvii) the Servicing Fee with respect to such Mortgage Loan,
expressed as a rate per annum.
Such schedule may consist of multiple reports that collectively set
forth all of the information required.
Mortgage Note: The original, executed note or other evidence of the
indebtedness of a Mortgagor under a Mortgage Loan.
Mortgage Pool: The aggregate of the Mortgage Loans identified on the
Mortgage Loan Schedule.
Mortgage Rate: As to any Mortgage Loan, the per annum rate at which
interest accrues under the related Mortgage Note.
Mortgaged Property: The underlying property securing a Mortgage Loan,
consisting of a fee simple estate in a single parcel of land improved by a
Residential Dwelling.
Mortgagor: The obligor on a Mortgage Note.
Net Excess Spread: With respect to any Distribution Date, the
fraction, expressed as a percentage, the numerator of which is equal to the
product of (i) the amount, if any, by which (a) the Optimal Interest Remittance
Amount for such Distribution Date exceeds (b) the Current Interest payable with
respect to the Certificates for such date and (ii) twelve, and the denominator
of which is the Total Loan Balance for such date.
Net Funds Cap: With respect to any Distribution Date, the per annum
rate equal to the fraction, expressed as a percentage, the numerator of which is
the product of (i) the Optimal Interest Remittance Amount for such date and (ii)
twelve, and the denominator of which is the Total Loan Balance for the
immediately preceding Distribution Date.
Net Liquidation Proceeds: As to any Liquidated Mortgage Loan,
Liquidation Proceeds net of, without duplication, Liquidation Expenses and net
of any unpaid Servicing Fees, unreimbursed Periodic Advances and unreimbursed
Servicing Advances made by the Servicer. For all purposes of this Agreement, Net
Liquidation Proceeds shall be allocated first to accrued and unpaid interest on
the related Mortgage Loan and then to the unpaid principal balance thereof.
Net Maximum Interest Rate: With respect to any Class of LIBOR
Certificates and any Distribution Date, the per annum rate equal to (a) the
weighted average (by Principal Balance) of the maximum interest rates applicable
to the Adjustable Rate Mortgage Loans under the applicable Mortgage Notes and
the Mortgage Rates applicable to the Fixed Rate Mortgage Loans, MINUS (b) the
Total Expense Rate.
Net Mortgage Rate: With respect to each Mortgage Loan at any time of
determination, a rate equal to the Mortgage Rate on such Mortgage Loan MINUS the
Total Expense Rate.
Net REO Proceeds: As to any REO Mortgage Loan, REO Proceeds net of,
without duplication, any unpaid Servicing Fees, unreimbursed Periodic Advances
and unreimbursed Servicing Advances made by the Servicer. For all purposes of
this Agreement, Net REO Proceeds shall be allocated first to accrued and unpaid
interest on the related Mortgage Loan and then to the unpaid principal balance
thereof.
Nonrecoverable Advances: With respect to any Mortgage Loan, (a) any
Periodic Advance or Servicing Advance previously made and not reimbursed from
late collections pursuant to Section 5.04(a), or (b) a Periodic Advance proposed
to be made in respect of a Mortgage Loan or REO Property, either of which, in
the good faith business judgment of the Servicer, as evidenced by an Officer's
Certificate delivered to [the Certificate Insurer and] the Trustee no later than
the Business Day following such determination would not be ultimately
recoverable pursuant to Section 5.04(a).
Non-United States Person: Any Person other than a United States
Person.
Notional Certificate:
Offering Document: The Prospectus.
Officer's Certificate: A certificate signed by the Chairman of the
Board, the President or a Vice President and the Treasurer, the Secretary, one
of the Assistant Treasurers or Assistant Secretaries or a Servicing Officer of
the Seller, the Servicer, or the Depositor, as required by this Agreement.
Opinion of Counsel: A written opinion of counsel, which opinion shall
be reasonably acceptable in form and substance to [the Certificate Insurer and]
the Trustee and delivered to [the Certificate Insurer and] the Trustee from
counsel experienced in matters relating to the subject of such opinion; except
that any opinion of counsel relating to (a) the qualification of the Trust Fund
as a REMIC or (b) compliance with the REMIC Provisions must be an opinion of
counsel who (i) is in fact independent of the Seller, the Servicer and the
Trustee, (ii) does not have any direct financial interest or any material
indirect financial interest in the Seller or the Servicer or the Trustee or in
an Affiliate thereof and (iii) is not connected with the Seller or the Servicer
or the Trustee as an officer, employee, director or person performing similar
functions [and (iv) is reasonably acceptable to the Certificate Insurer].
Optimal Interest Remittance Amount: With respect to each Distribution
Date, the product of (1)(x) the weighted average of the Net Mortgage Rates of
the Mortgage Loans as of the first day of the related Due Period, DIVIDED BY (y)
twelve, and (2) the Total Loan Balance for the immediately preceding
Distribution Date.
Original Pre-Funded Amount:
Originator: [AMRESCO Residential Mortgage Corporation, a Delaware
corporation] [ ], a [ ] corporation], in its capacity as Originator under the
Purchase Agreement.
Outstanding Mortgage Loan: As to any Due Date, a Mortgage Loan
(including an REO Mortgage Loan) which was not the subject of a Principal
Prepayment in Full prior to such Due Date, which did not become a Liquidated
Mortgage Loan prior to such Due Date, and which was not purchased by the
Servicer, the Seller or the Originator prior to such Due Date.
[Overcollateralization Amount: With respect to any Distribution Date,
the amount, if any, by which (x) the Total Loan Balance for such Distribution
Date exceeds (y) the aggregate Certificate Principal Amount of the Certificates
after giving effect to distributions on such Distribution Date.]
[Overcollateralization Deficiency: With respect to any Distribution
Date, the amount, if any, by which (x) the Targeted Overcollateralization Amount
for such Distribution Date exceeds (y) the Overcollateralization Amount for such
Distribution Date, calculated for this purpose after giving effect to the
reduction on such Distribution Date of the Certificate Principal Amounts of the
Certificates resulting from the distribution of the Principal Remittance Amount
(but not any Extra Principal Distribution Amount) on such Distribution Date, but
before the allocation of any Applied Loss Amount on such Distribution Date.]
[Overcollateralization Release Amount: With respect to any
Distribution Date, the amount, if any, by which (a) the Overcollateralization
Amount for such date exceeds (b) the Targeted Overcollateralization Amount for
such date.]
Ownership Interest: As to any Certificate, any ownership or security
interest in such Certificate, including 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.
Owner-Occupied Mortgaged Property: A Residential Dwelling as to which
the related Mortgagor represented an intent to occupy as such Mortgagor's
primary, secondary or vacation residence at the origination of the Mortgage
Loan.
Payahead: With respect to any Mortgage Loan and any Due Date therefor,
any Monthly Payment received by the Servicer during any Due Period in addition
to the Monthly Payment due on such Due Date, intended by the related Mortgagor
to be applied on a subsequent Due Date.
Percentage Interest: With respect to a Regular Certificate and any
date of determination, the portion evidenced by such Certificate, expressed as a
percentage rounded to four decimal places, equal to a fraction the numerator of
which is the initial Certificate Principal Amount represented by such
Certificate and the denominator of which is the initial Class Principal Amount
or Class Notional Amount of such Class of Certificates. With respect to a Class
R Certificate and any date of determination, the portion evidenced thereby as
stated on the face of such Certificate.
Periodic Advance: The aggregate of the advances with respect to
Mortgage Loans and REO Properties required to be made by the Servicer on any
Servicer Remittance Date pursuant to Section 5.21 hereof, the amount of any such
advances being equal to the sum of: (i) with respect to the Mortgage Loans other
than REO Properties as described in clause (ii) below, all Monthly Payments (net
of the related Servicing Fee) other than any Balloon Payment on such Mortgage
Loans that were Delinquent as of the related Determination Date, plus (ii) with
respect to each REO Property, which REO Property was acquired during or prior to
the related Prepayment Period and as to which an REO Disposition did not occur
during the related Prepayment Period, an amount equal to the Monthly Payment
(net of the related Servicing Fee) for the most recently ended Due Period for
the related Mortgage Loan MINUS the net income from such REO Property
transferred to the related Certificate Account for such Distribution Date, MINUS
(iii) the amount of any advance otherwise required for such Distribution Date
pursuant to clauses (i) and (ii) above which the Servicer has determined to be a
Nonrecoverable Advance.
Permitted Investments: As used herein, Permitted Investments shall be
limited to the following:
(a) direct general obligations of, or obligations fully and
unconditionally guaranteed as to the timely payment of principal and
interest by, the United States or any agency or instrumentality
thereof, provided such obligations are backed by the full faith and
credit of the United States and any obligation of, or guaranties by,
FHLMC or FNMA (other than senior debt obligations and mortgage
pass-through certificates guaranteed by FHLMC or FNMA) shall be a
Permitted Investment; [provided that at the time of such investment,
such investment is acceptable to the Certificate Insurer,] but
excluding any of such securities whose terms do not provide for
payment of a fixed dollar amount upon maturity or call for redemption;
(b) federal funds and certificates of deposit, time and demand
deposits and banker's acceptances (having original maturities of not
more than 365 days) issued by any bank or trust company incorporated
under the laws of the United States or any state thereof and subject
to supervision and examination by federal or state banking
authorities, provided that at the time of such investment or
contractual commitment providing for such investment the short-term
debt obligations of such bank or trust company at the date of
acquisition thereof have been rated in its highest rating by each
Rating Agency; provided that any such certificates of deposit must be
secured at all times by collateral described in clause (a) or (b)
above, such collateral must be held by a third party and the Trustee
must have a perfected first priority security interest in such
collateral;
(c) commercial paper (having original maturities of not more than
180 days) rated in its highest rating by each Rating Agency;
(d) investments in money market funds rated in its highest rating
by each Rating Agency, which funds are registered under the Investment
Company Act of 1940 and whose shares are registered under the Act; and
(e) other investments approved by the Rating Agencies in writing
delivered to the Trustee;
provided that each such Permitted Investment shall be a "permitted investment"
within the meaning of Section 860G(a)(5) of the Code and that no instrument
described hereunder shall evidence either the right to receive (x) only interest
with respect to the obligations underlying such instrument or (y) both principal
and interest payments derived from obligations underlying such instrument and
the interest and principal payments with respect to such instrument provided a
yield to maturity at par greater than 120% of the yield to maturity at par of
the underlying obligations; and PROVIDED, FURTHER, that no instrument described
hereunder may be purchased at a price greater than par.
Permitted Transferee: Any transferee of a Class R Certificate other
than a Disqualified Non-United States Person or Disqualified Organization.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, national
banking association, unincorporated organization or government or any agency or
political subdivision thereof.
Plan: As defined in Section 4.02(m).
[Preference Amount: Any amount previously distributed to an Insured
Certificateholder that is recoverable and sought to be recovered as a voidable
preference by a trustee in bankruptcy pursuant to the United States Bankruptcy
Code (11 U.S.C.)as amended from time to time, in accordance with a final
nonappealable order of a court having competent jurisdiction.]
[Preference Claim: As defined in Section 6.04(f).]
Pre-Funded Amount:
Pre-Funding Account:
Pre-Funding Period:
[Premium Amount: On each Distribution Date, the product of 1/12 of the
Premium Percentage and the aggregate Certificate Principal Amount of the Insured
Certificates immediately prior to the related Distribution Date.]
[Premium Percentage: The rate per annum set forth as the premium
percentage in the Insurance Agreement.]
[Premium Rate: With respect to any Distribution Date, the fraction,
expressed as a percentage, the numerator of which is the product of (i) the
Premium Percentage and (ii) the aggregate Certificate Principal Amount of the
Insured Certificates immediately prior to such date, and the denominator of
which is the Total Loan Balance for the immediately preceding Distribution
Date.]
[Prepayment Interest Excess: With respect to any Distribution Date,
for each Mortgage Loan that was the subject during the related Prepayment Period
and from the first day through the 15th day of a calendar month of a Principal
Prepayment in Full, an amount equal to any payment of interest received in
connection with such Principal Prepayment in Full, LESS the Servicing Fee,
representing interest accrued after the Due Date in such Prepayment Period.]
[Prepayment Interest Shortfall: With respect to any Distribution Date,
for each Mortgage Loan that was the subject during the related Prepayment Period
of a Curtailment or of a Principal Prepayment in Full from the 16th day through
the last day of a calendar month, an amount equal to (a) 30 days' interest on
the Principal Balance of such Mortgage Loan at a per annum rate equal to the
Mortgage Rate MINUS the rate at which the Servicing Fee is calculated MINUS (b)
the amount of interest actually remitted by the Mortgagor in connection with
such Principal Prepayment in Full or Curtailment less the Servicing Fee for such
Mortgage Loan in such month.]
[Prepayment Period: With respect to any Distribution Date, the period
beginning on the Cut-off Date, in the case of the first Distribution Date, and
on the day immediately following the close of the immediately preceding
Prepayment Period, in the case of each succeeding Distribution Date, and ending
on the 15th day (or if that day is not a Business Day, the immediately preceding
Business Day) of the month in which that Distribution Date occurs.]
Prepayment Premium: Any prepayment fee, penalty, charge or premium
paid by a Mortgagor under the terms of the related Mortgage Note in connection
with a Principal Prepayment in Full or Curtailment.
Principal Balance: As to any Mortgage Loan and Distribution Date, the
principal balance of such Mortgage Loan as of the Due Date preceding such date
of determination as specified for such Due Date in the amortization schedule
(before any adjustment to such amortization schedule by reason of any bankruptcy
(other than Deficient Valuations) or similar proceeding or any moratorium or
similar waiver or grace period) after giving effect to Principal Prepayments in
Full or Curtailments received prior to the close of the related Prepayment
Period, Deficient Valuations incurred prior to such Due Date, to any
Curtailments applied by the Servicer in reduction of the unpaid principal
balance of such Mortgage Loan as of the close of the related Prepayment Period
and to the payment of principal due on or before such Due Date and irrespective
of any delinquency in payment by the related Mortgagor. The Principal Balance of
a Mortgage Loan that becomes a Liquidated Mortgage Loan prior to the close of
the related Prepayment Period shall be zero.
Principal Distribution Amount: With respect to any Distribution Date,
an amount equal to the sum of (a) the Principal Remittance Amount MINUS any
Overcollateralization Release Amount for such date and (b) any Extra Principal
Distribution Amount for such date.
Principal Prepayment in Full: 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.
Principal Remittance Amount: With respect to any Distribution Date,
the sum of (i) all principal collected (other than Payaheads) or advanced in
respect of Monthly Payments on the Mortgage Loans during the related Due Period,
(ii) all Principal Prepayments in Full and all Curtailments received during the
related Prepayment Period, (iii) the outstanding principal balance of each
Mortgage Loan that was purchased from the Trust Fund during the related
Prepayment Period, (iv) the portion of any Substitution Adjustment paid with
respect to the Mortgage Loans during the related Prepayment Period allocable to
principal, and (v) all Net Liquidation Proceeds, Insurance Proceeds, Net REO
Proceeds, Released Mortgaged Property Proceeds and other recoveries collected
with respect to such Mortgage Loans during the related Prepayment Period, to the
extent allocable to principal, as reduced, in each case to the extent
applicable, without duplication, by unreimbursed Periodic Advances and
Nonrecoverable Advances due to the Servicer or the Trustee, to the extent
allocable to principal and as provided in this Agreement.
Proprietary Lease: With respect to any Cooperative Unit, a lease or
occupancy agreement between a Cooperative Corporation and a holder of related
Cooperative Shares.
Prospectus: The prospectus supplement dated [ ], together with the
accompanying prospectus dated [ ], relating to the [Class A, Class M1, Class M2
and Class B] Certificates.
Purchase Agreement: The Mortgage Loan Purchase Agreement dated as of
[ ], among the Originator, the Seller and the Depositor.
Qualified Mortgage: "Qualified Mortgage" shall have the meaning set
forth in the definition thereof at Section 860G(a)(3) of the Code (or any
successor statute thereto) (but without regard to the rule in Treasury
Regulation Section 1.860G-2(f)(2) that treats a defective obligation as a
qualified mortgage, or any similar provision).
Qualified Substitute Mortgage Loan: A mortgage loan substituted by the
Originator for a Deleted Mortgage Loan which must, on the date of such
substitution, (i) have an outstanding principal balance, after deduction of all
Monthly Payments due and received in the month of substitution (or in the case
of a substitution of more than one mortgage loan for a Deleted Mortgage Loan, an
aggregate principal balance), not in excess of the Principal Balance of the
Deleted Mortgage Loan and not less than 90% of the Principal Balance of the
Deleted Mortgage Loan (the amount of any shortfall to be paid by the Originator
in the month of substitution), (ii) have a remaining term to maturity not
greater than (and not more than one year less than) that of the Deleted Mortgage
Loan, (iii) have a Mortgage Rate not less than the Mortgage Rate of the Deleted
Mortgage Loan, (iv) have a Servicing Fee Rate as provided herein for all
Mortgage Loans subject to this Agreement, (v) with respect to each Adjustable
Rate Mortgage Loan, have a minimum rate not less than that of the Deleted
Mortgage Loan, (vi) with respect to each Adjustable Rate Mortgage Loan, have a
maximum rate not less than that of the Deleted Mortgage Loan, (vii) with respect
to each Adjustable Rate Mortgage Loan, have a margin not less than that of the
Deleted Mortgage Loan, (viii) with respect to each Adjustable Rate Mortgage
Loan, have a periodic rate cap equal to that of the Deleted Mortgage Loan, (ix)
have a Loan-to-Value Ratio equal to or less than the Loan-to-Value Ratio of the
Deleted Mortgage Loan, (x) with respect to each Adjustable Rate Mortgage Loan,
have the same adjustment frequency as that of the Deleted Mortgage Loan, (xi)
with respect to each Adjustable Rate Mortgage Loan, have the same Index as the
Deleted Mortgage Loan, (xii) comply as of the date of substitution with each
representation and warranty set forth in [Section 6] of the Purchase Agreement,
(xiii) be in the same credit grade category as the Deleted Mortgage Loan (xiv)
have a Prepayment Premium of the same type as that of the Deleted Mortgage Loan,
(xv) is of the same or better property type or is a single family dwelling and
the same or better occupancy status or is a primary residence as the Mortgage
Loan being replaced, (xvi) shall be a first lien on the Mortgaged Property,
(xvii) shall not provide for a Balloon Payment (and if such related Mortgage
Loan provided for a Balloon Payment, such Qualified Substitute Mortgage Loan
shall have an original maturity of not less than the original maturity of such
related Mortgage Loan), (xviii) shall be a fixed rate Mortgage Loan or an
Adjustable Rate Mortgage Loan if the Mortgage Loan being replaced is an
Adjustable Rate Mortgage Loan, (xix) satisfies the criteria set forth from time
to time in the definition thereof at Section 860G(a)(4) of the Code (or any
successor statute thereto) and applicable to the Trust, (xx) satisfies the
representations and warranties set forth in Sections [5(b)(viii), (xii) and
(xiv)] of the Purchase Agreement, (xxi) shall not be 30 days or more delinquent,
(xxii) with respect to each Adjustable Rate Mortgage Loan, shall have a next
adjustment date not more than two months later than the next adjustment date of
the Deleted Mortgage Loan, and (xxiii) shall have the same Due Date as the
Mortgage Loan being replaced.
In the event that one or more mortgage loans are proposed to be
substituted for one or more Mortgage Loans, [the Certificate Insurer may allow]
the foregoing tests may be met on a weighted average basis, except that the
requirements of clauses (ii), (iii), (v), (vi), (vii), (viii), (ix), (x), (xi),
(xii), (xiii), (xix), (xx), (xxii), and (xxiii) hereof must be satisfied as to
each Qualified Substitute Mortgage Loan.
Rating Agency: Each of [Xxxxx'x, S&P, DCR and Fitch].
Realized Loss: With respect to any Distribution Date, the aggregate of
the amount of losses with respect to each Mortgage Loan that became a Liquidated
Mortgage Loan during the Prepayment Period preceding such Distribution Date,
equal to (i) the unpaid principal balance of each such Liquidated Mortgage Loan,
plus accrued interest thereon in accordance with the amortization schedule at
the time applicable thereto at the applicable Mortgage Rate from the Due Date as
to which interest was last paid with respect thereto through the last day of the
month in which such Mortgage Loan became a Liquidated Mortgage Loan, plus,
without duplication, the amount of any Periodic Advances and Servicing Advances
paid by the related Mortgagor, MINUS (ii) Net Liquidation Proceeds with respect
to such Liquidated Mortgage Loan.
Recognition Agreement: With respect to any Cooperative Loan, an
agreement between the related Cooperative Corporation and the originator of such
Mortgage Loan to establish the rights of such originator in the related
Cooperative Property.
Record Date: With respect to any Distribution Date, the close of
business on the last Business Day of the month immediately preceding the month
of such Distribution Date.
Reference Banks: As defined in Section 6.14.
Regular Certificate: Each Certificate other than a Residual
Certificate.
Regular Certificateholder: Each Holder of a Regular Certificate.
[Reimbursement Amount: As of any Distribution Date, the sum of (a)(i)
all Insured Payments (as defined in the Certificate Insurance Policy) previously
paid by the Certificate Insurer and in each case not previously repaid to the
Certificate Insurer pursuant to Section 6.05 hereof plus (ii) interest accrued
on each such Insured Payment not previously repaid calculated at the Late
Payment Rate from the date such Insured Payment was made and (b)(i) any amounts
then due and owing to the Certificate Insurer under the Insurance Agreement, as
certified to the Trustee by the Certificate Insurer plus (ii) interest on such
amounts at the Late Payment Rate (as defined in the Insurance Agreement). The
Certificate Insurer shall notify the Trustee and the Depositor of the amount of
any Reimbursement Amount.]
Released Mortgaged Property Proceeds: As to any Mortgage Loan,
proceeds received by the 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, Accepted Servicing
Practices and this Agreement.
Relief Act: The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended.
Relief Act Shortfall: With respect to any Distribution Date and each
Mortgage Loan as to which there has been a reduction in the amount of interest
collected with respect to the related Due Period as a result of application of
the Relief Act, the amount by which (a) interest collectible on such Mortgage
Loan during such Due Period is less than (b) one month's interest on the
Principal Balance of such Mortgage Loan at the applicable Mortgage Rate before
giving effect to the Relief Act.
REMIC: A "real estate mortgage investment conduit" within the meaning
of Section 860D of the Code.
REMIC Maturity Date:
REMIC Opinion: As defined in Section 10.02.
REMIC Provisions: Provisions of the federal income tax law relating to
real estate mortgage investment conduits, which appear at Sections 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
temporary and final regulations promulgated thereunder and published rulings,
notices and announcements, as the foregoing may be in effect from time to time.
REO Acquisition: The acquisition of any REO Property pursuant to
Section 5.12.
REO Disposition: The final sale by the Servicer of a Mortgaged
Property acquired by the Servicer in foreclosure or by deed in lieu of
foreclosure.
REO Mortgage Loan: Any Mortgage Loan which is not a Liquidated
Mortgage Loan and as to which the indebtedness evidenced by the related Mortgage
Note is discharged and the related Mortgaged Property is held as part of the
Trust Fund.
REO Proceeds: Proceeds received in respect of any REO Mortgage Loan
(including, without limitations, proceeds from the rental of the related REO
Property).
REO Property: A Mortgaged Property acquired by the Trust Fund through
foreclosure or deed-in-lieu of foreclosure in connection with a defaulted
Mortgage Loan or otherwise treated as having been acquired pursuant to the REMIC
Provisions.
Representation Letter: Letters to, or agreements with, the Depository
to effectuate a book entry system with respect to the Book-Entry Certificates
registered in the Certificate Register under the nominee name of the Depository.
Request for Release: A request for release in substantially the form
attached as Exhibit H hereto.
Required Reserve Fund Deposit: With respect to any Distribution Date
on which the Net Excess Spread is less than 0.25%, the amount by which (a) the
sum of any Basis Risk Shortfall, any Unpaid Basis Risk Shortfall, and the
product of 1.00% and the Total Loan Balance for such date exceeds (b) the amount
on deposit in the Basis Risk Reserve Fund immediately prior to such date. With
respect to any Distribution Date on which the Net Excess Spread is equal to or
greater than 0.25%, the amount by which (a) the sum of any Basis Risk Shortfall,
any Unpaid Basis Risk Shortfall, and $1,000 exceeds (b) the amount on deposit in
the Basis Risk Reserve Fund immediately prior to such date.
Reserve Interest Rate: As defined in Section 6.14.
Residential Dwelling: A one- to four-family dwelling, a unit in a
planned unit development, a unit in a condominium development, a townhouse or a
manufactured housing unit which is non-mobile.
Residual Certificate: Any Class R Certificate.
Residual Certificateholder: Any Holder of a Residual Certificate.
Responsible Officer: When used with respect to the Trustee, any
officer assigned to the Corporate Trust Division (or any successor thereto),
including any Vice President, Assistant Vice President, Senior Trust Officer,
Trust Officer, Assistant Trust Officer, Assistant Treasurer, any Assistant
Secretary, any trust officer or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers who has direct responsibility for the administration of this Agreement
or to whom, with respect to a particular matter, 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 Servicer, the President or any Vice
President, Assistant Vice President, or any Secretary or Assistant Secretary.
Restricted Certificate: Any Class R Certificate.
[S&P: Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc., or its successor in interest.]
SEC: As defined in Section 5.10.
Security Agreement: With respect to any Cooperative Loan, the
agreement between the owner of the related Cooperative Shares and the originator
of the related Mortgage Note that defines the terms of the security interest in
such Cooperative Shares and the related Proprietary Lease.
Seller: [ ], a [ ]
corporation, or its successor in interest.
Senior Certificate: Any [Class A] Certificate.
Senior Enhancement Percentage: With respect to any Distribution Date,
the fraction, expressed as a percentage, the numerator of which is the sum of
the aggregate Certificate Principal Amount of the [Class M1, Class M2 and Class
B] Certificates and the Overcollateralization Amount (which amount, for purposes
of this definition, shall not be less than zero), in each case calculated after
giving effect to distributions on such date, and the denominator of which is the
Total Loan Balance for such date.
Senior Mortgage Loan: With respect to any Junior Mortgage Loan, a
mortgage loan on the related Mortgaged Property that is senior to the lien
provided by such Junior Mortgage Loan.
[Senior Principal Distribution Amount: With respect to any
Distribution Date, the amount, if any, by which (x) the Class Principal Amount
of the Class A Certificates immediately prior to such Distribution Date exceeds
(y) the lesser of (i) the product of (A) if a Cumulative Loss Trigger Event has
not occurred with respect to such date, [ ]%, and if a Cumulative Loss Trigger
Event has occurred with respect to such date, [ ]%, and (B) the Total Loan
Balance for such Distribution Date and (ii) the amount, if any, by which the
Total Loan Balance for such Distribution Date exceeds $[ ].]
Servicer: [ ], a [ ]
corporation, or any successor appointed as herein provided.
Servicer Remittance Date: With respect to any Distribution Date, the
24th day of the month in which such Distribution Date occurs, or if such 24th
day is not a Business Day, the Business Day immediately preceding such 24th day.
Servicer Termination Test: The Servicer Termination Test is satisfied
for any date of determination if the Cumulative Loss Percentage for such period
does not exceed [ ]%.
Servicing Account: The account created and maintained pursuant to
Section 5.09.
Servicing Advances: All reasonable and customary "out-of-pocket" costs
and expenses relating to a borrower default or delinquency or other
unanticipated event incurred by the Servicer in the performance of its servicing
obligations, including, but not limited to, the cost of (a) the preservation,
restoration and protection of the Mortgaged Property including, without
limitation, taxes and insurance costs, (b) any enforcement or judicial
proceedings, including foreclosures, (c) the management and liquidation of the
REO Property, including reasonable fees paid to any independent contractor in
connection therewith, (d) compliance with the obligations under Sections 5.05,
5.07, 5.09, 5.12 or 5.21(b), all of which reasonable and customary out-of-pocket
costs and expenses are reimbursable to the Servicer to the extent provided in
Section 5.04.
Servicing Compensation: The Servicing Fee and other amounts to which
the Servicer is entitled pursuant to Section 5.14.
Servicing Fee: As to each Mortgage Loan, the annual fee payable to the
Servicer and the related Subservicer, if any, as indicated on the related
Mortgage Loan Schedule. Such fee shall be equal to the product the Servicing Fee
Rate and the outstanding principal balance of the Mortgage Loans at the start of
the related Due Period. Such fee shall be calculated and payable monthly only
from the amounts received in respect of interest on such Mortgage Loan and shall
be computed on the basis of the same principal amount and for the period
respecting which any related interest payment on a Mortgage Loan is computed.
The Servicing Fee includes any servicing fees owed or payable to any
Subservicer.
Servicing Fee Rate: [ ]% per annum.
Servicing Officer: Any employee of the Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and specimen signature appear on a list of servicing officers furnished to
the Trustee [and the Certificate Insurer] by the Servicer, as such list may from
time to time be amended.
Startup Day: The day designated as such pursuant to Section 10.01(b)
hereof.
[Stepdown Date: The earlier to occur of (a) the first Distribution
Date after the Class Principal Amount of the Senior Certificates has been
reduced to zero and (b) the later to occur of (x) the Distribution Date in [ ]
and (y) the first Distribution Date on which the Senior Enhancement Percentage
(calculated for this purpose after giving effect to payments or other recoveries
on the Mortgage Loans during the related Due Period but before giving effect to
distributions on any Certificates on such Distribution Date) is greater than or
equal to [ ]% if a Cumulative Loss Trigger Event has not occurred with respect
to such date, or [ ]% if a Cumulative Loss Trigger Event has occurred with
respect to such date.]
[Subordination Deficit: With respect to any Distribution Date on which
the Senior Enhancement Percentage is zero, the amount, if any, by which (a) the
aggregate Certificate Principal Amount of the Senior Certificates on such date
prior to giving effect to distributions of principal on such date exceeds (b)
the Total Loan Balance for such date.]
Subsequent Cut-off Date:
Subsequent Mortgage Loan:
Subsequent Transfer Date:
Subsequent Transfer Instrument:
Subservicer: Any Person that satisfies the requirements of Section
5.02 with which the Servicer has entered into a Subservicing Agreement pursuant
to the terms of this Agreement.
Subservicing Agreement: The contract between the Servicer and any
Subservicer.
Substitution Adjustment: As to any date on which a substitution occurs
pursuant to Sections 2.04 or 3.03, the sum of (i) the amount (if any) by which
the aggregate unpaid principal balances of the Qualified Substitute Mortgage
Loans (after application of principal payments received on or before the date of
substitution of any Qualified Substitute Mortgage Loans as of the date of
substitution), are less than the aggregate of the unpaid principal balances of
the related Deleted Mortgage Loans, (ii) interest accrued and unpaid on the
related Deleted Mortgage Loans, (iii) the amount of any Servicing Advances
remaining unreimbursed with respect to such Deleted Mortgage Loans and (iv) the
amount of any Servicing Advances reimbursed other than from collections or other
recoveries in respect of such Deleted Mortgage Loans.
[Targeted Cumulative Loss Percentage: With respect to any Distribution
Date occurring during the time periods set forth below, the percentage specified
below for such time period:]
Targeted Cumulative
Periods (dates inclusive) Loss Percentage
------------------------- ---------------
[ ]-[ ]......... [ ]%
[ ]-[ ]......... [ ]%
[ ]-[ ]......... [ ]%
[ ]-[ ]......... [ ]%
[ ] and thereafter..... [ ]%
[Targeted Overcollateralization Amount: With respect to any
Distribution Date (a) prior to the Stepdown Date, and if a Cumulative Loss
Trigger Event has not occurred for such Distribution Date, the product of [ ]%
and the Cut-off Date Balance; (b) prior to the Stepdown Date, and if a
Cumulative Loss Trigger Event has occurred for such Distribution Date, the
product of [ ]% and the Cut-off Date Balance; (c) on and after the Stepdown
Date, and if a Cumulative Loss Trigger Event has not occurred for such
Distribution Date, the greater of (i) the product of [ ]% and the Total Loan
Balance for the related Distribution Date, and (ii) the product of [ ]% and the
Cut-Off Date Balance; and (d) on and after the Stepdown Date, and if a
Cumulative Loss Trigger Event has occurred for such Distribution Date, the
greater of (i) the product of [ ]% and the Total Loan Balance for such
Distribution Date, and (ii) the product of [ ]% and the Cut-off Date Balance.]
Tax Matters Person: The Person or Persons appointed pursuant to
Section 10.01(c) from time to time to act as the "tax matters person" (within
the meaning of the REMIC Provisions) of the Trust Fund.
Tax Return: The federal income tax return on Internal Revenue Service
Form 1066, "U.S. Real Estate Mortgage Investment Conduit Income Tax Return,"
including Schedule Q thereto, "Quarterly Notice to Residual Interest Holders of
REMIC Taxable Income or Net Loss Allocation", or any successor forms, to be
filed on behalf of the Trust Fund due to its classification as a REMIC under the
REMIC Provisions, together with any and all other information reports or returns
that may be required to be furnished to the Certificateholders or filed with the
Internal Revenue Service or any other governmental taxing authority under any
applicable provision of federal, state or local tax laws in connection with the
Trust Fund.
Three Month Delinquency Rate: With respect to any Distribution Date,
the average of the Delinquency Rates for each of the three (or one and two, in
the case of the first and second Distribution Dates) immediately preceding Due
Periods.
Total Distribution Amount: With respect to any Distribution Date, the
sum of the Interest Remittance Amount for such date, the aggregate of the
Principal Remittance Amounts for such date and the aggregate of the Prepayment
Premiums received by the Servicer during the Prepayment Period immediately
preceding such date.
Total Expense Rate: With respect to any Distribution Date, the sum of
the Servicing Fee Rate [, the Premium Rate] and the Trustee Fee Rate for such
date.
Total Loan Balance: The aggregate of the Principal Balances of all
Mortgage Loans at the date of determination.
[Transaction Document: As defined in the Insurance Agreement.]
Transfer: Any direct or indirect transfer, sale, pledge, hypothecation
or other form of assignment of any Ownership Interest in a Certificate.
Transfer Affidavit And Agreement: As defined in Section 4.02(j).
Transferee: Any Person who is acquiring by Transfer any Ownership
Interest in a Certificate.
Transferor: Any Person who is disposing by Transfer any Ownership
Interest in a Certificate.
Trust Fund: The segregated pool of assets subject hereto, constituting
the trust created hereby and to be administered hereunder, consisting of: (a)
such Mortgage Loans as from time to time are subject to this Agreement, together
with the Mortgage Files relating thereto and all collections thereon and
proceeds thereof due after the Cut-off Date, (b) such assets as from time to
time are identified as deposited in the Certificate Account, (c) such assets as
from time to time are identified as REO Property and collections thereon and
proceeds thereof, (d) assets that are deposited in the Accounts, including
amounts on deposit in the Accounts and invested in Permitted Investments, (e)
the Trustee's rights with respect to the Mortgage Loans under all insurance
policies required to be maintained pursuant to this Agreement [(including the
Certificate Insurance Policy)] and any Insurance Proceeds [(and any proceeds of
the Certificate Insurance Policy)], (f) Liquidation Proceeds, (g) Released
Mortgaged Property Proceeds, (h) REO Proceeds, (i) the rights (but not the
obligations) of the Depositor under the Purchase Agreement to the extent
assigned to the Trustee hereunder, (j) the Basis Risk Reserve Fund, including
amounts on deposit from time to time therein, (k) the Depositor's security
interest in any collateral pledged to secure the Mortgage Loans, including the
Mortgaged Properties, and (l) any and all proceeds of the foregoing.
Trustee: [ ], a [ ],
or its successor in interest, or any successor trustee appointed as herein
provided.
Trustee Fee: As to any Distribution Date, the fee payable to the
Trustee in respect of its services as Trustee that accrues at a monthly rate
equal to the product of 1/12 of the Trustee Fee Rate and Total Loan Balance of
each Mortgage Loan as of the immediately preceding Due Date.
Trustee Fee Rate: [ ]% per annum.
Trustee Remittance Report: As defined in Section 6.07.
UCC: The Uniform Commercial Code in effect in the applicable
jurisdiction.
UCC Financing Statement: A financing statement executed and filed
pursuant to the UCC.
United States Person: (i) a citizen or resident of the United States;
(ii) a corporation (or entity treated as a corporation for tax purposes) created
or organized in the United States or under the laws of the United States or of
any state thereof, including, for this purpose, the District of Columbia; (iii)
a partnership (or entity treated as a partnership for tax purposes) organized in
the United States or under the laws of the United States or of any state
thereof, including, for this purpose, the District of Columbia (unless provided
otherwise by future Treasury regulations); (iv) an estate whose income is
includible in gross income for United States income tax purposes regardless of
its source; or (v) 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 U.S. Persons have authority to control all substantial decisions of the
trust. Notwithstanding the last clause of the preceding sentence, to the extent
provided in Treasury regulations, certain trusts in existence on August 20,
1996, and treated as U.S. Persons prior to such date, may elect to continue to
be U.S. Persons.
Unpaid Basis Risk Shortfall: With respect to any Distribution Date and
any Certificate, the aggregate of all Basis Risk Shortfalls with respect to such
Certificate remaining unpaid from previous Distribution Dates, plus interest
accrued thereon at the applicable Interest Rate (calculated without giving
effect to the applicable Net Funds Cap).
Unpaid REO Amortization: As to any REO Mortgage Loan and any month,
the aggregate of the installments of principal and accrued interest (adjusted to
the related Net Mortgage Rate) deemed to be due in such month and in any prior
months that remain unpaid, calculated in accordance with Section 5.12.
Section 1.02. Provisions of General Application. (a) All accounting
terms not specifically defined herein shall be construed in accordance with
GAAP.
(b) The terms defined in this Article include the plural as well
as the singular.
(c) The words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole. All references to Articles
and Sections shall be deemed to refer to Articles and Sections of this
Agreement.
(d) Reference to statutes are to be construed as including all
statutory provisions consolidating, amending or replacing the statute to which
reference is made and all regulations promulgated pursuant to such statutes.
(e) All calculations of interest (other than with respect to the
Mortgage Loans, or as otherwise specifically set forth herein) provided for
herein shall be made on the basis of a 360-day year consisting of twelve 30-day
months. All calculations of interest with respect to any Mortgage Loan provided
for herein shall be made in accordance with the terms of the related Mortgage
Note and Mortgage.
(f) Any Mortgage Loan payment is deemed to be received on the date
such payment is actually received by the Servicer, provided, however, that for
purposes of calculating distributions on the Certificates, Prepayments in Full
and Curtailments with respect to any Mortgage Loan are deemed to be received on
the date they are applied in accordance with customary servicing practices
consistent with the terms of the related Mortgage Note and Mortgage to reduce
the outstanding principal balance of such Mortgage Loan on which interest
accrues.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. Conveyance of Mortgage Loans; Special Deposit; Priority
and Subordination of Ownership Interests. (a) The Depositor does hereby sell,
transfer, assign, set over and convey to the Trustee without recourse but
subject to the provisions of this Section 2.01 and the other terms and
provisions of this Agreement, all of the right, title and interest of the
Depositor in and to the Mortgage Loans (other than interest and principal due
thereon on or before the Cut-off Date), and all other assets included or to be
included in the Trust Fund for the benefit of the Certificateholders [and the
Certificate Insurer]. In connection with such transfer and assignment, the
Depositor does hereby also irrevocably transfer, assign, set over and otherwise
convey to the Trustee all of its rights under the Purchase Agreement, other than
[Section 17] thereof. The Trustee hereby accepts such assignment, and shall be
entitled to exercise all rights of the Depositor under the Purchase Agreement as
if, for such purpose, it were the Depositor.
(b) The rights of the Certificateholders to receive payments with
respect to the Mortgage Loans in respect of the Certificates, and all ownership
interests of the Certificateholders in such payments, shall be as set forth in
this Agreement. In this regard, all rights of the Class R Certificateholders to
receive payments in respect of the Class R Certificates are subject and
subordinate to the preferential rights of the Regular Certificateholders to
receive payments in respect of the Regular Certificates [and to the Certificate
Insurer's rights to be reimbursed for Insured Payments together with interest
thereon at the rate specified herein or in the Insurance Agreement]. In
accordance with the foregoing, the ownership interest of the Class R
Certificateholders in amounts deposited in the Certificate Account and the Basis
Risk Reserve Fund from time to time shall not vest unless and until such amounts
are distributed in respect of the Class R Certificates in accordance with the
terms of this Agreement.
(c) It is intended that the conveyance of the Mortgage Loans and the
other assets to be included in the Trust Fund by the Depositor to the Trustee as
provided in this Section be, and be construed as, a sale of the Mortgage Loans
and the other assets to be included in the Trust Fund by the Depositor to the
Trustee for the benefit of the Certificateholders [and the Certificate Insurer].
It is, further, not intended that such conveyance be deemed a pledge of the
Mortgage Loans and such other assets by the Depositor to the Trustee to secure a
debt or other obligation of the Depositor. However, in the event that the
Mortgage Loans and the other assets to be included in the Trust Fund are held to
be property of the Depositor, or if for any reason this Agreement is held or
deemed to create a security interest in the Mortgage Loans and such other
assets, then it is intended that, (a) this Agreement shall also be deemed to be
a security agreement within the meaning of Articles 8 and 9 of the New York UCC
and the UCC of any other applicable jurisdiction; (b) the conveyance provided
for in this Section shall be deemed to be (1) a grant by the Depositor to the
Trustee of a security interest in all of the Depositor's right (including the
power to convey title thereto), title and interest, whether now owned or
hereafter acquired, in and to (A) the Mortgage Loans, including the Mortgage
Notes, the Mortgages, any related insurance policies and all other documents in
the related Mortgage Files, (B) all amounts payable to the holders of the
Mortgage Loans in accordance with the terms thereof [the Certificate Insurance
Policy] and (C) all proceeds of the conversion, voluntary or involuntary, of the
foregoing into cash, instruments, securities or other property, including
without limitation all Liquidation Proceeds, all Insurance Proceeds, all REO
Proceeds, all Released Mortgaged Property Proceeds, all amounts from time to
time held or invested in the Certificate Account, the Collection Account or the
Basis Risk Reserve Fund, whether in the form of cash, instruments, securities or
other property and (2) an assignment by the Depositor to the Trustee of any
security interest in any and all of the Seller's right (including the power to
convey title thereto), title and interest, whether now owned or hereafter
acquired, in and to the property described in the foregoing clauses (1)(A) and
(B) granted by the Seller to the Depositor pursuant to the Purchase Agreement;
(c) the possession by the Trustee or its agent of Mortgage Notes and such other
items of property as constitute instruments, money, negotiable documents or
chattel paper shall be deemed to be "possession by the secured party" or
possession by a purchaser or a person designated by such secured party, for
purposes of perfecting the security interest pursuant to the New York UCC and
the UCC of any other applicable jurisdiction (including, without limitation,
Sections 9-305, 8-313 or 8-321 thereof); and (d) notifications to persons
holding such property, and acknowledgments, receipts or confirmations from
persons holding such property, shall be deemed notifications to, or
acknowledgments, receipts or confirmations from, financial intermediaries,
bailees or agents (as applicable) of the Trustee for the purpose of perfecting
such security interest under applicable law. The Depositor and, at the
Depositor's direction, the Seller and the Trustee shall, to the extent
consistent with this Agreement, take such reasonable actions as may be necessary
to ensure that, if this Agreement were deemed to create a security interest in
the Mortgage Loans and other property of the Trust Fund, such security interest
would be deemed to be a perfected security interest of first priority under
applicable law and will be maintained as such throughout the term of the
Agreement.
Section 2.02. Possession of Mortgage Files; Access to Mortgage Files.
(a) Upon the issuance of the Certificates, the ownership of each Mortgage Note,
the Mortgage and the contents of the Mortgage File related to each Mortgage Loan
is vested in the Trustee for the benefit of the Certificateholders [and the
Certificate Insurer].
(b) The Depositor has delivered or caused to be delivered the Mortgage
File related to each Mortgage Loan to the Trustee or the Custodian on behalf of
the Trustee.
(c) As provided in Section 9.11, the Trustee may [, with the prior
written consent of the Certificate Insurer,] enter into a custodial agreement
pursuant to which the Trustee will appoint a custodian (a "Custodian") to hold
the Mortgage Files in trust for the benefit of all present and future
Certificateholders [and the Certificate Insurer]; PROVIDED, HOWEVER, that the
Custodian so appointed shall in no event be the Depositor or the Servicer or any
Person known to a Responsible Officer of the Trustee to be an Affiliate of the
Depositor or the Servicer.
(d) The Trustee shall cause the Custodian to afford the Depositor and
the Servicer reasonable access to all records and documentation regarding the
Mortgage Loans relating to this Agreement, such access being afforded at
customary charges, upon reasonable prior notice and during normal business hours
at the offices of the Custodian. Section 2.03. Delivery of Mortgage Loan
Documents [and the Certificate Insurance Policy]. In connection with each
conveyance pursuant to Section 2.01 hereof, the Depositor has delivered or does
hereby agree to deliver or cause to be delivered to the Trustee (or the
Custodian on behalf of the Trustee) on or before the Closing Date, [, the
Certificate Insurance Policy,] the Mortgage Loan Schedule and each of the
following documents for each Mortgage Loan sold by the Seller to the Depositor
and sold by the Depositor to the Trust Fund:
(i) The original Mortgage Note bearing all intervening
endorsements showing a complete chain of endorsements from the
originator of such Mortgage Loan to the Originator, endorsed by the
Originator without recourse in the following form: "Pay to the order
of __________________, without recourse" and signed manually or by
facsimile in the name of the Originator by an authorized officer;
(ii) The original Mortgage with evidence of recording indicated
thereon;
(iii) An original assignment of the Mortgage, in form acceptable
for recordation in the jurisdiction in which the related Mortgaged
Property is located (except for the assignee's name and recordation
information not yet received), such assignment to be in blank and
signed in the name of the Originator by an authorized officer;
(iv) The originals of all intervening assignments of the Mortgage
(with evidence of recording thereon) showing a complete chain of
assignments from the originator of such Mortgage Loan to the
Originator;
(v) Any assumption, modification, consolidation or extension
agreements (with evidence of recording thereon);
(vi) The original policy of title insurance (or the original
commitment for title insurance, if the policy is being held by the
title insurance company pending recordation of the Mortgage); and
(vii) The certificate of primary mortgage guaranty insurance, if
any, issued with respect to such Mortgage Loan.
With respect to each Mortgage Loan as to which the Depositor has
received recording information by the Closing Date, the Depositor shall cause,
within [30] days following the Closing Date, and with respect to each other
Mortgage Loan, the Depositor shall cause, within [30] days of receipt of such
recording information, Assignments of Mortgages to "[ ], as Trustee of Finance
America Securities, LLC Mortgage Loan Trust [ ] under the Pooling and Servicing
Agreement dated as of [ ]" to be submitted for recording in the appropriate
jurisdictions; PROVIDED, that the Depositor shall not be required to record an
Assignment of Mortgage if the Depositor furnishes to the Trustee [and the
Certificate Insurer], on or before the Closing Date, at the Depositor's expense,
an Opinion of Counsel with respect to the relevant jurisdiction that such
recording is not necessary to protect the Trustee's interest in the related
Mortgage Loans (in form and substance satisfactory to the Trustee [, the
Certificate Insurer] and the Rating Agencies); PROVIDED FURTHER, notwithstanding
the delivery of any legal opinions, each Assignment of Mortgage shall be
recorded by the Trustee upon the earliest to occur of: [(i) reasonable direction
by the Certificate Insurer,] (i) the occurrence of an Event of Default, or (ii)
the occurrence of a bankruptcy, insolvency or foreclosure relating to the
Originator.
The Depositor shall deliver the title insurance policy or title
searches, the original Mortgages and such recorded assignments, together with
originals or duly certified copies of any and all prior assignments (other than
unrecorded warehouse assignments), to the Trustee or its Custodian, within [15]
days of receipt thereof by the Originator (but in any event, with respect to any
Mortgage as to which original recording information has been made available to
the Originator, within 12 months after the Closing Date).
In instances where the original recorded Mortgage or intervening
assignment (other than the Assignment of Mortgage) cannot be delivered to the
Trustee or its Custodian prior to or concurrently with the execution and
delivery of this Agreement due to a delay in connection with recording, the
Depositor may in lieu of delivering such original recorded Mortgage or
intervening assignment (other than the Assignment of Mortgage), deliver to the
Trustee or its Custodian a copy thereof, provided that the Originator provides a
copy of such document and certifies that the original Mortgage or intervening
assignment (other than the Assignment of Mortgage) has been delivered to a title
insurance company for recordation after receipt of its policy of title insurance
or binder therefor. In all such instances, the Depositor will deliver or cause
to be delivered the original recorded Mortgage or intervening assignment (other
than the Assignment of Mortgage) to the Trustee or its Custodian promptly upon
receipt by the Originator of the original recorded Mortgage or intervening
assignment (other than the Assignment of Mortgage) but in no event later than 12
months after the Closing Date.
Notwithstanding anything to the contrary contained in this Section
2.03, in those instances where the public recording office retains the original
Mortgage, the Assignment of Mortgage or the intervening assignments of the
Mortgage after it has been recorded, the Depositor shall be deemed to have
satisfied its obligations hereunder (and the Originator shall be deemed to have
satisfied its obligations under the Purchase Agreement) upon delivery to the
Trustee or its Custodian of a copy of such Mortgage, such Assignment or
intervening assignments of Mortgage certified by the public recording office to
be a true copy of the recorded original thereof.
Within a period of [30] days from the Closing Date, the Trustee shall,
or shall cause the Custodian to, complete the endorsement of each Mortgage Note
and each Assignment of Mortgage and assignment of leases, if any, in the name of
the Trustee on behalf of the Trust Fund.
(b) In the event that any such original document is required pursuant
to the terms of this Section 2.03 to be a part of a Mortgage File, such document
shall be delivered promptly by the Depositor to the Trustee or its Custodian. If
the Servicer receives any such original document, the Servicer agrees further
that it does not and will not have or assert any beneficial ownership interest
in the Mortgage Loans or the Mortgage Files, and shall transfer such original to
the Trustee or the Custodian on behalf of the Trustee.
Section 2.04. Acceptance by Trustee of the Trust Fund; Certain
Substitutions; Certification by Trustee. (a) The Trustee agrees to execute and
deliver, or cause to be executed and delivered, to the Depositor, [the
Certificate Insurer,] the Servicer and the Seller [on or prior to the Closing
Date an acknowledgment of receipt of the Certificate Insurance Policy and,] with
respect to each Mortgage Loan, on or prior to the Closing Date, an
acknowledgment of receipt of the original Mortgage Note (with any exceptions
noted), and, subject to the review provided for in this Section, its receipt of
the Mortgage Files in substantially the form attached as Exhibit E hereto and
declares that it will hold such documents and any amendments, replacements or
supplements thereto, as well as any other assets included in the definition of
Trust Fund and delivered to the Trustee (or the Custodian on behalf of the
Trustee), as Trustee in trust upon and subject to the conditions set forth
herein for the benefit of the Certificateholders [and the Certificate Insurer].
The Trustee agrees, for the benefit of the Certificateholders [and the
Certificate Insurer], to review, or cause to be reviewed, each Mortgage File
within [45] Business Days after the Closing Date (with respect to the Mortgage
Loans), and to deliver or cause to be delivered to the Seller, the Servicer and
the Depositor [and the Certificate Insurer] a certification of the Trustee or
the Custodian on behalf of the Trustee substantially in the form attached hereto
as Exhibit F to the effect that, as to each Mortgage Loan listed in the related
Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any
Mortgage Loan specifically identified in such certification as not covered by
such certification), (i) all documents required to be delivered to it pursuant
to Section 2.03 are in its possession and that the Mortgage Notes have been
endorsed as provided in Section 2.03, (ii) each such document has been reviewed
by it and has not been mutilated, damaged, torn or otherwise physically altered
(handwritten additions, changes or corrections shall not constitute physical
alteration if initialed by the Mortgagor), appears regular on its face and
relates to such Mortgage Loan, and (iii) based on its examination and only as to
the foregoing documents, the information set forth on the Schedule of Mortgage
Loans accurately reflects the information set forth in the Mortgage File with
respect to the Servicer's loan number, maturity date, original principal
balance, first payment date and original term to maturity. The Trustee makes no
representations as to and shall not be responsible to verify (i) the validity,
legality, enforceability, sufficiency, due authorization, recordability or
genuineness of any of the documents contained in each Mortgage File or of any of
the Mortgage Loans or (ii) the collectability, insurability, effectiveness or
suitability of any such Mortgage Loan.
Within [180] days after the Closing Date, the Trustee shall deliver or
cause to be delivered to the Servicer, the Seller and the Depositor [and the
Certificate Insurer] a final certification of the Trustee or the Custodian
substantially in the form attached hereto as Exhibit G to the effect 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 such
certification as not covered by such certification), (i) all documents required
to be delivered to it pursuant to Section 2.03 are in its possession and that
the Mortgage Notes have been endorsed as provided in Section 2.03, (ii) each
such document has been reviewed by it and has not been mutilated, damaged, torn
or otherwise physically altered (handwritten additions, changes or corrections
shall not constitute physical alteration if initialed by the Mortgagor), appears
regular on its face and relates to such Mortgage Loan, and (iii) based on its
examination and only as to the foregoing documents, the information set forth on
the Mortgage Loan Schedule accurately reflects the information set forth in the
Mortgage File with respect to the Servicer's loan number, maturity date,
original principal balance, first payment date and original term to maturity.
(b) If [the Certificate Insurer or] the Trustee (or its Custodian)
during the process of reviewing the Mortgage Files or otherwise finds any
document constituting a part of a Mortgage File which is not executed, has not
been received, is unrelated to the Mortgage Loan identified in the related
Mortgage Loan Schedule, or does not conform to the requirements of Section 2.03
or the description thereof as set forth in the related Mortgage Loan Schedule,
the Trustee [or the Certificate Insurer, as applicable,] shall promptly so
notify the Servicer, the Seller and the Originator [or the Certificate Insurer].
In performing any such review, the Trustee (or its Custodian) may conclusively
rely on the Seller as to the purported genuineness of any such document and any
signature thereon. It is understood that the scope of the Trustee's (or its
Custodian's) review of the Mortgage Files is limited solely to confirming that
the documents listed in Section 2.03 have been executed and received and relate
to the Mortgage Files identified in the related Mortgage Loan Schedule and such
documents conform to the standard set forth in clauses (ii) and (iii) of the
immediately preceding paragraph. The Trustee shall enforce its rights as to any
defective Mortgage Loan document against the Seller and the Originator under the
Purchase Agreement for the benefit of Certificateholders [and the Certificate
Insurer]. It is understood and agreed that the Depositor has assigned to the
Trustee certain of its rights under the Purchase Agreement including the right
to enforce any remedy against the Seller and the Originator thereunder (other
than under [Section 17] thereof). For purposes of calculating the amount the
Servicer is required to remit on the Servicer Remittance Date following such
repurchase or substitution, any Loan Purchase Price or Substitution Adjustment
that is paid and deposited in the related Collection Account as provided above
shall be deemed to have been deposited in the related Collection Account in the
Prepayment Period preceding such Servicer Remittance Date.
(c) Upon receipt by the Trustee or its Custodian of a certification of
a Servicing Officer of such substitution or purchase (which certification shall
be in the form of Exhibit H hereto) and, in the case of a substitution, upon
receipt of the related Mortgage File, and the deposit of the amounts described
above in the Collection Account, the Trustee shall, or shall cause the Custodian
to, release to the Servicer for release to the Seller and the Originator, as
applicable, the related Mortgage File and shall execute, without recourse, and
deliver such instruments of transfer furnished by the Seller and the Originator,
as applicable, as may be necessary to transfer such Mortgage Loan to the Seller
and the Originator, as applicable. [The Trustee shall, or shall cause the
Custodian to, notify the Certificate Insurer if the Seller or the Originator, as
applicable, fails to repurchase or substitute for a Mortgage Loan in accordance
with the foregoing.]
Section 2.05. Execution of Certificates. The Trustee acknowledges the
assignment to it of the Mortgage Loans and the delivery of the Mortgage Files
relating thereto to the Custodian on behalf of the Trustee and, concurrently
with such delivery, has executed, authenticated and delivered to or upon the
order of the Depositor, in exchange for the Mortgage Loans, the Mortgage Files
and the other assets included in the definition of Trust Fund, Certificates duly
authenticated by the Trustee in Authorized Denominations evidencing the entire
ownership of the Trust Fund.
Section 2.06. Further Action Evidencing Assignment. (a) The Depositor
agrees that, from time to time, at the Seller's expense, the Depositor shall
cause the Seller promptly to execute and deliver all further instruments and
documents, and take all further action, that may be necessary or appropriate, or
that the Servicer [, the Certificate Insurer] or the Trustee may reasonably
request, in order to perfect, protect or more fully evidence the transfer of
ownership of the Trust Fund or to enable the Trustee to exercise or enforce any
of its rights hereunder. Without limiting the generality of the foregoing, the
Depositor will, upon the request of the Servicer or of the Trustee, execute and
file (or cause to be executed and filed) such real estate filings, financing or
continuation statements, or amendments thereto or assignments thereof, and such
other instruments or notices, as may be necessary or appropriate.
(b) The Depositor hereby grants to the Servicer and the Trustee, and
this Agreement shall constitute, a power of attorney to execute all documents on
its behalf under this Agreement as may be necessary or desirable to effectuate
the foregoing.
Section 2.07. Conveyance of the Subsequent Mortgage Loans. [ ].
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01. Representations of the Servicer. The Servicer hereby
represents and warrants to the Trustee, the Depositor [, the Certificate
Insurer] and the Certificateholders as of the Closing Date:
(a) The Servicer is a corporation duly organized, validly existing and
in good standing under the laws of the State of [ ] and is duly authorized and
qualified to transact any and all business contemplated by this Agreement to be
conducted by the Servicer in any state in which a Mortgaged Property is located
or is otherwise not required under applicable law to effect such qualification
and, in any event, is in compliance with the doing business laws of any such
State, to the extent necessary to ensure its ability to enforce each Mortgage
Loan and to service the Mortgage Loans in accordance with the terms of this
Agreement;
(b) The Servicer has the full corporate power and authority to service
each Mortgage Loan, and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by this Agreement and has duly
authorized by all necessary corporate action on the part of the Servicer the
execution, delivery and performance of this Agreement; and this Agreement,
assuming the due authorization, execution and delivery thereof by the Depositor
and the Trustee, constitutes a legal, valid and binding obligation of the
Servicer, enforceable against the Servicer in accordance with its terms, except
to the extent that (a) the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to
creditors' rights generally and (b) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to the equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought;
(c) The execution and delivery of this Agreement by the Servicer, the
servicing of the Mortgage Loans by the Servicer hereunder, the consummation of
any other of the transactions herein contemplated, and the fulfillment of or
compliance with the terms hereof are in the ordinary course of business of the
Servicer and will not (A) result in a breach of any term or provision of the
charter or by-laws of the Servicer or (B) conflict with, result in breach,
violation or acceleration of, or result in a default under, the terms of any
other material agreement or instrument to which the Servicer is a party or by
which it may be bound, or any statute, order or regulation applicable to the
Servicer of any court, regulatory body, administrative agency or governmental
body having jurisdiction over the Servicer; and the Servicer is not a party to,
bound by, or in breach or violation of any indenture or other agreement or
instrument, or subject to or in violation of any statute, order or regulation of
any court, regulatory body, administrative agency or governmental body having
jurisdiction over it, which materially and adversely affects or, to the
Servicer's knowledge, would in the future materially and adversely affect, (x)
the ability of the Servicer to perform its obligations under this Agreement or
(y) the business, operations, financial condition, properties or assets of the
Servicer taken as a whole;
(d) The Servicer is an approved seller/servicer for Xxxxxx Xxx or
Xxxxxxx Mac in good standing and is a HUD approved mortgagee pursuant to Section
203 of the National Housing Act;
(e) No litigation is pending, or to the best of the Servicer's
knowledge, threatened, against the Servicer that would materially and adversely
affect the execution, delivery or enforceability of this Agreement or the
ability of the Servicer to service the Mortgage Loans or to perform any of its
other obligations hereunder in accordance with the terms hereof; and
(f) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Servicer of, or compliance by the Servicer with, this
Agreement or the consummation of the transactions contemplated hereby, or if any
such consent, approval, authorization or order is required, the Service has
obtained the same.
It is understood and agreed that the representations and warranties
set forth in this Section 3.01 shall survive the delivery of the respective
Mortgage Files to the Trustee or to a Custodian, as the case may be, and inure
to the benefit of the Trustee and the Certificateholders.
Section 3.02. Representations, Warranties and Covenants of the
Depositor. The Depositor hereby represents, warrants and covenants to the
Trustee, the Servicer [, the Certificate Insurer] and the Certificateholders
that as of the date of this Agreement or as of such date specifically provided
herein:
(a) The Depositor is a corporation duly organized, validly existing
and in good standing under the laws of the State of [ ];
(b) The Depositor has the corporate power and authority to convey the
Mortgage Loans and to execute, deliver and perform, and to enter into and
consummate transactions contemplated by, this Agreement;
(c) This Agreement has been duly and validly authorized, executed and
delivered by the Depositor, all requisite corporate action having been taken,
and, assuming the due authorization, execution and delivery hereof by the
Servicer and the Trustee, constitutes or will constitute the legal, valid and
binding agreement of the Depositor, enforceable against the Depositor in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights of creditors generally, and by general
equity principles (regardless of whether such enforcement is considered in a
proceeding in equity or at law);
(d) No consent, approval, authorization or order of or registration or
filing with, or notice to, any governmental authority or court is required for
the execution, delivery and performance of or compliance by the Depositor with
this Agreement or the consummation by the Depositor of any of the transactions
contemplated hereby, except as have been made on or prior to the Closing Date;
(e) None of the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby or thereby, or the
fulfillment of or compliance with the terms and conditions of this Agreement,
(i) conflicts or will conflict with or results or will result in a breach of, or
constitutes or will constitute a default or results or will result in an
acceleration under (A) the charter or by-laws of the Depositor, or (B) of any
term, condition or provision of any material indenture, deed of trust, contract
or other agreement or instrument to which the Depositor or any of its
subsidiaries is a party or by which it or any of its subsidiaries is bound; (ii)
results or will result in a violation of any law, rule, regulation, order,
judgment or decree applicable to the Depositor of any court or governmental
authority having jurisdiction over the Depositor or its subsidiaries; or (iii)
results in the creation or imposition of any lien, charge or encumbrance which
would have a material adverse effect upon the Mortgage Loans or any documents or
instruments evidencing or securing the Mortgage Loans;
(f) There are no actions, suits or proceedings before or against or
investigations of, the Depositor pending, or to the knowledge of the Depositor,
threatened, before any court, administrative agency or other tribunal, and no
notice of any such action, which, in the Depositor's reasonable judgment, might
materially and adversely affect the validity or enforceability of the Mortgage
Loans or the performance by the Depositor of its obligations under this
Agreement, or the validity or enforceability of this Agreement;
(g) The Depositor is not in default with respect to any order or
decree of any court or any order, regulation or demand of any federal, state,
municipal or governmental agency that would materially and adversely affect its
performance hereunder;
(h) Immediately prior to the sale and assignment by the Depositor to
the Trustee on behalf of the Trust Fund of each Mortgage Loan, the Depositor had
good title to, and was the sole owner of, each Mortgage Loan subject to no prior
lien, claim, participation interest, mortgage, security interest, pledge, charge
or other encumbrance or other interest of any nature;
(i) Upon execution and delivery of this Agreement the Depositor
transferred all right, title and interest in the Mortgage Loans to the Trustee
on behalf of the Trust Fund; and
(j) The transfer, assignment and conveyance of the Mortgage Notes and
the Mortgages by the Depositor hereunder are not subject to the bulk transfer
laws of any similar statutory provisions in effect in any applicable
jurisdiction.
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 3.02 shall survive delivery of the
respective Mortgage Files to the Trustee or to the Custodian, as the case may
be, and shall inure to the benefit of the Trustee, the Servicer and the
Certificateholders [and the Certificate Insurer].
Section 3.03. Purchase And Substitution. (a) Upon discovery by the
Seller, the Depositor, the Servicer [, the Certificate Insurer] or the Trustee
of a breach of any of representation or warranty set forth in [Section 5 or
Section 6] of the Purchase Agreement which materially and adversely affects the
value of any Mortgage Loan or the interests of Certificateholders [or the
Certificate Insurer], the party discovering such breach shall give prompt
written notice to the others, and the Trustee shall enforce its rights as to any
Mortgage Loan with respect to which such a breach of representation or warranty
has occurred against the Seller or the Originator, as applicable, under the
Purchase Agreement for the benefit of Certificateholders [and the Certificate
Insurer].
(b) Any Loan Purchase Price paid in connection with the repurchase of
a Deleted Mortgage Loan, and any Substitution Adjustment paid in connection with
the substitution of a Qualified Substitute Mortgage Loan, shall be deposited
into the Collection Account.
(c) The Servicer shall deposit in the Collection Account all payments
received in connection with such Qualified Substitute Mortgage Loan or Loans
after the date of such substitution (which date shall not be later than two
years after the Closing Date). Monthly Payments received with respect to
Qualified Substitute Mortgage Loans on or before the date of substitution will
be retained by the Seller or the Originator, as applicable. The Trust Fund will
own all payments received on the Deleted Mortgage Loan on or before the date of
substitution, and the Seller or the Originator, as applicable, will thereafter
be entitled to retain all amounts subsequently received in respect of such
Deleted Mortgage Loan. The Servicer shall give written notice to the Trustee
[and the Certificate Insurer] that such substitution has taken place and shall
amend the Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage
Loan from the terms of this Agreement and the substitution of the Qualified
Substitute Mortgage Loan. Upon such substitution, such Qualified Substitute
Mortgage Loan or Loans shall be subject to the terms of this Agreement in all
respects.
(d) With respect to each Qualified Substitute Mortgage Loan to be
delivered to the Trustee (or its Custodian) pursuant to the terms of this
Article III in exchange for a Deleted Mortgage Loan: (i) the Seller or the
Originator, as applicable, shall deliver to the Trustee (or its Custodian) the
Mortgage File for the Qualified Substitute Mortgage Loan containing the
documents set forth in Section 2.03(a) along with a written certification
certifying as to the delivery of such Mortgage File and containing the granting
language set forth in Section 2.01(a); and (ii) the Seller or the Originator, as
applicable, will be deemed to have made, with respect to such Qualified
Substitute Mortgage Loan, each of the representations and warranties made by it
with respect to the related Deleted Mortgage Loan. As soon as practicable after
the delivery of any Qualified Substitute Mortgage Loan hereunder, the Servicer,
at the expense of the Depositor and with the cooperation of the Servicer, shall
cause the Assignment of Mortgage to be recorded if required pursuant to Section
2.03.
(e) It is understood and agreed that the obligations of the Seller and
the Originator set forth in [Sections 4, 5, 6 and 7] of the Purchase Agreement
to cure, purchase or substitute for a defective Mortgage Loan constitute the
sole remedies of the Trustee [, the Certificate Insurer] and the
Certificateholders respecting a breach of the representations and warranties of
the Seller and the Originator set forth in [Sections 5 and 6] of the Purchase
Agreement [, except as provided for in the Insurance Agreement]. In addition, it
is understood and agreed that the Depositor has assigned to the Trustee all of
its rights under the Purchase Agreement (other than [Section 17]), including the
right to enforce any remedy against the Seller or the Originator as provided in
[Section 7] thereof. The Trustee shall give prompt written notice to the Rating
Agencies [and the Certificate Insurer] of any repurchase or substitution made
pursuant to this Section 3.03 or Section 2.04(b).
ARTICLE IV
THE CERTIFICATES
Section 4.01. The Certificates. The Certificates shall be
substantially in the forms annexed hereto as Exhibits B-1 and B-2. The
Certificates shall be issued in Authorized Denominations only. All Certificates
shall be executed by manual or facsimile signature on behalf of the Trustee by
an authorized officer and authenticated by the manual or facsimile signature of
an authorized officer. Certificates bearing the signatures of individuals who
were at the time of the execution of the Certificates the authorized officers of
the Trustee shall bind the Trustee, notwithstanding that such individuals or any
of them have ceased to hold such offices prior to the delivery of such
Certificates or did not hold such offices at the date of such Certificates. All
Certificates issued hereunder shall be dated the date of their authentication.
Section 4.02. Registration of Transfer and Exchange of Certificates.
(a) The Trustee, as registrar, shall cause to be kept a register (the
"Certificate Register") in which, subject to such reasonable regulations as it
may prescribe, the Trustee shall provide for the registration of Certificates
and the registration of transfer of Certificates. The Trustee hereby appoints
the Certificate Registrar for the purpose of registering Certificates and
transfers of Certificates as herein provided. [The Certificate Insurer shall be
entitled to inspect and verify the Certificate Register and the records of the
Trustee and the Certificate Registrar, and obtain copies thereof, relating to
the Certificates during normal business hours upon reasonable notice.]
(b) All Certificates issued upon any registration of transfer or
exchange of Certificates shall be valid evidence of the same ownership interests
in the Trust Fund and entitled to the same benefits under this Agreement as the
Certificates surrendered upon such registration of transfer or exchange.
(c) Every Certificate presented or surrendered for registration of
transfer or exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Trustee duly executed by the
Holder thereof or his attorney duly authorized in writing.
(d) No service charge shall be made to a Holder for any registration
of transfer or exchange of Certificates, but the Trustee may require payment of
a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of
Certificates; any other expenses in connection with such transfer or exchange
shall be an expense of the Trust Fund.
(e) It is intended that the Book-Entry Certificates be registered so
as to participate in a global book-entry system with the Depository, as set
forth herein. Each Class of Book-Entry Certificates shall, except as otherwise
provided in the next paragraph, be initially issued in the form of a single
fully registered Book-Entry Certificate of such Class with a denomination equal
to the initial Certificate Principal Amount of such Class. Upon initial
issuance, the ownership of each such Book-Entry Certificate shall be registered
in the Certificate Register in the name of Cede & Co., or any successor thereto,
as nominee for the Depository. The Depositor and the Trustee are hereby
authorized to execute and deliver the Representation Letter with the Depository.
With respect to Book-Entry Certificates registered in the Certificate Register
in the name of Cede & Co., as nominee of the Depository, the Depositor, the
Seller, the Servicer and the Trustee [and the Certificate Insurer] shall have no
responsibility or obligation to Direct or Indirect Participants or beneficial
owners for which the Depository holds Book-Entry Certificates from time to time
as a Depository. Without limiting the immediately preceding sentence, the
Depositor, the Seller, the Servicer and the Trustee [and the Certificate
Insurer] shall have no responsibility or obligation with respect to (i) the
accuracy of the records of the Depository, Cede & Co., or any Direct or Indirect
Participant with respect to any Ownership Interest, (ii) the delivery to any
Direct or Indirect Participant or any other Person, other than a
Certificateholder, of any notice with respect to the Book-Entry Certificates or
(iii) the payment to any Direct or Indirect Participant or any other Person,
other than a Certificateholder, of any amount with respect to any distribution
of principal or interest on the Book-Entry Certificates. No Person other than a
Certificateholder shall receive a certificate evidencing such Book-Entry
Certificate. Upon delivery by the Depository to the Trustee of written notice to
the effect that the Depository has determined to substitute a new nominee in
place of Cede & Co., and subject to the provisions hereof with respect to the
payment of interest by the mailing of checks or drafts to the Certificateholders
appearing as Certificateholders at the close of business on a Record Date, the
name "Cede & Co." in this Agreement shall refer to such new nominee of the
Depository.
(f) In the event that (i) the Depository or the Depositor advises the
Trustee in writing that the Depository is no longer willing or able to discharge
properly its responsibilities as nominee and depository with respect to the
Book-Entry Certificates and the Depositor or the Depository is unable to locate
a qualified successor or (ii) the Depositor at its sole option elects to
terminate the book-entry system through the Depository, the Book-Entry
Certificates shall no longer be restricted to being registered in the
Certificate Register in the name of Cede & Co. (or a successor nominee) as
nominee of the Depository. At that time, the Depositor may determine that the
Book-Entry Certificates shall be registered in the name of and deposited with a
successor depository operating a global book-entry system, as may be acceptable
to the Depositor, or such depository's agent or designee but, if the Depositor
does not select such alternative global book-entry system, then the Book-Entry
Certificates may be registered in whatever name or names Certificateholders
transferring Book-Entry Certificates shall designate, in accordance with the
provisions hereof; PROVIDED, HOWEVER, that any such reregistration shall be at
the expense of the Depositor.
(g) Notwithstanding any other provision of this Agreement to the
contrary, so long as any Book-Entry Certificate is registered in the name of
Cede & Co., as nominee of the Depository, all distributions of principal or
interest on such Book-Entry Certificates as the case may be and all notices with
respect to such Book-Entry Certificates as the case may be shall be made and
given, respectively, in the manner provided in the Representation Letter.
(h) Except as provided in Section 4.02(i), no transfer, sale, pledge
or other disposition of a Restricted Certificate shall be made unless such
transfer, sale, pledge or other disposition is exempt from the registration
requirements of the Act, and any applicable state securities laws or is made in
accordance with said Act and laws. In the event that a transfer of a Restricted
Certificate is to be made under this Section 4.02(h), (i) the Depositor may
direct the Trustee to require an Opinion of Counsel in form and substance
satisfactory to the Trustee and the Depositor [and the Certificate Insurer] that
such transfer shall be made pursuant to an exemption, describing the applicable
exemption and the basis therefor, from said Act and laws or is being made
pursuant to said Act and laws, which Opinion of Counsel shall not be an expense
of the Trustee, the Depositor [, the Certificate Insurer] or the 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, to a non-affiliate of the Depositor and (ii) the Trustee shall require
the transferee to execute a representation letter, substantially in the form of
Exhibit O hereto, and the Trustee shall require the transferor to execute a
representation letter, substantially in the form of Exhibit P hereto, each
acceptable to and in form and substance satisfactory to the Depositor and the
Trustee certifying to the Depositor and the Trustee the facts surrounding such
transfer, which representation letters shall not be an expense of the Trustee,
the Depositor or the Servicer, provided that such representation letter will not
be required in connection with any transfer of any such Certificate by the
Depositor to an affiliate of the Depositor. Any such Certificateholder desiring
to effect such transfer shall, and does hereby agree to, indemnify the Trustee,
the Depositor [, the Certificate Insurer] and the Servicer against any liability
that may result if the transfer is not so exempt or is not made in accordance
with such applicable federal and state laws.
(i) Transfers of Restricted Certificates may be made in accordance
with this Section 4.02(i) if the prospective transferee of a Restricted
Certificate provides the Trustee and the Depositor with an investment letter
substantially in the form of Exhibit Q attached hereto, which investment letter
shall not be an expense of the Trustee, the Depositor or the Servicer, and which
investment letter states that, among other things, such transferee is a
"qualified institutional buyer" as defined under Rule 144A under the Act. Such
transfers shall be deemed to have complied with the requirements of Section
4.02(h) hereof; PROVIDED, HOWEVER, that no Transfer of any of the Restricted
Certificates may be made pursuant to this Section 4.02(i) by the Depositor. Any
such Certificateholder desiring to effect such transfer shall, and does hereby
agree to, indemnify the Trustee, the Depositor [, the Certificate Insurer] and
the Servicer against any liability that may result if the transfer is not so
exempt or is not made in accordance with such applicable federal and state laws.
(j) Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions and to
have irrevocably appointed the Depositor or its designee as its attorney-in-fact
to negotiate the terms of any mandatory sale under clause (vi) below and to
execute all instruments of transfer and to do all other things necessary in
connection with any such sale, and the rights of each Person acquiring any
Ownership Interest in a Residual Certificate are expressly subject to the
following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall be a Permitted Transferee and shall
promptly notify the Trustee of any change or impending change in its
status as a Permitted Transferee.
(ii) In connection with any proposed Transfer of any Ownership
Interest in a Residual Certificate, the Trustee shall require delivery
to it, and shall not register the Transfer of any Residual Certificate
until its receipt of, an affidavit and agreement (a "Transfer
Affidavit and Agreement") attached hereto as Exhibit I from the
proposed Transferee, in form and substance satisfactory to the
Trustee, representing and warranting, among other things, that such
Transferee is a Permitted Transferee, that it is not acquiring its
Ownership Interest in the Residual Certificate that is the subject of
the proposed Transfer as a nominee, trustee or agent for any Person
that is not a Permitted Transferee, that for so long as it retains its
Ownership Interest in a Residual Certificate, it will endeavor to
remain a Permitted Transferee, and that it has reviewed the provisions
of this Section 4.02(j) and agrees to be bound by them.
(iii) Notwithstanding the delivery of a Transfer Affidavit and
Agreement by a proposed Transferee under clause (ii) above, if a
Responsible Officer of the Trustee has actual knowledge that the
proposed Transferee is not a Permitted Transferee, no Transfer of an
Ownership Interest in a Residual Certificate to such proposed
Transferee shall be effected.
(iv) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall agree (x) to require a Transfer Affidavit
and Agreement from any other Person to whom such Person attempts to
transfer its Ownership Interest in a Residual Certificate and (y) not
to transfer its Ownership Interest unless it provides a certificate
(attached hereto as Exhibit J) to the Trustee stating that, among
other things, it has no actual knowledge that such other Person is not
a Permitted Transferee.
(v) The Trustee will register the Transfer of any Residual
Certificate only if it shall have received the Transfer Affidavit and
Agreement and all of such other documents as shall have been
reasonably required by the Trustee as a condition to such
registration. In addition, no Transfer of a Residual Certificate shall
be made unless the Trustee shall have received a representation letter
from the Transferee of such Certificate to the effect that such
Transferee is not a Disqualified Non-United States Person and is not a
Disqualified Organization. Transfers of the Residual Certificates to
Disqualified Non-United States Persons and Disqualified Organizations
are prohibited.
(vi) Any attempted or purported transfer of any Ownership
Interest in a Residual Certificate in violation of the provisions of
this Section 4.02 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 Residual Certificate in violation of the
provisions of this Section 4.02, 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 Residual
Certificate. The Trustee shall notify the Depositor [and the
Certificate Insurer] upon receipt of written notice or discovery by a
Responsible Officer that the registration of transfer of a Residual
Certificate was not in fact permitted by this Section 4.02. Knowledge
shall not be imputed to the Trustee with respect to an impermissible
transfer in the absence of such a written notice or discovery by a
Responsible Officer. The Trustee shall be under no liability to any
Person for any registration of transfer of a Residual Certificate that
is in fact not permitted by this Section 4.02 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 and Transfer Certificate. The Trustee shall
be entitled, but not obligated to recover from any Holder of a
Residual 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 Residual
Certificate at and after either such time. Any such payments so
recovered by the Trustee shall be paid and delivered by the Trustee to
the last preceding Holder of such Certificate.
(k) The Trustee shall make available to the Internal Revenue Service
and those Persons specified by the REMIC Provisions, all information necessary
to compute any tax imposed (A) as a result of the transfer of an ownership
interest in a Residual Certificate to any Person who is a Disqualified
Organization, including the information regarding "excess inclusions" of such
Residual Certificates required to be provided to the Internal Revenue Service
and certain Persons as described in Treasury Regulations Sections 1.860D-1(b)(5)
and 1.860E- 2(a)(5), and (B) as a result of any regulated investment company,
real estate investment trust, common trust fund, partnership, trust, estate or
organization described in Section 1381 of the Code that holds an Ownership
Interest in a Residual Certificate having as among its record holders at any
time any Person who is a Disqualified Organization. The Trustee may charge and
shall be entitled to reasonable compensation for providing such information as
may be required from those Persons which may have had a tax imposed upon them as
specified in clauses (A) and (B) of this paragraph for providing such
information.
(l) No transfer of an ERISA-Restricted Certificate shall be made to
any Person unless the Trustee has received (A) a certificate substantially in
the form of Exhibit K hereto from such transferee or (B) an Opinion of Counsel
satisfactory to the Trustee [, the Certificate Insurer] and the Depositor to the
effect that the purchase and holding of such a Certificate will not constitute
or result in the assets of the Trust Fund being deemed to be "plan assets"
subject to the prohibited transactions provisions of ERISA or Section 4975 of
the Code and will not subject the Trustee or the Depositor to any obligation in
addition to those undertaken in this Agreement; PROVIDED, HOWEVER, that the
Trustee will not require such certificate or opinion in the event that, as a
result of a change of law or otherwise, counsel satisfactory to the Trustee has
rendered an opinion to the effect that the purchase and holding of an
ERISA-Restricted Certificate by a Plan or a Person that is purchasing or holding
such a Certificate with the assets of a Plan will not constitute or result in a
prohibited transaction under ERISA or Section 4975 of the Code. The preparation
and delivery of the certificate and opinions referred to above shall not be an
expense of the Trust Fund, the Trustee [, the Certificate Insurer] or the
Depositor. Notwithstanding the foregoing, no opinion or certificate shall be
required for the initial issuance of the ERISA-Restricted Certificates.
(m) No transfer of a Residual Certificate or any interest therein
shall be made to any employee benefit plan or other retirement arrangement,
including individual retirement accounts and annuities, Xxxxx plans and
collective investment funds and separate accounts in which such plans, accounts
or arrangements are invested, that is subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or the Code (each, a "Plan"), unless
the prospective transferee of such Residual Certificate provides the Servicer
and the Trustee with a certification of facts and, at the prospective
transferee's expense, an Opinion of Counsel which establish to the satisfaction
of the Servicer [, the Certificate Insurer] and the Trustee that such transfer
will not result in a violation of Section 406 of ERISA or Section 4975 of the
Code or cause the Servicer or the Trustee to be deemed a fiduciary of such Plan
or result in the imposition of an excise tax under Section 4975 of the Code. In
the absence of their having received the certification of facts or Opinion of
Counsel contemplated by the preceding sentence, the Trustee and the Servicer
shall require the prospective transferee of any Residual Certificate to certify
in the form of Exhibit O or Exhibit Q that (A) it is neither (i) a Plan nor (ii)
a Person who is directly or indirectly purchasing a Residual Certificate on
behalf of, as named fiduciary of, as trustee of, or with assets, of a Plan and
(B) all funds used by such transferee to purchase such Certificates will be
funds held by it in its general account which it reasonably believes do not
constitute "plan assets" of any Plan.
(n) Subject to the restrictions set forth in this Agreement, upon
surrender for registration of transfer of any Certificate at the office or
agency of the Trustee located in [ ], the Trustee shall execute, authenticate
and deliver in the name of the designated transferee or transferees, a new
Certificate of the same Class and Percentage Interest and dated the date of
authentication by the Trustee. At the option of the Certificateholders,
Certificates may be exchanged for other Certificates of Authorized Denominations
of a like aggregate Percentage Interest, upon surrender of the Certificates to
be exchanged at such office. Whenever any Certificates are so surrendered for
exchange, the Trustee shall execute, authenticate and deliver the Certificates
which the Certificateholder making the exchange is entitled to receive. No
service charge shall be made for any transfer or exchange of Certificates, but
the Trustee 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. All Certificates surrendered for transfer and exchange
shall be cancelled by the Trustee.
All Certificates surrendered for registration of transfer or exchange
shall, if surrendered to any Person other than the Trustee, be delivered to the
Trustee and shall be promptly canceled by it. No Certificate shall be
authenticated in lieu of or in exchange for any Certificate canceled as provided
in this Section, except as expressly permitted by this Agreement. All canceled
Certificates may be held by the Trustee in accordance with its standard
retention policy.
Section 4.03. Mutilated, Destroyed, Lost or Stolen Certificates. If
(a) any mutilated Certificate is surrendered to the Trustee, or the Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Certificate, and (b) there is delivered to the Trustee [and the Certificate
Insurer] such security or indemnity as may reasonably be required by each of
them to save each of them harmless, then, in the absence of notice to the
Trustee that such Certificate has been acquired by a bona fide purchaser, the
Trustee shall execute, 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, but bearing a number not contemporaneously
outstanding. Upon the issuance of any new Certificate under this Section 4.03,
the Trustee may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and their fees
and expenses connected therewith. Any duplicate Certificate issued pursuant to
this Section 4.03 shall constitute complete and indefeasible evidence of
ownership in the Trust Fund, as if originally issued, whether or not the
mutilated, destroyed, lost or stolen Certificate shall be found at any time.
Section 4.04. Persons Deemed Owners. Prior to due presentation of a
Certificate for registration of transfer and subject to the provisions of
Section 4.02 and Article X, the Servicer, the Depositor, the Seller [, the
Certificate Insurer] and the Trustee may treat the Person in whose name any
Certificate is registered as the owner of such Certificate for the purpose of
receiving remittances pursuant to Section 6.05 and for all other purposes
whatsoever, and the Servicer, the Depositor, the Seller [, the Certificate
Insurer] and the Trustee shall not be affected by notice to the contrary.
ARTICLE V
ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS
Section 5.01. Appointment of the Servicer. Acting directly or through
one or more Subservicers as provided in Section 5.02, the Servicer shall service
and administer the Mortgage Loans on behalf of the Trustee and in the best
interests of and for the benefit of the holders of Certificates [and the
Certificate Insurer] in accordance with this Agreement and the terms of the
respective Mortgage Loans, and Accepted Servicing Practices, and shall have full
power and authority, acting alone, to do or cause to be done any and all things
in connection with such servicing and administration which it may deem necessary
or desirable but without regard to: (i) any relationship that the Servicer, any
Subservicer or any Affiliate of the Servicer or any Subservicer may have with
the related Mortgagor; (ii) the ownership of any Certificate by the Servicer or
any Affiliate of the Servicer; (iii) the Servicer's obligation to make Periodic
Advances or Servicing Advances; or (iv) the Servicer's or any Subservicer's
right to receive compensation for its services hereunder or with respect to any
particular transaction.
Subject to Section 5.02 hereof, the Servicer may, and is hereby
authorized to, perform any of its servicing responsibilities with respect to
all or certain of the Mortgage Loans through a Subservicer as it may from time
to time designate, but no such designation of a Subservicer shall serve to
release the Servicer from any of its obligations under this Agreement. Such
Subservicer shall have the rights and powers of the Servicer which have been
delegated to such Subservicer with respect to such Mortgage Loans under this
Agreement; PROVIDED, HOWEVER, the Servicer shall remain primarily liable for
all duties and obligations of the Servicer hereunder.
Without limiting the generality of the foregoing, but subject to
Sections 5.12 and 5.13, the Servicer in its own name or in the name of a
Subservicer is hereby authorized and empowered to execute and deliver, on behalf
of itself, the Certificateholders and the Trustee or any of them, (i) any and
all instruments of satisfaction or cancellation or of partial or full release or
discharge and all other comparable instruments with respect to the Mortgage
Loans and with respect to the Mortgaged Properties, (ii) to institute
foreclosure proceedings or obtain a deed in lieu of foreclosure so as to effect
ownership of any Mortgaged Property in the name of the Servicer on behalf of the
Trustee, and (iii) to hold title to any Mortgaged Property upon such foreclosure
or deed in lieu of foreclosure on behalf of the Trustee [; PROVIDED, HOWEVER,
that to the extent any instrument described in clause (i) preceding would be
delivered by the Servicer outside of its usual procedures for Mortgage Loans
held in its own portfolio the Servicer shall, prior to executing and delivering
such instrument, obtain the prior written consent of the Certificate Insurer].
The Trustee hereby grants to the Servicer, and this Agreement shall constitute,
a power of attorney to execute all documents on its behalf under this Agreement
as may be necessary or desirable to effectuate the provisions of this paragraph;
PROVIDED, HOWEVER, that instruments of satisfaction, cancellation, release or
discharge shall only be executed with respect to Mortgage Loans paid in full or
foreclosed (or with respect to which payment in full has been escrowed).
Revocation of the power of attorney created by the preceding sentence shall take
effect upon (i) the receipt by the Servicer of written notice thereof from the
Trustee, (ii) an Event of Default or (iii) the termination of the Trust Fund.
The Trustee shall execute any documentation furnished to it by the Servicer for
recordation by the Servicer in the appropriate jurisdictions, as shall be
necessary to effectuate the foregoing. Subject to Sections 5.12 and 5.13, the
Trustee shall, if necessary, execute additional powers of attorney to the
Servicer or any Subservicer and furnish them with any other documents as the
Servicer or such Subservicer shall reasonably request to enable the Servicer and
such Subservicer to carry out their respective servicing and administrative
duties hereunder.
Upon the request of the Trustee, the Servicer shall send to the
Trustee [and, if requested by the Certificate Insurer, the Certificate Insurer,]
the details concerning the servicing of the Mortgage Loans on computer generated
tape, diskette or other machine readable format which is mutually agreeable.
The Servicer shall give prompt written notice to the Trustee [and the
Certificate Insurer] of any action, of which the Servicer has actual knowledge,
to (i) assert a claim against the Trust Fund or (ii) assert jurisdiction over
the Trust Fund.
Servicing Advances incurred by the Servicer or any Subservicer in
connection with the servicing of the Mortgage Loans (including any penalties in
connection with the payment of any taxes and assessments or other charges) on
any Mortgaged Property shall be recoverable by the Servicer or such Subservicer
to the extent provided in Section 5.21(b) hereof.
Section 5.02. Subservicers. (a) The Servicer may [, with the prior
written consent of the Certificate Insurer,] enter into Subservicing Agreements
for any servicing and administration of Mortgage Loans with any institution
which [is acceptable to the Certificate Insurer and which,], (v) is an
institution approved as a mortgage loan originator by the Federal Housing
Administration or an institution, the deposit accounts of which are insured by
the FDIC, (w) a FHLMC or FNMA approved mortgage servicer, (x) is in compliance
with the laws of each state necessary to enable it to perform its obligations
under such Subservicing Agreement, (y) has experience servicing mortgage loans
that are similar to the Mortgage Loans and (z) has equity of not less than
[$5,000,000] (as determined in accordance with generally accepted accounting
principles). The Servicer shall give written notice to the Trustee, the
Certificateholders [, the Certificate Insurer] and the Rating Agencies of the
appointment of any Subservicer. For purposes of this Agreement, the Servicer
shall be deemed to have received payments on Mortgage Loans when any Subservicer
has received such payments. [The Servicer shall not amend any such Subservicing
Agreement without the Certificate Insurer's prior written consent.] Each
Subservicer shall be required to service the Mortgage Loans in accordance with
this Agreement and any such Subservicing Agreement shall be consistent with and
not violate the provisions of this Agreement. Each Subservicing Agreement shall
provide that the Trustee (if acting as successor Servicer) or any other
successor Servicer shall have the option to terminate such agreement without
payment of any fees if the original Servicer is terminated or resigns. The
Servicer shall deliver to the Trustee copies of all Subservicing Agreements, and
any amendments or modifications thereof promptly upon the Servicer's execution
and delivery of such instrument.
The Servicer shall not be relieved of its obligations under this
Agreement notwithstanding any Subservicing Agreement or any of the provisions of
this Agreement relating to agreements or arrangements between the Servicer and a
Subservicer and the Servicer shall be obligated to the same extent and under the
same terms and conditions as if it alone were servicing and administering the
Mortgage Loans. The Servicer shall be entitled to enter into any agreement with
a Subservicer for indemnification of the Servicer by such Subservicer and
nothing contained in such Subservicing Agreement shall be deemed to limit or
modify this Agreement.
(b) The Servicer shall be entitled to terminate any Subservicing
Agreement in accordance with the terms and conditions of such Subservicing
Agreement and to either itself directly service the related Mortgage Loans or
enter into a Subservicing Agreement with a successor Subservicer that qualifies
under this Section.
As part of its servicing activities hereunder, the Servicer (except as
otherwise provided in the last sentence of this paragraph), for the benefit of
the Trustee [, the Certificate Insurer] and the Certificateholders, shall
enforce the obligations of each Subservicer under the related Subservicing
Agreement and of the Originator and the Seller under the Purchase Agreement,
including, without limitation, any obligation to make advances in respect of
delinquent payments as required by a Subservicing Agreement, or to purchase a
Mortgage Loan on account of missing or defective documentation or on account of
a breach of a representation, warranty or covenant, as described in Section 3.03
hereof and [Section 7] of the Purchase Agreement. Such enforcement, including,
without limitation, the legal prosecution of claims, termination of any
Subservicing Agreement, and the pursuit of other appropriate remedies, shall be
in such form and carried out to such an extent and at such time as the Servicer,
in its good faith business judgment, would require were it the owner of the
related Mortgage Loans. The Servicer shall pay the costs of such enforcement
(except against the Seller) at its own expense, and shall be reimbursed therefor
only (i) from a general recovery resulting from such enforcement, to the extent,
if any, that such recovery exceeds all amounts due in respect of the related
Mortgage Loans, or (ii) from a specific recovery of costs, expenses or
attorneys' fees against the party against whom such enforcement is directed.
Enforcement of the Purchase Agreement against the Originator shall be effected
by the Servicer to the extent it is not the Originator, and otherwise by the
Trustee, in accordance with the foregoing provisions of this paragraph.
(c) Any Subservicing Agreement and any other transactions or services
relating to the Mortgage Loans involving a Subservicer shall be deemed to be
between the Subservicer and the Servicer alone and the Trustee and the
Certificateholders shall not be deemed parties thereto and shall have no claims,
rights, obligations, duties or liabilities with respect to any Subservicer
except as set forth in paragraph (d) below. The Servicer shall be solely liable
for all fees and expenses owed by it to any Subservicer, irrespective of whether
the Servicer's compensation pursuant to this Agreement is sufficient to pay such
fees and expenses.
(d) In connection with the assumption of the responsibilities, duties
and liabilities and of the authority, power and rights of the Servicer hereunder
by the Trustee pursuant to Section 7.02 or by another successor Servicer, it is
understood and agreed that the Servicer's rights and obligations under any
Subservicing Agreement then in force between the Servicer and a Subservicer
shall be assumed simultaneously by the Trustee or other successor Servicer
without act or deed on part of the Trustee except that (i) the predecessor
Servicer shall not thereby be relieved of any liability or obligations under any
Subservicing Agreement that arose before it ceased to be the Servicer and (ii)
none of the Trustee, its designee or any successor Servicer shall be deemed to
have assumed any liability or obligation of the predecessor Servicer that arose
before it ceased to be the Servicer; PROVIDED, HOWEVER, that the Trustee (if
acting as successor Servicer) or any other successor Servicer may [, with the
consent of the Certificate Insurer, and shall, at the direction of the
Certificate Insurer,] terminate the Subservicer as provided in Section 5.02.
The Servicer shall, upon the reasonable request of the Trustee but at
the expense of the Servicer, deliver to the assuming party documents and records
relating to each Subservicing Agreement and an accounting of amounts collected
and held by it and otherwise use its best reasonable efforts to effect the
orderly and efficient transfer of the Subservicing Agreements to the assuming
party.
Section 5.03. Collection of Certain Mortgage Loan Payments; Collection
Account. (a) The 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 and the terms
and provisions of any applicable Insurance Policy, follow Accepted Servicing
Practices.
(b) The Servicer shall establish and maintain in the name of the
Trustee the Collection Account, in trust for the benefit of the
Certificateholders [and the Certificate Insurer]. The Collection Account shall
be established and maintained as an Eligible Account. If the Collection Account
ceases to be an Eligible Account hereunder, then the Servicer shall immediately
be required to establish a new Collection Account that is an Eligible Account
and transfer all funds on deposit in such existing Collection Account to such
new Collection Account. If the Servicer fails to fulfill such requirement, then
the Collection Account shall thenceforth be held as a trust account with a
depository institution selected by the Trustee. The Servicer shall notify the
Trustee [and the Certificate Insurer] if there is a change in the name, account
number or institution holding the Collection Account.
The Servicer shall deposit in the Collection Account (i) on the
Closing Date, any amounts representing Monthly Payments on the Mortgage Loans
due or to be applied as of a date after the Cut-off Date and (ii) thereafter, on
a daily basis within [one] Business Day of receipt of good funds (except as
otherwise permitted herein), the following payments and collections received or
made by it:
(i) all payments received after the Cut-off Date on account of
principal on the Mortgage Loans (other than payments of principal due
on or prior to the Cut-off Date) and all Principal Prepayments in
Full, Curtailments and all Net REO Proceeds collected after the
Cut-off Date;
(ii) all payments received after the Cut-off Date on account of
interest on the Mortgage Loans (other than payments of interest that
accrued on each Mortgage Loan up to and including the Cut-off Date),
including all Prepayment Premiums;
(iii) all Net Liquidation Proceeds;
(iv) all Insurance Proceeds;
(v) all Released Mortgaged Property Proceeds;
(vi) any amounts payable in connection with the repurchase of any
Mortgage Loan and the amount of any Substitution Adjustment pursuant
to Sections 2.04 and 3.03; and
(vii) any amount expressly required to be deposited in the
Collection Account in accordance with certain provisions of this
Agreement, including, without limitation Sections 2.04(b), 2.04(c),
3.03(b), 3.03(c), 5.06, 5.07 and 5.18 of this Agreement; PROVIDED,
HOWEVER, that the Servicer shall be entitled, at its election, either
(a) to withhold and to pay to itself the applicable Servicing Fee from
any payment on account of interest or other recovery (including Net
REO Proceeds) as received and prior to deposit of such payments in the
Collection Account or (b) to withdraw the applicable Servicing Fee
from the Collection Account after the entire payment or recovery has
been deposited therein.
The Servicer shall invest the funds in the Collection Account only in
Permitted Investments, and any such investment shall mature no later than the
Business Day immediately preceding the next Servicer Remittance Date. No
Permitted Investment shall be sold or disposed of at a gain prior to maturity.
All income (other than any gain from a sale or disposition of the type referred
to in the preceding sentence) realized from any such Permitted Investment shall
be for the benefit of the Servicer as additional servicing compensation and may
only be withdrawn from the Collection Account by the Servicer immediately
following the remittance to the Trustee on each Servicer Remittance Date by the
Servicer in accordance with the terms hereof. The amount of any net losses
incurred in respect of any such investments shall be deposited in the Collection
Account by the Servicer out of its own funds immediately as realized.
The foregoing requirements for deposit in the Collection Account shall
be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of those described in the
first paragraph of Section 5.14 need not be deposited by the Servicer in the
Collection Account. If the Servicer deposits in the Collection Account any
amount not required to be deposited therein, it may at any time withdraw such
amount from the Collection Account, any provision herein to the contrary
notwithstanding. All funds deposited by the Servicer in the Collection Account
shall be held in the Collection Account for the account of the Trustee in trust
for the Certificateholders [and the Certificate Insurer] until disbursed in
accordance with Section 6.01 or withdrawn in accordance with Section 5.04.
(c) The Collection Account may [, upon written notice by the Trustee
to the Certificate Insurer,] be transferred to a different depository
institution so long as such transfer is to an Eligible Account.
Section 5.04. Permitted Withdrawals from the Collection Account. The
Servicer may, from time to time, make withdrawals from the Collection Account
for the following purposes:
(a) to reimburse itself for any accrued unpaid Servicing Fees and for
unreimbursed Periodic Advances and Servicing Advances; PROVIDED, HOWEVER, that
the Servicer's right to reimbursement for unpaid Servicing Fees and unreimbursed
Servicing Advances and Periodic Advances shall be limited to late collections on
the related Mortgage Loan and to Liquidation Proceeds, REO Proceeds, Released
Mortgaged Property Proceeds, Insurance Proceeds and such other amounts as may be
collected by the Servicer from the related Mortgagor or otherwise relating to
the Mortgage Loan in respect of which such unreimbursed amounts are owed limited
as follows: The Servicer's right to reimbursement of unpaid Servicing Fees shall
be limited to the portion of such amounts allocable to interest; the Servicer's
right to reimbursement of Periodic Advances from late collections shall be
limited to the portion of any Monthly Payment allocable to principal and
interest; and the Servicer's right to reimbursement of Servicing Advances from
late collections shall be limited to amounts allocable to escrow payments for
taxes, assessments or insurance, to the extent that such Servicing Advances were
made for such purposes.
(b) to reimburse itself for any Periodic Advances and Servicing
Advances determined to have become Nonrecoverable Advances and amounts
reimbursable to itself pursuant to Section 11.01, such reimbursement to be made
from any funds in the Collection Account;
(c) [Reserved]
(d) to withdraw any funds deposited in the Collection Account that
were not required to be deposited therein;
(e) to pay itself Servicing Compensation owed pursuant to Section 5.14
hereof to the extent not retained or paid pursuant to Sections 5.03 or 5.14;
(f) to pay to the Seller or the Originator, as applicable, with
respect to each Mortgage Loan or property acquired in respect thereof that has
been repurchased or replaced pursuant to Sections 2.04 or 3.03 or to pay to
itself with respect to each Mortgage Loan or property acquired in respect
thereof that has been purchased pursuant to Section 8.01 all amounts received
thereon and not required to be distributed as of the date on which the related
repurchase or purchase price or Principal Balance, as the case may be, was
determined;
(g) to pay to the Seller with respect to each Mortgage Loan the amount
of interest accrued and unpaid on such Mortgage Loan on the Cut-off Date;
(h) to remit to the Trustee amounts to be deposited into the
Certificate Account in the amounts and in the manner provided for herein;
(i) to pay itself any net interest earned on or net investment income
earned with respect to funds in the Collection Account;
(j) to pay to the Trustee, any amounts payable or reimbursable thereto
under Section 9.05 hereof, and to the Servicer, any amounts payable or
reimbursable thereto under Section 7.02 (with respect to Servicer set-up
expenses and with respect to successor Servicers) hereof; and
(k) to clear and terminate the Collection Account upon the termination
of this Agreement.
The Servicer shall keep and maintain a separate accounting for each
Mortgage Loan for the purpose of accounting for withdrawals from the Collection
Account pursuant to subclause (a).
[In addition, if (a) there has been a draw on the Certificate
Insurance Policy for which the Originator or the Servicer is required to
reimburse the Certificate Insurer pursuant to the Insurance Agreement; (b) the
Originator or the Servicer has reimbursed the Certificate Insurer for all such
amounts required by the Insurance Agreement (c) the Certificate Insurer has paid
the draw amount to the Trustee for the benefit of the Insured Certificateholders
and (d) the Servicer has received late payments on the Mortgage Loans in respect
of which such draw was made, then the Servicer may, upon notice to the Trustee
and the Certificate Insurer, reimburse itself or the Originator, as applicable,
from such late payments for the draw amount.]
Section 5.05. Payment of Taxes, Insurance and Other Charges. With
respect to each Mortgage Loan, the Servicer shall maintain accurate records
reflecting casualty insurance coverage. With respect to each Mortgage Loan as to
which the Servicer maintains escrow accounts, the Servicer shall maintain
accurate records reflecting the status of ground rents, taxes, assessments,
water rates and other charges which are or may become a lien upon the Mortgaged
Property and the status of primary mortgage guaranty insurance premiums, if any,
and casualty insurance coverage and shall obtain, from time to time, all bills
for the payment of such charges (including renewal premiums) and shall effect
payment thereof prior to the applicable penalty or termination date and at a
time appropriate for securing maximum discounts allowable, employing for such
purpose deposits of the Mortgagor in any escrow account which shall have been
estimated and accumulated by the Servicer in amounts sufficient for such
purposes, as allowed under the terms of the Mortgage. To the extent that a
Mortgage does not provide for escrow payments, the Servicer shall, if it has
received notice of a default or deficiency, monitor such payments to determine
if they are made by the Mortgagor. The Servicer shall effect payment of taxes,
assessments, primary mortgage or hazard insurance premiums and other charges
which are or may become a lien upon the Mortgaged Property prior to the
applicable penalty or termination date and at a time appropriate for securing
maximum discounts allowable but the Servicer shall be required to so advance
only to the extent that such advances, in the good faith judgment of the
Servicer, will be recoverable by the Servicer pursuant to Section 5.04 out of
Liquidation Proceeds, Insurance Proceeds or other recoveries.
Section 5.06. Maintenance Of Casualty Insurance. (a) The Servicer
shall cause to be maintained with respect to each Mortgage Loan fire insurance
with extended coverage on the related Mortgaged Property in an amount which is
at least equal to the least of (i) the current principal balance of such
Mortgage Loan, (ii) the amount necessary to fully compensate for any damage or
loss to the improvements that are a part of such property on a replacement cost
basis and (iii) the maximum insurable value of the improvements that are a part
of such Mortgaged Property, in each case in an amount not less than such amount
as is necessary to avoid the application of any coinsurance clause contained in
the related hazard insurance policy. The Servicer shall also cause to be
maintained fire insurance with extended coverage on each REO Property in an
amount which is at least equal to the lesser of (i) the maximum insurable value
of the improvements which are a part of such property and (ii) the outstanding
principal balance of the related Mortgage Loan at the time it became an REO
Property. The Servicer will comply in the performance of this Agreement with all
reasonable rules and requirements of each insurer under any such hazard
policies. The Servicer shall maintain the insurance policies required hereunder
in the name of the mortgagee, its successors and assigns, and shall be named as
loss payee. Any cost incurred by the Servicer in maintaining any such insurance
shall not, for the purpose of calculating distributions to Certificateholders
[and the Certificate Insurer], be added to the unpaid principal balance of the
related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so
permit. It is understood and agreed that no earthquake or other additional
insurance is to be required of any Mortgagor other than pursuant to such
applicable laws and regulations as shall at any time be in force and as shall
require such additional insurance. If the Mortgaged Property or REO Property is
at any time in an area identified in the Federal Register by the Federal
Emergency Management Agency as having special flood hazards, the Servicer will
cause to be maintained a flood insurance policy in respect thereof. Such flood
insurance shall be in an amount equal to the lesser of (i) the unpaid principal
balance of the related Mortgage Loan and (ii) the maximum amount of such
insurance available for the related Mortgaged Property under the national flood
insurance program (assuming that the area in which such Mortgaged Property is
located is participating in such program). The Insurance Policies shall require
the insurer to provide the mortgagee with 30 days' notice prior to any
cancellation or as otherwise required by law.
(b) Amounts collected by the Servicer under any Insurance Policies net
of amounts remitted to the Mortgagor for repairs shall be deposited into the
Collection Account, subject to withdrawal pursuant to Section 5.04.
Section 5.07. Maintenance of Mortgage Impairment Insurance Policy. In
the event that the Servicer shall obtain and maintain a blanket policy (a
"Mortgage Impairment Insurance Policy") with an insurer having a General Policy
Rating of A:X or better in Best's Key Rating Guide insuring against hazard
losses on all of the Mortgage Loans, it shall conclusively be deemed to have
satisfied its obligations as set forth in the first two sentences of Section
5.06, it being understood and agreed that such policy may contain a deductible
clause, in which case the Servicer shall, in the event that there shall not have
been maintained on the related Mortgaged Property or REO Property a policy
complying with the first two sentences of Section 5.06, and there shall have
been one or more losses which would have been covered by such policy, deposit to
the Collection Account from its own funds the amount not otherwise payable under
the blanket policy because of such deductible clause. In connection with its
activities as administrator and servicer of the Mortgage Loans, the Servicer
agrees to prepare and present, on behalf of itself, the Trustee and
Certificateholders [and the Certificate Insurer], claims under any such blanket
policy in a timely fashion in accordance with the terms of such Insurance
Policy.
Section 5.08. Fidelity Bond; Errors and Omissions Policy. The Servicer
(including the Trustee if it shall become the Servicer hereunder) agrees to
maintain errors and omissions coverage and a fidelity bond, each at least to the
extent required by Section 305 of Part I of FNMA Guide or any successor
provision thereof; PROVIDED, HOWEVER, that in any event that the fidelity bond
or the errors and omissions coverage is no longer in effect, the Servicer shall
notify the Trustee and the Trustee shall promptly give such notice to the
Certificateholders [and the Certificate Insurer] and shall secure replacement
coverage in conformity with this Section.
Section 5.09. Collection of Taxes, Assessments and Other Items;
Servicing Account. In addition to the Collection Account, the Servicer shall
establish and maintain a Servicing Account, which shall be an Eligible Account,
and shall deposit therein all payments by Mortgagors for taxes, assessments,
primary mortgage or hazard insurance premiums or comparable items. Withdrawals
from the Servicing Account may be made to effect payment of taxes, assessments,
primary mortgage or hazard insurance premiums or comparable items, to reimburse
the Servicer out of related collections for any advances made in the nature of
any of the foregoing, to refund to any Mortgagors any sums determined to be
overages, or to pay any interest owed to Mortgagors on such account to the
extent required by law or to clear and terminate the Servicing Account at the
termination of this Agreement upon the termination of the Trust Fund.
Section 5.10. Periodic Filings With The Securities And Exchange
Commission; Additional Information. The Depositor shall prepare or cause to be
prepared the initial current report on Form 8-K and thereafter the Trustee shall
prepare or cause to be prepared, on the basis of information supplied by the
Servicer, Form 10-Ks and Form 10-Qs (if necessary), or monthly current reports
on Form 8-K, on behalf of the Trust Fund, as may be required by applicable law,
for filing with the Securities and Exchange Commission (the "SEC"). The Trustee
shall sign each such report on behalf of the Trust Fund. The Trustee will
forward a copy of each such report to the Depositor promptly after such report
has been filed with the SEC. The Trustee agrees to use its best efforts to seek
to terminate such filing obligation promptly after the period during which such
filings are required under the Securities Exchange Act of 1934. Promptly after
filing a Form 15 or other applicable form with the SEC in connection with such
termination, the Trustee shall deliver to the Depositor a copy of such form
together with copies of confirmations of receipt by the SEC of each report filed
therewith on behalf of the Trust Fund.
The Servicer and the Depositor each agree to promptly furnish to the
Trustee, from time to time upon request, such further information, reports and
financial statements within their control and customarily generated related to
this Agreement and the Mortgage Loans as the Trustee reasonably deems
appropriate to prepare and file all necessary reports with the SEC.
Section 5.11. Enforcement of Due-on-Sale Clauses; Assumption
Agreements. When a Mortgaged Property has been or is about to be conveyed by the
Mortgagor, the Servicer shall, to the extent it has knowledge of such conveyance
or prospective conveyance, exercise its rights 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 Servicer shall not
exercise any such right if the "due-on-sale" clause, in the reasonable belief of
the Servicer, is not enforceable under applicable law. In such event, the
Servicer shall 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 becomes liable under the Mortgage Note and, unless prohibited
by applicable law or the Mortgage documents, the Mortgagor remains liable
thereon. If the foregoing is not permitted under applicable law, the Servicer is
authorized to enter into a substitution of liability agreement with such person,
pursuant to which the original Mortgagor is released from liability and such
person is substituted as Mortgagor and becomes liable under the Mortgage Note.
In connection with any assumption or substitution, the Servicer shall apply such
underwriting standards and follow such practices and procedures as shall be
normal and usual in its general mortgage originating activities and as it
applies to other mortgage loans owned solely by it. The Servicer shall not take
or enter into any assumption and modification agreement, however, unless (to the
extent practicable in the circumstances) it shall have received confirmation, in
writing, of the continued effectiveness of any applicable hazard insurance
policy, or a new policy meeting the requirements of this Section is obtained.
The Servicer shall notify the Trustee that any such assumption or substitution
agreement has been completed by forwarding to the Trustee the original copy of
such assumption or substitution agreement (indicating the Mortgage File to which
it relates) which copy shall be added by the Trustee to the related Mortgage
File and which 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. The Servicer shall be responsible for recording any such
assumption or substitution agreements. In connection with any such assumption or
substitution agreement, no material term of the Mortgage Loan (including,
without limitation, the required monthly payment on the related Mortgage Loan,
the stated maturity, the outstanding principal amount or the Mortgage Rate)
shall be changed nor shall any required monthly payments of principal or
interest be deferred or forgiven. Any fee collected by the Servicer or the
Subservicer for consenting to any such conveyance or entering into an assumption
or substitution agreement shall be retained by or paid to the Servicer as
additional servicing compensation.
Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Servicer shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any assumption of a
Mortgage Loan by operation of law or any assumption which the Servicer may be
restricted by law from preventing, for any reason whatsoever.
Section 5.12. Realization Upon Defaulted Mortgage Loans. (a) The
Servicer shall foreclose upon or otherwise comparably effect the ownership in
the name of the Trustee on behalf of the Trust Fund of Mortgaged Properties
relating to defaulted Mortgage Loans as to which no satisfactory arrangements
can be made for collection of Delinquent payments and which the Servicer has not
purchased pursuant to Section 5.18. In connection with such foreclosure or other
conversion, the Servicer shall use Accepted Servicing Practices. Any amounts so
advanced including any amounts described below regarding environmental
inspections shall constitute "Servicing Advances" within the meaning of Section
5.21(b) hereof. The Servicer shall sell any REO Property within 35 months from
the close of the taxable year of its acquisition by the Trust Fund, at such
price as the Servicer in good xxxxx xxxxx necessary to comply with this covenant
unless the Servicer obtains for [the Certificate Insurer and] the Trustee, an
Opinion of Counsel (the expense of which opinion shall be a Servicing Advance)
experienced in federal income tax matters acceptable to [the Certificate Insurer
and] the Trustee, addressed to [the Certificate Insurer and] the Trustee and the
Servicer, to the effect that the holding by the Trust Fund of such REO Property
for any greater period will not result in the imposition of taxes on "Prohibited
Transactions" of the Trust Fund or any REMIC as defined in Section 860F of the
Code or cause either REMIC to fail to qualify as a REMIC under the REMIC
Provisions at any time that any Certificates are Outstanding. Notwithstanding
the generality of the foregoing provisions, the Servicer shall manage, conserve,
protect and operate each REO Property for the Certificateholders solely for the
purpose of its prompt disposition and sale in a manner which does not cause such
REO Property to fail to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code or result in the receipt by any REMIC created
hereunder of any "income from non-permitted assets" within the meaning of
Section 860F(a)(2)(B) of the Code or any "net income from foreclosure property"
which is subject to taxation under the REMIC Provisions. Pursuant to its efforts
to sell such REO Property, the Servicer shall either itself or through an agent
selected by the Servicer protect and conserve such REO Property in the same
manner and to such extent as is customary in the locality where such REO
Property is located and may, incident to its conservation and protection of the
interests of the Certificateholders [and the Certificate Insurer], rent the
same, or any part thereof, as the Servicer deems to be in the best interest of
the Certificateholders [and the Certificate Insurer] for the period prior to the
sale of such REO Property.
Notwithstanding anything to the contrary herein, the Servicer shall be
under no obligation to foreclose upon or otherwise convert the ownership of any
Mortgaged Property which it believes may be contaminated with or affected by
hazardous or toxic wastes or substances. If the Servicer has actual knowledge of
any environmental or hazardous waste risk with respect to the Mortgaged Property
that the Servicer is contemplating acquiring in foreclosure or deed in lieu of
foreclosure, the Servicer will cause an environmental inspection of the
Mortgaged Property in accordance with Accepted Servicing Practices. If such
environmental audit or report reveals or if the Servicer has knowledge or notice
that such Mortgaged Property contains toxic wastes or substances, the Servicer
shall, in accordance with Accepted Servicing Practices, take such action as it
deems to be in the best interests of Certificateholders [and the Certificate
Insurer].
(b) The Servicer shall determine, with respect to each defaulted
Mortgage Loan, when it has recovered, whether through trustee's sale,
foreclosure sale or otherwise, all amounts it expects to recover from or on
account of such defaulted Mortgage Loan, whereupon such Mortgage Loan shall
become a Liquidated Mortgage Loan [and the Servicer shall promptly submit a
liquidation report to the Certificate Insurer in form acceptable to the
Certificate Insurer as attached hereto as Exhibit L].
(c) The Servicer shall not agree to any modification, waiver or
amendment of any provision of any Mortgage Loan unless, in the Servicer's good
faith judgment, such modification, waiver or amendment would minimize the loss
that might otherwise be experienced with respect to such Mortgage Loan and the
Servicer shall not: (i) permit (unless the Mortgagor is in default with respect
to the Mortgage Loan or such default is, in the judgment of the Servicer,
reasonably foreseeable) any modification with respect to any Mortgage Loan that
would change the Mortgage Rate, reduce or increase the Principal Balance (except
for reductions resulting from actual payments of principal) or extend the
maturity date of such Mortgage Loan or (ii) permit any modification, waiver or
amendment of any term of any Mortgage Loan that would both (A) effect an
exchange or reissuance of such Mortgage Loan under Section 1001 of the Code (or
Treasury regulations promulgated thereunder) and (B) cause any REMIC to fail to
qualify as a REMIC under the Code or the imposition of any tax on "prohibited
transactions" or "contributions after the startup date" under the REMIC
Provisions [; provided that the Certificate Insurer's prior written consent
shall be required for any modification, waiver or amendment if the aggregate
number of Mortgage Loans outstanding which have been modified, waived or amended
exceeds 5% of the number of Mortgage Loans as of the Cut-off Date].
Notwithstanding anything set out in this Section 5.12(c) or elsewhere in this
Agreement to the contrary, the Servicer shall be permitted to modify, waive or
amend any provision of a Mortgage Loan if required by statute or a court of
competent jurisdiction to do so.
Section 5.13. Trustee to Cooperate; Release of Mortgage Files. (a)
Upon the payment in full of any Mortgage Loan (including any liquidation of such
Mortgage Loan through foreclosure or otherwise), or the receipt by the Servicer
of a notification that payment in full will be escrowed in a manner customary
for such purposes, the Servicer shall deliver to the Trustee or the Custodian on
behalf of the Trustee a written request and certification of the Servicer
substantially in the form attached hereto as Exhibit H signed by a Servicing
Officer which states the purpose of the release of a Mortgage File. Upon receipt
of such written request and certification, the Trustee or the Custodian on
behalf of the Trustee will promptly release the related Mortgage File, in trust,
to (i) the Servicer, (ii) an escrow agent or (iii) any employee, agent or
attorney of the Trustee. Upon any such payment in full, or the receipt of such
notification that such funds have been placed in escrow, the Servicer is
authorized to give, as attorney-in-fact for the Trustee and the mortgagee under
the Mortgage which secured the Mortgage Note, an instrument of satisfaction (or
assignment of Mortgage without recourse) regarding the Mortgaged Property
relating to such Mortgage, which instrument of satisfaction or assignment, as
the case may be, shall be delivered to the Person or Persons entitled thereto
against receipt therefor of payment in full, it being understood and agreed that
no expense incurred in connection with such instrument of satisfaction or
assignment, as the case may be, shall be chargeable to the Collection Account,
the Certificate Account, the Trustee or the Trust Fund. In lieu of executing any
such satisfaction or assignment, as the case may be, the Servicer may prepare
and submit to the Trustee a satisfaction (or assignment without recourse, if
requested by the Person or Persons entitled thereto) in form for execution by
the Trustee with all requisite information completed by the Servicer; in such
event, the Trustee shall execute and acknowledge such satisfaction or
assignment, as the case may be, and deliver the same with the related Mortgage
File, as aforesaid.
(b) [Reserved]
(c) From time to time and as appropriate in the servicing of any
Mortgage Loan, including, without limitation, foreclosure or other comparable
conversion of a Mortgage Loan or collection under any applicable Insurance
Policy, the Custodian shall release the related Mortgage File to the Servicer,
promptly upon a written request and certification of the Servicer in form
attached hereto as Exhibit H signed by a Servicing Officer, which states the
purpose of the release of a Mortgage File [; provided, however, that no more
than 10% of the outstanding Mortgage Loans (by number) shall be released to the
Servicer at any time without the prior written consent of the Certificate
Insurer]. Such receipt shall obligate the Servicer to return the Mortgage File
to the Trustee or the Custodian on behalf of the Trustee when the need therefore
by the Servicer no longer exists.
(d) In all cases where the Servicer needs the Trustee to sign any
document or to release a Mortgage File within a particular period of time, the
Servicer shall notify a Responsible Officer of the Trustee by telephone of such
need and the Trustee shall thereon use its best efforts to comply with the
Servicer's needs, but in any event will comply within two Business Days of such
request.
(e) No costs associated with the procedures described in this Section
5.13 shall be an expense of the Trust Fund.
(f) Upon written certification of a Servicing Officer, the Trustee
shall execute and deliver to the Servicer [, with copies to the Certificate
Insurer,] any court pleadings, requests for trustee's sale or other documents
reasonably necessary to the foreclosure or trustee's sale in respect of a
Mortgaged Property or to any legal action brought to obtain judgment against any
Mortgagor on the Mortgage Note or Mortgage or to obtain a deficiency judgment,
or to enforce any other remedies or rights provided by the Mortgage Note or
Mortgage or otherwise available at law or in equity. Each such certification
shall include a request that such pleadings or documents be executed by the
Trustee and a statement as to the reason such documents or pleadings are
required.
Section 5.14. Servicing Fee; Servicing Compensation. As compensation
for its activities hereunder, the Servicer shall be entitled to be paid (or to
retain) the amount of the related Servicing Fee with respect to each Mortgage
Loan, but only to the extent of payments or recoveries allocable to interest
thereon. Additional servicing compensation in the form of release fees, bad
check charges, assumption fees, late payment charges, or any other
servicing-related fees (other than Prepayment Premiums) and similar items may,
to the extent collected from Mortgagors, be retained by the Servicer, unless a
successor Servicer is appointed pursuant to Section 7.02 hereof, in which case
the successor Servicer shall be entitled to such fees as are agreed upon by the
Trustee [, the Certificate Insurer] and the successor Servicer. In addition, the
Servicer shall be entitled to retain, as additional servicing compensation,
investment earnings, net of losses, on amounts on deposit in the Collection
Account and in the Certificate Account, to the extent provided in Section 6.01.
The right to receive the Servicing Fee may not be transferred in whole
or in part except in connection with the transfer of all of the Servicer's
responsibilities and obligations under this Agreement.
The aggregate Servicing Fee shall be offset as provided in Section
5.20. The Servicer shall be required to pay all expenses incurred by it in
connection with its servicing activities hereunder (including maintenance of the
hazard insurance required by Section 5.05) and shall not be entitled to
reimbursement therefor except as specifically provided herein.
Section 5.15. Reports to the Trustee and the Depositor; Collection
Account Statements. Not later than [15] days after each Distribution Date, the
Servicer shall provide to the Trustee [, the Certificate Insurer] and the
Depositor a statement, certified by a Servicing Officer, setting forth the
status of the Collection Account as of the close of business on the last day of
the immediately preceding calendar month, showing, for the period covered by
such statement, the aggregate of deposits into and withdrawals from the
Collection Account for each category of deposit specified in Section 5.03 and
each category of withdrawal specified in Section 5.04 and the aggregate of
deposits into the Certificate Accounts as specified in Section 6.05(a). Such
statement shall also state the aggregate unpaid principal balance of all the
Mortgage Loans as of the close of business on the last day of the month
preceding the month in which such Distribution Date occurs. Copies of such
statement shall be provided by the Trustee to any Certificateholder upon
request.
Section 5.16. Annual Statement as to Compliance. The Servicer, at its
own expense, will deliver to the Trustee, [the Certificate Insurer,] the
Depositor, and the Rating Agencies, on or before April 15 of each year,
commencing in [ ], an Officer's Certificate stating, as to each signer thereof,
that (i) a review of the activities of the Servicer during such preceding
calendar year and of performance under this Agreement has been made under such
officers' supervision, and (ii) to the best of such officers' knowledge, based
on such review, the Servicer has fulfilled all its obligations under this
Agreement for such year, or, if there has been a default in the fulfillment of
all such obligations, specifying each such default known to such officers and
the nature and status thereof including the steps being taken by the Servicer to
remedy such default.
The Servicer shall deliver to the Trustee, the Depositor [, the
Certificate Insurer] and the Rating Agencies, promptly after having obtained
knowledge thereof 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 would become an Event of Default.
Section 5.17. Annual Independent Public Accountants' Servicing Report.
On or before April 15 of each year, commencing in [ ], the Servicer, at its own
expense, shall cause to be delivered to the Trustee, [the Certificate Insurer,]
the Depositor, and the Rating Agencies a letter or letters of a firm of
independent, nationally recognized certified public accountants [reasonably
acceptable to the Certificate Insurer] stating that (i) it has obtained a letter
of representation regarding certain matters from the management of the Servicer
which includes an assertion that the Servicer has complied with certain minimum
residential mortgage loan servicing standards, identified in the Uniform Single
Attestation Program for Mortgage Bankers established by the Mortgage Bankers
Association of America, with respect to the servicing of residential mortgage
loans during the most recently completed calendar year and (ii) on the basis of
an examination conducted by such firm in accordance with standards established
by the American Institute of Certified Public Accountants, such representation
is fairly stated in all material respects, subject to such exceptions and other
qualifications that may be appropriate. In rendering its report such firm may
rely, as to matters relating to the direct servicing of residential mortgage
loans by Subservicers, upon comparable reports of firms of independent certified
public accountants rendered on the basis of examinations conducted in accordance
with the same standards (rendered within one year of such report) with respect
to those Subservicers. Immediately upon receipt of such report, the Servicer
shall furnish a copy of such report to the Trustee [, the Certificate Insurer]
and each Rating Agency. Copies of such statement shall be provided by the
Trustee to any Certificateholder upon request at the Servicer's expense,
provided that such statement is delivered by the Servicer to the Trustee.
Section 5.18. Purchase of Defaulted Mortgage Loans. [(a) Subject to
paragraph (b) below,] The Servicer shall have the option, but not the
obligation, to purchase for its own account any Mortgage Loan that becomes [90]
or more days Delinquent, in whole or in part, or any Mortgage Loan as to which
foreclosure proceedings have been brought by the Servicer; PROVIDED, HOWEVER,
that the Servicer may not purchase any such Mortgage Loan unless the Servicer
has delivered to the Trustee [and the Certificate Insurer], at the Servicer's
expense, an Opinion of Counsel acceptable to the Trustee [and the Certificate
Insurer] to the effect that such a purchase would not constitute a Prohibited
Transaction for the Trust Fund or otherwise subject the Trust Fund to tax and
would not jeopardize the status of the Trust Fund as a REMIC. Any such Mortgage
Loan so purchased shall be purchased by the Servicer on or prior to a Servicer
Remittance Date at a purchase price equal to the Loan Purchase Price thereof,
which purchase price shall be deposited in the Collection Account.
(b) [If a Mortgage Loan to be purchased by the Servicer pursuant to
paragraph (a) above is the greatest number of days Delinquent of all then
Delinquent Mortgage Loans (including Mortgage Loans relating to REO Property),
the Servicer may purchase such Mortgage Loan without having first notified the
Certificate Insurer of such purchase. In all other cases, the Servicer must
notify the Certificate Insurer and the Trustee, in writing, of its intent to
purchase a Mortgage Loan and the Servicer may not purchase such Mortgage Loan
without the written consent of the Certificate Insurer.]
Section 5.19. Reports to be Provided by the Servicer. The Servicer
shall provide to the Trustee and the Depositor [and the Certificate Insurer]
access to the documentation regarding the Mortgage Loans, such access being
afforded without charge but only upon reasonable prior notice and during normal
business hours at the offices of the Servicer designated by it.
Upon any change in the format of the computer tape or file maintained
by the Servicer in respect of the Mortgage Loans, the Servicer shall deliver a
copy of such computer tape or file to the Trustee, and in addition shall provide
a copy of such computer tape or file to the Trustee [and the Certificate
Insurer] at such other times as the Trustee [or the Certificate Insurer] may
reasonably request.
The Servicer shall deliver to the Depositor, the Seller and the
Trustee [and the Certificate Insurer] monthly, not later than the close of
business on the [20th] day of each month (or, if such [20th] day is not a
Business Day, the immediately preceding Business Day), such information, in a
format mutually agreeable to the Servicer and the Trustee, as is necessary for
the calculation of distributions and preparation of the reports required to be
delivered by the Trustee under Section 6.07.
Section 5.20. Adjustment of Servicing Compensation In Respect of
Prepaid Mortgage Loans. The aggregate amount of the Servicing Fees that the
Servicer shall be entitled to receive with respect to all of the Mortgage Loans
and each Distribution Date shall be offset on such Distribution Date by an
amount equal to the aggregate Compensating Interest with respect to all Mortgage
Loans that were subjects of Principal Prepayments in Full or Curtailments during
the month preceding the month of such Distribution Date, calculated as provided
in Section 6.09. The amount of any offset against the aggregate Servicing Fee
with respect to any Distribution Date under this Section 5.20 shall be limited
to the aggregate amount of the Servicing Fees otherwise payable to the Servicer
(without adjustment on account of Prepayment Interest Shortfalls) with respect
to such Distribution Date.
Section 5.21. Periodic Advances. (a) On or before each Servicer
Remittance Date, the Servicer shall be required to remit to the Trustee for
deposit to the Certificate Account out of the Servicer's own funds or from
collections on any Mortgage Loans that are not required to be remitted to the
Trustee on such Servicer Remittance Date (all or any portion of such amount to
be replaced on future Servicer Remittance Dates) any Periodic Advances for such
date.
The Servicer shall be permitted to reimburse itself on any Business
Day for any Periodic Advances paid from the Servicer's own funds, from late
collections on the related Mortgage Loan or as provided in Section 5.04.
Notwithstanding the foregoing, in the event that the Servicer
determines in accordance with the servicing standards set out herein that any
proposed Periodic Advance would be a Nonrecoverable Advance, the Servicer shall
not be required to make Periodic Advances with respect to such Mortgage Loan. To
the extent that the Servicer previously has made any Periodic Advance with
respect to a Mortgage Loan that the Servicer subsequently determines is a
Nonrecoverable Advance, the Servicer shall be entitled to reimbursement for such
aggregate Nonrecoverable Advances from collections on any Mortgage Loan on
deposit in the Collection Account. The Servicer shall give written notice of
such determination as to why such amount would not be recoverable to the Trustee
[and the Certificate Insurer]; the Trustee shall promptly furnish a copy of such
notice to the Holders of the Class R Certificates; PROVIDED, FURTHER, that the
Servicer shall be entitled to recover any unreimbursed Periodic Advances in
accordance with Section 5.04.
(b) The Servicer will pay all "out-of-pocket" costs and expenses
relating to a Mortgagor delinquency or default or other unanticipated event
incurred in the performance of its servicing obligations, including, but not
limited to, (i) property preservation expenses, (ii) the cost of any
enforcement or judicial proceedings, including foreclosures, (iii) the cost of
the management and liquidation of REO Property, and (iv) advances required by
Section 5.12(a), except to the extent that such amounts are determined by the
Servicer in its reasonable business judgment not to be recoverable. Such costs
will constitute Servicing Advances. If the Servicer determines that a
Servicing Advance, if made, would be a Nonrecoverable Advance, the Servicer
shall make such Servicing Advance only if, in the good faith business judgment
of the Servicer, the making of such Servicing Advance is in the best interests
of the Certificateholders [and the Certificate Insurer]. To the extent that
the Servicer previously has made any Servicing Advance with respect to a
Mortgage Loan that the Servicer subsequently determines is a Nonrecoverable
Advance, the Servicer shall be entitled to reimbursement for such aggregate
Nonrecoverable Advances from collections on any Mortgage Loan on deposit in
the Collection Account. The Servicer shall give written notice of such
determination as to why such amount would not be recoverable to the Trustee
[and the Certificate Insurer]; the Trustee shall promptly furnish a copy of
such notice to the Holders of the Class R Certificates; PROVIDED, FURTHER,
that the Servicer shall be entitled to recover any unreimbursed Servicing
Advances in accordance with Section 5.04.
(c) Any cost incurred by the Servicer or by Subservicers in effecting
the timely payment of taxes and assessments on a Mortgaged Property shall not,
for the purpose of calculating distributions to Certificateholders, be added to
the unpaid principal balance of the related Mortgage Loan, notwithstanding that
the terms of such Mortgage Loan so permit.
Section 5.22. Inspections. At any reasonable time and from time to
time upon reasonable notice, the Trustee, [the Certificate Insurer,] any
Certificateholder of a Residual Certificate, or any agents thereof may inspect
the Servicer's servicing operations and discuss the servicing operations of the
Servicer during the Servicer's normal business hours with any of its officers or
directors; PROVIDED, HOWEVER, that the costs and expenses incurred by the
Servicer or its agents or representatives in connection with any such
examinations or discussions shall be paid by the Servicer, other than
extraordinary costs and expenses, which shall be paid by the inspecting party.
Section 5.23. Maintenance of Corporate Existence and Licenses; Merger
or Consolidation of the Servicer. (a) The Servicer will keep in full effect its
existence, rights and franchises as a corporation, will obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction
necessary to protect the validity and enforceability of this Agreement or any of
the Mortgage Loans and to perform its duties under this Agreement and will
otherwise operate its business so as to cause the representations and warranties
under Section 3.01 to be true and correct at all times under this Agreement.
(b) Any corporation into which the Servicer may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Servicer shall be a party or
any corporation succeeding to all or substantially all of the business or assets
of the Servicer shall be the successor of the Servicer hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto [provided that such corporation is acceptable to the Certificate
Insurer].
Section 5.24. Assignment of Agreement by Servicer; Servicer Not to
Resign. The Servicer shall not assign this Agreement or resign from the
obligations and duties hereby imposed on it except by [mutual] consent of the
Trustee [and the Certificate Insurer], which consent shall not be unreasonably
withheld, or upon the determination that the Servicer's duties hereunder are no
longer permissible under applicable law and that such incapacity cannot be cured
by the Servicer without incurring unreasonable expense. Any such determination
that the Servicer's duties hereunder are no longer permissible under applicable
law permitting the resignation of the Servicer shall be evidenced by a written
Opinion of Counsel to such effect delivered to the Trustee, the Seller and the
Depositor [and the Certificate Insurer]. No such assignment or resignation shall
become effective until the Trustee or a successor Servicer appointed in
accordance with the terms of this Agreement has assumed the Servicer's
responsibilities and obligations hereunder in accordance with Section 7.02. The
Servicer shall provide the Trustee and the Rating Agencies [and the Certificate
Insurer] with [30] days prior written notice of its intention to resign pursuant
to this Section 5.24.
Section 5.25. Information Reports to be Filed by the Servicer. The
Servicer shall file information returns with respect to the receipt of mortgage
interest received in a trade or business, reports of foreclosures and
abandonments of any Mortgaged Property and cancellation of indebtedness income
with respect to any Mortgaged Property as required by Sections 6050H, 6050J and
6050P of the Code, respectively.
Section 5.26. [Reserved]
Section 5.27. Waiver of Prepayment Premiums. The Servicer shall not
waive any Prepayment Premium, whether in connection with a refinancing of a
Mortgage Loan that is related to a default or a reasonably foreseeable default
or otherwise, unless (i) such waiver would maximize recovery of total proceeds
with respect to such Mortgage Loan, taking into account the value of the
Prepayment Premium and the related Mortgage Loan and (ii) such waiver is
standard and customary in servicing similar mortgage loans. In no event shall
the Servicer waive any Prepayment Premium in connection with a refinancing of a
Mortgage Loan that is not related to a default or a reasonably foreseeable
default.
Section 5.28. Adjustable Rate Mortgage Loans. The Servicer shall
enforce each Adjustable Rate Mortgage Loan in accordance with its terms and
shall timely calculate, record, report and apply all interest rate adjustments
in accordance with the related Mortgage Note. The Servicer's records shall, at
all times, reflect the then Mortgage Rate and monthly payment and the Servicer
shall timely notify the Mortgagor of any changes to the Mortgage Rate or the
Mortgagor's monthly payment. If the Servicer fails to make either a timely or
accurate adjustment to the Mortgage Rate or monthly payment or to notify the
Mortgagor of such adjustments, upon the Servicer's discovery of such error and
such continued failure, the Servicer shall pay from its own funds any shortage.
If the Servicer's continued failure after notice thereof to make a scheduled
change affects the Trust Fund's rights to make future adjustments under the
terms of such Adjustable Rate Mortgage Loan, the Servicer shall repurchase such
Adjustable Rate Mortgage Loan in accordance with the provisions hereof by
depositing the Loan Purchase Price in the Collection Account. Any amounts paid
by the Servicer pursuant to this Section shall not be an advance and shall not
be reimbursable from the proceeds of any Mortgage Loan.
Section 5.29. [Notices of Material Events.] [The Servicer shall give
prompt written notice to the Certificate Insurer, the Trustee and the Rating
Agencies of the occurrence of any of the following events:
(a) Any default or any fact or event of which with notice or the
passage of time, or both, would result in the occurrence of a default by the
Servicer under any Transaction Document or would constitute a material breach of
a representation, warranty or covenant under any Transaction Document;
(b) The submission of any claim or the initiation of any legal
process, litigation or administrative or judicial investigation against the
Servicer to which the Servicer has knowledge in any federal, state or local
court or before any governmental body or agency or before any arbitration board
or any such proceedings threatened by any governmental agency, which, if
adversely determined, would have a material adverse effect upon the Servicer's
ability to perform its obligations under any Transaction Document;
(c) The commencement of any proceedings by or against the Servicer
under any applicable bankruptcy, reorganization, liquidation, insolvency or
other similar law now or hereafter in effect or of any proceeding in which a
receiver, liquidator, trustee or other similar official shall have been, or may
be, appointed or requested for the Servicer; and
(d) The receipt of notice from any agency or governmental body having
authority over the conduct of the Servicer's business that the Servicer is to
cease or desist, or to undertake any practice, program, procedure or policy
employed by the Servicer in the conduct of the business of any of them, and such
cessation or undertaking will materially and adversely affect the conduct of the
Servicer' s business or its ability to perform under the Transaction Document
(as defined in the Insurance Agreement) or materially and adversely affect the
financial affairs of the Servicer.]
Section 5.30. [Purchase of Receivables upon Breach.] [The Depositor,
the Servicer, the Trustee and the Certificate Insurer shall inform the Servicer
promptly, in writing, upon the discovery of any breach pursuant to Section
5.12(c). Unless the breach shall have been cured within [60] days following such
discovery thereof by the Servicer or the receipt by the Servicer of written
notice of such breach, the Servicer shall be obligated to purchase any Mortgage
Loan in which the interests of the Certificateholders or the Certificate Insurer
are materially and adversely affected by such breach as of the first day
succeeding the end of such [60] day period that is the last day of a Due Period.
In the event of any such repurchase pursuant to this Section, a REMIC Opinion
shall be required to be delivered by the Servicer. Any required purchase or
substitution, if delayed by the absence of such opinion, shall nonetheless occur
upon the earlier of (i) the occurrence of a default or imminent default with
respect to the Mortgage Loan or (ii) the delivery of such opinion. In the event
that any such repurchase results in a "prohibited transaction," the Trustee
shall immediately notify the Servicer in writing thereof and the Servicer shall,
within 10 days of receiving notice thereof from the Trustee, deposit the amount
due from the Trust Fund with the Trustee for the payment thereof, including any
interest and penalties, in immediately available funds. In consideration of the
purchase of any such Mortgage Loan pursuant to the preceding sentence, the
Servicer shall remit the Loan Purchase Price to the Collection Account. The sole
remedy of the Trustee or the Certificateholders with respect to such a breach
shall be to require the Servicer to purchase Mortgage Loans pursuant to this
Section and the indemnity provided in Section 10.01(g) and Section 10.03 hereof.
The Trustee shall have no duty to conduct any affirmative investigation as to
the occurrence of any condition requiring the purchase of any Mortgage Loan
pursuant to this Section.]
ARTICLE VI
DISTRIBUTIONS AND PAYMENTS
Section 6.01. Establishment of Certificate Accounts; Deposits to the
Certificate Accounts. (a) The Trustee shall establish and maintain a Certificate
Account in the name of the Trustee in trust for the benefit of the
Certificateholders [and the Certificate Insurer]. The Certificate Account shall
be an Eligible Account.
(b) The Trustee shall invest the funds in the Certificate Account only
in Permitted Investments as directed in writing by the Servicer. With respect to
each Distribution Date, one day's investment income realized from any such
Permitted Investment shall be for the benefit of the Trustee as additional
compensation, and the remainder of the investment income from such Permitted
Investments with respect to such Distribution Date, if any, shall be paid to the
Servicer as additional servicing compensation. The amount of any losses incurred
in respect of any such investments shall be deposited in the related Certificate
Account by the Servicer out of its own funds immediately as realized.
Section 6.02. Permitted Withdrawals from the Certificate Account. The
Trustee shall withdraw or cause to be withdrawn funds from the Certificate
Account for the following purposes:
(a) to effect the distributions described in Section 6.05;
(b) to pay to the Seller or the Originator, as applicable, with
respect to each Mortgage Loan or property acquired in respect thereof that has
been repurchased or replaced pursuant to Section 2.04 or 3.03 or to pay to the
Servicer with respect to each Mortgage Loan or property acquired in respect
thereof that has been purchased all amounts received thereon and not required to
be distributed as of the date on which the related repurchase or purchase price
or Principal Balance was determined;
(c) to pay itself and the Servicer any interest earned on or
investment income earned with respect to funds in the Certificate Account as
provided in Section 6.01;
(d) to return to the Collection Account any amount deposited in the
Certificate Account that was not required to be deposited therein; and
(e) to clear and terminate the Certificate Account upon termination of
any of the Trust Fund pursuant to Article VIII.
The Trustee shall keep and maintain a separate accounting for
withdrawals from the Certificate Account pursuant to each of subclauses (a)
through (e) listed above.
Section 6.03. Collection of Money. Except as otherwise expressly
provided herein, the Trustee may demand payment or delivery of all money and
other property payable to or receivable by the Trustee pursuant to this
Agreement, including [(a)] all payments due on the Mortgage Loans in accordance
with the respective terms and conditions of such Mortgage Loans and required to
be paid over to the Trustee by the Servicer [(b) Insured Payments]. The Trustee
shall hold all such money and property received by it as part of the Trust Fund
and shall apply it as provided in this Agreement.
Section 6.04. [The Certificate Insurance Policy.] [(a) If, on the
third Business Day before any Distribution Date, the Trustee determines that a
Deficiency Amount exists for such Distribution Date, the Trustee shall determine
the amount of any such Insured Payment and shall give notice to the Certificate
Insurer by completing a notice in the form of Exhibit A to the Certificate
Insurance Policy and submitting such notice by 12:00 noon New York City time on
such third Business Day as a claim for an Insured Payment. The Trustee's
responsibility for delivering a notice to the Certificate Insurer, as provided
in the preceding sentence, is limited to the availability, timeliness and
accuracy of the information provided by the Servicer.]
(b) [In the event that the Trustee receives a certified copy of an
order of the appropriate court that any scheduled payment of principal or
interest on an Insured Certificates has been voided in whole or in part as a
preference payment under applicable bankruptcy law, the Trustee shall (i)
promptly notify the Certificate Insurer, as appropriate, and the Fiscal Agent,
if any, and (ii) comply with the provisions of the Certificate Insurance Policy
to obtain payment by the Certificate Insurer of such voided payment. In
addition, the Trustee shall mail notice to all Holders of Insured Certificates
so affected that, in the event that any such Holder's payment is so recovered,
such Holder will be entitled to payment pursuant to the terms of the Certificate
Insurance Policy, a copy of which shall be made available to such Holders by the
Trustee. The Trustee shall furnish to the Certificate Insurer and the
appropriate Fiscal Agent, if any, its records listing the payments on the
affected Insured Certificates, if any, that have been made by the Trustee and
subsequently recovered from the affected Holders, and the dates on which such
payments were made by the Trustee.]
(c) [The Trustee shall establish a separate Eligible Account for the
benefit of Holders of the Insured Certificates and the Certificate Insurer
referred to herein as the "Certificate Insurance Payments Account" over which
the Trustee shall have exclusive control and sole right of withdrawal. The
Trustee shall deposit upon receipt any amount paid under the Certificate
Insurance Policy in the Certificate Insurance Payments Account and distribute
such amount only for purposes of payment to Insured Certificateholders of the
Insured Payment and such amount may not be applied to satisfy any costs,
expenses or liabilities of the Servicer, the Trustee or the Trust Fund. Amounts
paid under the Certificate Insurance Policy, to the extent needed to pay the
Insured Payment shall be transferred by the Trustee from the Certificate
Insurance Payments Account to the Certificate Account on the related
Distribution Date and disbursed by the Trustee to Insured Certificateholders in
accordance with Section 6.05. It shall not be necessary for payments made under
the Certificate Insurance Policy to be made by checks or wire transfers separate
from other amounts distributed pursuant to Section 6.05. However, the amount of
any payment of principal or of interest on the Certificates to be paid from
funds transferred from the Certificate Insurance Payments Account shall be noted
as provided in paragraph (d) below. Funds held in the Certificate Insurance
Payments Account shall not be invested. Any funds remaining in the Certificate
Insurance Payments Account on the first Business Day following a Distribution
Date shall be returned to the Certificate Insurer pursuant to the written
instructions of the Certificate Insurer by the end of such Business Day.]
(d) [The Trustee Remittance Report shall indicate the amount of
interest and principal paid in respect of the Insured Certificates from moneys
received under the Certificate Insurance Policy. The Trustee shall keep a
complete and accurate record of the amount of interest and principal paid in
respect of any Insured Certificate from moneys received under the Certificate
Insurance Policy. The Certificate Insurer shall have the right to inspect such
records at reasonable times during normal business hours upon one Business Day's
prior notice to the Trustee.]
(e) [The Trustee shall promptly notify the Certificate Insurer of any
proceeding or the institution of any action, of which a Responsible Officer of
the Trustee has actual knowledge, seeking the avoidance as a preferential
transfer under applicable bankruptcy, insolvency, receivership or similar law (a
"Preference Claim") of any distribution made with respect to the Insured
Certificates. Each Certificateholder, by its acceptance of a Certificate, the
Servicer and the Trustee agree that, the Certificate Insurer (so long as no
Certificate Insurer Default exists) may at any time during the continuation of
any proceeding relating to a Preference Claim direct all matters relating to
such Preference Claim, including, without limitation, (i) the direction of any
appeal of any order relating to such Preference Claim and (ii) the posting of
any surety, supersedeas or performance bond pending any such appeal. In addition
and without limitation of the foregoing, the Certificate Insurer shall be
subrogated to, and each Certificateholder, the Servicer and the Trustee hereby
delegate and assign to the Certificate Insurer, to the fullest extent permitted
by law, the rights of the Servicer, the Trustee and each Certificateholder in
the conduct of any such Preference Claim, including, without limitation, all
rights of any party to any adversary proceeding or action with respect to any
court order issued in connection with any such Preference Claim.]
(f) [Anything herein to the contrary notwithstanding, any payment with
respect to principal of or interest on any of the Insured Certificates which is
made with moneys received pursuant to the terms of the Certificate Insurance
Policy shall not be considered payment of such Certificates from the Trust Fund
and shall not result in the payment of or the provision for the payment of the
principal of or interest on such Certificates within the meaning of Section
6.05. The Depositor, the Servicer and the Trustee acknowledge, and each Holder
by its acceptance of a Certificate agrees, that without the need for any further
action on the part of the Certificate Insurer, the Depositor, the Servicer, the
Trustee or the Certificate Registrar (a) to the extent the Certificate Insurer
makes payments, directly or indirectly, on account of principal of or interest
on any Insured Certificates to the Holders of such Insured Certificates, the
Certificate Insurer will be fully subrogated to the rights of such Holders to
receive such principal and interest from the Trust Fund and (b) the Certificate
Insurer shall be paid such principal and interest but only from the sources and
in the manner provided herein for the payment of such principal and interest.]
[The Trustee, the Depositor and the Servicer shall cooperate in all
respects with any reasonable request by the Certificate Insurer for action to
preserve or enforce the Certificate Insurer's rights or interests under this
Agreement without limiting the rights or affecting the interests of the Holders
as otherwise set forth therein.]
[(g) The Trustee will hold the Certificate Insurance Policy in trust
for the benefit of the Insured Certificateholders for the purpose of making
claims thereon and distributing the proceeds thereof. Each Insured
Certificateholder, by accepting its Insured Certificates, appoints the Trustee
as attorney-in-fact for the purpose of making claims on the Certificate
Insurance Policy.]
Section 6.05. Distributions. (a) Not later than the close of business
on each Servicer Remittance Date, the Servicer shall remit to the Trustee for
deposit into the Certificate Account from funds on deposit in the Collection
Account an amount equal to the Total Distribution Amount.
(b) With respect to funds deposited in the Certificate Account, on
each Distribution Date, the Trustee shall make the following allocations,
disbursements and transfers, and each such allocation, transfer and disbursement
shall be treated as having occurred only after all preceding allocations,
transfers and disbursements have occurred:
(i) On each Distribution Date, the Trustee shall distribute the
Interest Remittance Amount for such date in the following order of
priority:
[FIRST, to the Trustee, the Trustee Fee for such date;]
[SECOND, to the Certificate Insurer, the Premium Amount for
such date;]
[SECOND, to the Class A Certificates, Current Interest for
such Class for such date and any Carryforward Interest for such
Class for such date;]
[THIRD, to the Class M1 Certificates, Current Interest for
such Class for such date;]
[FOURTH, to the Certificate Insurer, in reimbursement of any
Reimbursement Amount not yet reimbursed, to the extent that such
amount was paid in respect of Current Interest on the Insured
Certificates, together with interest thereon at the Late Payment
Rate;]
[FOURTH, to the Class M2 Certificates, Current Interest for
such Class for such date;]
[FIFTH, to the Class B Certificates, Current Interest for
such Class for such date; and]
[SIXTH, for application as part of Monthly Excess Cashflow
for such date, as provided in subsection (b)(iii) of this
Section, any Interest Remittance Amount remaining after
application pursuant to clauses FIRST through FIFTH above.]
(ii) On each Distribution Date, the Trustee shall distribute the
Principal Distribution Amount for such date as follows:
(1) On each Distribution Date (A) prior to the Stepdown Date
or (B) with respect to which a Delinquency Trigger Event has
occurred, the Trustee will distribute the Principal Distribution
Amount for such date in the following order of priority:
[FIRST, to the Class A Certificates, until the Class
Principal Amount has been reduced to zero;]
[SECOND, to the Certificate Insurer, in reimbursement
of any Reimbursement Amount not yet reimbursed, to the
extent that such amount was paid in respect of a
Subordination Deficit, together with interest thereon at the
Late Payment Rate;]
[SECOND, to the Class M1 Certificates, until the Class
Principal Amount has been reduced to zero;]
[THIRD, to the Class M2 Certificates, until the Class
Principal Amount has been reduced to zero;]
[FOURTH, to the Class B Certificates, until the Class
Principal Amount has been reduced to zero; and]
[FIFTH, for application as part of Monthly Excess
Cashflow for such date, as provided in subsection (b)(iii)
of this Section, any Principal Distribution Amount remaining
after application pursuant to clauses FIRST through FOURTH
above.]
(2) On each Distribution Date (A) on and after the Stepdown
Date and (B) on any Distribution Date on which a Delinquency
Trigger Event has not occurred, the Trustee will distribute the
Principal Distribution Amount for such date in the following
order of priority:
[FIRST, to the Class A Certificates, the lesser of (x)
the Principal Distribution Amount and (y) the Senior
Principal Distribution Amount for such date, until the Class
Principal Amount has been reduced to zero;]
[SECOND, to the Certificate Insurer, in reimbursement
of any Reimbursement Amount not yet reimbursed, to the
extent that such amount was paid in respect of a
Subordination Deficit, together with interest thereon at the
Late Payment Rate;]
[SECOND, to the Class M1 Certificates, the lesser of
(x) the remaining Principal Distribution Amount and (y) the
Class M1 Principal Distribution Amount for such date, until
the Class Principal Amount has been reduced to zero;]
[THIRD, to the Class M2 Certificates, the lesser of (x)
the remaining Principal Distribution Amount and (y) the
Class M2 Principal Distribution Amount for such date, until
the Class Principal Amount has been reduced to zero;]
[FOURTH, to the Class B Certificates, the lesser of (x)
the remaining Principal Distribution Amount and (y) the
Class B Principal Distribution Amount for such date, until
the Class Principal Amount has been reduced to zero; and]
[FIFTH, for application as part of Monthly Excess
Cashflow for such date, as provided in subsection (b)(iii)
of this Section, any Principal Distribution Amount remaining
after application pursuant to clauses FIRST through FOURTH
above.]
(iii) On each Distribution Date, the Trustee shall distribute the
Monthly Excess Cashflow for such date, in the following order of
priority:
[FIRST, to the Certificate Insurer, in reimbursement of any
Reimbursement Amount;]
[FIRST, to the extent of Monthly Excess Interest, to fund
the Extra Principal Distribution Amount for such date;]
[SECOND, to the Class M1 Certificates, any Carryforward
Interest for such date;]
[THIRD, to the Class M1 Certificates, any Deferred Amount
for such date;]
[FOURTH, to the Class M2 Certificates, any Carryforward
Interest for such date;]
[FIFTH, to the Class M2 Certificates, any Deferred Amount
for such date;]
[SIXTH, to the Class B Certificates, any Carryforward
Interest for such date;]
[SEVENTH, to the Class B Certificates, any Deferred Amount
for such date;]
[EIGHTH, for deposit into the Basis Risk Reserve Fund, as
required under Section 6.15(b) of this Agreement;]
[NINTH, from the Basis Risk Reserve Fund, to the Class A
Certificates, in an amount equal to any outstanding Basis Risk
Shortfall and Unpaid Basis Risk Shortfall for such Class for such
date;]
[TENTH, from the Basis Risk Reserve Fund, to the Class M1
Certificates, in an amount equal to any outstanding Basis Risk
Shortfall and Unpaid Basis Risk Shortfall for such Class for such
date;]
[ELEVENTH, from the Basis Risk Reserve Fund, to the Class M2
Certificates, in an amount equal to any outstanding Basis Risk
Shortfall and Unpaid Basis Risk Shortfall for such Class for such
date;]
[TWELFTH, from the Basis Risk Reserve Fund, to the Class B
Certificates, in an amount equal to any outstanding Basis Risk
Shortfall and Unpaid Basis Risk Shortfall for such Class for such
date; and]
[THIRTEENTH, to the Class R Certificate, any remaining
Monthly Excess Cashflow for such date.]
(iv) [On each Distribution Date, the Trustee shall distribute any
Insured Payment for such date to the Insured Certificateholders
entitled thereto.]
(v) On each Distribution Date, the Trustee shall distribute the
amount of all Prepayment Premiums received by the Servicer during the
related Prepayment Period to the holder of the Class R Certificate.
Section 6.06. 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 Account, other than the
Collection Account [and the Certificate Insurance Payments Account,], held by
the Trustee shall be invested and reinvested by the Trustee, as directed in
writing by the Servicer (with respect to the Certificate Account) or the
Depositor (with respect to any Pre-Funding Account or Capitalized Interest
Account) in one or more Permitted Investments bearing interest or sold at a
discount. If an Event of Default shall have occurred and be continuing or if the
Servicer does not provide investment directions, the Trustee shall invest all
Accounts in Permitted Investments described in paragraph (d) of the definition
of Permitted Investments. No such investment in any Account shall mature later
than the Business Day immediately preceding the next Distribution Date (except
that if such Permitted Investment is an obligation of the Trustee, then such
Permitted Investment shall mature not later than such Distribution Date).
(b) Subject to Section 9.01 hereof, the Trustee shall not in any way
be held liable by reason of any insufficiency in any Account held by the Trustee
resulting from any investment loss on any Permitted Investment included therein
(except to the extent that the Trustee is the obligor and has defaulted
thereon).
Section 6.07. Reports by Trustee. (a) On each Distribution Date the
Trustee shall provide to each Holder, to the Servicer, to the Seller, [to the
Certificate Insurer,] to the Depositor and to the Rating Agencies a report (the
"Trustee Remittance Report"), setting forth information including, without
limitation, the following information:
(i) the amount of the distribution with respect to each Class of
Certificates;
(ii) the amount of such distributions allocable to principal,
separately identifying the aggregate amount of any Principal
Prepayments in Full and Curtailments or other unscheduled recoveries
of principal included therein;
(iii) the amount of such distributions allocable to interest and
the calculation thereof;
(iv) the Class Principal Amount or Class Notional Amount of each
Class of Regular Certificates as of such Distribution Date after
giving effect to any payment of principal on such Distribution Date;
(v) [the amount of any Insured Payment included in the amounts
distributed to the Insured Certificateholders on such Distribution
Date;]
(vi) the total of any Substitution Adjustments and any Loan
Purchase Price amounts included in such distribution;
(vii) the amounts, if any, of any Realized Losses for the
Prepayment Period immediately preceding such Distribution Date and the
cumulative amount of Realized Losses from the Closing Date;
(viii) the number of Mortgage Loans and the aggregate Principal
Balance of Mortgage Loans purchased or substituted for pursuant to
Sections 3.03 and 2.04 for the related Distribution Date and, since
the Closing Date, the cumulative number and Principal Balance of
Mortgage Loans purchased or substituted for pursuant to Sections 3.03
and 2.04;
(ix) the Interest Rate applicable to each Class of Certificates
for such Distribution Date;
(x) the amount of any outstanding Carryforward Interest for each
Class of Certificates;
(xi) the amount of any outstanding Basis Risk Shortfall and
Unpaid Basis Risk Shortfall for each Class of Certificates;
(xii) the amount of any unreimbursed Deferred Amount for the
Class M1, Class M2 and Class B Certificates;
(xiii) the amount of any Periodic Advances included in
distributions on such Distribution Date;
(xiv) the amount of the Servicing Fees [, Premium Amount] and
Trustee Fee with respect to such Distribution Date;
(xv) [the amount of any Reimbursement Amount paid to the
Certificate Insurer on such date;]
(xvi) the amount of any distribution to the Residual Certificates
on such Distribution Date;
(xvii) the amount on deposit in the Basis Risk Reserve Fund
before and after withdrawals on such Distribution Date;
(xviii) the Targeted Overcollateralization Amount,
Overcollateralization Amount and Overcollateralization Deficiency for
such Distribution Date;
(xix) the Senior Principal Distribution Amount for such
Distribution Date;
(xx) the Class M1 Principal Distribution Amount for such
Distribution Date;
(xxi) the Class M2 Principal Distribution Amount for such
Distribution Date;
(xxii) the Class B Principal Distribution Amount for such
Distribution Date;
(xxiii) LIBOR for such Distribution Date; and
(xxiv) Monthly Excess Interest and Monthly Excess Cashflow for
such Distribution Date.
Items (i), (ii) and (iii) above shall, with respect to the Regular
Certificates, be presented on the basis of a Certificate having a $1,000
denomination. In addition, by March 31 of each calendar year (or such earlier
date as may be required by applicable law or regulation) following any year
during which the Certificates are outstanding, the Trustee shall furnish a
report to each Holder of record if so requested in writing at any time during
each calendar year as to the aggregate of amounts reported pursuant to (i), (ii)
and (iii) with respect to the Certificates for such calendar year. Such
information shall be deemed to have been furnished if provided pursuant to the
requirements of the Code from time to time in force.
(b) All distributions made to each Class of Certificates on each
Distribution Date will be made on a pro rata basis among the Certificateholders
of such Class on the next preceding Record Date based on the Percentage Interest
represented by their respective Certificates, and shall be made by wire transfer
of immediately available funds at the expense of such Certificateholder to the
account of such Certificateholder at a bank or other entity having appropriate
facilities therefor, if such Certificateholder shall have provided complete
wiring instructions by the Record Date, and otherwise by check mailed to the
address of such Certificateholder appearing in the Certificate Register.
(c) In addition, on each Distribution Date the Trustee will provide to
each Holder, [to the Certificate Insurer,] to the Servicer, to the Depositor and
to the Rating Agencies, together with the information described in subsection
(a) preceding, the following information with respect to the Mortgage Loans,
based on information provided by the Servicer, as of the following dates, as
applicable: (1) with respect to Monthly Payments, the close of business on the
last day of the related Due Period; (2) with respect to Principal Prepayments in
Full, Curtailments, Liquidation Proceeds, Insurance Proceeds, REO Proceeds,
Released Mortgaged Property Proceeds and any other unscheduled payments or
recoveries, and with respect to Realized Losses, the close of business on the
last day of the related Prepayment Period; (3) with respect to Mortgage Loans
that are Delinquent, the close of business on the last day of the immediately
preceding calendar month and (4) in all other cases, unless otherwise specified,
the close of business on the last day of the related Due Period:
(i) the total number of Mortgage Loans and the aggregate
Principal Balances thereof for such Distribution Date, together with
the number and aggregate Principal Balances of such Mortgage Loans and
the percentage (based on the aggregate Principal Balances of the
Mortgage Loans) of all Mortgage Loans (A) 30-59 days Delinquent, (B)
60-89 days Delinquent and (C) 90 or more days Delinquent;
(ii) the number and aggregate Principal Balances of all Mortgage
Loans and percentage (based on the aggregate Principal Balances of the
Mortgage Loans) of the aggregate Principal Balances of such Mortgage
Loans to the aggregate Principal Balance of all Mortgage Loans in
foreclosure proceedings and the number and aggregate Principal
Balances of all Mortgage Loans and percentage (based on the aggregate
Principal Balances of the Mortgage Loans) of any such Mortgage Loans
which are also included in any of the statistics described in the
foregoing clauses (i)(A), (i)(B) and (i)(C);
(iii) the number and aggregate Principal Balances of all Mortgage
Loans and percentage (based on the aggregate Principal Balances of the
Mortgage Loans) of the aggregate Principal Balances of such Mortgage
Loans to the aggregate Principal Balance of all Mortgage Loans
relating to Mortgagors in bankruptcy proceedings and the number and
aggregate Principal Balances of all Mortgage Loans and percentage
(based on the aggregate Principal Balances of the Mortgage Loans) of
any such Mortgage Loans which are also included in any of the
statistics described in the foregoing clauses (i)(A), (i)(B) and
(i)(C);
(iv) the number and aggregate Principal Balances of all Mortgage
Loans and percentage (based on the aggregate Principal Balances of the
Mortgage Loans) of the aggregate Principal Balances of such Mortgage
Loans to the aggregate Principal Balance of all Mortgage Loans
relating to REO Properties and the number and aggregate Principal
Balances of all Mortgage Loans and percentage (based on the aggregate
Principal Balances of the Mortgage Loans) of any such Mortgage Loans
which are also included in any of the statistics described in the
foregoing clause (i)(A), (i)(B) and (i)(C);
(v) the weighted average Mortgage Rate as of the Due Date
occurring in the Due Period related to such Distribution Date;
(vi) the weighted average remaining term to stated maturity of
all Mortgage Loans;
(vii) the book value of any REO Property;
(viii) the Total Loan Balance for such Distribution Date;
(ix) the number of REO Properties and aggregate Principal Balance
of REO Mortgage Loans;
(x) Liquidation Proceeds, Liquidation Expenses and Net
Liquidation Proceeds received by the Servicer during the related
Prepayment Period;
(xi) the Three Month Delinquency Rate for such Distribution Date;
(xii) the Targeted Cumulative Loss Percentage for such
Distribution Date;
(xiii) the Cumulative Loss Percentage for such Distribution Date;
(xiv) the aggregate Principal Balance of the three Mortgage Loans
having the largest Principal Balances in the Mortgage Pool; and
(xv) the aggregate outstanding principal balance of Mortgage
Loans 270 or more days Delinquent as of the close of the related Due
Period.
Section 6.08. Additional Reports by Trustee. [(a)] The Trustee shall
report to the Depositor and the Servicer [and the Certificate Insurer] with
respect to the amount then held in each Account (including investment earnings
accrued or scheduled to accrue) held by the Trustee and the identity of the
investments included therein, as the Depositor or the Servicer may from time to
time request in writing.
(b) [From time to time, at the request of the Certificate Insurer, the
Trustee shall report to the Certificate Insurer with respect to its actual
knowledge of any breach of any of the representations or warranties relating to
individual Mortgage Loans set forth in the Purchase Agreement or in Section 3.01
or 3.02 hereof.]
Section 6.09. Compensating Interest. Not later than the close of
business on the Servicer Remittance Date prior to the Distribution Date, the
Servicer shall remit to the Trustee (without right or reimbursement therefor)
for deposit into the Certificate Account an amount equal to the lesser of (a)
the excess of (i) the aggregate of the Prepayment Interest Shortfalls for the
related Distribution Date resulting from Principal Prepayments in Full and
Curtailments during the related Prepayment Period over (ii) any Prepayment
Interest Excess resulting from Principal Prepayments in Full during such
Prepayment Period and (b) its aggregate Servicing Fees for such Distribution
Date and shall not have the right to reimbursement therefor (the "Compensating
Interest").
Section 6.10. [Effect of Payments by the Certificate Insurer;
Subrogation]. [Anything herein to the contrary notwithstanding, any payment with
respect to principal of or interest on the Insured Certificates that is made
with moneys received pursuant to the terms of the Certificate Insurance Policy
shall not be considered payment of the Certificates from the Trust Fund. The
Depositor, the Servicer and the Trustee acknowledge, and each Holder by its
acceptance of a Certificate agrees, that without the need for any further action
on the part of the Certificate Insurer, the Depositor, the Servicer, the Trustee
or the Certificate Registrar (a) to the extent the Certificate Insurer makes
payments, directly or indirectly, on account of principal of or interest on the
Insured Certificates to the Holders of such Certificates, the Certificate
Insurer will be fully subrogated to, and each Certificateholder, the Servicer
and the Trustee hereby delegate and assign to the Certificate Insurer, to the
fullest extent permitted by law, the rights of such Holders to receive such
principal and interest from the Trust Fund, including, without limitation, any
amounts due to the Certificateholders in respect of securities law violations
arising from the offer and sale of the Insured Certificates, and (b) the
Certificate Insurer shall be paid such amounts but only from the sources and in
the manner provided herein for the payment of such amounts. The Trustee and the
Servicer shall cooperate in all respects with any reasonable request by the
Certificate Insurer for action to preserve or enforce the Certificate Insurer's
rights or interests under this Agreement without limiting the rights or
affecting the interests of the Holders as otherwise set forth herein.]
Section 6.11. Allocation of Realized Losses. On each Distribution
Date, the Class Principal Amounts of the [Class M1, Class M2 and Class B]
Certificates will be reduced by the amount of any Applied Loss Amount for such
date, in the following order of priority:
[FIRST, to the Class B Certificates, until the Class Principal
Amount thereof has been reduced to zero;]
[SECOND, to the Class M2 Certificates, until the Class Principal
Amount thereof has been reduced to zero; and]
[THIRD, to the Class M1 Certificates, until the Class Principal
Amount thereof has been reduced to zero.] Section 6.12. Pre-Funding
Account. [ ].
Section 6.13. Capitalized Interest Account. [ ].
Section 6.14. Determination of LIBOR. If the outstanding Certificates
include any LIBOR Certificates, then on each LIBOR Determination Date the
Trustee shall determine LIBOR for the next succeeding Accrual Period by
reference to the display designated as page 3750 on the Dow Xxxxx Telerate
Service (or such other page as may replace such page on that service for the
purpose of displaying London interbank offered quotations of major banks).
If such rate does not appear on Telerate Page 3750, the rate for such
day shall be determined on the basis of the rates at which deposits in United
States dollars are offered by the Reference Banks at approximately 11:00 a.m.,
London time, on such day to banks in the London interbank market for a term
equal to the relevant Accrual Period. The Trustee shall 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, LIBOR for the next applicable
Accrual Period shall be the arithmetic mean of those quotations.
As used herein, "Reference Banks" means leading banks selected by the
Trustee and engaged in transactions in Eurodollar deposits in the international
Eurocurrency market.
If on any LIBOR Determination Date only one or none of the Reference
Banks provides the offered quotations, LIBOR for the next applicable Accrual
Period shall be the arithmetic mean of the rates quoted by major banks in New
York City, selected by the Trustee, at approximately 11:00 a.m., New York City
time, on such day for loans in United States dollars to leading European banks
for a term equal to the relevant Accrual Period. If on any LIBOR Determination
Date the Trustee is unable to determine LIBOR for an Accrual Period, LIBOR for
such Accrual Period shall be LIBOR as determined on the previous LIBOR
Determination Date.
Notwithstanding the foregoing, LIBOR for the next succeeding Accrual
Period shall not be based on LIBOR for the immediately preceding Accrual Period
for two consecutive LIBOR Determination Dates. If, under the procedures
described above, LIBOR for the next succeeding Accrual Period would be based on
LIBOR for the previous LIBOR Determination Date for the second consecutive LIBOR
Determination Date, the Trustee shall select an alternative index (over which
the Trustee has no control) used for determining Eurodollar lending rates that
is calculated and published (or otherwise made available) by an independent
third party.
The establishment of LIBOR by the Trustee and the Trustee's subsequent
calculation of the rate of interest applicable to the LIBOR Certificates for the
relevant Accrual Period, in the absence of manifest error, shall be final and
binding.
Section 6.15. The Basis Risk Reserve Fund. (a) On the Closing Date,
the Trustee shall establish and maintain in its name, in trust for the benefit
of the holders of the [Class A, Class M1, Class M2 and Class B] Certificates, a
Basis Risk Reserve Fund, into which the Depositor shall cause to be deposited
$1,000. The Basis Risk Reserve Fund shall be an Eligible Account, and funds on
deposit therein shall be held separate and apart from, and shall not be
commingled with, any other moneys, including, without limitation, other moneys
of the Trustee held pursuant to this Agreement.
(b) On each Distribution Date on which the Net Excess Spread is less
than 0.25%, the Trustee shall transfer the Required Reserve Fund Deposit from
the Certificate Account to the Basis Risk Reserve Fund pursuant to Section
6.05(b)(iii). The Trustee shall make withdrawals from the Basis Risk Reserve
Fund to make distributions pursuant to Section 6.05(b)(iii).
(c) Funds in the Basis Risk Reserve Fund shall be invested in
Permitted Investments. The Class R Certificate shall evidence ownership of the
Basis Risk Reserve Fund solely for federal income tax purposes and for no other
purpose, and the Holder thereof shall direct the Trustee, in writing, as to
investment of amounts on deposit therein. In the absence of written instructions
from the Class R Certificateholder as to investment of funds on deposit in the
Basis Risk Reserve Fund, such funds shall be invested pursuant to clause (d) of
the definition of Permitted Investments. Any amounts on deposit in the Basis
Risk Reserve Fund on any Distribution Date in excess of the Required Reserve
Fund Deposit for such date after giving effect to withdrawals therefrom pursuant
to Section 6.05(b)(iii) on such date shall be distributed to the Class R
Certificate on such Distribution Date.
Upon termination of the Trust Fund, any amounts remaining in the Basis
Risk Reserve Fund shall be distributed to the Class R Certificateholder. Each
Class R Certificateholder, by its acceptance of a Class R Certificate,
acknowledges and agrees that such Certificateholder has and shall have no
present interest in the Basis Risk Reserve Fund and the amounts on deposit or to
be deposited therein, but shall have only a contingent interest in amounts
distributable on the Class R Certificate as provided in this Agreement.
ARTICLE VII
DEFAULT
Section 7.01. Events of Default. (a) "Event of Default," wherever used
herein, means any one of the following events:
(i) any failure by the Servicer to remit to the Trustee any
payment, excluding any Periodic Advance and any Servicing Advance,
required to be made by the Servicer under the terms of this Agreement
which continues unremedied for [one] Business Day after delivery of
notice thereof to the Servicer;
(ii) any failure by the Servicer to make any required Servicing
Advance which failure continues unremedied for a period of [60] days
after the date on which written notice of such failure, requiring the
same to be remedied, shall have been given to the Servicer by the
Trustee or to the Servicer and the Trustee by any Certificateholder
[or the Certificate Insurer];
(iii) any failure on the part of the Servicer duly to observe or
perform in any material respect any other of the covenants or
agreements on the part of the Servicer contained in this Agreement
(or, if the Servicer is the Originator, the failure of the Originator
to repurchase a Mortgage Loan as to which a breach has been
established that requires a repurchase pursuant to the terms of the
Purchase Agreement), or the failure of any representation and warranty
made pursuant to Section 3.01 to be true and correct which continues
unremedied for a period of [90] days after the earlier of (A) the date
on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Servicer, as the case may be,
by the Depositor or the Trustee or to the Servicer and the Trustee by
any Certificateholder [or the Certificate Insurer] and (B) actual
knowledge of such failure by a Servicing Officer or Responsible
Officer of the Servicer [; PROVIDED, HOWEVER, that if, prior to the
occurrence of a Certificate Insurer Default, the Servicer shall have
given notice to the Certificate Insurer of corrective action it
proposes to take, which corrective action is agreed in writing by the
Certificate Insurer to be satisfactory, such period may be extended by
the Certificate Insurer];
(iv) a decree or order of a court or agency or supervisory
authority having jurisdiction in an involuntary case under any present
or future federal or state bankruptcy, insolvency or similar law or
for the appointment of a conservator or receiver or liquidator in any
insolvency, readjustment of debt, marshaling of assets and liabilities
or similar proceedings, or for the winding-up or liquidation of its
affairs, shall have been entered against the Servicer and such decree
or order shall have remained in force, undischarged or unstayed for a
period of [60] days or shall have resulted in the entry of an order
for relief or any such adjudication or appointment;
(v) the Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment
of debt, marshaling of assets and liabilities or similar proceedings
of or relating to the Servicer or of or relating to all or
substantially all of the Servicer's property;
(vi) the Servicer shall admit in writing its inability to pay its
debts 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;
(vii) the Servicer no longer meets the qualifications of either a
FNMA or FHLMC seller/servicer;
(viii) the Servicer attempts to assign any of its rights or
delegate any of its duties hereunder other than in compliance with the
terms of this Agreement;
(ix) the Servicer shall fail to satisfy the Servicer Termination
Test;
(x) any failure of the Servicer to make any Periodic Advance on
any Servicer Remittance Date required to be made which continues
unremedied until 3:00 p.m. New York time on the Business Day
immediately following the Servicer Remittance Date;
(xi) [any failure of the Servicer to provide any of the reports
and information to the Trustee as provided in Section 5.19 which
results in a draw on the Certificate Insurance Policy;]
(xii) [the Certificate Insurer notifies the Trustee of an Event
of Default with respect to the Servicer under the Insurance
Agreement;]
(b) If an Event of Default described in this Section shall occur,
then, and in each and every such case, so long as such Event of Default shall
not have been remedied [the Certificate Insurer may or] the Trustee shall [, but
only at the direction of the Certificate Insurer] (x) in the case of an Event of
Default specified in clause (i) or clause (x) of Section 7.01(a), and (y) in the
case of any other Event of Default at the direction of the Majority
Certificateholders, by notice in writing to the Servicer terminate all the
rights and obligations of the Servicer under this Agreement and in and to the
Mortgage Loans and the proceeds thereof, as servicer. Upon receipt by the
Servicer of such written notice, all authority and power of the Servicer under
this Agreement, whether with respect to the Mortgage Loans or otherwise, shall,
subject to Section 7.02, pass to and be vested in the Trustee or its designee
[approved by the Certificate Insurer (or another successor Servicer appointed by
the Certificate Insurer)] and the Trustee (or such other successor Servicer, as
applicable) is hereby authorized and empowered to execute and deliver, on behalf
of the Servicer, as attorney-in-fact or otherwise, at the expense of the
Servicer, any and all documents and other instruments and do or cause to be done
all other acts or things necessary or appropriate to effect the purposes of such
notice of termination, including, but not limited to, the transfer and
endorsement or assignment of the Mortgage Loans and related documents. The
Servicer agrees to cooperate (and pay any related costs and expenses) with the
Trustee or another successor Servicer, as applicable, in effecting the
termination of the Servicer's responsibilities and rights hereunder, including,
without limitation, the transfer to the Trustee or its designee or another
successor Servicer, as applicable, for administration by it of all amounts which
shall at the time be credited by the Servicer to the Collection Account or
thereafter received with respect to the Mortgage Loans. The Trustee shall
promptly notify [the Certificate Insurer and] the Rating Agencies of the
occurrence of an Event of Default. [The Certificate Insurer may appoint a
successor Servicer other than the Trustee.] Until a successor Servicer has been
appointed, the Trustee shall be the successor Servicer in all respects without
further action, and all authority and power of the Servicer under this agreement
shall pass to and be vested in the Trustee on and after the effective date of
termination.
(c) [On or before [ ] and prior to conclusion of the servicing review
described in subsection (d) of this Section, the Certificate Insurer may, in its
sole discretion, remove the Servicer, without cause, by providing written notice
of termination to the Servicer.]
(d) [Between [ ] and [ ], the Certificate Insurer may cause a review
of the operations of the Servicer. The Certificate Insurer shall bear all costs
and expenses of the Certificate Insurer in connection with such review,
including (without limitation) fees and expenses of accountants of the
Certificate Insurer. Upon the conclusion of such servicing review and receipt of
unsatisfactory results, the Certificate Insurer may, in its sole discretion,
remove the Servicer, by providing written notice of termination to the
Servicer.]
Section 7.02. Trustee to Act; Appointment of Successor. (a) On and
after the time that the Servicer receives a notice of termination pursuant to
Section 7.01, or the Trustee receives the resignation of the Servicer evidenced
by an Opinion of Counsel pursuant to Section 5.24, or the Servicer is removed as
Servicer pursuant to Section 7.01, in which event the Trustee shall promptly
notify the Rating Agencies, and except as otherwise provided in Section 7.01,
the Trustee or another successor [acceptable to the Certificate Insurer] shall
be the successor in all respects to the Servicer in its capacity as servicer
under this Agreement and the transactions set forth or provided for herein and
shall be subject to all the responsibilities, duties and liabilities relating
thereto placed on the Servicer by the terms and provisions hereof arising on or
after the date of succession; PROVIDED, HOWEVER, that the Trustee shall not be
liable for any actions or the representations and warranties of any servicer
prior to it and including, without limitation, the obligations of the Servicer
set forth in Sections 2.04 and 3.03. The Trustee, as successor Servicer, or any
other successor Servicer shall be obligated to pay Compensating Interest
pursuant to Section 6.09 in any event and to make advances pursuant to Section
5.21 unless, and only to the extent the Trustee as successor servicer determines
reasonably and in good faith that such advances would not be recoverable
pursuant to Section 5.04 [, such determination to be evidenced by a
certification of a Responsible Officer of the Trustee, as successor Servicer
delivered to the Certificate Insurer].
(b) Notwithstanding the above, the Trustee may, if it shall be
unwilling to so act, or shall, if it is unable to so act or if the Majority
Certificateholders [with the consent of the Certificate Insurer or the
Certificate Insurer] so requests in writing to the Trustee, appoint, pursuant to
the provisions set forth in paragraph (f) below, or petition a court of
competent jurisdiction to appoint, any established mortgage loan servicing
institution [acceptable to the Certificate Insurer] as the successor to the
Servicer hereunder in the assumption of all or any part of the responsibilities,
duties or liabilities of the Servicer hereunder. Notwithstanding the above, the
Trustee shall perform all obligations of the Servicer [until the Certificate
Insurer] or the Trustee [with the prior written consent of the Certificate
Insurer] appoints a successor Servicer [acceptable to the Certificate Insurer].
[The Certificate Insurer may appoint a successor Servicer other than
the Trustee. If the Certificate Insurer fails to appoint a successor Servicer,]
The Trustee shall, if it is unable to obtain a qualifying bid and is prevented
by law from acting as Servicer, appoint, or petition a court of competent
jurisdiction to appoint, any housing an home finance institution, bank or
mortgage servicing institution which has been designated as an approved
seller-servicer by FNMA or FHLMC for first and second home equity loans and
having equity of not less than $[5,000,000] [(or such lower level as may be
acceptable to the Certificate Insurer)], as determined in accordance with
generally accepted accounting principles [and acceptable to the Certificate
Insurer] as the successor to the Servicer hereunder in the assumption of all or
any part of the responsibilities, duties or liabilities of the Servicer
hereunder. The compensation of any successor Servicer (other than the Trustee in
its capacity as successor Servicer) so appointed shall be the amount agreed to
between the successor Servicer [, the Certificate Insurer] and the Trustee (up
to a maximum of [ ]% per annum on the outstanding Principal Balance of each
Mortgage Loan), together with the other servicing compensation in the form of
assumption fees, late payment charges or otherwise as provided in Sections 5.14;
PROVIDED, HOWEVER, that if the Trustee becomes the successor Servicer it shall
receive as its compensation the same compensation paid to the Servicer
immediately prior to the Servicer's removal or resignation. The successor
Servicer shall be entitled to set-up expenses, if any, in connection with
becoming Servicer pursuant to Section 5.04(j) hereof.
(c) [Reserved]
(d) The Trustee and such successor shall take such action, consistent
with this Agreement, as shall be necessary to effectuate any such succession,
including the notification by such successor of all Mortgagors of the transfer
of servicing to the extent that the predecessor Servicer fails to do so. The
predecessor Servicer agrees to cooperate with the Trustee and any successor
Servicer in effecting the termination of the predecessor Servicer's servicing
responsibilities and rights hereunder and shall promptly provide the Trustee or
such successor Servicer, as applicable, at the predecessor Servicer's cost and
expense, all documents and records reasonably requested by it to enable it to
assume the Servicer's functions hereunder and shall promptly also transfer to
the Trustee or such successor Servicer, as applicable, all amounts that then
have been or should have been deposited in the Collection Account by the
Servicer or that are thereafter received with respect to the Mortgage Loans. Any
collections received by the predecessor Servicer after such removal or
resignation shall be endorsed by it to the Trustee and remitted directly to the
Trustee or, at the direction of the Trustee, to the successor Servicer. Any
amounts and documents which are property of the Trust Fund held by the
predecessor Servicer shall be held in trust on behalf of the Trustee until
transferred to the successor Servicer or Trustee. Neither the Trustee nor any
other successor Servicer shall be held liable by reason of any failure to make,
or any delay in making, any distribution hereunder or any portion thereof caused
by (i) the failure of the Servicer to deliver, or any delay in delivering, cash,
documents or records to it, or (ii) restrictions imposed by any regulatory
authority having jurisdiction over the Servicer hereunder. No appointment of a
successor to the Servicer hereunder shall be effective until [the Certificate
Insurer shall have consented in writing thereto, and] written notice of such
proposed appointment shall have been provided by the Trustee to [the Certificate
Insurer and] each Certificateholder. The Trustee shall not resign as Servicer
until a successor Servicer [acceptable to the Certificate Insurer] has been
appointed.
(e) Pending appointment of a successor to the Servicer hereunder, the
Trustee shall act in such capacity as hereinabove provided. In connection with
such appointment and assumption, the Trustee may make such arrangements for the
compensation of such successor out of payments on Mortgage Loans as it [, the
Certificate Insurer] and such successor shall agree; PROVIDED, HOWEVER, that no
such compensation shall be in excess of that permitted the Servicer pursuant to
Section 5.14. The Servicer, the Trustee and such successor shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any
such succession.
(f) Notwithstanding anything to the contrary in this Article VII, upon
removal or resignation of the Servicer the Trustee shall (i) solicit bids from
prospective successor Servicers as described below and (ii) until such time as
another successor Servicer is appointed [by the Certificate Insurer], assume the
duties and obligations of the Servicer. The Trustee agrees to act as Servicer
during such solicitation process and shall assume all duties and obligations of
the Servicer. The Trustee shall solicit, by public announcement, bids from
housing and home finance institutions, banks and mortgage servicing institutions
[from a list of one or more institutions acceptable to the Certificate Insurer].
Such public announcement shall specify that the successor Servicer shall be
entitled to servicing compensation in accordance with this Agreement. [Within
thirty days after the Certificate Insurer has provided the list of eligible
institutions as provided above,] The Trustee shall negotiate and effect the
sale, transfer and assignment of the servicing rights and responsibilities
hereunder to the qualified party submitting the highest satisfactory bid as to
the price it will pay to obtain servicing [provided that the Certificate Insurer
has given its prior written consent]. The Trustee shall deduct from any sum
received by the Trustee from the successor to the Servicer in respect of such
sale, transfer and assignment all costs and expenses of any public announcement
and of any sale, transfer and assignment of the servicing rights and
responsibilities hereunder. After such deductions, the remainder of such sum
less any amounts due the Trustee or the Trust from the Servicer shall be paid by
the Trustee to the predecessor Servicer at the time of such sale, transfer and
assignment to the Servicer's successor.
If the Servicer resigns or is replaced hereunder, the costs and
expenses of the successor Servicer relating to the transfer of servicing rights
and responsibilities remaining, if any, after deduction from the sale price as
described above shall be payable to the successor Servicer pursuant to Section
5.04(j) hereof.
(g) The Trustee or any other successor Servicer, upon assuming the
duties of Servicer hereunder, shall immediately (i) record all Assignments of
Mortgage not previously recorded in the name of the Trustee pursuant to Section
2.03 as a result of an Opinion of Counsel and (ii) make all Periodic Advances
and Compensating Interest payments and deposit them to the Collection Account,
which amounts the predecessor Servicer has theretofore failed to remit with
respect to the Mortgage Loans.
(h) The Servicer that is being removed or is resigning shall give
notice to the Mortgagors and to the Rating Agencies of the transfer of the
servicing to the successor.
(i) Upon appointment, the successor Servicer shall be the successor in
all respects to the predecessor Servicer and shall be subject to all the
responsibilities, duties and liabilities of the predecessor Servicer including,
but not limited to, the maintenance of the hazard insurance policies, the
fidelity bond and an errors and omissions policy pursuant to Section 5.08 and
shall be entitled to the Servicing Compensation and all of the rights granted to
the predecessor Servicer by the terms and provisions of this Agreement. The
appointment of a successor Servicer shall not affect any liability or right of
the predecessor Servicer which may have arisen or accrued under this Agreement
prior to its termination as Servicer (including, without limitation, any
deductible under an insurance policy) and any right to reimbursement pursuant to
Section 5.04 or otherwise under this Agreement, nor shall any successor Servicer
be liable for any acts or omissions of the predecessor Servicer or for any
breach by such Servicer of any of its representations or warranties contained
herein or in any related document or agreement.
Section 7.03. Waiver of Defaults. The Majority Certificateholders [or
the Certificate Insurer] may, on behalf of all Certificateholders, [and subject
to the consent of the Certificate Insurer,] waive any events permitting removal
of the Servicer as servicer pursuant to this Article VII; PROVIDED, HOWEVER,
that the Majority 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 unless otherwise specified in such
waiver. 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 Trustee to the Rating Agencies.
Section 7.04. [Mortgage Loans, Trust Fund and Accounts Held for
Benefit of the Certificate Insurer]. [(a) The Trustee shall hold the Trust Fund
and shall hold, directly or indirectly through its Custodian, the Mortgage Files
for the benefit of the Certificateholders and the Certificate Insurer and all
references in this Agreement and in the Certificates to the benefit of Holders
of the Certificates shall be deemed to include the Certificate Insurer. The
Trustee shall cooperate in all reasonable respects with any reasonable request
by the Certificate Insurer for action to preserve or enforce the Certificate
Insurer's rights or interests under this Agreement and the Certificates.]
(b) [The Servicer hereby acknowledges and agrees that it shall service
the Mortgage Loans for the benefit of the Certificateholders and for the benefit
of the Certificate Insurer, and all references in this Agreement to the benefit
of or actions on behalf of the Certificateholders shall be deemed to include the
Certificate Insurer.]
Section 7.05. [Rights of the Certificate Insurer to Exercise Rights of
Certificateholders]. [By accepting its Certificate, each Regular
Certificateholder agrees that unless a Certificate Insurer Default exists, the
Certificate Insurer shall be deemed to be the Regular Certificateholders for all
purposes (other than with respect to payment on the Certificates) and shall have
the right to exercise all rights of the Regular Certificateholders under this
Agreement and under each Class of Regular Certificates without any further
consent of such Certificateholders.]
Section 7.06. [Trustee to Act Solely with Consent of the Certificate
Insurer]. [Unless Certificate Insurer Default exists, the Trustee shall not,
without the Certificate Insurer's consent or unless directed by the Certificate
Insurer:
(a) terminate the rights and obligations of the Servicer as Servicer
pursuant to Section 7.01;
(b) agree to any amendment pursuant to Article XI, PROVIDED, HOWEVER,
that such consent shall not be unreasonably withheld; or
(c) undertake any litigation.]
[The Certificate Insurer may, in writing and in its sole discretion
renounce all or any of its rights under section 7.04, 7.05 or 7.06 or any
requirement for the Certificate Insurer's consent for any period of time.]
ARTICLE VIII
TERMINATION
Section 8.01. Termination. (a) Subject to Section 8.02, this Agreement
shall terminate upon notice to the Trustee of either: (i) the disposition of all
funds with respect to the last Mortgage Loan and the remittance of all funds due
hereunder and the payment of all amounts due and payable to the Trustee [and the
Certificate Insurer] or (ii) mutual consent of the Servicer [, the Certificate
Insurer] and all Certificateholders in writing; PROVIDED, HOWEVER, that in no
event shall the Trust Fund established by this Agreement terminate later than
twenty-one years after the death of the last surviving lineal descendant of
Xxxxxx X. Xxxxxxx, late Ambassador of the United States to the Court of St.
Xxxxx, alive as of the date hereof.
(b) In addition, subject to Section 8.02, the [Residual
Certificateholder] may, at its option and at its sole cost and expense, upon
[20] days' prior written notice to the Trustee, terminate this Agreement on any
date on which the Total Loan Balance is less than [10%] of the sum of (x) the
Cut-off Date Loan Balance plus (y) the aggregate of the Principal Balances of
any Subsequent Mortgage Loans on their respective Subsequent Cut-off Dates, by
purchasing, during the Prepayment Period relating to the next succeeding
Distribution Date, all of the outstanding Mortgage Loans and REO Properties for
a price (the "Termination Price") equal to the sum of (i) the greater of (x)
100% of the unpaid principal balance of each such outstanding Mortgage Loan and
each REO Property plus the aggregate amount of accrued and unpaid interest on
such Mortgage Loans through the related Due Period and (y) the aggregate
Certificate Principal Amount of the Regular Certificates, plus interest accrued
and unpaid thereon, (ii) any Deferred Amount not yet reimbursed to the [Class
M1, Class M2 and Class B] Certificateholders, (iii) any unreimbursed Servicing
Advances, [(iv) any unreimbursed amounts due to the Certificate Insurer under
this Agreement or the Insurance Agreement,] and (iv) the fair market value of
any other property held by the Trust Fund. If the [Residual Certificateholder]
does not exercise such purchase option within three calendar months of the date
on which it is first entitled to do so, the Servicer shall have the option, at
its sole cost and expense, upon [20] days' prior written notice to Trustee, to
purchase all of the outstanding Mortgage Loans and REO Properties for the
Termination Price.
Any such purchase shall be accomplished by deposit into the
Certificate Account of the Termination Price. From the Termination Price so
deposited, the Trustee shall reimburse the Servicer for the amount of any unpaid
Servicing Fees, unreimbursed Periodic Advances and unreimbursed Servicing
Advances made by the Servicer with respect to the related Mortgage Loans. [No
such termination is permitted without the prior written consent of the
Certificate Insurer if it would result in a draw on the Certificate Insurance
Policy.]
(c) [Reserved]
(d) Notice of any termination, specifying the Distribution Date upon
which the Trust Fund will terminate and that the Certificateholders shall
surrender their Certificates to the Trustee or the Certificate Registrar for
payment of the final distribution and cancellation, shall be given promptly by
the Trustee by letter to the Certificateholders mailed during the month of such
final distribution before the Servicer Remittance Date in such month, specifying
(i) the Distribution Date upon which final payment of the Certificates will be
made upon presentation and surrender of the Certificates at the office of the
Trustee or the Certificate Registrar therein designated, (ii) the amount of any
such final payment and (iii) that the Record Date otherwise applicable to such
Distribution Date is not applicable, payments being made only upon presentation
and surrender of the Certificates at the office of the Trustee or the
Certificate Registrar therein specified. [The obligations of the Certificate
Insurer hereunder shall terminate upon the deposit with the Trustee of the
Termination Price and when the aggregate Certificate Principal Amount of the
Certificates has been reduced to zero, whereupon the Trustee will return the
Certificate Insurance Policy to the Certificate Insurer for cancellation.]
(e) In the event that not all Certificateholders surrender their
Certificates for cancellation within six months after the time specified in the
above-mentioned written notice, the Trustee shall give a second written notice
to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
six months after the second notice, all of the Certificates shall not have been
surrendered for cancellation, the Trustee may take appropriate steps, or may
appoint an agent to take appropriate steps, to contact the remaining
Certificateholders concerning surrender of their Certificates and the cost
thereof shall be paid out of the funds and other assets which remain subject
hereto. If within nine months after the second notice all the Certificates shall
not have been surrendered for cancellation, the Class R Certificateholders shall
be entitled to all unclaimed funds and other assets [(other than amounts
relating to Insured Payments, which shall be disbursed to the Certificate
Insurer)] which remain subject hereto and the Trustee upon transfer of such
funds shall be discharged of any responsibility for such funds and the
Certificateholders shall look only to such Class R Certificateholders for
payment. Such funds shall remain uninvested.
Section 8.02. Additional Termination Requirements. (a) In the event
that the Residual Certificateholder or the Servicer exercises its purchase
option with respect to the Trust Fund as provided in Section 8.01, the Trust
Fund shall be terminated in accordance with the following additional
requirements, unless the Trustee [and the Certificate Insurer] has been
furnished with an Opinion of Counsel to the effect that the failure of the Trust
Fund to comply with the requirements of this Section 8.02 will not (i) result in
the imposition of taxes on "prohibited transactions" of the Trust Fund as
defined in Section 860F of the Code or (ii) cause the Trust Fund to fail to
qualify as a REMIC at any time that any Regular Certificates are outstanding:
(i) The Trustee shall establish a 90-day liquidation period for
the Trust Fund and specify the first day of such period in a statement
attached to the Trust Fund's final Tax Return pursuant to Treasury
Regulation Section 1.860F-1. The Trustee shall satisfy all the
requirements of a qualified liquidation under Section 860F of the Code
and any regulations thereunder;
(ii) During such 90-day liquidation period, and at or prior to
the time of making of the final payment on the Certificates, the
Trustee shall sell all of the assets of the Trust Fund for cash; and
(iii) [At the time of the making of the final payment on the
Certificates, the Trustee shall distribute or credit, or cause to be
distributed or credited, to the Holders of the Class R Certificates
all cash on hand in the Trust Fund (other than cash retained to meet
claims), and the REMIC shall terminate at that time.]
(b) By their acceptance of the Class R Certificates, the Holders
thereof hereby agree to authorize the Trustee to specify the 90-day liquidation
period for the Trust Fund, which authorization shall be binding upon all
successor Class R Certificateholders.
ARTICLE IX
CONCERNING THE TRUSTEE
Section 9.01. Duties of Trustee. The Trustee, prior to the occurrence
of an Event of Default and after the curing of all Events of Default which may
have occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement. If an Event of Default occurs and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Agreement, and use the same degree of care and skill in its exercise
as a prudent person would exercise or use under the circumstances in the conduct
of such person's own affairs. Any permissive right of the Trustee enumerated in
this Agreement shall not be construed as a duty.
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 on their face to the requirements of this Agreement; PROVIDED, HOWEVER,
that the Trustee shall not be responsible for the accuracy or content of any
resolution, certificate, statement, opinion, report, document, order or other
instrument furnished by the Servicer or the Seller hereunder. If any such
instrument is found not to conform to the requirements of this Agreement in a
material manner, the Trustee shall take action as it deems appropriate to have
the instrument corrected [and will provide notice thereof to the Certificate
Insurer].
The Trustee shall sign on behalf of the Trust Fund any tax return that
the Trustee is required to sign pursuant to applicable federal, state or local
tax laws.
The Trustee covenants and agrees that it shall perform its obligations
hereunder in a manner so as to maintain the status of the Trust Fund as a REMIC
under the REMIC Provisions and to prevent the imposition of any federal, state
or local income, prohibited transaction, contribution or other tax on the Trust
Fund to the extent that maintaining such status and avoiding such taxes are
reasonably within the control of the Trustee and are reasonably within the scope
of its duties under this Agreement.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct; PROVIDED, HOWEVER, that:
(i) Prior to the occurrence of an Event of Default, and after the
curing of all such Events of Default which may have occurred, the
duties and obligations of the Trustee shall be determined solely by
the express provisions of this Agreement, the Trustee shall not be
liable except for the performance of such duties and obligations as
are specifically set forth in this Agreement, no implied covenants or
obligations shall be read into this Agreement against the Trustee and,
in the absence of bad faith on the part of the Trustee, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates
or opinions furnished to the Trustee and conforming to the
requirements of this Agreement; and
(ii) The Trustee shall not be personally liable for an error of
judgment made in good faith by a Responsible Officer or Responsible
Officers of the Trustee, unless it shall be proved that the Trustee
was negligent in ascertaining the pertinent facts.
(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 Certificate Insurer relating
to the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power
conferred upon the Trustee, under this Agreement.
Section 9.02. Certain Matters Affecting the Trustee. Except as
otherwise provided in Section 9.01:
(a) The Trustee may request and rely upon and shall be protected in
acting or refraining from acting upon any resolution, Officers' Certificate,
Opinion of Counsel, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, appraisal, bond or
other paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) The Trustee may consult with counsel and any Opinion of Counsel
shall be full and complete authorization and protection in respect of any action
taken or suffered or omitted by it hereunder in good faith and in accordance
therewith;
(c) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Agreement or to make any investigation of
matters arising hereunder or to institute, conduct or defend any litigation
hereunder or in relation hereto at the request, order or direction of any of the
Certificateholders [or the Certificate Insurer], pursuant to the provisions of
this Agreement, unless such Certificateholders [or the Certificate Insurer, as
the case may be,] shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby; nothing contained herein shall, however, relieve the Trustee
of the obligation, upon the occurrence of an Event of Default (which has not
been cured and of which a Responsible Officer of the Trustee has actual
knowledge or notice), 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 its exercise as
a prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs;
(d) 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;
(e) Prior to the occurrence of an Event of Default hereunder and after
the curing of all Events of Default which may have occurred, the Trustee shall
not be bound to 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 document, unless
requested in writing to do so by [the Certificate Insurer or by] at least a
[25]% Percentage Interest of any Class of Regular Certificates; 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 such Certificateholders or this Agreement, the Trustee may require
reasonable security or indemnity against such expense, or liability from such
Certificateholders as a condition to taking any such action;
(f) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys;
(g) 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; and
(h) 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
hereunder.
Section 9.03. Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates, other than the signature
of the Trustee on the Certificates and the certificate of authentication, shall
be taken as the statements of the Depositor or the Servicer, as the case may be,
and the Trustee assumes no responsibility for their correctness. The Trustee
makes no representations or warranties as to the validity or sufficiency of this
Agreement or of the Certificates or of any Mortgage Loan or related document,
other than the signature of the Trustee on the Certificates and the certificate
of authentication. The Trustee shall not be accountable for the use or
application by the Depositor or the Servicer of any of the Certificates or of
the proceeds of such Certificates, or for the use or application of any funds
paid to the Seller in respect of the Mortgage Loans or deposited in or withdrawn
from the Collection Account or any other account by or on behalf of the
Depositor or the Servicer, other than any funds held by or on behalf of the
Trustee in accordance with Article VI.
Section 9.04. 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 it would have if it were not Trustee.
Section 9.05. Payment of Trustee's Fees. The Trustee shall withdraw
from the Certificate Account on each Distribution Date and pay to itself the
Trustee Fee as provided in Section [6.05(b)(i)]. Except as otherwise provided in
this Agreement, the Trustee and any director, officer, employee or agent of the
Trustee shall be indemnified by the Trust Fund and held harmless against any
loss, liability or unanticipated out-of-pocket expense incurred or paid to third
parties (which expenses shall not include salaries paid to employees, or
allocable overhead, of the Trustee) in connection with the acceptance or
administration of its trusts hereunder or the Certificates, [or its performance
under the Insurance Agreement,] other than any loss, liability or expense
incurred by reason of willful misfeasance, bad faith or negligence in the
performance of duties hereunder [or under the Insurance Agreement] or by reason
of reckless disregard of obligations and duties hereunder [or under the
Insurance Agreement]. All such amounts shall be payable from funds in the
Collection Account as provided in Section 5.04.
The Servicer covenants and agrees to indemnify the Trustee and any
director, officer, employee or agent of the Trustee against any losses,
liabilities, damages, claims or expenses (including reasonable legal fees and
such related expenses) that may be sustained by the Trustee in connection with
this Agreement related to willful misfeasance, bad faith or negligence in the
performance of the Servicer's duties hereunder.
The provisions of this Section 9.05 shall survive the termination of
this Agreement and the removal or resignation of the Trustee.
Section 9.06. Eligibility Requirements for Trustee. The Trustee
hereunder shall at all times be a corporation or a national banking association
organized and doing business under the laws of any state or the United States of
America or the District of Columbia, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
[$50,000,000] and subject to supervision or examination by federal or state
authority and having a deposit rating of at least ["A-"] or the equivalent by
each Rating Agency. In addition, the Trustee shall at all times be acceptable to
the Rating Agencies rating the Certificates [and the Certificate Insurer]. 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. 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 9.07. The corporation or national banking association
serving as Trustee may have normal banking and trust relationships with the
Seller and their affiliates or the Servicer and its affiliates; PROVIDED,
HOWEVER, that such corporation cannot be an affiliate of the Servicer other than
the Trustee in its role as successor to the Servicer.
Section 9.07. Resignation and Removal of the Trustee. The Trustee may
at any time resign and be discharged from the trusts hereby created by giving
notice thereof to the Depositor, [the Certificate Insurer,] the Servicer and to
all Certificateholders; PROVIDED, that such resignation shall not be effective
until a successor trustee [acceptable to the Certificate Insurer] is appointed
and accepts appointment in accordance with the following provisions. Upon
receiving such notice of resignation, the Servicer shall [, with the prior
written consent of the Certificate Insurer,] promptly appoint a successor
trustee who meets the eligibility requirements of Section 9.06 by written
instrument, in duplicate, which instrument shall be delivered to the resigning
Trustee and to the successor trustee. A copy of such instrument shall be
delivered to the Certificateholders [, the Certificate Insurer] and the Servicer
by the Depositor. If no successor trustee shall have been so appointed and have
accepted appointment within [60] 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; PROVIDED, HOWEVER, that
the resigning Trustee shall not resign and be discharged from the trusts hereby
created until such time as each Rating Agency [and the Certificate Insurer]
rating the Certificates approve the successor trustee.
If at any time the Trustee 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 Servicer [or the Certificate Insurer], or if at any time
the Trustee shall become incapable of acting, or shall be adjudged bankrupt or
insolvent, or a receiver of the Trustee or of its property shall be appointed,
or any public officer shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, or if the rating of the long-term debt obligations of the Trustee
is not acceptable to the Rating Agencies in respect of mortgage pass-through
certificates having a rating equal to the then current rating on the
Certificates or if the Trustee fails to perform its duties in accordance with
this Agreement, then [the Certificate Insurer or] the Servicer may remove the
Trustee and appoint a successor trustee who meets the eligibility requirements
of Section 9.06 by written instrument, in duplicate, which instrument shall be
delivered to the Trustee so removed and to the successor trustee. A copy of such
instrument shall be delivered to the Certificateholders [, the Certificate
Insurer] and the Depositor by the Servicer.
The Majority Certificateholders [, with the prior written consent of
the Certificate Insurer,] may at any time remove the Trustee and appoint a
successor trustee by written instrument or instruments, in triplicate, signed by
[the Certificate Insurer] such Holders or their attorneys-in-fact duly
authorized, one complete set of which instruments shall be delivered to the
Servicer, one complete set to the Trustee so removed and one complete set to the
successor so appointed. A copy of such instrument shall be delivered to the
Certificateholders [, the Certificate Insurer] and the Depositor by the
Servicer.
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 9.08.
Section 9.08. Successor Trustee. Any successor trustee appointed as
provided in Section 9.07 shall execute, acknowledge and deliver to the Servicer
[, the Certificate Insurer] and to its predecessor trustee an instrument
accepting such appointment hereunder, and thereupon the resignation or removal
of the predecessor trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become fully vested with all
the rights, powers, duties and obligations of its predecessor hereunder, with
the like effect as if originally named as trustee herein. The predecessor
trustee shall deliver to the successor trustee all of the Mortgage Files and
related documents and statements held by it hereunder, and the Servicer and the
predecessor trustee shall execute and deliver such instruments and do such other
things as may reasonably be required for more fully and certainly vesting and
confirming in the successor trustee all such rights, powers, duties and
obligations.
No successor trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor trustee shall be
eligible under the provisions of Section 9.06.
Upon acceptance of appointment by a successor trustee as provided in
this Section, the Servicer shall mail notice of the succession of such trustee
hereunder to [the Certificate Insurer and] all Holders of Certificates at their
addresses as shown in the Certificate Register provided that the Servicer has
received such Certificate Register. If the Servicer fails to mail such notice
within ten days after acceptance of appointment by the successor trustee, the
successor trustee shall cause such notice to be mailed at the expense of the
Servicer.
[Notwithstanding anything to the contrary contained herein, so long as
no Certificate Insurer Default exists, the appointment of any successor trustee
pursuant to any provision of this Agreement will be subject to the prior written
consent of the Certificate Insurer.]
Section 9.09. Merger or Consolidation of Trustee. Any corporation into
which the Trustee may be merged or converted or with which it may be
consolidated or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to the business of the Trustee, shall be the successor of the Trustee
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, anything herein to the contrary
notwithstanding.
Section 9.10. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions hereof, at any time, for the purpose of
meeting any legal requirements of any jurisdiction in which any part of the
Trust Fund or property securing the same may at the time be located, the
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 [and acceptable to the Certificate Insurer] to act as co-trustee or
co-trustees, jointly with the Trustee, or separate trustee or separate trustees,
of all or any part of the Trust Fund, and to vest in such Person or Persons, in
such capacity, such title to the Trust Fund, or any part thereof, and, subject
to the other provisions of this Section 9.10, such powers, duties, obligations,
rights and trusts as the Depositor and the Trustee may consider necessary or
desirable. If the Depositor shall not have joined in such appointment within
[15] days after the receipt by it of a request so to do, or in case an Event of
Default shall have occurred and be continuing, the Trustee [, subject to the
approval of the Certificate Insurer,] 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 9.06
hereunder and no notice to Holders of Certificates of the appointment of
co-trustee(s) or separate trustee(s) shall be required under Section 9.08
hereof.
In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 9.10 all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed (whether as Trustee hereunder or
as successor to the Servicer hereunder), the Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the Trust Fund or any
portion thereof in any such jurisdiction) shall be exercised and performed by
such separate trustee or co-trustee solely at the direction of the Trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article IX. 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 delivered to
the Certificate Insurer].
Any separate trustee or co-trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section 9.11. Appointment of Custodians. The Trustee may [, with the
consent of the Certificate Insurer,] appoint one or more Custodians to hold all
or a portion of the Mortgage Files as agent for the Trustee. The Trustee shall
pay any and all fees and expenses of any Custodian in accordance with each
Custodial Agreement. The Trustee initially appoints [ ] as Custodian, and the
Depositor and the Servicer [and the Certificate Insurer] consent to such
appointment. Subject to the terms of this Agreement, the Trustee agrees to
comply with the terms of each Custodial Agreement, if any, and to enforce the
terms and provisions thereof against the Custodian for the benefit of the
Certificateholders [and the Certificate Insurer] having an interest in any
Mortgage File held by such Custodian. Each Custodian shall be a depository
institution or trust company subject to supervision by federal or state
authority, shall have combined capital and surplus of at least [$10,000,000] and
shall be qualified to do business in the jurisdiction in which it holds any
Mortgage File. Each Custodial Agreement [shall be acceptable to the Certificate
Insurer and] may be amended only as provided in section 11.03 thereof. Subject
to the provisions of this Agreement, in no event shall the appointment of any
Custodian pursuant to a Custodial Agreement diminish the obligations of the
Trustee hereunder.
Section 9.12. Appointment of Agent. The Trustee hereby appoints [ ] as
its agent and, as necessary, its attorney in fact, for the purpose of performing
the duties of the Trustee under this Agreement and the Custodial Agreement
(including payment of fees and expenses of the Custodian) relating to compliance
with the REMIC Provisions and related reporting obligations (including payment
by such agent of amounts otherwise payable by the Trustee under Sections
10.01(c) and (d)), SEC reporting, distributions and related reporting
requirements, registration, execution and authentication of Certificates in its
capacity as Certificate Registrar, establishment and maintenance of accounts and
the holding of the Trust Fund (other than the Mortgage Files).
ARTICLE X
REMIC PROVISIONS
Section 10.01. REMIC Administration. (a) The Trustee shall make an
election to treat the Trust Fund (exclusive of the Basis Risk Reserve Fund) as a
REMIC under the Code, and if necessary, under applicable state law. Such
election will be made on Form 1066 or other appropriate federal tax or
information return or any appropriate state return for the taxable year ending
on the last day of the calendar year in which the Certificates are issued. For
purposes of the REMIC election, (i) each Class of Regular Certificates shall be
designated as representing ownership of "regular interests" and the Class R
Certificates shall be designated as the sole Class of "residual interest" in the
REMIC. The Trustee shall not permit the creation of any "interests" in the REMIC
(within the meaning of Section 860G of the Code) other than the REMIC regular
interests and the residual interest represented by the Certificates.
(b) The Closing Date is hereby designated as the Startup Day of the
REMIC within the meaning of Section 860G(a)(9) of the Code.
(c) The Trustee shall pay out of its own funds, without any right of
reimbursement, any and all expenses relating to any tax audit of the Trust Fund
(including, but not limited to, any professional fees or any administrative or
judicial proceedings with respect thereto that involved the Internal Revenue
Service or state tax authorities), other than the expense of obtaining any tax
related Opinion of Counsel not obtained in connection with such an audit and
other than taxes, in either case except as specified herein; PROVIDED, HOWEVER,
that if such audit resulted from the negligence of the Servicer or the
Depositor, then the Servicer or the Depositor, as the case may be, shall pay
such expenses. The Trustee, as agent for the tax matters person, shall (i) act
on behalf of the Trust Fund in relation to any tax matter or controversy
involving the Trust Fund and (ii) represent the Trust Fund in any administrative
or judicial proceeding relating to an examination or audit by any governmental
taxing authority with respect thereto. The Holder of the largest Percentage
Interest in the Class R Certificates from time to time is hereby designated as
Tax Matters Person with respect to the REMIC and hereby irrevocably appoints and
authorizes the Trustee to act its agent to perform the duties of the Tax Matters
Person with respect to the REMIC. To the extent authorized under the Code and
the regulations promulgated thereunder, each Holder of a Class R Certificate
hereby irrevocably appoints and authorizes the Trustee to be its
attorney-in-fact for purposes of signing any Tax Returns required to be filed on
behalf of the Trust Fund.
(d) The Trustee shall prepare or cause to be prepared, sign and file
all of the Tax Returns in respect of the Trust Fund created hereunder, other
than Tax Returns required to be filed by the Servicer pursuant to Section 5.25.
The expenses of preparing and filing such returns shall be borne by the Trustee
without any right of reimbursement therefor.
(e) The Trustee shall perform on behalf of the Trust Fund all
reporting and other tax compliance duties that are the responsibility of the
Trust Fund under the Code, REMIC Provisions or other compliance guidance issued
by the Internal Revenue Service or any state or local taxing authority. Among
its other duties, as required by the Code, the REMIC Provisions or other such
compliance guidance, the Trustee shall provide (i) to any Transferor of a Class
R Certificate and to the Internal Revenue Service such information as is
necessary for the application of any tax relating to the transfer of a Class R
Certificate to any Person who is not a Disqualified Organization, (ii) to
Certificateholders such information or reports as are required by the Code or
the REMIC Provisions including reports relating to interest, original issue
discount and market discount or premium and (iii) to the Internal Revenue
Service the name, title, address and telephone number of the person who will
serve as the representative of the Trust Fund. In addition, the Depositor shall
provide or cause to be provided to the Trustee, within ten (10) days after the
Closing Date, all information or data that the Trustee reasonably determines to
be relevant for tax purposes as to the valuations and issue prices of the
Certificates, including, without limitation, the price, yield, prepayment
assumption and projected cash flow of the Certificates. The Depositor shall
indemnify the Trustee and hold it harmless for any loss, liability, damage,
claim, or expense of the Trustee arising from any failure of the Depositor to
provide, or to cause to be provided, in response to the reasonable requests of
the Trustee made pursuant to this paragraph, accurate information or data to the
Trustee on a timely basis. The indemnification provisions hereunder shall
survive the termination of this Agreement.
(f) The Trustee shall take such action and shall cause the Trust Fund
created hereunder to take such action as shall be necessary to create or
maintain the status of the Trust Fund (exclusive of the Basis Risk Reserve Fund)
as a REMIC under the REMIC Provisions (and the Servicer shall assist it, to the
extent reasonably requested by it). The Trustee shall not take any action, cause
the Trust Fund to take any action or fail to take (or fail to cause to be taken)
any action that, under the REMIC Provisions, if taken or not taken, as the case
may be, could (i) endanger the status of the Trust Fund (exclusive of the Basis
Risk Reserve Fund) as a REMIC or (ii) result in the imposition of a tax upon the
Trust Fund (including but not limited to the tax on prohibited transactions as
defined in Section 860F(a)(2) of the Code and the tax on contributions to a
REMIC set forth in Section 860G(d) of the Code) (either such event, an "Adverse
REMIC Event") unless the Trustee [and the Certificate Insurer] received an
Opinion of Counsel (at the expense of the party seeking to take such action but
in no event shall such Opinion of Counsel be an expense of the Trustee) to the
effect that the contemplated action will not, with respect to the Trust Fund
created hereunder, endanger such status or result in the imposition of such a
tax. The Servicer shall not take or fail to take any action (whether or not
authorized hereunder) as to which the Trustee has advised it in writing that it
has received an Opinion of Counsel (which such Opinion of Counsel shall not be
an expense of the Trustee) to the effect that an Adverse REMIC Event could occur
with respect to such action. In addition, prior to taking any action with
respect to the Trust Fund or its assets, or causing the Trust Fund to take any
action which is not expressly permitted under the terms of this Agreement, the
Servicer will consult with the Trustee or its designee, in writing, with respect
to whether such action could cause an Adverse REMIC Event to occur with respect
to the Trust Fund, and the Servicer shall not take any such action or cause the
Trust Fund to take any such action as to which the Trustee has advised it in
writing that an Adverse REMIC Event could occur. The Trustee may consult with
counsel to make such written advice, and the cost of same shall be borne by the
party seeking to take the action not permitted by this Agreement (but in no
event shall such cost be an expense of the Trustee). At all times as may be
required by the Code, the Trustee will ensure that substantially all of the
assets of the Trust Fund (exclusive of the Basis Risk Reserve Fund) will consist
of "qualified mortgages" as defined in Section 860G(a)(3) of the Code and
"permitted investments" as defined in Section 860G(a)(5) of the Code.
(g) In the event that any tax is imposed on "prohibited transactions"
of the Trust Fund created hereunder as defined in Section 860F(a)(2) of the Code
on "net income from foreclosure property" of the Trust Fund as defined in
Section 860G(c) of the Code, on any contributions to the Trust Fund after the
Startup Day therefor pursuant to Section 860G(d) of the Code, or any other tax
is imposed by the Code or any applicable provisions of state or local tax laws,
such tax shall be charged (i) to the Trustee, if such tax arises out of or
results from a breach by the Trustee of any of its obligations under this
Article X, (ii) to the Servicer pursuant to Section 10.03 hereof, if such tax
arises out of or results from a breach by the Servicer of any of its obligations
under Article V or this Article X, or otherwise (iii) to the Holders of the
Residual Certificates.
(h) On or before April 15 of each calendar year, commencing April 15,
[ ], the Trustee shall deliver to the Servicer and each Rating Agency a
certificate from a Responsible Officer of the Trustee stating the Trustee's
compliance with this Article X.
(i) The Servicer and the Trustee shall, for federal income tax
purposes, maintain books and records with respect to the Trust Fund on a
calendar year and on an accrual basis.
(j) The Trustee shall not accept any contributions of assets to the
Trust Fund unless it [and the Certificate Insurer] shall have received an
Opinion of Counsel (which such Opinion of Counsel shall not be an expense of the
Trustee) to the effect that the inclusion of such assets in the Trust Fund will
not cause the Trust Fund (exclusive of the Basis Risk Reserve Fund) to fail to
qualify as a REMIC at any time that any Certificates are outstanding or subject
the Trust Fund to any tax under the REMIC Provisions or other applicable
provisions of federal, state and local law or ordinances.
(k) Neither the Trustee nor the Servicer shall enter into any
arrangement by which the Trust Fund will receive a fee or other compensation for
services nor permit the Trust Fund to receive any income from assets other than
"qualified mortgages" as defined in Section 860G(a)(3) of the Code or "permitted
investments" as defined in Section 860G(a)(5) of the Code.
(l) Solely for purposes of satisfying Section 1.860G-1(a)(4)(iii) of
the Treasury Regulations, the "latest possible maturity date" of the Regular
Certificates is the REMIC Maturity Date.
(m) Upon filing with the Internal Revenue Service, the Trustee shall
furnish to the Holders of the Class R Certificates the Form 1066 and each Form
1066Q.
(n) The Trustee shall treat the Basis Risk Reserve Fund as an outside
reserve fund within the meaning of Treasury Regulation Section 1.860G-2(h) that
is owned by the Holder of the Class R Certificate and that is not an asset of
the REMIC. The Trustee shall treat the rights of the [Class A, Class M1, Class
M2, and Class B] Certificateholders to receive payments from the Basis Risk
Reserve Fund in the event of a Basis Risk Shortfall as rights in an interest
rate cap contract written by the Class R Certificateholder in favor of the Class
A, Class M1, Class M2, and Class B Certificateholders. Thus, each [Class A,
Class M1, Class M2, and Class B] Certificate shall be treated as representing
not only ownership of regular interests in the Trust Fund, but also ownership of
an interest in a discrete interest rate cap contract. For purposes of
determining the issue prices of the regular interests, the Trustee shall assume
that the interest rate cap contract has only a nominal value. This provision is
intended to satisfy the requirements of Treasury Regulation Section 1.860G-2(i),
concerning the treatment of property rights coupled with regular interests, and
shall be interpreted in a manner consistent with such regulations.
Section 10.02. Prohibited Transactions and Activities. Neither the
Depositor, the Servicer nor the Trustee shall sell, dispose of or substitute for
any of the Mortgage Loans, except in connection with (i) the foreclosure of a
Mortgage Loan, including but not limited to, the acquisition or sale of a
Mortgaged Property acquired by deed in lieu of foreclosure, (ii) the bankruptcy
of the Trust Fund, (iii) the termination of the Trust Fund pursuant to Article
VIII of this Agreement, or (iv) a purchase of Mortgage Loans pursuant to Article
II or III of this Agreement, nor acquire any assets for the Trust Fund, nor sell
or dispose of any investments in the Certificate Accounts for gain, nor accept
any contributions to the Trust Fund after the Closing Date unless it [and the
Certificate Insurer] have received an Opinion of Counsel (at the expense of the
party seeking to cause such sale, disposition, substitution or acquisition but
in no event shall such Opinion of Counsel be an expense of the Trustee) that
such sale, disposition, substitution or acquisition will not (a) affect
adversely the status of the Trust Fund (exclusive of the Basis Risk Reserve
Fund) as a REMIC or (b) cause the Trust Fund to be subject to a tax on
"prohibited transactions" or "contributions" pursuant to the REMIC Provisions
(such opinion, a "REMIC Opinion").
Section 10.03. Trustee and Servicer Indemnification. (a) The Trustee
agrees to indemnify the Trust Fund, the Depositor [, the Certificate Insurer]
and the Servicer for any taxes and costs (including, without limitation, any
reasonable attorneys' fees) imposed on or incurred by the Trust Fund, the
Depositor or the Servicer as a result of a breach of the Trustee's covenants set
forth in this Article X.
(b) The Servicer agrees to indemnify the Trust Fund, the Depositor and
the Trustee for any taxes and costs (including, without limitation, any
reasonable attorneys' fees) imposed on or incurred by the Trust Fund, the
Depositor or the Trustee, as a result of a breach of the Servicer's covenants
set forth in this Article X or in Article V with respect to compliance with the
REMIC Provisions, including without limitation, any penalties arising from the
Trustee's execution of Tax Returns prepared by the Servicer pursuant to Section
5.25 that contain errors or omissions.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Limitation on Liability of the Depositor and the
Servicer. (a) Neither the Depositor, the Servicer nor any of the directors,
members, officers, employees or agents of the Depositor or the Servicer shall be
under any liability to [the Certificate Insurer,] the Trust Fund or the
Certificateholders for any action taken or for refraining from the taking of any
action in good faith pursuant to this Agreement, or for errors in judgment;
provided, however, that this provision shall not protect the Depositor or the
Servicer against any breach of warranties or representations made herein, or
against any specific liability imposed on the Servicer or the Depositor pursuant
to any other Section hereof; and provided further that this provision shall not
protect the Depositor, the Servicer or any such person, against any liability
which would otherwise be imposed by reason of willful misfeasance, bad faith or
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder. The Depositor, the Servicer and any director,
member, officer, employee or agent of the Depositor or the Servicer may rely in
good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising hereunder. The Depositor,
the Servicer and any director, officer, member, employee or agent of the
Depositor or the Servicer shall be indemnified and held harmless by the Trust
Fund 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 the Servicer's servicing obligations with
respect to any specific Mortgage Loan or Mortgage Loans (except as any such
loss, liability or expense shall be otherwise reimbursable pursuant to this
Agreement) or related to the Servicer's obligations under this Agreement, or any
loss, liability or expense incurred by reason of willful misfeasance, bad faith
or negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder. Neither the Depositor nor the
Servicer shall be under any obligation to appear in, prosecute or defend any
legal action which is not incidental to its respective duties under this
Agreement and which in its opinion may involve it in any expense or liability;
PROVIDED, HOWEVER, that the Depositor or the Servicer may in its sole discretion
undertake any such action which it may deem necessary or desirable with respect
to this Agreement and the rights and duties of the parties hereto and the
interests of the Certificateholders hereunder. In the event the Depositor or the
Servicer take any action as described in the preceding sentence, the legal
expenses and costs of such action [, if previously approved in writing by the
Certificate Insurer, which approval shall not be unreasonably withheld,] and any
liability resulting therefrom will be expenses, costs and liabilities of the
Trust Fund, and the Servicer or the Depositor, as the case may be, will be
entitled to be reimbursed therefor as provided in Section 5.04.
(b) [Reserved]
(c) The Servicer agrees to indemnify and hold the Trustee, the
Depositor [, the Certificate Insurer] and each Certificateholder harmless
against any and all claims, losses, penalties, fines, forfeitures, legal fees
and related costs, judgments, and any other costs, fees and expenses that the
Trustee, the Depositor and any Certificateholder may sustain resulting from the
failure of the Servicer to perform its duties and service the Mortgage Loans in
compliance with the terms of this Agreement. The Servicer shall immediately
notify the Trustee, the Depositor [, the Certificate Insurer] and each
Certificateholder if a claim is made by a third party arising out of or based
upon the alleged actions of the Servicer or alleged failure of the Servicer to
perform its duties and service the Mortgage Loans in compliance with the terms
of this Agreement, and the Servicer shall assume (with the consent of the
Trustee [and the Certificate Insurer]) the defense of any such claim and pay all
expenses in connection therewith, including reasonable counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be entered
against the Servicer, the Trustee, the Depositor [, the Certificate Insurer]
and/or Certificateholder in respect of such claim. Notwithstanding the
foregoing, the Servicer shall not be obligated to indemnify the Trust Fund or
assume the defense for any claim by a third party that does not arise out of and
is not based upon the alleged actions of the Servicer or alleged failure of the
Servicer to perform its duties and service the Mortgage Loans in compliance with
the terms of this Agreement.
(d) The Servicer shall reimburse itself from amounts in the Collection
Account pursuant to Section 5.04 for all amounts advanced by it pursuant to the
preceding sentence, except when a final nonappealable adjudication determines
that the claim relates directly to the failure of the Servicer to perform its
duties in compliance with this Agreement. The provision of this Section 11.01(d)
shall survive the termination of this Agreement and the payment of the
outstanding Certificates.
Section 11.02. Acts of Certificateholders. (a) Except as otherwise
specifically provided herein, whenever Certificateholder action, consent or
approval is required under this Agreement, such action, consent or approval
shall be deemed to have been taken or given on behalf of, and shall be binding
upon, all Certificateholders if the Majority Certificateholders [or the
Certificate Insurer] agree to take such action or give such consent or approval.
(b) The death or incapacity of any Certificateholder shall not operate
to terminate this Agreement or the Trust Fund, nor entitle such
Certificateholder's legal representatives or heir to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of the
Trust Fund, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.
(c) No Certificateholder shall have any right to vote (except as
expressly provided for herein) or in any manner otherwise control the operation
and management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth, or contained in the terms of the Certificates,
be construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be under
any liability to any third person by reason of any action taken by the parties
to this Agreement pursuant to any provision hereof.
(d) No Certificateholder shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Agreement [or the
Certificate Insurance Policy], or for the appointment of a receiver or trustee
of the Trust Fund, or for any other remedy with respect to an event of default
hereunder, unless: (i) such Certificateholder has previously given written
notice to the Depositor [, the Certificate Insurer] and the Trustee of such
Certificateholder's intention to institute such proceeding; (ii) the
Certificateholders of not less than [51]% of the Percentage Interests
represented by the Senior Certificates then outstanding or, if there are no
Senior Certificates then outstanding, by a majority of the Percentage Interests
represented by the outstanding Classes of Certificates, shall have made written
request to the Trustee to institute such proceeding in its own name as Trustee
establishing the Trust Fund; (iii) such Certificateholder or Certificateholders
have offered to the Trustee reasonable indemnity against the costs, expenses and
liabilities to be insured in compliance with such request; (iv) the Trustee for
[60] days after its receipt of such notice, request and offer of indemnity has
failed to institute such proceeding; [(v) as long as any Senior Certificates are
outstanding or any Reimbursement Amounts are owed to the Certificate Insurer,
the Certificate Insurer has consented in writing thereto (unless a Certificate
Insurer Default has occurred and is continuing);] and (v) no direction
inconsistent with such written request has been given to the Trustee during such
[60-day] period by the Certificateholders of a majority of the Percentage
Interests represented by the Senior Certificates or, if there are no Senior
Certificates then outstanding, by a majority of the Percentage Interests
represented by the outstanding Classes of Certificates; it being understood and
intended that no one or more Certificateholders shall have any right in any
manner whatever by virtue of, or by availing themselves of, any provision of
this Agreement to affect, disturb or prejudice the rights of any other
Certificateholder of the same Class or to obtain or to seek to obtain priority
or preference over any other Certificateholder of the same Class or to enforce
any right under this Agreement, except in the manner herein provided and for the
equal and ratable benefit of all the Certificateholders of the same Class. [In
the event the Trustee shall receive conflicting or inconsistent requests and
indemnity from two or more groups of Certificateholders, each representing less
than a majority of the applicable Class of Certificates and each conforming to
paragraphs (i)-(vi) of this Section 11.02(d), the Trustee shall so notify the
Certificate Insurer and the Certificate Insurer in its sole discretion may
determine what action, if any, shall be taken, notwithstanding any other
provision of this Agreement.]
Section 11.03. Amendment. This Agreement may be amended from time to
time by the Depositor, the Servicer and the Trustee [with the prior written
consent of the Certificate Insurer] without the consent of any of the
Certificateholders, (i) to cure any ambiguity or mistake, (ii) to correct,
modify or supplement any provisions herein which may be inconsistent with any
other provisions herein or in an Offering Document, (iii) to make any other
provisions with respect to matters or questions arising under this Agreement
that are not materially inconsistent with the provisions hereof amend this
Agreement in any respect subject to the provisions below, or (iv) if such
amendment, as evidenced by an Opinion of Counsel (provided by the Person
requesting such amendment) delivered to the Trustee [and the Certificate
Insurer], is reasonably necessary to comply with any requirements imposed by the
Code or any successor or amendatory statute or any temporary or final
regulation, revenue ruling, revenue procedure or other written official
announcement or interpretation relating to federal income tax laws or any
proposed such action which, if made effective, would apply retroactively to the
Trust Fund at least from the effective date of such amendment; provided that in
the case of clause (iii) such action shall not adversely affect in any material
respect the interests of any Certificateholder (other than Certificateholders
who shall consent to such amendment) [or the Certificate Insurer], as evidenced
either by an Opinion of Counsel (provided by the Person requesting such
amendment) or written notification from each Rating Agency to the effect that
such amendment will not cause such Rating Agency to lower or withdraw the then
current ratings on the Certificates [(without regard to the Certificate
Insurance Policy)], delivered to the Trustee [and the Certificate Insurer].
This Agreement may also be amended from time to time by the Depositor,
the Servicer and the Trustee with the consent of the Majority Certificateholders
[and the Certificate Insurer] 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 Holders of Certificates; PROVIDED,
HOWEVER, that no such amendment shall (i) reduce in any manner the amount of, or
delay the timing of, payments received on Mortgage Loans which are required to
be distributed on any Certificate without the consent of the Holder of such
Certificate or (ii) reduce the aforesaid percentage of Certificates the Holders
of which are required to consent to any such amendment, without the consent of
the Holders of all Certificates [and the Certificate Insurer] then outstanding.
Notwithstanding any other provision of this Agreement, for purposes of the
giving or withholding of consents pursuant to this Section 11.03, Certificates
registered in the name of the Depositor or the Servicer or any affiliate thereof
shall be entitled to voting rights with respect to matters described in (i) and
(ii) of this paragraph.
Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it [and the
Certificate Insurer] shall have first received an Opinion of Counsel (provided
by the Person requesting such amendment) to the effect that such amendment will
not result in the imposition of any tax on the Trust Fund pursuant to the REMIC
Provisions or cause the Trust Fund to fail to qualify as a REMIC at any time
that any of the Certificates are outstanding.
Promptly after the execution of any such amendment the Trustee shall
furnish a statement describing the amendment to each Certificateholder [, the
Certificate Insurer] and each Rating Agency.
It shall not be necessary for the consent of Certificateholders under
this Section 11.03 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
The Trustee may, but shall not be obligated to enter into any
amendment pursuant to this Section that affects its rights, duties and
immunities under this Agreement or otherwise.
Section 11.04. Recordation of Agreement. To the extent permitted by
applicable law, this Agreement, or a memorandum thereof if permitted under
applicable law, is subject to recordation in all appropriate public offices for
real property records in all of the counties or other comparable jurisdictions
in which any or all of the properties subject to the Mortgages are situated, and
in any other appropriate public recording office or elsewhere, such recordation
to be effected by the Servicer at the Certificateholders' [or the Certificate
Insurer's] expense on direction and at the expense of Majority
Certificateholders [or the Certificate Insurer's] requesting such recordation,
but only when accompanied by an Opinion of Counsel to the effect that such
recordation materially and beneficially affects the interests of the
Certificateholders [or the Certificate Insurer], as applicable, or is necessary
for the administration or servicing of the Mortgage Loans.
Section 11.05. Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given when
delivered to (i) in the case of the Servicer, [ , Attention: [ ]; (ii) in the
case of Finance America Securities, LLC, 00000 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxx
00000, Attention: [ ]; (iii) in the case of the Trustee, [ , Attention: [ ];
(iv) in the case of the Certificateholders, as set forth in the Certificate
Register; (v) in the case of Moody's, Xxxxx'x Investors Service, 00 Xxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Residential Mortgage Pass-through
Monitoring; (vi) in the case of S&P, Standard & Poor's Rating Services, 00 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000; and (vii) in the case of Fitch, Fitch ICBA,
Inc., Xxx Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 [; and (viii) in the case
of the Certificate Insurer [ ]. Any such notices shall be deemed to be effective
with respect to any party hereto upon the receipt of such notice by such party,
except that notices to the Certificateholders shall be effective upon mailing or
personal delivery.
Section 11.06. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be held
invalid for any reason whatsoever, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other covenants, agreements, provisions or terms of this
Agreement or of the Certificates or the rights of the Holders thereof.
Section 11.07. Counterparts. This Agreement 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 agreement.
Section 11.08. Successors and Assigns. This Agreement shall inure to
the benefit of and be binding upon the Servicer, the Depositor, the Trustee and
the Certificateholders and their respective successors and permitted assigns.
Section 11.09. Headings. The headings of the various articles and
sections of this Agreement have been inserted for convenience of reference only
and shall not be deemed to be part of this Agreement.
Section 11.10. [Certificate Insurer Default]. [Any right conferred to
the Certificate Insurer, including, without limitation, the right to receive the
Premium Amount shall be suspended during any period in which a Certificate
Insurer Default exists. At such time as the Certificates are no longer
outstanding hereunder, and no amounts owed to the Certificate Insurer hereunder
or under the Insured Amount remain unpaid, the Certificate Insurer's rights
hereunder shall terminate.]
Section 11.11. Third Party Beneficiary. The parties agree that the
Seller [and the Certificate Insurer] is intended to have and shall have all
rights of a third-party beneficiary of this Agreement.
Section 11.12. Intent of the Parties. It is the intent of the
Depositor and Certificateholders that, for federal income taxes, state and local
income or franchise taxes and other taxes imposed on or measured by income, the
Certificates will be treated as evidencing beneficial ownership interests in a
REMIC. The parties to this Agreement and the holder of each Certificate, by
acceptance of its Certificate, and each beneficial owner thereof, agree to
treat, and to take no action inconsistent with the treatment of, the
Certificates in accordance with the preceding sentence for purposes of federal
income taxes, state and local income and franchise taxes and other taxes imposed
on or measured by income.
Section 11.13. Notice to Rating Agencies.
The Trustee shall use its best efforts to promptly provide notice to
the Rating Agencies with respect to each of the following of which it has actual
knowledge:
1. Any material change or amendment to this Agreement;
2. The occurrence of any Event of Default;
3. The resignation or termination of the Servicer or the Trustee;
and
4. The final payment to Certificateholders.
In addition, the Trustee shall promptly furnish to the Rating Agencies
copies of the following:
1. Each report to Certificateholders described in Section 6.07;
and
2. Each annual independent public accountants' servicing report
described in Section 5.17.
Any such notice pursuant to this Section 11.13 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 [(except in
the case of notice to the Certificate Insurer which notice shall be given in
accordance with Section 11.05 hereof)].
Section 11.14. Governing Law. THIS AGREEMENT AND THE CERTIFICATES
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS (AS
OPPOSED TO CONFLICT OF LAWS PROVISIONS) 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 11.15. Appointment of Agent. The Depositor hereby appoints
Deutsche Bank Securities Inc. as its agent for the purpose of performing the
duties of the Depositor under this Agreement, other than the duties of the
Depositor under Article II and Section 3.02 hereof.
IN WITNESS WHEREOF, the Servicer, the Trustee and the Depositor have
caused their names to be signed hereto by their respective officers thereunto
duly authorized as of the day and year first above written.
FINANCE AMERICA SECURITIES, LLC
as Depositor
By: ________________________________
Name:
Title:
[ ]
as Servicer
By: ________________________________
Name:
Title:
[ ]
as Trustee
By: ________________________________
Name:
Title:
EXHIBIT A
[CERTIFICATE INSURANCE POLICY]
EXHIBIT B-1
FORMS OF REGULAR CERTIFICATES
FORM OF SENIOR CERTIFICATE
THIS CERTIFICATE IS A REMIC REGULAR INTEREST CERTIFICATE. THIS
CERTIFICATE DOES NOT EVIDENCE AN OBLIGATION OF, OR AN INTEREST IN, AND IS NOT
GUARANTEED BY, THE DEPOSITOR, THE TRUSTEE, OR ANY AFFILIATE OF ANY OF THEM AND
IS NOT INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR PRIVATE INSURER.
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL AMOUNT OF THIS
CERTIFICATE MAY BE MADE IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE
CERTIFICATE PRINCIPAL AMOUNT OF THIS CERTIFICATE AT ANY TIME MAY BE LESS THAN
THE AMOUNT SHOWN ON THE FACE HEREOF.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
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.
FINANCE AMERICA SECURITIES, LLC
MORTGAGE LOAN TRUST [ ]
PASS-THROUGH CERTIFICATE, CLASS [ ]
Evidencing a beneficial interest in a pool consisting
primarily of certain fixed and adjustable rate, fully amortizing and
balloon, conventional, first-lien residential mortgage loans and other
assets in a trust fund established by
FINANCE AMERICA SECURITIES, LLC
Initial Class _________ Initial Certificate
Principal Amount of the Class [ ] Principal Amount of this
Certificates: $[ ] Certificate: $[ ]
Certificate Cut-off Date: [ ]
Interest Rate: Variable
Number [ ] CUSIP: [ ]
ISIN: [ ]
Common Code: [ ]
THIS CERTIFIES THAT [ ] is the registered owner of the Percentage
Interest evidenced by this Certificate (obtained by dividing the initial
Certificate Principal Amount of this Certificate by the initial Class Principal
Amount of the Class [ ] Certificates, both as specified above) in (i) certain
distributions of principal and interest on certain fixed and adjustable rate,
fully amortizing and balloon, conventional, first lien residential mortgage
loans (the "Mortgage Loans") acquired from Finance America Securities, LLC (the
"Depositor"), a Delaware limited liability company, (ii) such amounts and
investments as from time to time may be held in the Trust Fund established
pursuant to the Pooling and Servicing Agreement (as defined on the reverse
hereof) and (iii) certain other assets, if any, as described in the Pooling and
Servicing Agreement (the foregoing assets hereinafter collectively referred to
as the "Trust Fund").
Distributions on this Certificate will be made on the [25th] day of
each month or, if such a day is not a Business Day, then on the next succeeding
Business Day, commencing in [ ] (each, a "Distribution Date"), to the Person in
whose name this Certificate is registered at the close of business on the last
Business Day of the month immediately preceding the month in which such
Distribution Date occurs (the "Record Date"), in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount, if any,
required to be distributed to all the Certificates of the Class represented by
this Certificate. All sums distributable on this Certificate are payable in the
coin or currency of the United States of America which at the time of payment is
legal tender for the payment of public and private debts.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which shall have the same effect as though
fully set forth on the face of this Certificate.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee, whose name appears below by manual signature, this
Certificate shall not be entitled to any benefit under the Pooling and Servicing
Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
[ ],
as Trustee
By: _________________________________
AUTHORIZED SIGNATORY
Dated: __________________________
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Pooling and Servicing Agreement.
[ ],
as Trustee
By: _________________________________
AUTHORIZED SIGNATORY
Dated: __________________________
FINANCE AMERICA SECURITIES, LLC
MORTGAGE LOAN TRUST [ ]
PASS-THROUGH CERTIFICATE
This Certificate is one of a duly authorized issue of certificates
designated as Finance America Securities, LLC Mortgage Loan Trust [ ]
Pass-Through Certificates (the "Certificates"), representing all or part of a
beneficial ownership interest in a Trust Fund established pursuant to a Pooling
and Servicing Agreement dated as of [ ] (the "Pooling and Servicing Agreement"),
among Finance America Securities, LLC, as Depositor, [ ], as Trustee, and [ ],
as Servicer, to which terms, provisions and conditions thereof the Holder of
this Certificate by virtue of the acceptance hereof assents, and by which such
Holder is bound. The Certificates consist of the following Classes: [the Class A
Certificates (the "Senior Certificates"), the Class M1, Class M2 and Class B
Certificates (the "Subordinate Certificates")] and the Class R Certificate (the
"Residual Certificate").
On each Distribution Date, the Total Distribution Amount for such date
will be distributed from the Certificate Account to Holders of the Certificates
according to the terms of the Pooling and Servicing Agreement. All distributions
or allocations made with respect to each Class of Certificates on each
Distribution Date shall be allocated among the outstanding Certificates of such
Class based on the Percentage Interest of each such Certificate.
Distributions on this Certificate will be made by check mailed to the
Holder of record of this Certificate on the immediately preceding Record Date at
the address of such Holder as it appears on the Certificate Register (except
that with respect to a Certificate registered in the name of a Clearing Agency
or its nominee, distributions will be made by wire transfer of immediately
available funds) or by wire transfer in immediately available funds, upon
written request made to the Trustee or as otherwise permitted by the Trustee.
Wire transfers will be made at the expense of the Holder requesting the same by
deducting a wire transfer fee from the related distribution. The final
distribution on this Certificate will be made, after due notice to the Holder of
the pendency of such distribution, only upon presentation and surrender of this
Certificate at the Corporate Trust Office (as defined below).
The Corporate Trust Office with respect to the presentment and
surrender of Certificates for the final distribution thereon and the presentment
and surrender of the Certificates for any other purpose is the corporate trust
office of the Trustee at [ ], Attention: [ ]. The Trustee may designate another
address from time to time by notice to the Holders of the Certificates and the
Depositor.
The Pooling and Servicing Agreement permits the amendment thereof from
time to time by the Depositor, the Servicer and the Trustee [with the consent of
the Certificate Insurer] for the purpose of adding, changing or eliminating any
provisions of the Pooling and Servicing Agreement or modifying the rights of the
Holders of the Certificates thereunder; PROVIDED, HOWEVER, that (i) no such
amendment may be made unless the Trustee receives an opinion of counsel as to
certain tax matters specified in the Pooling and Servicing Agreement and (ii) no
such amendment may (a) reduce the amount or delay the timing of distributions
required to be made on any Certificate without the consent of the Holder of such
Certificate, or (b) reduce the percentage of aggregate outstanding Percentage
Interest of each Class the Holders of which are required to consent to any such
amendment, without [the Certificate Insurer and] the consent of the Holders of
all Certificates then outstanding. Any consent by the Holder of this Certificate
will be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Pooling and Servicing Agreement also permits the
amendment thereof, in certain limited circumstances, [with the consent of the
Certificate Insurer but] without the consent of the Holders of any of the
Certificates.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, the transfer of this Certificate is
registerable in the Certificate Register upon surrender of this Certificate for
registration of transfer, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to 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 of
authorized denominations evidencing the same initial Certificate Principal
Amount (or Percentage Interest) will be issued to the designated transferee or
transferees. As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, this Certificate is exchangeable for new
Certificates of the same Class evidencing the same aggregate initial Certificate
Principal Amount (or 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 Certificate Registrar may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The [Class A, Class M1, Class M2 and Class B] Certificates are
issuable only in registered form, in minimum denominations of $[25,000] in
initial Certificate Principal Amount and in integral multiples of $1 in excess
thereof registered in the name of the nominee of the Clearing Agency, which
shall maintain such Certificates through its book-entry facilities. The Class R
Certificate will be issued as a single Certificate and maintained in physical
form. The Class R Certificate shall remain outstanding until the latest final
Distribution Date for the Certificates.
The Certificates are subject to optional prepayment in full in
accordance with the Pooling and Servicing Agreement on any Distribution Date on
which the Total Loan Balance is less than [10]% of the Cut-off Date Loan Balance
thereof for an amount as specified in the Pooling and Servicing Agreement. In no
event 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 living at the date of the Pooling and Servicing Agreement of a
certain person named in the Pooling and Servicing Agreement.
The Depositor, the Trustee and the Certificate Registrar and any agent
of any of them may treat the Person in whose name this Certificate is registered
as the owner hereof for all purposes, and neither the Depositor, the Trustee,
nor the Certificate Registrar nor any such agent shall be affected by any notice
to the contrary.
As provided in the Pooling and Servicing Agreement, this Certificate
and the Pooling and Servicing Agreement shall be construed in accordance with
and governed by the laws of the State of New York, without regard to the
conflict of laws principles applied in the State of New York. In the event of
any conflict between the provisions of this Certificate and the Pooling and
Servicing Agreement, the Pooling and Servicing Agreement shall be controlling.
Any term used herein and not otherwise defined shall be as defined in the
Pooling and Servicing Agreement.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s) and assign(s) and
transfer(s) unto
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(Please print or type name and address, including postal zip code, of assignee
and social security number or employer identification number)
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the within Certificate stating in the names of the undersigned in the
Certificate Register and does hereby irrevocably constitute and appoint
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to transfer such Certificate in such Certificate Register of the Trust.
I [we] further direct the Certificate Registrar to issue a new Certificate of
the same Class of like principal to the above-named assignee and deliver such
Certificate to the following address:
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Dated:____________________ __________________________________________
Signature by or on behalf of Assignor
__________________________ __________________________________________
Authorized Officer Signature Guaranteed
__________________________ __________________________________________
Name of Institution NOTICE: The signature(s) of this
assignment must correspond with the name(s)
on the face of this Certificate without
alteration or any change whatsoever. The
signature must be guaranteed by a participant
in the Securities Transfer Agents Medallion
Program, the New York Stock Exchange
Medallion Signature Program or the Stock
Exchanges Medallion Program. Notarized or
witnessed signatures are not acceptable as
guaranteed signatures.
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for the information
of the Certificate Registrar. Distributions shall be made by wire transfer in
immediately available funds to
______________________________________________________________________________
for the account of ___________________________________________________________
account number __________________ or, if mailed by check, to _________________
______________________________________________________________________________
Applicable reports and statements should be mailed to ________________________
______________________________________________________________________________
This information is provided by _____________________________________________
the assignee named above, or ____________________________________ as its agent.
FORM OF CLASS M1 CERTIFICATE
THIS CERTIFICATE IS A REMIC REGULAR INTEREST CERTIFICATE. THIS
CERTIFICATE DOES NOT EVIDENCE AN OBLIGATION OF, OR AN INTEREST IN, AND IS NOT
GUARANTEED BY, THE DEPOSITOR, THE TRUSTEE, OR ANY AFFILIATE OF ANY OF THEM AND
IS NOT INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR PRIVATE INSURER.
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL AMOUNT OF THIS
CERTIFICATE MAY BE MADE IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE
CERTIFICATE PRINCIPAL AMOUNT OF THIS CERTIFICATE AT ANY TIME MAY BE LESS THAN
THE AMOUNT SHOWN ON THE FACE HEREOF.
THIS CERTIFICATE IS SUBORDINATE IN RIGHT OF PAYMENT AS DESCRIBED IN
THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
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.
NO TRANSFER OF THIS CERTIFICATE SHALL BE REGISTERED UNLESS THE
PROSPECTIVE TRANSFEREE PROVIDES THE TRUSTEE AND THE DEPOSITOR WITH (A) A
CERTIFICATION TO THE EFFECT THAT SUCH TRANSFEREE (1) IS NEITHER AN EMPLOYEE
BENEFIT PLAN SUBJECT TO SECTION 406 OR SECTION 407 OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), THE TRUSTEE OF ANY SUCH
PLAN OR A PERSON ACTING ON BEHALF OF ANY SUCH PLAN NOR A PERSON USING THE ASSETS
OF ANY SUCH PLAN OR (2) IF SUCH TRANSFEREE IS AN INSURANCE COMPANY, SUCH
TRANSFEREE IS PURCHASING SUCH CERTIFICATES WITH FUNDS CONTAINED IN AN "INSURANCE
COMPANY GENERAL ACCOUNT" (AS SUCH TERM IS DEFINED IN SECTION V(e) OF THE
PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 ("PTCE 95-60")) AND THAT THE
PURCHASE AND HOLDING OF SUCH CERTIFICATES ARE COVERED UNDER PTCE 95-60; OR (B)
AN OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE AND THE DEPOSITOR, AND UPON
WHICH THE TRUSTEE AND THE DEPOSITOR SHALL BE ENTITLED TO RELY, TO THE EFFECT
THAT THE PURCHASE OR HOLDING OF SUCH CERTIFICATE BY THE PROSPECTIVE TRANSFEREE
WILL NOT RESULT IN THE ASSETS OF THE TRUST FUND BEING DEEMED TO BE PLAN ASSETS
AND SUBJECT TO THE PROHIBITED TRANSACTION PROVISIONS OF ERISA OR THE CODE AND
WILL NOT SUBJECT THE TRUSTEE OR THE DEPOSITOR TO ANY OBLIGATION IN ADDITION TO
THOSE UNDERTAKEN BY SUCH ENTITIES IN THE POOLING AND SERVICING AGREEMENT, WHICH
OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUST FUND, THE TRUSTEE OR THE
DEPOSITOR.
FINANCE AMERICA SECURITIES, LLC
MORTGAGE LOAN TRUST [ ]
PASS-THROUGH CERTIFICATE, CLASS M1
Evidencing a beneficial interest in a pool consisting
primarily of certain fixed and adjustable rate, fully amortizing and
balloon, conventional, first-lien residential mortgage loans and other
assets in a trust fund established by
FINANCE AMERICA SECURITIES, LLC
Initial Class Initial Certificate
Principal Amount of the Class M1 Principal Amount of this
Certificates: $[ ] Certificate: $[ ]
Certificate Cut-off Date: [ ]
Interest Rate: Variable
Number [ ] CUSIP: [ ]
ISIN: [ ]
Common Code: [ ]
THIS CERTIFIES THAT [ ] is the registered owner of the Percentage
Interest evidenced by this Certificate (obtained by dividing the initial
Certificate Principal Amount of this Certificate by the initial Class Principal
Amount of the Class M1 Certificates, both as specified above) in (i) certain
distributions of principal and interest on certain fixed and adjustable rate,
fully amortizing and balloon, conventional, first lien residential mortgage
loans (the "Mortgage Loans") acquired from Finance America Securities, LLC (the
"Depositor"), a Delaware limited liability company, (ii) such amounts and
investments as from time to time may be held in the Trust Fund established
pursuant to the Pooling and Servicing Agreement (as defined on the reverse
hereof) and (iii) certain other assets, if any, as described in the Pooling and
Servicing Agreement (the foregoing assets hereinafter collectively referred to
as the "Trust Fund").
Distributions on this Certificate will be made on the [25th] day of
each month or, if such a day is not a Business Day, then on the next succeeding
Business Day, commencing in [ ] (each, a "Distribution Date"), to the Person in
whose name this Certificate is registered at the close of business on the last
Business Day of the month immediately preceding the month in which such
Distribution Date occurs (the "Record Date"), in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount, if any,
required to be distributed to all the Certificates of the Class represented by
this Certificate. All sums distributable on this Certificate are payable in the
coin or currency of the United States of America which at the time of payment is
legal tender for the payment of public and private debts.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which shall have the same effect as though
fully set forth on the face of this Certificate.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee, whose name appears below by manual signature, this
Certificate shall not be entitled to any benefit under the Pooling and Servicing
Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
[ ],
as Trustee
By: ________________________________
AUTHORIZED SIGNATORY
Dated:__________________________
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Pooling and Servicing Agreement.
[ ],
as Trustee
By: ________________________________
AUTHORIZED SIGNATORY
Dated:__________________________
FINANCE AMERICA SECURITIES, LLC
MORTGAGE LOAN TRUST [ ]
PASS-THROUGH CERTIFICATE
This Certificate is one of a duly authorized issue of certificates
designated as Finance America Securities, LLC Mortgage Loan Trust [ ]
Pass-Through Certificates (the "Certificates"), representing all or part of a
beneficial ownership interest in a Trust Fund established pursuant to a Pooling
and Servicing Agreement dated as of [ ] (the "Pooling and Servicing Agreement"),
among Finance America Securities, LLC, as Depositor, [ ], as Trustee, and [ ],
as Servicer, to which terms, provisions and conditions thereof the Holder of
this Certificate by virtue of the acceptance hereof assents, and by which such
Holder is bound. The Certificates consist of the following Classes: [the Class A
Certificates (the "Senior Certificates"), the Class M1, Class M2 and Class B
Certificates (the "Subordinate Certificates")] and the Class R Certificate (the
"Residual Certificate").
On each Distribution Date, the Total Distribution Amount for such date
will be distributed from the Certificate Account to Holders of the Certificates
according to the terms of the Pooling and Servicing Agreement. All distributions
or allocations made with respect to each Class of Certificates on each
Distribution Date shall be allocated among the outstanding Certificates of such
Class based on the Percentage Interest of each such Certificate.
Distributions on this Certificate will be made by check mailed to the
Holder of record of this Certificate on the immediately preceding Record Date at
the address of such Holder as it appears on the Certificate Register (except
that with respect to a Certificate registered in the name of a Clearing Agency
or its nominee, distributions will be made by wire transfer of immediately
available funds) or by wire transfer in immediately available funds, upon
written request made to the Trustee or as otherwise permitted by the Trustee.
Wire transfers will be made at the expense of the Holder requesting the same by
deducting a wire transfer fee from the related distribution. The final
distribution on this Certificate will be made, after due notice to the Holder of
the pendency of such distribution, only upon presentation and surrender of this
Certificate at the Corporate Trust Office (as defined below).
The Corporate Trust Office with respect to the presentment and
surrender of Certificates for the final distribution thereon and the presentment
and surrender of the Certificates for any other purpose is the corporate trust
office of the Trustee at [ , Attention: [ ]. The Trustee may designate another
address from time to time by notice to the Holders of the Certificates and the
Depositor.
The Pooling and Servicing Agreement permits the amendment thereof from
time to time by the Depositor, the Servicer and the Trustee [with the consent of
the Certificate Insurer] for the purpose of adding, changing or eliminating any
provisions of the Pooling and Servicing Agreement or modifying the rights of the
Holders of the Certificates thereunder; PROVIDED, HOWEVER, that (i) no such
amendment may be made unless the Trustee receives an opinion of counsel as to
certain tax matters specified in the Pooling and Servicing Agreement and (ii) no
such amendment may (a) reduce the amount or delay the timing of distributions
required to be made on any Certificate without the consent of the Holder of such
Certificate, or (b) reduce the percentage of aggregate outstanding Percentage
Interest of each Class the Holders of which are required to consent to any such
amendment, without [the Certificate Insurer and] the consent of the Holders of
all Certificates then outstanding. Any consent by the Holder of this Certificate
will be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Pooling and Servicing Agreement also permits the
amendment thereof, in certain limited circumstances, [with the consent of the
Certificate Insurer but] without the consent of the Holders of any of the
Certificates.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, the transfer of this Certificate is
registerable in the Certificate Register upon surrender of this Certificate for
registration of transfer, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to 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 of
authorized denominations evidencing the same initial Certificate Principal
Amount (or Percentage Interest) will be issued to the designated transferee or
transferees. As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, this Certificate is exchangeable for new
Certificates of the same Class evidencing the same aggregate initial Certificate
Principal Amount (or 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 Certificate Registrar may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The [Class A, Class M1, Class M2 and Class B] Certificates are
issuable only in registered form, in minimum denominations of $[25,000] in
initial Certificate Principal Amount and in integral multiples of $1 in excess
thereof registered in the name of the nominee of the Clearing Agency, which
shall maintain such Certificates through its book-entry facilities. The Class R
Certificate will be issued as a single Certificate and maintained in physical
form. The Class R Certificate shall remain outstanding until the latest final
Distribution Date for the Certificates.
The Certificates are subject to optional prepayment in full in
accordance with the Pooling and Servicing Agreement on any Distribution Date on
which the Total Loan Balance is less than [10]% of the Cut-off Date Loan Balance
thereof for an amount as specified in the Pooling and Servicing Agreement. In no
event 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 living at the date of the Pooling and Servicing Agreement of a
certain person named in the Pooling and Servicing Agreement.
The Depositor, the Trustee and the Certificate Registrar and any agent
of any of them may treat the Person in whose name this Certificate is registered
as the owner hereof for all purposes, and neither the Depositor, the Trustee,
nor the Certificate Registrar nor any such agent shall be affected by any notice
to the contrary.
As provided in the Pooling and Servicing Agreement, this Certificate
and the Pooling and Servicing Agreement shall be construed in accordance with
and governed by the laws of the State of New York, without regard to the
conflict of laws principles applied in the State of New York. In the event of
any conflict between the provisions of this Certificate and the Pooling and
Servicing Agreement, the Pooling and Servicing Agreement shall be controlling.
Any term used herein and not otherwise defined shall be as defined in the
Pooling and Servicing Agreement.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s) and assign(s) and
transfer(s) unto
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(Please print or type name and address, including postal zip code, of assignee
and social security number or employer identification number)
------------------------------------------------------------------------------
the within Certificate stating in the names of the undersigned in the
Certificate Register and does hereby irrevocably constitute and appoint
------------------------------------------------------------------------------
to transfer such Certificate in such Certificate Register of the Trust.
I [we] further direct the Certificate Registrar to issue a new Certificate of
the same Class of like principal to the above-named assignee and deliver such
Certificate to the following address:
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Dated:____________________ __________________________________________
Signature by or on behalf of Assignor
__________________________ __________________________________________
Authorized Officer Signature Guaranteed
__________________________ __________________________________________
Name of Institution NOTICE: The signature(s) of this
assignment must correspond with the name(s)
on the face of this Certificate without
alteration or any change whatsoever. The
signature must be guaranteed by a
participant in the Securities Transfer
Agents Medallion Program, the New York Stock
Exchange Medallion Signature Program or the
Stock Exchanges Medallion Program. Notarized
or witnessed signatures are not acceptable
as guaranteed signatures.
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for the information of the
Certificate Registrar. Distributions shall be made by wire transfer in
immediately available funds to
------------------------------------------------------------------------------
for the account of ___________________________________________________________
account number __________________ or, if mailed by check, to _________________
------------------------------------------------------------------------------
Applicable reports and statements should be mailed to ________________________
------------------------------------------------------------------------------
This information is provided by _________________________________________
the assignee named above, or _______________________________ as its agent.
FORM OF CLASS M2 CERTIFICATE
THIS CERTIFICATE IS A REMIC REGULAR INTEREST CERTIFICATE. THIS
CERTIFICATE DOES NOT EVIDENCE AN OBLIGATION OF, OR AN INTEREST IN, AND IS NOT
GUARANTEED BY, THE DEPOSITOR, THE TRUSTEE, OR ANY AFFILIATE OF ANY OF THEM AND
IS NOT INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR PRIVATE INSURER.
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL AMOUNT OF THIS
CERTIFICATE MAY BE MADE IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE
CERTIFICATE PRINCIPAL AMOUNT OF THIS CERTIFICATE AT ANY TIME MAY BE LESS THAN
THE AMOUNT SHOWN ON THE FACE HEREOF.
THIS CERTIFICATE IS SUBORDINATE IN RIGHT OF PAYMENT AS DESCRIBED IN
THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
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.
NO TRANSFER OF THIS CERTIFICATE SHALL BE REGISTERED UNLESS THE
PROSPECTIVE TRANSFEREE PROVIDES THE TRUSTEE AND THE DEPOSITOR WITH (A) A
CERTIFICATION TO THE EFFECT THAT SUCH TRANSFEREE (1) IS NEITHER AN EMPLOYEE
BENEFIT PLAN SUBJECT TO SECTION 406 OR SECTION 407 OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), THE TRUSTEE OF ANY SUCH
PLAN OR A PERSON ACTING ON BEHALF OF ANY SUCH PLAN NOR A PERSON USING THE ASSETS
OF ANY SUCH PLAN OR (2) IF SUCH TRANSFEREE IS AN INSURANCE COMPANY, SUCH
TRANSFEREE IS PURCHASING SUCH CERTIFICATES WITH FUNDS CONTAINED IN AN "INSURANCE
COMPANY GENERAL ACCOUNT" (AS SUCH TERM IS DEFINED IN SECTION V(e) OF THE
PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 ("PTCE 95-60")) AND THAT THE
PURCHASE AND HOLDING OF SUCH CERTIFICATES ARE COVERED UNDER PTCE 95-60; OR (B)
AN OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE AND THE DEPOSITOR, AND UPON
WHICH THE TRUSTEE AND THE DEPOSITOR SHALL BE ENTITLED TO RELY, TO THE EFFECT
THAT THE PURCHASE OR HOLDING OF SUCH CERTIFICATE BY THE PROSPECTIVE TRANSFEREE
WILL NOT RESULT IN THE ASSETS OF THE TRUST FUND BEING DEEMED TO BE PLAN ASSETS
AND SUBJECT TO THE PROHIBITED TRANSACTION PROVISIONS OF ERISA OR THE CODE AND
WILL NOT SUBJECT THE TRUSTEE OR THE DEPOSITOR TO ANY OBLIGATION IN ADDITION TO
THOSE UNDERTAKEN BY SUCH ENTITIES IN THE POOLING AND SERVICING AGREEMENT, WHICH
OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUST FUND, THE TRUSTEE OR THE
DEPOSITOR.
FINANCE AMERICA SECURITIES, LLC
MORTGAGE LOAN TRUST [ ]
PASS-THROUGH CERTIFICATE, CLASS M2
Evidencing a beneficial interest in a pool consisting
primarily of certain fixed and adjustable rate, fully amortizing and
balloon, conventional, first-lien residential mortgage loans and other
assets in a trust fund established by
FINANCE AMERICA SECURITIES, LLC
Initial Class Initial Certificate
Principal Amount of the Class M2 Principal Amount of this
Certificates: $[ ] Certificate: $[ ]
Certificate Cut-off Date: [ ]
Interest Rate: Variable
Number [ ] CUSIP: [ ]
ISIN: [ ]
Common Code: [ ]
THIS CERTIFIES THAT [ ] is the registered owner of the Percentage
Interest evidenced by this Certificate (obtained by dividing the initial
Certificate Principal Amount of this Certificate by the initial Class Principal
Amount of the Class M1 Certificates, both as specified above) in (i) certain
distributions of principal and interest on certain fixed and adjustable rate,
fully amortizing and balloon, conventional, first lien residential mortgage
loans (the "Mortgage Loans") acquired from Finance America Securities, LLC (the
"Depositor"), a Delaware limited liability company, (ii) such amounts and
investments as from time to time may be held in the Trust Fund established
pursuant to the Pooling and Servicing Agreement (as defined on the reverse
hereof) and (iii) certain other assets, if any, as described in the Pooling and
Servicing Agreement (the foregoing assets hereinafter collectively referred to
as the "Trust Fund").
Distributions on this Certificate will be made on the [25th] day of
each month or, if such a day is not a Business Day, then on the next succeeding
Business Day, commencing in [ ] (each, a "Distribution Date"), to the Person in
whose name this Certificate is registered at the close of business on the last
Business Day of the month immediately preceding the month in which such
Distribution Date occurs (the "Record Date"), in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount, if any,
required to be distributed to all the Certificates of the Class represented by
this Certificate. All sums distributable on this Certificate are payable in the
coin or currency of the United States of America which at the time of payment is
legal tender for the payment of public and private debts.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which shall have the same effect as though
fully set forth on the face of this Certificate.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee, whose name appears below by manual signature, this
Certificate shall not be entitled to any benefit under the Pooling and Servicing
Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
[ ]
as Trustee
By: _________________________________
AUTHORIZED SIGNATORY
Dated:___________________________
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Pooling and Servicing Agreement.
[ ],
as Trustee
By: _________________________________
AUTHORIZED SIGNATORY
Dated:___________________________
FINANCE AMERICA SECURITIES, LLC
MORTGAGE LOAN TRUST [ ]
PASS-THROUGH CERTIFICATE
This Certificate is one of a duly authorized issue of certificates
designated as Finance America Securities, LLC Mortgage Loan Trust [ ]
Pass-Through Certificates (the "Certificates"), representing all or part of a
beneficial ownership interest in a Trust Fund established pursuant to a Pooling
and Servicing Agreement dated as of [ ] (the "Pooling and Servicing Agreement"),
among Finance America Securities, LLC, as Depositor, [ ], as Trustee, and [ ],
as Servicer, to which terms, provisions and conditions thereof the Holder of
this Certificate by virtue of the acceptance hereof assents, and by which such
Holder is bound. The Certificates consist of the following Classes: [the Class A
Certificates (the "Senior Certificates"), the Class M1, Class M2 and Class B
Certificates (the "Subordinate Certificates")] and the Class R Certificate (the
"Residual Certificate").
On each Distribution Date, the Total Distribution Amount for such date
will be distributed from the Certificate Account to Holders of the Certificates
according to the terms of the Pooling and Servicing Agreement. All distributions
or allocations made with respect to each Class of Certificates on each
Distribution Date shall be allocated among the outstanding Certificates of such
Class based on the Percentage Interest of each such Certificate.
Distributions on this Certificate will be made by check mailed to the
Holder of record of this Certificate on the immediately preceding Record Date at
the address of such Holder as it appears on the Certificate Register (except
that with respect to a Certificate registered in the name of a Clearing Agency
or its nominee, distributions will be made by wire transfer of immediately
available funds) or by wire transfer in immediately available funds, upon
written request made to the Trustee or as otherwise permitted by the Trustee.
Wire transfers will be made at the expense of the Holder requesting the same by
deducting a wire transfer fee from the related distribution. The final
distribution on this Certificate will be made, after due notice to the Holder of
the pendency of such distribution, only upon presentation and surrender of this
Certificate at the Corporate Trust Office (as defined below).
The Corporate Trust Office with respect to the presentment and
surrender of Certificates for the final distribution thereon and the presentment
and surrender of the Certificates for any other purpose is the corporate trust
office of the Trustee at [ ], Attention: [ ]. The Trustee may designate another
address from time to time by notice to the Holders of the Certificates and the
Depositor.
The Pooling and Servicing Agreement permits the amendment thereof from
time to time by the Depositor, the Servicer and the Trustee [with the consent of
the Certificate Insurer] for the purpose of adding, changing or eliminating any
provisions of the Pooling and Servicing Agreement or modifying the rights of the
Holders of the Certificates thereunder; PROVIDED, HOWEVER, that (i) no such
amendment may be made unless the Trustee receives an opinion of counsel as to
certain tax matters specified in the Pooling and Servicing Agreement and (ii) no
such amendment may (a) reduce the amount or delay the timing of distributions
required to be made on any Certificate without the consent of the Holder of such
Certificate, or (b) reduce the percentage of aggregate outstanding Percentage
Interest of each Class the Holders of which are required to consent to any such
amendment, without [the Certificate Insurer and] the consent of the Holders of
all Certificates then outstanding. Any consent by the Holder of this Certificate
will be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Pooling and Servicing Agreement also permits the
amendment thereof, in certain limited circumstances, [with the consent of the
Certificate Insurer but] without the consent of the Holders of any of the
Certificates.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, the transfer of this Certificate is
registerable in the Certificate Register upon surrender of this Certificate for
registration of transfer, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to 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 of
authorized denominations evidencing the same initial Certificate Principal
Amount (or Percentage Interest) will be issued to the designated transferee or
transferees. As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, this Certificate is exchangeable for new
Certificates of the same Class evidencing the same aggregate initial Certificate
Principal Amount (or 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 Certificate Registrar may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The [Class A, Class M1, Class M2 and Class B] Certificates are
issuable only in registered form, in minimum denominations of $[25,000] in
initial Certificate Principal Amount and in integral multiples of $1 in excess
thereof registered in the name of the nominee of the Clearing Agency, which
shall maintain such Certificates through its book-entry facilities. The Class R
Certificate will be issued as a single Certificate and maintained in physical
form. The Class R Certificate shall remain outstanding until the latest final
Distribution Date for the Certificates.
The Certificates are subject to optional prepayment in full in
accordance with the Pooling and Servicing Agreement on any Distribution Date on
which the Total Loan Balance is less than [10]% of the Cut-off Date Loan Balance
thereof for an amount as specified in the Pooling and Servicing Agreement. In no
event 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 living at the date of the Pooling and Servicing Agreement of a
certain person named in the Pooling and Servicing Agreement.
The Depositor, the Trustee and the Certificate Registrar and any agent
of any of them may treat the Person in whose name this Certificate is registered
as the owner hereof for all purposes, and neither the Depositor, the Trustee,
nor the Certificate Registrar nor any such agent shall be affected by any notice
to the contrary.
As provided in the Pooling and Servicing Agreement, this Certificate
and the Pooling and Servicing Agreement shall be construed in accordance with
and governed by the laws of the State of New York, without regard to the
conflict of laws principles applied in the State of New York. In the event of
any conflict between the provisions of this Certificate and the Pooling and
Servicing Agreement, the Pooling and Servicing Agreement shall be controlling.
Any term used herein and not otherwise defined shall be as defined in the
Pooling and Servicing Agreement.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s) and assign(s) and
transfer(s) unto
------------------------------------------------------------------------------
------------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee
and social security number or employer identification number)
------------------------------------------------------------------------------
the within Certificate stating in the names of the undersigned in the
Certificate Register and does hereby irrevocably constitute and appoint
------------------------------------------------------------------------------
to transfer such Certificate in such Certificate Register of the Trust.
I [we] further direct the Certificate Registrar to issue a new Certificate of
the same Class of like principal to the above-named assignee and deliver such
Certificate to the following address:
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Dated:____________________ __________________________________________
Signature by or on behalf of Assignor
__________________________ __________________________________________
Authorized Officer Signature Guaranteed
__________________________ __________________________________________
Name of Institution NOTICE: The signature(s) of this
assignment must correspond with the name(s)
on the face of this Certificate without
alteration or any change whatsoever. The
signature must be guaranteed by a participant
in the Securities Transfer Agents Medallion
Program, the New York Stock Exchange
Medallion Signature Program or the Stock
Exchanges Medallion Program. Notarized or
witnessed signatures are not acceptable as
guaranteed signatures.
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for the information of the
Certificate Registrar. Distributions shall be made by wire transfer in
immediately available funds to
------------------------------------------------------------------------------
for the account of ___________________________________________________________
account number ______________ or, if mailed by check, to _____________________
------------------------------------------------------------------------------
Applicable reports and statements should be mailed to ________________________
------------------------------------------------------------------------------
This information is provided by ___________________________________________
the assignee named above, or ____________________________________ as its agent.
FORM OF CLASS B CERTIFICATE
THIS CERTIFICATE IS A REMIC REGULAR INTEREST CERTIFICATE. THIS
CERTIFICATE DOES NOT EVIDENCE AN OBLIGATION OF, OR AN INTEREST IN, AND IS NOT
GUARANTEED BY, THE DEPOSITOR, THE TRUSTEE, OR ANY AFFILIATE OF ANY OF THEM AND
IS NOT INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR PRIVATE INSURER.
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL AMOUNT OF THIS
CERTIFICATE MAY BE MADE IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE
CERTIFICATE PRINCIPAL AMOUNT OF THIS CERTIFICATE AT ANY TIME MAY BE LESS THAN
THE AMOUNT SHOWN ON THE FACE HEREOF.
THIS CERTIFICATE IS SUBORDINATE IN RIGHT OF PAYMENT AS DESCRIBED IN
THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
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.
NO TRANSFER OF THIS CERTIFICATE SHALL BE REGISTERED UNLESS THE
PROSPECTIVE TRANSFEREE PROVIDES THE TRUSTEE AND THE DEPOSITOR WITH (A) A
CERTIFICATION TO THE EFFECT THAT SUCH TRANSFEREE (1) IS NEITHER AN EMPLOYEE
BENEFIT PLAN SUBJECT TO SECTION 406 OR SECTION 407 OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), THE TRUSTEE OF ANY SUCH
PLAN OR A PERSON ACTING ON BEHALF OF ANY SUCH PLAN NOR A PERSON USING THE ASSETS
OF ANY SUCH PLAN OR (2) IF SUCH TRANSFEREE IS AN INSURANCE COMPANY, SUCH
TRANSFEREE IS PURCHASING SUCH CERTIFICATES WITH FUNDS CONTAINED IN AN "INSURANCE
COMPANY GENERAL ACCOUNT" (AS SUCH TERM IS DEFINED IN SECTION V(e) OF THE
PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 ("PTCE 95-60")) AND THAT THE
PURCHASE AND HOLDING OF SUCH CERTIFICATES ARE COVERED UNDER PTCE 95-60; OR (B)
AN OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE AND THE DEPOSITOR, AND UPON
WHICH THE TRUSTEE AND THE DEPOSITOR SHALL BE ENTITLED TO RELY, TO THE EFFECT
THAT THE PURCHASE OR HOLDING OF SUCH CERTIFICATE BY THE PROSPECTIVE TRANSFEREE
WILL NOT RESULT IN THE ASSETS OF THE TRUST FUND BEING DEEMED TO BE PLAN ASSETS
AND SUBJECT TO THE PROHIBITED TRANSACTION PROVISIONS OF ERISA OR THE CODE AND
WILL NOT SUBJECT THE TRUSTEE OR THE DEPOSITOR TO ANY OBLIGATION IN ADDITION TO
THOSE UNDERTAKEN BY SUCH ENTITIES IN THE POOLING AND SERVICING AGREEMENT, WHICH
OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUST FUND, THE TRUSTEE OR THE
DEPOSITOR.
FINANCE AMERICA SECURITIES, LLC
MORTGAGE LOAN TRUST [ ]
PASS-THROUGH CERTIFICATE, CLASS B
Evidencing a beneficial interest in a pool consisting
primarily of certain fixed and adjustable rate, fully amortizing and
balloon, conventional, first-lien residential mortgage loans and other
assets in a trust fund established by
FINANCE AMERICA SECURITIES, LLC
Initial Class Initial Certificate
Principal Amount of the Class B Principal Amount of this
Certificates: $[ ] Certificate: $[ ]
Certificate Cut-off Date: [ ]
Interest Rate: Variable
Number [ ] CUSIP: [ ]
ISIN: [ ]
Common Code: [ ]
THIS CERTIFIES THAT [ ] is the registered owner of the Percentage
Interest evidenced by this Certificate (obtained by dividing the initial
Certificate Principal Amount of this Certificate by the initial Class Principal
Amount of the Class B Certificates, both as specified above) in (i) certain
distributions of principal and interest on certain fixed and adjustable rate,
fully amortizing and balloon, conventional, first lien residential mortgage
loans (the "Mortgage Loans") acquired from Finance America Securities, LLC (the
"Depositor"), a Delaware limited liability company, (ii) such amounts and
investments as from time to time may be held in the Trust Fund established
pursuant to the Pooling and Servicing Agreement (as defined on the reverse
hereof) and (iii) certain other assets, if any, as described in the Pooling and
Servicing Agreement (the foregoing assets hereinafter collectively referred to
as the "Trust Fund").
Distributions on this Certificate will be made on the [25th] day of
each month or, if such a day is not a Business Day, then on the next succeeding
Business Day, commencing in [ ] (each, a "Distribution Date"), to the Person in
whose name this Certificate is registered at the close of business on the last
Business Day of the month immediately preceding the month in which such
Distribution Date occurs (the "Record Date"), in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount, if any,
required to be distributed to all the Certificates of the Class represented by
this Certificate. All sums distributable on this Certificate are payable in the
coin or currency of the United States of America which at the time of payment is
legal tender for the payment of public and private debts.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which shall have the same effect as though
fully set forth on the face of this Certificate.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee, whose name appears below by manual signature, this
Certificate shall not be entitled to any benefit under the Pooling and Servicing
Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
[ ],
as Trustee
By: _________________________________
AUTHORIZED SIGNATORY
Dated: ________________________
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Pooling and Servicing Agreement.
[ ],
as Trustee
By: _________________________________
AUTHORIZED SIGNATORY
Dated: ________________________
FINANCE AMERICA SECURITIES, LLC
MORTGAGE LOAN TRUST [ ]
PASS-THROUGH CERTIFICATE
This Certificate is one of a duly authorized issue of certificates
designated as Finance America Securities, LLC Mortgage Loan Trust [ ]
Pass-Through Certificates (the "Certificates"), representing all or part of a
beneficial ownership interest in a Trust Fund established pursuant to a Pooling
and Servicing Agreement dated as of [ ] (the "Pooling and Servicing Agreement"),
among Finance America Securities, LLC, as Depositor, [ ], as Trustee, and [ ],
as Servicer, to which terms, provisions and conditions thereof the Holder of
this Certificate by virtue of the acceptance hereof assents, and by which such
Holder is bound. The Certificates consist of the following Classes: [the Class A
Certificates (the "Senior Certificates"), the Class M1, Class M2 and Class B
Certificates (the "Subordinate Certificates")] and the Class R Certificate (the
"Residual Certificate").
On each Distribution Date, the Total Distribution Amount for such date
will be distributed from the Certificate Account to Holders of the Certificates
according to the terms of the Pooling and Servicing Agreement. All distributions
or allocations made with respect to each Class of Certificates on each
Distribution Date shall be allocated among the outstanding Certificates of such
Class based on the Percentage Interest of each such Certificate.
Distributions on this Certificate will be made by check mailed to the
Holder of record of this Certificate on the immediately preceding Record Date at
the address of such Holder as it appears on the Certificate Register (except
that with respect to a Certificate registered in the name of a Clearing Agency
or its nominee, distributions will be made by wire transfer of immediately
available funds) or by wire transfer in immediately available funds, upon
written request made to the Trustee or as otherwise permitted by the Trustee.
Wire transfers will be made at the expense of the Holder requesting the same by
deducting a wire transfer fee from the related distribution. The final
distribution on this Certificate will be made, after due notice to the Holder of
the pendency of such distribution, only upon presentation and surrender of this
Certificate at the Corporate Trust Office (as defined below).
The Corporate Trust Office with respect to the presentment and
surrender of Certificates for the final distribution thereon and the presentment
and surrender of the Certificates for any other purpose is the corporate trust
office of the Trustee at [ , Attention: [ ]. The Trustee may designate another
address from time to time by notice to the Holders of the Certificates and the
Depositor.
The Pooling and Servicing Agreement permits the amendment thereof from
time to time by the Depositor, the Servicer and the Trustee [with the consent of
the Certificate Insurer] for the purpose of adding, changing or eliminating any
provisions of the Pooling and Servicing Agreement or modifying the rights of the
Holders of the Certificates thereunder; PROVIDED, HOWEVER, that (i) no such
amendment may be made unless the Trustee receives an opinion of counsel as to
certain tax matters specified in the Pooling and Servicing Agreement and (ii) no
such amendment may (a) reduce the amount or delay the timing of distributions
required to be made on any Certificate without the consent of the Holder of such
Certificate, or (b) reduce the percentage of aggregate outstanding Percentage
Interest of each Class the Holders of which are required to consent to any such
amendment, without [the Certificate Insurer and] the consent of the Holders of
all Certificates then outstanding. Any consent by the Holder of this Certificate
will be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Pooling and Servicing Agreement also permits the
amendment thereof, in certain limited circumstances, [with the consent of the
Certificate Insurer but] without the consent of the Holders of any of the
Certificates.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, the transfer of this Certificate is
registerable in the Certificate Register upon surrender of this Certificate for
registration of transfer, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to 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 of
authorized denominations evidencing the same initial Certificate Principal
Amount (or Percentage Interest) will be issued to the designated transferee or
transferees. As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, this Certificate is exchangeable for new
Certificates of the same Class evidencing the same aggregate initial Certificate
Principal Amount (or 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 Certificate Registrar may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The [Class A, Class M1, Class M2 and Class B] Certificates are
issuable only in registered form, in minimum denominations of $[25,000] in
initial Certificate Principal Amount and in integral multiples of $1 in excess
thereof registered in the name of the nominee of the Clearing Agency, which
shall maintain such Certificates through its book-entry facilities. The Class R
Certificate will be issued as a single Certificate and maintained in physical
form. The Class R Certificate shall remain outstanding until the latest final
Distribution Date for the Certificates.
The Certificates are subject to optional prepayment in full in
accordance with the Pooling and Servicing Agreement on any Distribution Date on
which the Total Loan Balance is less than [10]% of the Cut-off Date Loan Balance
thereof for an amount as specified in the Pooling and Servicing Agreement. In no
event 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 living at the date of the Pooling and Servicing Agreement of a
certain person named in the Pooling and Servicing Agreement.
The Depositor, the Trustee and the Certificate Registrar and any agent
of any of them may treat the Person in whose name this Certificate is registered
as the owner hereof for all purposes, and neither the Depositor, the Trustee,
nor the Certificate Registrar nor any such agent shall be affected by any notice
to the contrary.
As provided in the Pooling and Servicing Agreement, this Certificate
and the Pooling and Servicing Agreement shall be construed in accordance with
and governed by the laws of the State of New York, without regard to the
conflict of laws principles applied in the State of New York. In the event of
any conflict between the provisions of this Certificate and the Pooling and
Servicing Agreement, the Pooling and Servicing Agreement shall be controlling.
Any term used herein and not otherwise defined shall be as defined in the
Pooling and Servicing Agreement.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s) and assign(s) and
transfer(s) unto
------------------------------------------------------------------------------
------------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee
and social security number or employer identification number)
------------------------------------------------------------------------------
the within Certificate stating in the names of the undersigned in the
Certificate Register and does hereby irrevocably constitute and appoint
------------------------------------------------------------------------------
to transfer such Certificate in such Certificate Register of the Trust.
I [we] further direct the Certificate Registrar to issue a new Certificate of
the same Class of like principal to the above-named assignee and deliver such
Certificate to the following address:
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Dated:____________________ __________________________________________
Signature by or on behalf of Assignor
__________________________ __________________________________________
Authorized Officer Signature Guaranteed
__________________________ __________________________________________
Name of Institution NOTICE: The signature(s) of this
assignment must correspond with the name(s)
on the face of this Certificate without
alteration or any change whatsoever. The
signature must be guaranteed by a
participant in the Securities Transfer
Agents Medallion Program, the New York Stock
Exchange Medallion Signature Program or the
Stock Exchanges Medallion Program. Notarized
or witnessed signatures are not acceptable
as guaranteed signatures.
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for the information of the
Certificate Registrar. Distributions shall be made by wire transfer in
immediately available funds to
------------------------------------------------------------------------------
for the account of ___________________________________________________________
account number ______________ or, if mailed by check, to _____________________
------------------------------------------------------------------------------
Applicable reports and statements should be mailed to ________________________
-----------------------------------------------------------------------------
This information is provided by _____________________________________________
the assignee named above, or ____________________________________ as its agent.
EXHIBIT B-2
FORM OF RESIDUAL CERTIFICATE
THIS CERTIFICATE IS A REMIC RESIDUAL INTEREST CERTIFICATE. THIS
CERTIFICATE DOES NOT EVIDENCE AN OBLIGATION OF, OR AN INTEREST IN, AND IS NOT
GUARANTEED BY, THE DEPOSITOR, THE TRUSTEE, OR ANY AFFILIATE OF ANY OF THEM AND
IS NOT INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR PRIVATE INSURER.
THIS CERTIFICATE IS NOT ENTITLED TO DISTRIBUTIONS OF PRINCIPAL AND
WILL NOT ACCRUE INTEREST. THE HOLDER OF THIS CERTIFICATE WILL BE ENTITLED ONLY
TO CERTAIN LIMITED DISTRIBUTIONS AS PROVIDED IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE IS SUBORDINATE IN RIGHT OF PAYMENT AS DESCRIBED IN
THE POOLING AND SERVICING AGREEMENT.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "1933 ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
CERTIFICATE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION, UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS CERTIFICATE BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH CERTIFICATE ONLY (A) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE 1933 ACT, (B)
TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS
DEFINED IN RULE 144A UNDER THE 1933 ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT
THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A UNDER THE 1933 ACT, (C) TO
AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH
(A)(1), (2), (3) OR (7) OF RULE 501 UNDER THE 1933 ACT THAT IS ACQUIRING THE
CERTIFICATE FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
"ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR
OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE 1933 ACT
OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE 1933 ACT, SUBJECT TO THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH
OFFER, SALE OR TRANSFER TO REQUIRE THE DELIVERY OF A CERTIFICATE OF TRANSFER IN
THE FORM APPEARING IN THE POOLING AND SERVICING AGREEMENT.
NEITHER THIS CERTIFICATE, NOR ANY BENEFICIAL INTEREST IN THIS
CERTIFICATE, MAY BE TRANSFERRED, SOLD, PLEDGED, OR OTHERWISE DISPOSED OF UNLESS
PRIOR TO SUCH DISPOSITION, THE PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE AN
AFFIDAVIT STATING (A) THAT THE PROPOSED TRANSFEREE IS NOT A "DISQUALIFIED
ORGANIZATION" WITHIN THE MEANING OF SECTION 860E(E)(5) OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE "CODE") AND IS NOT PURCHASING THE CERTIFICATE ON
BEHALF OF A DISQUALIFIED ORGANIZATION, (B) THAT THE PROPOSED TRANSFEREE (1) IS
NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), (2) IS NOT INVESTING THE ASSETS OF ANY SUCH
PLAN, (3) IS NOT A PLAN SUBJECT TO CODE SECTION 4975 OR (4) A PERSON OR ENTITY
THAT IS USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR OTHER PLAN TO ACQUIRE
THIS CERTIFICATE, (C) THAT NO PURPOSE OF SUCH TRANSFER IS TO AVOID OR IMPEDE THE
ASSESSMENT OR COLLECTION OF TAX, AND (D) IN THE CASE OF A NON-U.S. PERSON, IS A
NON-U.S. PERSON THAT HOLDS A RESIDUAL CERTIFICATE IN CONNECTION WITH THE CONDUCT
OF A TRADE OR BUSINESS WITHIN THE UNITED STATES AND HAS FURNISHED THE TRANSFEROR
AND THE TRUSTEE WITH AN EFFECTIVE INTERNAL REVENUE SERVICE FORM 4224 OR
SUCCESSOR FORM AT THE TIME AND IN THE MANNER REQUIRED BY THE CODE. IN ADDITION,
THIS CERTIFICATE MAY NOT BE HELD BY A NOMINEE.
FINANCE AMERICA SECURITIES, LLC
MORTGAGE LOAN TRUST [ ]
PASS-THROUGH CERTIFICATE, CLASS R
Evidencing a beneficial interest in a pool consisting
primarily of certain fixed and adjustable rate, fully amortizing and
balloon, conventional, first lien residential mortgage loans and other
assets in a trust fund established by
FINANCE AMERICA SECURITIES, LLC
Percentage Interest: 100% Cut-off Date: [ ]
Number [ ]
THIS CERTIFIES THAT [ ] is the registered owner of the Percentage
Interest evidenced by this Certificate in (i) certain distributions of amounts
in respect of certain fixed and adjustable rate, fully amortizing and balloon,
conventional, first lien residential mortgage loans (the "Mortgage Loans")
acquired from Finance America Securities, LLC (the "Depositor"), a Delaware
corporation, (ii) such amounts and investments as from time to time may be held
in the Trust Fund established pursuant to the Pooling and Servicing Agreement
(as defined on the reverse hereof) and (iii) certain other assets, if any, as
described in the Pooling and Servicing Agreement (the foregoing assets
hereinafter collectively referred to as the "Trust Fund").
Distributions on this Certificate will be made on the [25th] day of
each month or, if such a day is not a Business Day, then on the next succeeding
Business Day, commencing in [ ] (each, a "Distribution Date"), to the Person in
whose name this Certificate is registered at the close of business on the last
Business Day of the month immediately preceding the month in which such
Distribution Date occurs (the "Record Date"), in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount, if any,
required to be distributed to all the Certificates of the Class represented by
this Certificate. All sums distributable on this Certificate are payable in the
coin or currency of the United States of America which at the time of payment is
legal tender for the payment of public and private debts.
Solely for federal income tax purposes, and for no other purpose, the
Class R Certificate shall evidence ownership of the Basis Risk Reserve Fund.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which shall have the same effect as though
fully set forth on the face of this Certificate.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee, whose name appears below by manual signature, this
Certificate shall not be entitled to any benefit under the Pooling and Servicing
Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
[ ],
as Trustee
By: __________________________________
AUTHORIZED SIGNATORY
Dated: ___________________________
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Pooling and Servicing Agreement.
[ ],
as Trustee
By: __________________________________
AUTHORIZED SIGNATORY
Dated: ___________________________
FINANCE AMERICA SECURITIES, LLC
MORTGAGE LOAN TRUST [ ]
PASS-THROUGH CERTIFICATE
This Certificate is one of a duly authorized issue of certificates
designated as Finance America Securities, LLC Mortgage Loan Trust [ ]
Pass-Through Certificates (the "Certificates"), representing all or part of a
beneficial ownership interest in a Trust Fund established pursuant to a Pooling
and Servicing Agreement dated as of [ ] (the "Pooling and Servicing Agreement"),
among Finance America Securities, LLC, as Depositor, [ ], as Trustee, and [ ],
as Servicer, to which terms, provisions and conditions thereof the Holder of
this Certificate by virtue of the acceptance hereof assents, and by which such
Holder is bound. The Certificates consist of the following Classes: [the Class A
Certificates (the "Senior Certificates"), the Class M1, Class M2 and Class B
Certificates (the "Subordinate Certificates")] and the Class R Certificate (the
"Residual Certificate").
On each Distribution Date, the Total Distribution Amount for such date
will be distributed from the Certificate Account to Holders of the Certificates
according to the terms of the Pooling and Servicing Agreement. All distributions
or allocations made with respect to each Class of Certificates on each
Distribution Date shall be allocated among the outstanding Certificates of such
Class based on the Percentage Interest of each such Certificate.
Distributions on this Certificate will be made by check mailed to the
Holder of record of this Certificate on the immediately preceding Record Date at
the address of such Holder as it appears on the Certificate Register (except
that with respect to a Certificate registered in the name of a Clearing Agency
or its nominee, distributions will be made by wire transfer of immediately
available funds) or by wire transfer in immediately available funds, upon
written request made to the Trustee or as otherwise permitted by the Trustee.
Wire transfers will be made at the expense of the Holder requesting the same by
deducting a wire transfer fee from the related distribution. The final
distribution on this Certificate will be made, after due notice to the Holder of
the pendency of such distribution, only upon presentation and surrender of this
Certificate at the Corporate Trust Office (as defined below).
The Corporate Trust Office with respect to the presentment and
surrender of Certificates for the final distribution thereon and the presentment
and surrender of the Certificates for any other purpose is the corporate trust
office of the Trustee at [ , Attention: [ ]. The Trustee may designate another
address from time to time by notice to the Holders of the Certificates and the
Depositor.
The Pooling and Servicing Agreement permits the amendment thereof from
time to time by the Depositor, the Servicer and the Trustee [with the consent of
the Certificate Insurer] for the purpose of adding, changing or eliminating any
provisions of the Pooling and Servicing Agreement or modifying the rights of the
Holders of the Certificates thereunder; PROVIDED, HOWEVER, that (i) no such
amendment may be made unless the Trustee receives an opinion of counsel as to
certain tax matters specified in the Pooling and Servicing Agreement and (ii) no
such amendment may (a) reduce the amount or delay the timing of distributions
required to be made on any Certificate without the consent of [the Certificate
Insurer and] the Holder of such Certificate, or (b) reduce the percentage of
aggregate outstanding Percentage Interest of each Class the Holders of which are
required to consent to any such amendment, without the consent of the Holders of
all Certificates then outstanding. Any consent by the Holder of this Certificate
will be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Pooling and Servicing Agreement also permits the
amendment thereof, in certain limited circumstances, [with the consent of the
Certificate Insurer but] without the consent of the Holders of any of the
Certificates.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, the transfer of this Certificate is
registerable in the Certificate Register upon surrender of this Certificate for
registration of transfer, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to 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 of
authorized denominations evidencing the same initial Certificate Principal
Amount (or Percentage Interest) will be issued to the designated transferee or
transferees. As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, this Certificate is exchangeable for new
Certificates of the same Class evidencing the same aggregate initial Certificate
Principal Amount (or 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 Certificate Registrar may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The [Class A, Class M1, Class M2 and Class B] Certificates are
issuable only in registered form, in minimum denominations of [$25,000] in
initial Certificate Principal Amount and in integral multiples of $1 in excess
thereof registered in the name of the nominee of the Clearing Agency, which
shall maintain such Certificates through its book-entry facilities. The Class R
Certificate will be issued as a single Certificate and maintained in physical
form. The Class R Certificate shall remain outstanding until the latest final
Distribution Date for the Certificates.
The Certificates are subject to optional prepayment in full in
accordance with the Pooling and Servicing Agreement on any Distribution Date on
which the Total Loan Balance is less than [10%] of the Cut-off Date Loan Balance
thereof for an amount as specified in the Pooling and Servicing Agreement. In no
event 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 living at the date of the Pooling and Servicing Agreement of a
certain person named in the Pooling and Servicing Agreement.
The Depositor, the Trustee and the Certificate Registrar and any agent
of any of them may treat the Person in whose name this Certificate is registered
as the owner hereof for all purposes, and neither the Depositor, the Trustee,
nor the Certificate Registrar nor any such agent shall be affected by any notice
to the contrary.
As provided in the Pooling and Servicing Agreement, this Certificate
and the Pooling and Servicing Agreement shall be construed in accordance with
and governed by the laws of the State of New York, without regard to the
conflict of laws principles applied in the State of New York. In the event of
any conflict between the provisions of this Certificate and the Pooling and
Servicing Agreement, the Pooling and Servicing Agreement shall be controlling.
Any term used herein and not otherwise defined shall be as defined in the
Pooling and Servicing Agreement.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s) and assign(s) and
transfer(s) unto
------------------------------------------------------------------------------
------------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee
and social security number or employer identification number)
------------------------------------------------------------------------------
the within Certificate stating in the names of the undersigned in the
Certificate Register and does hereby irrevocably constitute and appoint
------------------------------------------------------------------------------
to transfer such Certificate in such Certificate Register of the Trust.
I [we] further direct the Certificate Registrar to issue a new Certificate of
the same Class of like principal to the above-named assignee and deliver such
Certificate to the following address:
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Dated:____________________ __________________________________________
Signature by or on behalf of Assignor
_________________________ __________________________________________
Authorized Officer Signature Guaranteed
_________________________ __________________________________________
Name of Institution NOTICE: The signature(s) of this
assignment must correspond with the name(s)
on the face of this Certificate without
alteration or any change whatsoever. The
signature must be guaranteed by a
participant in the Securities Transfer
Agents Medallion Program, the New York Stock
Exchange Medallion Signature Program or the
Stock Exchanges Medallion Program. Notarized
or witnessed signatures are not acceptable
as guaranteed signatures.
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for the information of the
Certificate Registrar. Distributions shall be made by wire transfer in
immediately available funds to
------------------------------------------------------------------------------
for the account of ___________________________________________________________
account number ______________ or, if mailed by check, to _____________________
------------------------------------------------------------------------------
Applicable reports and statements should be mailed to ________________________
------------------------------------------------------------------------------
This information is provided by ______________________________________________
the assignee named above, or ____________________________________ as its agent.
EXHIBIT C
MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items (copies to the extent the originals have been
delivered to the Trustee or the Custodian on behalf of the Trustee pursuant to
Section 2.03 of the Agreement), all of which shall be available for inspection
by the Certificateholders [and the Certificate Insurer], to the extent required
by applicable laws:
(i) The original Mortgage Note bearing all intervening
endorsements showing a complete chain of endorsements from the
originator of such Mortgage Loan to the Originator, endorsed by the
Originator without recourse in the following form: "Pay to the order
of __________________, without recourse" and signed manually or by
facsimile in the name of the Originator by an authorized officer;
(ii) The original Mortgage with evidence of recording indicated
thereon;
(iii) An original assignment of the Mortgage, in form acceptable
for recordation in the jurisdiction in which the related Mortgaged
Property is located (except for the assignee's name and recordation
information not yet received), such assignment to be in blank and
signed in the name of the Originator by an authorized officer;
(iv) The originals of all intervening assignments of the Mortgage
(with evidence of recording thereon) showing a complete chain of
assignments from the originator of such Mortgage Loan to the
Originator;
(v) Any assumption, modification, consolidation or extension
agreements (with evidence of recording thereon);
(vi) The original policy of title insurance (or the original
commitment for title insurance, if the policy is being held by the
title insurance company pending recordation of the Mortgage); and
(vii) The certificate of primary mortgage guaranty insurance, if
any, issued with respect to such Mortgage Loan.
EXHIBIT D
MORTGAGE LOAN SCHEDULE
EXHIBIT E
ACKNOWLEDGMENT OF RECEIPT
___________, 1999
Finance America Securities, LLC
[address]
[Servicer]
[address]
[Certificate Insurer]
[address]
Re: Pooling and Servicing Agreement, dated as of ______________ among
Finance America Securities, LLC, as Depositor, _________________,
as Servicer, and _______________________, as Trustee,
Certificates, Series ___________
Ladies and Gentlemen:
In accordance with Section 2.04 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as [Custodian], hereby certifies: except
as noted on the attachment hereto, if any (the "Loan Exception Report"), it has
received the original Mortgage Note (item (i) in Section 2.03(a)) with respect
to each Mortgage Loan listed in the Mortgage Loan Schedule and , subject to the
review provided in Section 2.04 of the Pooling and Servicing Agreement, the
other documents in the Mortgage File, and the documents contained therein appear
to bear original or facsimile signatures or copies of originals if the originals
have not yet been delivered.
The [Custodian] has made no independent examination of any such
documents beyond the review specifically required in the above-referenced
Pooling and Servicing Agreement. The [Custodian] makes no representations as to:
(i) the validity, legality, sufficiency, enforceability or genuineness of any
such documents or any of the Mortgage Loans identified on the Mortgage Loan
Schedule, or (ii) the collectability, insurability, effectiveness or suitability
of any such Mortgage Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
______________________
as [Custodian]
By: ______________________________
Name:
Title:
EXHIBIT F
INITIAL CERTIFICATION
__________________, 1999
Finance America Securities, LLC
[address]
[Servicer]
[address]
[Certificate Insurer]
[address]
Re: Pooling and Servicing Agreement, dated as of ______________
among Finance America Securities, LLC, as Depositor,
_____________________, as Servicer, and _____________________,
as Trustee, Certificates, Series ___________
Ladies and Gentlemen:
In accordance with the provisions of Section 2.04 of the above-
referenced Pooling and Servicing Agreement, the undersigned, as [Custodian],
hereby certifies that, except as noted on the attached exception report, as to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage
Loan paid in full or any Mortgage Loan listed on the attachment hereto), it has
reviewed the documents delivered to it pursuant to Section 2.03 of the Pooling
and Servicing Agreement and has determined that (i) all documents required to be
delivered to it pursuant to the above-referenced Pooling and Servicing Agreement
are in its possession, (ii) such documents have been reviewed by it and appear
regular on their face and have not been mutilated, damaged, torn or otherwise
physically altered and relate to such Mortgage Loan, (iii) based on its
examination and only as to the foregoing documents, the information set forth in
the Mortgage Loan Schedule (described in items (i), (ii), (v), (vi), (x), (xi)
and (xiii) of the definition of Mortgage Loan Schedule) respecting such Mortgage
Loan accurately reflects the information set forth in the Mortgage File with
respect to the Servicer's loan number, maturity date, original principal
balance, first payment date and original term to maturity and (iv) each Mortgage
Note has been endorsed as provided in Section 2.03 of the Pooling and Servicing
Agreement. The [Custodian] has made no independent examination of such documents
beyond the review specifically required in the above-referenced Pooling and
Servicing Agreement. The [Custodian] makes no representations as to: (i) the
validity, legality, enforceability or genuineness of any such documents
contained in each or any of the Mortgage Loans identified on the Mortgage Loan
Schedule, or (ii) the collectability, insurability, effectiveness or suitability
of any such Mortgage Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
____________________________________
as [Custodian]
By: ________________________________
Name:
Title:
EXHIBIT G
FINAL CERTIFICATION
_____________, 19__
Finance America Securities, LLC
[address]
[Servicer]
[address]
[Certificate Insurer]
[address]
Re: Pooling and Servicing Agreement, dated as of ______________
among Finance America Securities, LLC, as Depositor,
_____________________, as Servicer, and _______________________,
as Trustee, Certificates, Series ___________
Ladies and Gentlemen:
In accordance with Section 2.04 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as [Custodian], hereby certifies that,
except as noted on the attachment hereto, as to each Mortgage Loan listed in the
Mortgage Loan Schedule (other than any Mortgage Loan paid in full or listed on
the attachment hereto) it has reviewed the documents delivered to it pursuant to
Section 2.03 of the Pooling and Servicing Agreement and has determined that (i)
all documents required to be delivered to it pursuant to the above-referenced
Pooling and Servicing Agreement are in its possession, (ii) such documents have
been reviewed by it and appear regular on their face and have not been
mutilated, damaged, torn or otherwise physically altered and relate to such
Mortgage Loan, and (iii) based on its examination, and only as to the foregoing
documents, the information set forth in the Mortgage Loan Schedule (described in
items (i), (ii), (v), (vi), (x), (xi) and (xiii) of the definition of Mortgage
Loan Schedule) respecting such Mortgage Loan accurately reflects the information
set forth in the Mortgage File with respect to the Servicer's loan number,
maturity date, original principal balance, first payment date and original term
to maturity. The [Custodian] has made no independent examination of such
documents beyond the review specifically required in the above-referenced
Pooling and Servicing Agreement. The [Custodian] makes no representations as to:
(i) the validity, legality, enforceability or genuineness of any such documents
contained in each or any of the Mortgage Loans identified on the Mortgage Loan
Schedule, or (ii) the collectability, insurability, effectiveness or suitability
of any such Mortgage Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
____________________________________
as [Custodian]
By: ________________________________
Name:
Title:
EXHIBIT H
REQUEST FOR RELEASE OF DOCUMENTS
_____________, 19__
To: [Custodian]
Re: Finance America Securities, LLC, Certificates, Series ___________
In connection with the administration of the pool of Mortgage Loans
held by you as [Custodian], we request the release, and acknowledge receipt, of
the (Mortgage File/[specify document]) for the Mortgage Loan described below,
for the reason indicated.
MORTGAGOR'S NAME, ADDRESS & ZIP CODE:
MORTGAGE LOAN NUMBER:
REASON FOR REQUESTING DOCUMENTS (check one)
_____ 1. Mortgage Loan Paid in Full (Servicer hereby certifies that all amounts
received in connection therewith have been credited to the Collection Account.)
_____ 2. Mortgage Loan Liquidated (Servicer hereby certifies that all proceeds
of foreclosure, insurance or other liquidation have been finally received and
credited to the Collection Account.)
_____ 3. Mortgage Loan in foreclosure _____
_____ 4. Mortgage Loan purchased pursuant to Section 5.18, 5.30 or 8.01 of the
Pooling and Servicing Agreement, and the Servicer hereby certifies that the
applicable Loan Purchase Price or Termination Price has been credited to the
Collection Account.
_____ 5. Mortgage Loan purchased or substituted pursuant to Article II or III of
the Pooling and Servicing Agreement (Servicer hereby certifies that the
repurchase price or Substitution Adjustment has been credited to the Collection
Account and that the substituted mortgage loan is a Qualified Substitute
Mortgage Loan.)
_____ 6. Other (explain)
If box 1, 2, 4 or 5 above is checked, and if all or part of the
Mortgage File was previously released to us, please release to us our previous
receipt on file with you, as well as any additional documents in your possession
relating to the above specified Mortgage Loan.
If item 3 or 6 above is checked, upon our return of all of the above
documents to you as Trustee, please acknowledge your receipt by signing in the
space indicated below, and returning this form.
By: _____________________________________
Name:
Title:
Documents returned to [Custodian]:
Trustee
By: ________________________________
Date:
EXHIBIT I
FORM OF TRANSFER AFFIDAVIT AND AGREEMENT
State of _________________ )
)ss.:
County of ________________ )
[NAME OF OFFICER], being first duly sworn, deposes and says:
1. That he is [Title of Officer] of [Name of Purchaser] (record or
beneficial owner of the [Asset Backed] Certificates, Series 199__-__, Class R
(the "Purchaser")), a [savings institution] [corporation] duly organized and
existing under the laws of [the State of __________________] [the United
States], on behalf of which he makes this affidavit and agreement.
2. That the Purchaser (i) is not and will not be a "disqualified
organization" as of [date of transfer] within the meaning of Section 860E(e)(5)
of the Internal Revenue Code of 1986, as amended (the "Code"), (ii) will
endeavor to remain other than a disqualified organization for so long as it
retains its ownership interest in the Class R Certificates, and (iii) is
acquiring the Class R Certificates for its own account or for the account of
another Purchaser from which it has received an affidavit and agreement in
substantially the same form as this affidavit and agreement. (For this purpose,
a "disqualified organization" means the United States, any state or political
subdivision thereof, any agency or instrumentality of any of the foregoing
(other than an instrumentality all of the activities of which are subject to tax
and, except for the Federal Home Loan Mortgage Corporation, a majority of whose
board of directors is not selected by any such governmental entity) or any
foreign government, international organization or any agency or instrumentality
of such foreign government or organization, any rural electric or telephone
cooperative, or any organization (other than certain farmers' cooperatives) that
is generally exempt from federal income tax unless such organization is subject
to the tax on unrelated business taxable income).
3. That the Purchaser is aware (i) of the tax that would be imposed on
transfers of Class R Certificates to disqualified organizations under the Code,
that applies to all transfers of Class R Certificates after March 31, 1988; (ii)
that such tax would be on the transferor, or, if such transfer is through an
agent (which person includes a broker, nominee or middleman) for a disqualified
organization, on the agent; (iii) that the person otherwise liable for the tax
shall be relieved of liability for the tax if the transferee furnishes to such
person an affidavit that the transferee is not a disqualified organization and,
at the time of transfer, such person does not have actual knowledge that the
affidavit is false; and (iv) that the Class [R] Certificates may be "noneconomic
residual interests" within the meaning of Treasury regulations promulgated
pursuant to the Code and that the transferor of a noneconomic residual interest
will remain liable for any taxes due with respect to the income on such residual
interest, unless no significant purpose of the transfer was to impede the
assessment or collection of tax.
4. That the Purchaser is aware that the Trustee will not register the
transfer of any Class R Certificates unless the transferee, or the transferee's
agent, delivers to it an affidavit and agreement, among other things, in
substantially the same form as this affidavit and agreement. The Purchaser
expressly agrees that it will not consummate any such transfer if it knows or
believes that any of the representations contained in such affidavit and
agreement are false.
5. That the Purchaser has reviewed the restrictions set forth on the
face of the Class R Certificates and the provisions of Section 4.02(i) of the
Pooling and Servicing Agreement under which the Class R Certificates were issued
(in particular, clause (g) and (h) of Section 4.02(i) which authorize the
Trustee to deliver payments to a person other than the Purchaser in the event
the Purchaser holds such Certificates in violation of Section 4.02(i)). The
Purchaser expressly agrees to be bound by and to comply with such restrictions
and provisions.
6. That the Purchaser consents to any additional restrictions or
arrangements that shall be deemed necessary upon advice of counsel to constitute
a reasonable arrangement to ensure that the Class R Certificates will only be
owned, directly or indirectly, by an Purchaser that is not a disqualified
organization.
7. The Purchaser's Taxpayer Identification Number is ___________.
8. This affidavit and agreement relates only to the Class R
Certificates held by the Purchaser and not to any other holder of the Class R
Certificates. The Purchaser understands that the liabilities described herein
relate only to the Class R Certificates.
9. That no purpose of the Purchaser relating to the transfer of any of
the Class R Certificates by the Purchaser is or will be to impede the assessment
or collection of any tax.
10. That the Purchaser has no present knowledge or expectation that it
will be unable to pay any United States taxes owed by it so long as any of the
Certificates remain outstanding. In this regard, the Purchaser hereby represents
to and for the benefit of the person from whom it acquired the Class R
Certificate that the Purchaser intends to pay taxes associated with holding such
Class R Certificate as they become due, fully understanding that it may incur
tax liabilities in excess of any cash flows generated by the Class R
Certificate.
11. That the Purchaser has no present knowledge or expectation that it
will become insolvent or subject to a bankruptcy proceeding for so long as any
of the Class R Certificates remain outstanding.
12. The Purchaser is (i) a citizen or resident of the United States;
(ii) a corporation (or entity treated as a corporation for tax purposes) created
or organized in the United States or under the laws of the United States or of
any state thereof, including, for this purpose, the District of Columbia; (iii)
a partnership (or entity treated as a partnership for tax purposes) organized in
the United States or under the laws of the United States or of any state
thereof, including, for this purpose, the District of Columbia (unless provided
otherwise by future Treasury regulations); (iv) an estate whose income is
includible in gross income for United States income tax purposes regardless of
its source; or (v) 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 persons described in this Paragraph 12 have authority to control all
substantial decisions of the trust.
13. The Purchaser is not an employee benefit plan subject to the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or
Section 4975 of the Internal Revenue Code of 1986, as amended (the "Code"), nor
a Person acting directly on behalf of any such plan.
IN WITNESS WHEREOF, the Purchaser has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Title of Officer] and its corporate seal to be hereunto attached, attested
by its [Assistant] Secretary, this ____ day of _______________, 199__.
[NAME OF PURCHASER]
By: __________________________
[Name of Officer]
[Title of Officer]
[Corporate Seal]
ATTEST:
[Assistant] Secretary
Personally appeared before me the above-named [Name of Officer], known
or proved to me to be the same person who executed the foregoing instrument and
to be the [Title of Officer] of the Purchaser, and acknowledged to me that he
executed the same as his free act and deed and the free act and deed of the
Purchaser.
Subscribed and sworn before me this ____ day of ________________, 199__.
NOTARY PUBLIC
COUNTY OF STATE OF ______________
My Commission expires the ____ day of _______________, 19__.
EXHIBIT J
FORM OF TRANSFEROR CERTIFICATE
__________________, 19__
Finance America Securities, LLC
[Address]
[Trustee]
Re: Finance America Securities, LLC Certificates, Series [ ]
Ladies and Gentlemen:
This letter is delivered to you in connection with the transfer by
_______________________________ (the "Seller") to ________________________ (the
"Purchaser") of a ____% Percentage Interests of Asset Backed Certificates,
Series 199__-__, Class R Certificates (the "Certificates"), pursuant to Section
4.02 of the Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of __________, 199__, among Finance America Securities,
LLC, as seller (the "Depositor"), ______________________, as Servicer, and
______________________, as trustee (the "Trustee"). All terms used herein and
not otherwise defined shall have the meanings set forth in the Pooling and
Servicing Agreement. The Seller hereby certifies, represents and warrants to,
and covenants with, the Depositor and the Trustee that:
1. No purpose of the Seller relating to the transfer of the
Certificates by the Seller to the Purchaser is or will be to impede the
assessment or collection of any tax.
2. The Seller understands that the Purchaser has delivered to the
Trustee and the Servicer a transfer affidavit and agreement in the form attached
to the Pooling and Servicing Agreement as Exhibit I. The Seller does not know or
believe that any representation contained therein is false.
3. The Seller has at the time of the transfer conducted a reasonable
investigation of the financial condition of the Purchaser as contemplated by
Treasury Regulations Section 1.860E-1(c)(4)(i) and, as a result of that
investigation, the Seller has determined that the Purchaser has historically
paid its debts as they become due and has found no significant evidence to
indicate that the Purchaser will not continue to pay its debts as they become
due in the future. The Seller understands that the transfer of a Class R
Certificate may not be respected for United States income tax purposes (and the
Seller may continue to be liable for United States income taxes associated
therewith) unless the Seller has conducted such an investigation.
4. The Seller has no actual knowledge that the proposed Purchaser is
not both a United States Person and a Permitted Transferee.
Very truly yours,
(Seller)
By: __________________________
Name:
Title:
EXHIBIT K
FORM OF ERISA TRANSFER AFFIDAVIT
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
The undersigned, being first duly sworn, deposes and says as follows:
1. The undersigned is the ______________________ of (the "Investor"),
a [corporation duly organized] and existing under the laws of __________, on
behalf of which he makes this affidavit.
2. The Investor either (x) is not an employee benefit plan subject to
Section 406 or Section 407 of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or Section 4975 of the Internal Revenue Code of
1986, as amended (the "Code"), the Trustee of any such plan or a person acting
on behalf of any such plan nor a person using the assets of any such plan or (2)
if the Investor is an insurance company, such Investor is purchasing such
Certificates with funds contained in an "Insurance Company General Account" (as
such term is defined in Section v(e) of the Prohibited Transaction Class
Exemption 95-60 ("PTCE 95-60")) and that the purchase and holding of such
Certificates are covered under PTCE 95-60; or (y) shall deliver to the Trustee
and the Depositor an opinion of counsel (a "Benefit Plan Opinion") satisfactory
to the Trustee and the Depositor, and upon which the Trustee and the Depositor
shall be entitled to rely, to the effect that the purchase or holding of such
Certificate by the Investor will not result in the assets of the Trust Fund
being deemed to be plan assets and subject to the prohibited transaction
provisions of ERISA or the Code and will not subject the Trustee, the Servicer
or the Depositor to any obligation in addition to those undertaken by such
entities in the Trust Agreement, which opinion of counsel shall not be an
expense of the Trustee, the Servicer or the Depositor.
3. The Investor hereby acknowledges that under the terms of the
Pooling and Servicing Agreement (the "Agreement") among Finance America
Securities, LLC, as Depositor, and [ ], as Trustee, dated as of [ ], no transfer
of the ERISA-Restricted Certificates shall be permitted to be made to any person
unless the Trustee has received a certificate from such transferee in the form
hereof.
IN WITNESS WHEREOF, the Investor has caused this instrument to be
executed on its behalf, pursuant to proper authority, by its duly authorized
officer, duly attested, this ____ day of _______________, 199 .
__________________________________
[Investor]
By:______________________________
Name:
Title:
ATTEST:
__________________________
STATE OF )
) ss:
COUNTY OF )
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 Investor, and
acknowledged that he executed the same as his free act and deed and
the free act and deed of the Investor.
Subscribed and sworn before me this _____ day of _________ 199_.
__________________________
NOTARY PUBLIC
My commission expires the
_____ day of __________, 19__.
EXHIBIT L
FORM OF LIQUIDATION REPORT
Customer Name:
Account Number:
Original Loan Balance:
1. Type of Liquidation (REO disposition/charge-off/short pay-off)
Date last paid
Date of Foreclosure
Date of REO
Date of REO Disposition
Property Sale Price/Estimated Market Value at Disposition
2. Liquidation Proceeds
Any Principal Prepayment $____________
Proceeds from the Sale of the Property ____________
Net Insurance Proceeds ____________
Other (itemize) ____________
Total Proceeds $____________
3. Liquidation Expenses
Servicing Advances $____________
Periodic Advances ____________
Servicing Fees ____________
Total Advances $____________
4. Net Liquidation Proceeds $____________
(Item 2 MINUS Item 3)
5. Principal Balance of Mortgage Loan $____________
6. Loss, if any (Item 5 MINUS Item 4) $____________
EXHIBIT M
CERTIFICATE RE: PREPAID LOANS
I, ______________, ________________ of Finance America Securities,
LLC, as Depositor, hereby certify that between the "Cut-Off Date" (as defined in
the Pooling and Servicing Agreement dated as of ___________, 199__ among Finance
America Securities, LLC, as depositor, ___________________________, as servicer
and __________________________, as trustee) and the "Startup Day" the following
schedule of "Mortgage Loans" (each as defined in the Pooling and Servicing
Agreement) have been prepaid in full.
Dated:
By:
EXHIBIT N
SUBSEQUENT TRANSFER INSTRUMENT
[RESERVED]
EXHIBIT O
FORM OF INVESTOR REPRESENTATION LETTER
____________, 1996
[Trustee]
Re: Finance America Securities, LLC Certificates, Series [ ]
Ladies and Gentlemen:
_______________________(the "Purchaser") intends to purchase from
____________________ (the "Seller"), a ____% Percentage Interest of
Certificates, Series 199__-__, Class _____ (the "Certificates"), issued pursuant
to the Pooling and Servicing Agreement (the "Pooling and Servicing Agreement"),
dated as of ____________, 199__ among Finance America Securities, LLC, as
depositor (the "Depositor"), ______________________________, as servicer, and
_________________________, 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 Depositor and the Trustee 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 Depositor 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 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 "accredited investor" within the meaning of Rule
501(a)(1), (2), (3) or (7) promulgated pursuant to the Act.
4. The Purchaser has been furnished with, and has had an opportunity
to review a copy of the Pooling and Servicing Agreement and such other
information concerning the Certificates, the Mortgage Loans and the Depositor as
has been requested by the Purchaser from the Depositor 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 Depositor 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 Depositor, the Purchaser acknowledges that
such Memorandum was provided to it by the Seller, that the Memorandum was
prepared by the Depositor solely for use in connection with the Original Sale
and the Depositor 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 Depositor 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 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 either (x) is not an employee benefit plan subject to
Section 406 or Section 407 of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or Section 4975 of the Internal Revenue Code of
1986, as amended (the "Code"), the Trustee of any such plan or a person acting
on behalf of any such plan nor a person using the assets of any such plan or (2)
if the Purchaser is an insurance company, such Purchaser is purchasing such
Certificates with funds contained in an "Insurance Company General Account" (as
such term is defined in Section v(e) of the Prohibited Transaction Class
Exemption 95-60 ("PTCE 95-60")) and that the purchase and holding of such
Certificates are covered under PTCE 95-60; or (y) shall deliver to the Trustee
and the Depositor an opinion of counsel (a "Benefit Plan Opinion") satisfactory
to the Trustee and the Depositor, and upon which the Trustee and the Depositor
shall be entitled to rely, to the effect that the purchase or holding of such
Certificate by the Purchaser will not result in the assets of the Trust Fund
being deemed to be plan assets and subject to the prohibited transaction
provisions of ERISA or the Code and will not subject the Trustee, the Servicer
or the Depositor to any obligation in addition to those undertaken by such
entities in the Pooling and Servicing Agreement, which opinion of counsel shall
not be an expense of the Trustee, the Servicer or the Depositor.
Very truly yours,
By: __________________________
Name:
Title:
EXHIBIT P
FORM OF TRANSFEROR REPRESENTATION LETTER
___________, 199__
[Trustee]
Re: Finance America Securities, LLC, [Asset Backed] Certificates,
Series 199__-__
Ladies and Gentlemen:
In connection with the sale by _____________ (the "Seller") to
__________________ (the "Purchaser") of $___________ Initial Certificate
Principal Balance of Certificates, Series 199__-__, Class ___ (the
"Certificates"), issued pursuant to the Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement"), dated as of __________, 199__ among Finance
America Securities, LLC, as company (the "Depositor"),
_________________________, as servicer, and ______________________________, as
trustee (the "Trustee"). The Seller hereby certifies, represents and warrants
to, and covenants with, the Depositor and the Trustee 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.
Very truly yours,
(Seller)
By: ______________________________
Name:
Title:
EXHIBIT Q
FORM OF RULE 144A INVESTMENT REPRESENTATION
Description of Rule 144A Securities, including numbers:
Finance America Securities, LLC [Asset Backed] Certificates
Series [ ], Class ___, No. ___
The undersigned seller, as registered holder (the "Transferor"),
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
Transferor hereby certifies the following facts: Neither the Transferor 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, 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, which would constitute a
distribution of the Rule 144A Securities under the Securities Act of 1933, as
amended (the "1933 Act"), or which 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 Transferor has not offered the Rule 144A
Securities to any person other than the Buyer or another "qualified
institutional buyer" as defined in Rule 144A under the 0000 Xxx.
2. The Buyer warrants and represents to, and covenants with, the
Transferor, the Trustee and the Servicer pursuant to Section 5.02 of the Pooling
and Servicing Agreement as follows:
a. The Buyer understands that the Rule 144A Securities have not
been registered under the 1933 Act or the securities laws of any
state.
b. The Buyer considers itself a substantial, sophisticated
institutional investor having such knowledge and experience in
financial and business matters that it is capable of evaluating the
merits and risks of investment in the Rule 144A Securities.
c. The Buyer has been furnished with all information regarding
the Rule 144A Securities that it has requested from the Transferor,
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. 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 account
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 warrants and represents to, and covenants with, the
Transferor, the Servicer and the Depositor that either (1) the Buyer is not an
employee benefit plan within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") ("Plan"), or a plan
within the meaning of Section 4975(e)(1) of the Internal Revenue Code of 1986
(the "Code") (also a "Plan"), and the Buyer is not directly or indirectly
purchasing the Rule 144A Securities on behalf of, as investment manager of, as
named fiduciary of, as trustee of, or with assets of a Plan, or (2) the Buyer's
purchase of the Rule 144A Securities will not result in a prohibited transaction
under Section 406 of ERISA or Section 4975 of the Code.
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 Transferor Print Name of Buyer
______________________________________ _________________________________
By: _________________________________ By: ____________________________
Name: Name:
Title Title
Taxpayer Identification No: Taxpayer Identification No:
Date: Date:
