EXHIBIT 4.1
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▇▇▇▇▇ FARGO ASSET SECURITIES CORPORATION,
Depositor
▇▇▇▇▇ FARGO HOME MORTGAGE, INC.,
Servicer
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
Securities Administrator
and
[____________________________],
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of [________], 20
Home Equity Asset-Backed Certificates, Series 20 -
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms ........................................................
Section 1.02 Accounting ...........................................................
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance of Mortgage Loans .........................................
Section 2.02 Acceptance by Custodian ..............................................
Section 2.03 Repurchase or Substitution of Mortgage Loans by the Depositor ........
Section 2.04 Representations and Warranties of the Depositor with respect to the
Mortgage Loans .......................................................
Section 2.05 Representations, Warranties and Covenants of the Servicer ............
Section 2.06 Representations and Warranties of the Depositor ......................
Section 2.07 Issuance of Certificates and the Uncertificated Regular Interests ....
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE TRUST FUND
Section 3.01 Servicer to Act as Servicer ..........................................
Section 3.02 Collection of Mortgage Loan Payments .................................
Section 3.03 Realization Upon Defaulted Mortgage Loans ............................
Section 3.04 Collection Account, Distribution Account and Reserve Account .........
Section 3.05 Permitted Withdrawals From the Collection Account ....................
Section 3.06 Establishment of Escrow Accounts; Deposits in Escrow Accounts ........
Section 3.07 Permitted Withdrawals From Escrow Account ............................
Section 3.08 Payment of Taxes, Insurance and Other Charges; Collections
Thereunder; Primary Mortgage Insurance ...............................
Section 3.09 Transfer of Accounts .................................................
Section 3.10 Maintenance of Hazard Insurance ......................................
Section 3.11 Maintenance of Mortgage Impairment Insurance Policy ..................
Section 3.12 Fidelity Bond, Errors and Omissions Insurance ........................
Section 3.13 Title, Management and Disposition of REO Property ....................
Section 3.14 Due-on-Sale Clauses; Assumption and Substitution Agreements ..........
Section 3.15 Notification of Adjustments ..........................................
Section 3.16 Optional Purchases of Mortgage Loans by the Depositor ................
Section 3.17 Trustee to Cooperate; Release of Files ...............................
Section 3.18 Servicing Compensation ...............................................
Section 3.19 Annual Statement as to Compliance ....................................
Section 3.20 Annual Independent Certified Public Accountants' Reports .............
Section 3.21 Access to Certain Documentation and Information Regarding the
Mortgage Loans .......................................................
Section 3.22 Duties of Credit Risk Manager ........................................
Section 3.23 Obligations of the Servicer in Respect of Compensating Interest ......
Section 3.24 Obligations of the Servicer in Respect of Mortgage Interest Rates and
Monthly Payments .....................................................
Section 3.25 Investment of Funds in the Collection Account and the Distribution
Account ..............................................................
Section 3.26 Liability of Servicer; Indemnification ...............................
Section 3.27 Reports of Foreclosure and Abandonment of Mortgaged Properties .......
Section 3.28 Protection of Assets .................................................
Section 3.29 Limitation of Liability of the Credit Risk Manager ...................
Section 3.30 No Personal Solicitation .............................................
Section 3.31 Periodic Filings .....................................................
ARTICLE IV
FLOW OF FUNDS
Section 4.01 Interest Distributions ...............................................
Section 4.02 Distributions of Principal and Monthly Excess Cashflow Amounts .......
Section 4.03 Allocation of Losses .................................................
Section 4.04 Method of Distribution ...............................................
Section 4.05 Distributions on Book-Entry Certificates .............................
Section 4.06 Statements ...........................................................
Section 4.07 Remittance Reports; Advances .........................................
Section 4.08 REMIC Distributions ..................................................
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates .....................................................
Section 5.02 Registration of Transfer and Exchange of Certificates ................
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates ....................
Section 5.04 Persons Deemed Owners ................................................
Section 5.05 Appointment of Paying Agent ..........................................
ARTICLE VI
THE SERVICER AND THE DEPOSITOR
Section 6.01 Liability of the Servicer and the Depositor ..........................
Section 6.02 Merger or Consolidation of, or Assumption of the Obligations of, the
Servicer or the Depositor ............................................
Section 6.03 Limitation on Liability of the Servicer and Others ...................
Section 6.04 Servicer Not to Resign ...............................................
Section 6.05 Delegation of Duties .................................................
ARTICLE VII
DEFAULT
Section 7.01 Servicer Events of Termination .......................................
Section 7.02 Securities Administrator to Act; Appointment of Successor ............
Section 7.03 Waiver of Defaults ...................................................
Section 7.04 Notification to Certificateholders ...................................
Section 7.05 Survival of Servicer Liabilities .....................................
ARTICLE VIII
THE TRUSTEE AND THE SECURITIES ADMINISTRATOR
Section 8.01 Duties of Trustee and Securities Administrator .......................
Section 8.02 Certain Matters Affecting the Trustee and the Securities Administrator
Section 8.03 Trustee and Securities Administrator Not Liable for Certificates or
Mortgage Loans .......................................................
Section 8.04 Trustee and Securities Administrator May Own Certificates ............
Section 8.05 Securities Administrator and Custodian Fees and Expenses .............
Section 8.06 Eligibility Requirements for Trustee and Securities Administrator ....
Section 8.07 Resignation or Removal of Trustee and Securities Administrator .......
Section 8.08 Successor Trustee and Successor Securities Administrator .............
Section 8.09 Merger or Consolidation of Trustee or Securities Administrator .......
Section 8.10 Appointment of Co-Trustee or Separate Trustee ........................
Section 8.11 Limitation of Liability ..............................................
Section 8.12 Trustee May Enforce Claims Without Possession of Certificates ........
Section 8.13 Suits for Enforcement ................................................
Section 8.14 Waiver of Bond Requirement ...........................................
Section 8.15 Waiver of Inventory, Accounting and Appraisal Requirement ............
Section 8.16 Appointment of Custodian .............................................
ARTICLE IX
REMIC AND GRANTOR TRUST ADMINISTRATION
Section 9.01 REMIC Administration .................................................
Section 9.02 Prohibited Transactions and Activities ...............................
Section 9.03 Indemnification with Respect to Certain Taxes and Loss of REMIC
Status ...............................................................
Section 9.04 REO Property .........................................................
Section 9.05 Grantor Trust Administration .........................................
ARTICLE X
TERMINATION
Section 10.01 Termination ..........................................................
Section 10.02 Additional Termination Requirements ..................................
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Amendment ............................................................
Section 11.02 Recordation of Agreement; Counterparts ...............................
Section 11.03 Limitation on Rights of Certificateholders ...........................
Section 11.04 Governing Law; Jurisdiction ..........................................
Section 11.05 Notices ..............................................................
Section 11.06 Severability of Provisions ...........................................
Section 11.07 Article and Section References .......................................
Section 11.08 Notice to the Rating Agencies ........................................
Section 11.09 Further Assurances ...................................................
Section 11.10 Benefits of Agreement ................................................
Section 11.11 Acts of Certificateholders ...........................................
EXHIBITS:
Exhibit A-1 Form of Class A-1 Certificates
Exhibit A-1A Form of Class A-1A Certificates
Exhibit A-2 Form of Class A-2 Certificates
Exhibit B Form of Class B Certificates
Exhibit C-1 Form of Class M-1 Certificates
Exhibit C-2 Form of Class M-2 Certificates
Exhibit C-3 Form of Class M-3 Certificates
Exhibit C-4 Form of Class M-4 Certificates
Exhibit C-5 Form of Class M-5 Certificates
Exhibit C-6 Form of Class M-6 Certificates
Exhibit C-7 Form of Class CE Certificates
Exhibit C-8 Form of Class P Certificates
Exhibit C-9 Form of Class R Certificates
Exhibit D-1 Group 1 Mortgage Loan Schedule
Exhibit D-2 Group 2 Mortgage Loan Schedule
Exhibit E Form of Request for Release
Exhibit F-1 Form of Custodian's Initial Certification
Exhibit F-2 Form of Custodian's Interim Certification
Exhibit F-3 Form of Custodian's Final Certification
Exhibit G Mortgage Loan Purchase Agreement
Exhibit H Form of Lost Note Affidavit
Exhibit I Form of ERISA Representation
Exhibit J Form of Investment Letter
Exhibit K Form of Class R Certificate Transfer Affidavit
Exhibit L Form of Transferor Certificate
Exhibit M Monthly Information Provided by Servicer
Exhibit N Form of Yield Maintenance Agreement
Exhibit O Form of Certification
Exhibit P-1 Form of Certification of the Securities Administrator
to be Provided to Servicer
Exhibit Q List of Recordation States
This Pooling and Servicing Agreement is dated as of [_______] 1, 20
(the "Agreement"), among ▇▇▇▇▇ FARGO ASSET SECURITIES CORPORATION, as depositor
(the "Depositor"), ▇▇▇▇▇ FARGO HOME MORTGAGE, INC., as servicer (the
"Servicer"), ▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION, as securities administrator
(the "Securities Administrator") and [______________________], as trustee (the
"Trustee").
PRELIMINARY STATEMENT
The Depositor intends to sell pass-through certificates
(collectively, the "Certificates"), to be issued hereunder in multiple Classes,
which in the aggregate will evidence the entire beneficial ownership interest in
the Trust Fund created hereunder. The Certificates will consist of thirteen
Classes of Certificates, designated as (i) the Class A-1, Class A-1A and Class
A-2 Certificates, (ii) the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5
and Class M-6 Certificates, (iii) the Class B Certificates, (iv) the Class CE
Certificates, (v) the Class P Certificates and (vi) the Class R Certificate.
REMIC 1
As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the Mortgage Loans and certain other
related assets subject to this Agreement (but exclusive of the Yield Maintenance
Agreement, the Reserve Fund, the Cap Carryover Amounts and the Prepayment
Charges) as a real estate investment conduit (a "REMIC") for federal income tax
purposes, and such segregated pool of assets will be designated as "REMIC 1."
The Class R-1 Interest will represent the sole class of "residual interests" in
REMIC 1 for purposes of the REMIC Provisions under federal income tax law. The
following table irrevocably sets forth the designation, the Uncertificated REMIC
1 Pass-Through Rate, the initial Uncertificated Principal Balance, and solely
for purposes of satisfying Treasury Regulations Section 1.860G-1(a)(4)(iii), the
"latest possible maturity date" for each of the REMIC 1 Regular Interests. None
of the REMIC 1 Regular Interests will be certificated.
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Uncertificated Initial
REMIC Pass-Through Uncertificated Latest Possible
Designation Rate Balance Maturity Date
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LT1AA Variable(2) $
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LT1A1 Variable(2) $
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LT1A1A Variable(2) $
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LT1A2 Variable(2) $
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LT1M1 Variable(2) $
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LT1M2 Variable(2) $
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LT1M3 Variable(2) $
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LT1M4 Variable(2) $
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LT1M5 Variable(2) $
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LT1M6 Variable(2) $
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LT1B Variable(2) $
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LT1ZZ Variable(2) $
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LT1SUB Variable(2) $
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LT1GRP Variable(2) $
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LT2SUB Variable(2) $
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LT2GRP Variable(2) $
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LT1XX Variable(2) $
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(1) Solely for purposes of Treasury Regulations Section 1.860G-1(a)(4)(iii),
the Distribution Date immediately following the maturity date for the
Mortgage Loan with the latest maturity date has been designated as the
"latest possible maturity date" for each REMIC 1 Regular Interest.
(2) Calculated in accordance with the definition of "Uncertificated REMIC 1
Pass-Through Rate" herein.
REMIC 2
As provided herein, the Trustee shall make an election to treat the
segregated pool of assets consisting of the REMIC 1 Regular Interests as a REMIC
for federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC 2." The Class R-2 Interest represents the sole class of
"residual interests" in REMIC 2 for purposes of the REMIC Provisions.
The following table sets forth (or describes) the Class designation,
Pass-Through Rate and Original Principal Balance for each Class of Certificates
comprising the interests in the Trust Fund created hereunder:
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Original Pass-Through Assumed Final
Class Principal Balance Rate Maturity Dates*
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A-1 $ (1)
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A-1A $ (2)
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A-2 $ (3)
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M-1 $ (4)
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M-2 $ (5)
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M-3 $ (6)
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M-4 $ (7)
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M-5 $ (8)
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M-6 $ (9)
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B $ (10)
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CE (11) (11) N/A
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▇ ▇/▇ ▇/▇ ▇/▇
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▇ ▇/▇ ▇/▇ ▇/▇
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Total $
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* Solely for purposes of Treasury Regulations Section 1.860G-1(a)(4)(iii),
the Distribution Date following the maturity date for the Mortgage Loan
with the latest maturity date has been designated as the "latest possible
maturity date" for each Class of Certificates that represents one or more
of the "regular interests" in REMIC 2.
(1) The Pass-Through Rate for the Class A-1 Certificates during each Interest
Accrual Period at a rate equal to the lesser of: (i) the Class A-1 Formula
Rate and (ii) the Group 1 Cap for such Distribution Date.
(2) The Pass-Through Rate for the Class A-1A Certificates during each Interest
Accrual Period at a rate equal to the lesser of: (i) the Class A-1A
Formula Rate and (ii) the Group 1 Cap for such Distribution Date.
(3) The Pass-Through Rate for the Class A-2 Certificates during each Interest
Accrual Period at a rate equal to the lesser of: (i) the Class A-2 Formula
Rate and (ii) the Group 2 Cap for such Distribution Date.
(4) The Pass-Through Rate for the Class M-1 Certificates during each Interest
Accrual Period at a rate equal to the lesser of: (i) the Class M-1 Formula
Rate and (ii) the Pool Cap for such Distribution Date.
(5) The Pass-Through Rate for the Class M-2 Certificates during each Interest
Accrual Period at a rate equal to the lesser of: (i) the Class M-2 Formula
Rate and (ii) the Pool Cap for such Distribution Date.
(6) The Pass-Through Rate for the Class M-3 Certificates during each Interest
Accrual Period at a rate equal to the lesser of: (i) the Class M-3 Formula
Rate and (ii) the Pool Cap for such Distribution Date.
(7) The Pass-Through Rate for the Class M-4 Certificates during each Interest
Accrual Period at a rate equal to the lesser of: (i) the Class M-4 Formula
Rate and (ii) the Pool Cap for such Distribution Date.
(8) The Pass-Through Rate for the Class M-5 Certificates during each Interest
Accrual Period at a rate equal to the lesser of: (i) the Class M-5 Formula
Rate and (ii) the Pool Cap for such Distribution Date.
(9) The Pass-Through Rate for the Class M-6 Certificates during each Interest
Accrual Period at a rate equal to the lesser of: (i) the Class M-6 Formula
Rate and (ii) the Pool Cap for such Distribution Date.
(10) The Pass-Through Rate for the Class B Certificates will equal to the Class
B Formula Rate.
(11) Solely for REMIC purposes, the Class CE Certificates will (i) have an
Original Principal Balance equal to the Initial Overcollateralization
Amount and (ii) will bear interest on their Notional Amount.
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms.
Whenever used in this Agreement or in the Preliminary Statement, the
following words and phrases, unless the context otherwise requires, shall have
the meanings specified in this Article. Interest on all Classes of REMIC 1
Regular Interests and on the Class B Certificates will be calculated on the
basis of a 360-day year consisting of twelve 30-day months. Interest on
all Regular Certificates other than the Class B Certificates will be calculated
on the basis of the actual number of days in the related Interest Accrual Period
and a 360-day year.
"1933 Act": The Securities Act of 1933, as amended.
"60+ Day Delinquent Loan": Each Mortgage Loan (including each
Mortgage Loan in foreclosure and each Mortgage Loan for which the Mortgagor has
filed for bankruptcy after the Closing Date) with respect to which any portion
of a Monthly Payment is, as of the last day of the prior Collection Period, two
months or more past due and each Mortgage Loan relating to an REO Property.
"Account": Any of the Collection Account, the Distribution Account,
the Reserve Account or the Escrow Account.
"Accrued Certificate Interest": With respect to each Distribution
Date and Class of Certificates, an amount equal to the interest accrued at the
Pass-Through Rate set forth or described opposite such Class in the table in the
Preliminary Statement during the related Interest Accrual Period on the
Principal Balance of such Class of Certificates, reduced by such Class' Interest
Percentage of Relief Act Interest Shortfalls for such Distribution Date.
"Adjustable-Rate Mortgage Loan": A Mortgage Loan which has a rate at
which interest accrues that adjusts based on the Index plus a related Gross
Margin, as set forth and subject to the limitations in the related Mortgage
Note.
"Adjustment Date": With respect to each Adjustable-Rate Mortgage
Loan, each adjustment date on which the Mortgage Interest Rate of an
Adjustable-Rate Mortgage Loan changes pursuant to the related Mortgage Note. The
first Adjustment Date following the Cut-off Date as to each Adjustable-Rate
Mortgage Loan is set forth in the Mortgage Loan Schedules.
"Advance": As to any Mortgage Loan, any advance made by the Servicer
in respect of any Distribution Date pursuant to Section 4.07.
"Adverse REMIC Event": As defined in Section 9.01(f) hereof.
"Affiliate": With respect to any Person, any other Person
controlling, controlled by or under common control with such Person. For
purposes of this definition, "control" means the power to direct the management
and policies of a Person, directly or indirectly, whether through ownership of
voting securities, by contract or otherwise and "controlling" and "controlled"
shall have meanings correlative to the foregoing.
"Aggregate Overcollateralization Release Amount": With respect to
any Distribution Date, the lesser of (i) the Principal Remittance Amount and
(ii) the Overcollateralization Release Amount.
"Agreement": This Pooling and Servicing Agreement and all amendments
and supplements hereto.
"Applicable Regulations": As to any Mortgage Loan, all federal,
state and local laws, statutes, rules and regulations applicable thereto.
"Applied Realized Loss Amount": With respect to each Distribution
Date, (i) the allocation to the Class A-1A Certificates of the excess, if any,
of (a) the aggregate of the Principal Balances of the Class A-1 and Class A-1A
Certificates (after giving effect to all distributions on such Distribution Date
and the increase of any Principal Balances as a result of Subsequent Recoveries)
over (b) the aggregate Principal Balance of the Group 1 Mortgage Loans as of the
end of the related Collection Period and (ii) the allocation to the Class M and
Class B Certificates of the excess, if any, of (a) the aggregate of the
Principal Balances of the Certificates (after giving effect to all distributions
on such Distribution Date and the increase of any Principal Balances as a result
of Subsequent Recoveries) over (b) the Pool Balance as of the end of the related
Collection Period.
"Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form, which is sufficient under the laws of
the jurisdiction wherein the related Mortgaged Property is located to reflect or
record the sale of the Mortgage.
"Assumed Final Maturity Date": As to each Class of Certificates, the
date set forth as such in the Preliminary Statement.
"Available Funds": As to any Distribution Date, an amount equal to
the sum of the following amounts with respect to the Mortgage Loans, net of
amounts reimbursable or payable therefrom to the Servicer, the Trustee and the
Securities Administrator and net of any Stayed Funds and any amounts deposited
in the Collection Account or Distribution Account, as the case may be, in error:
(a) the aggregate of the Monthly Payments due during the related Collection
Period and received on or prior to the related Determination Date by the
Servicer, after deduction of (i) the Securities Administrator Fee for such
Distribution Date, (ii) the Servicing Fee for such Distribution Date, (iii) the
Credit Risk Manager Fee for such Distribution Date and (iv) any accrued and
unpaid Securities Administrator Fees, Servicing Fees and Credit Risk Manager
Fees, (b) Liquidation Proceeds, Insurance Proceeds, Condemnation Proceeds,
Principal Prepayments, Substitution Adjustment Amounts, the Purchase Price for
any repurchased Mortgage Loan, the Termination Price with respect to the
termination of the Trust pursuant to Section 10.01 hereof and other unscheduled
recoveries of principal and interest (excluding Prepayment Charges) in respect
of the Mortgage Loans during the related Prepayment Period, (c) the aggregate of
any amounts received in respect of an REO Property deposited in the Collection
Account for such Distribution Date, (d) any Compensating Interest for such
Distribution Date and (e) the aggregate of any Advances made by the Servicer for
such Distribution Date.
"Bankruptcy Code": Title 11 of the United States Code, as amended.
"Book-Entry Certificates": Any of the Certificates that shall be
registered in the name of the Depository or its nominee, the ownership of which
is reflected on the books of the Depository or on the books of a Person
maintaining an account with the Depository (directly, as a "Depository
Participant," or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 5.02 hereof). On the Closing
Date, the Class A-1, Class A-1A, Class A-2, Class M-1, Class M-2, Class M-3,
Class M-4, Class M-5 and Class M-6 Certificates shall be Book-Entry
Certificates.
"Business Day": Any day other than a Saturday, a Sunday or a day on
which banking institutions in the State of Delaware, the State of New York, the
State of Maryland, the State of Minnesota, the State of Iowa or in the city in
which the Corporate Trust Office of the Trustee is located are authorized or
obligated by law or executive order to be closed.
"Cap": Any of the Group 1 Cap, the Group 2 Cap or the Pool Cap.
"Cap Amount": With respect to each Distribution Date and Class of
Offered Certificates, the product of (i) the Yield Maintenance Agreement Payment
for such Distribution Date and (ii) a fraction, the numerator of which is the
Principal Balance of such Class immediately prior to such Distribution Date and
the denominator of which is the aggregate Principal Balance of the Offered
Certificates immediately prior to such Distribution Date.
"Cap Carryover Amount": If on any Distribution Date, the Accrued
Certificate Interest for any Offered Certificate is based upon a Cap, the excess
of (i) the amount of interest such Certificate would have been entitled to
receive on such Distribution Date based on the related Formula Rate, over (ii)
the amount of interest such Certificate received on such Distribution Date based
on the related Cap, together with the unpaid portion of any such excess from
prior Distribution Dates (and interest accrued thereon at the then applicable
Formula Rate on such Certificate).
"Certificate": Any Regular Certificate or Class R Certificate.
"Certificate Custodian": Initially, [____________]; thereafter any
other Certificate Custodian acceptable to the Depository and selected by the
Trustee.
"Certificate Owner": With respect to each Book-Entry Certificate,
any beneficial owner thereof.
"Certificate Register" and "Certificate Registrar": The register
maintained and registrar appointed pursuant to Section 5.02 hereof.
"Certificateholder" or "Holder": The Person in whose name a
Certificate is registered in the Certificate Register, except that a
Disqualified Organization or non-U.S. Person shall not be a Holder of the Class
R Certificate for any purpose hereof.
"Certification": As defined in Section 3.31(b) hereof.
"Class": Collectively, Certificates or REMIC Regular Interests which
have the same priority of payment and bear the same class designation and the
form of which is identical except for variation in the Percentage Interest
evidenced thereby.
"Class A-1 Certificate Margin": For each Distribution Date (i) on or
prior to the Optional Termination Date, [___]% per annum, and (ii) following the
Optional Termination Date, [___]% per annum.
"Class A-1 Formula Rate": For each Distribution Date, a rate per
annum equal to the lesser of (a) One-Month LIBOR as of the related LIBOR
Determination Date, plus the Class A-1 Certificate Margin and (b) the Group 1
Maximum Rate Cap.
"Class A-1A Applied Realized Loss Amount": As to the Class A-1A
Certificates and as of any Distribution Date, the lesser of (x) the Principal
Balance thereof (after taking into account the distribution of the Principal
Distribution Amount on such Distribution Date, but prior to the application of
the Class A-1A Applied Realized Loss Amount, if any, on such Distribution Date)
and (y) the excess of the aggregate Principal Balance of the Class A-1 and Class
A-1A Certificates over the aggregate Principal Balance of the Group 1 Mortgage
Loans after taking into account the application of the Class M-1 Applied
Realized Loss Amount, the M-2 Applied Realized Loss Amount, the Class M-3
Applied Realized Loss Amount, the Class M-4 Applied Realized Loss Amount, the
Class M-5 Applied Realized Loss Amount, the Class M-6 Applied Realized Loss
Amount and the Class B Applied Realized Loss Amount, in each case as of such
Distribution Date.
"Class A-1A Certificate Margin": For each Distribution Date (i) on
or prior to the Optional Termination Date, [___]% per annum, and (ii) following
the Optional Termination Date, [___]% per annum.
"Class A-1A Formula Rate": For each Distribution Date, a rate per
annum equal to the lesser of (a) One-Month LIBOR as of the related LIBOR
Determination Date, plus the Class A-1A Certificate Margin and (b) the Group 1
Maximum Rate Cap.
"Class A-1A Realized Loss Amortization Amount": As to the Class A-1A
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class A-1A Certificates as of such Distribution
Date and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the
sum of the amounts described in Section 4.02(b)(i) and (ii) hereof, in each case
for such Distribution Date.
"Class A-2 Certificate Margin": For each Distribution Date (i) on or
prior to the Optional Termination Date, [___]% per annum, and (ii) following the
Optional Termination Date, [___]% per annum.
"Class A-2 Formula Rate": For each Distribution Date, a rate per
annum equal to the lesser of (a) One-Month LIBOR as of the related LIBOR
Determination Date, plus the Class A-2 Certificate Margin and (b) the Group 2
Maximum Rate Cap.
"Class A Certificate": Any one of the Certificates with an "A"
designated on the face thereof substantially in the form annexed hereto as
Exhibits A-1, A-1A and A-2, executed by the Trustee on behalf of the Trust and
authenticated and delivered by the Certificate Registrar, representing the right
to distributions as set forth herein and therein.
"Class A Certificateholders": Collectively, the Holders of the Class
A Certificates.
"Class B Certificate": Any one of the Certificates with a "B"
designated on the face thereof substantially in the form annexed hereto as
Exhibit B, executed by the Trustee on behalf of the Trust and authenticated and
delivered by the Certificate Registrar, representing the right to distributions
as set forth herein and therein.
"Class B Certificateholders": Collectively, the Holders of the Class
B Certificates.
"Class B Formula Rate": For each Distribution Date, a rate per annum
equal to [___]%.
"Class B Principal Distribution Amount": As of any Distribution Date
on or after the Stepdown Date and as long as a Trigger Event is not in effect,
the excess of (x) the sum of (i) the sum of the Principal Balances of the Class
A Certificates (after taking into account the payment of the Senior Principal
Distribution Amount on such Distribution Date), (ii) the Principal Balance of
the Class M-1 Certificates (after taking into account the payment of the Class
M-1 Principal Distribution Amount on such Distribution Date), (iii) the
Principal Balance of the Class M-2 Certificates (after taking into account the
payment of the Class M-2 Principal Distribution Amount on such Distribution
Date), (iv) the Principal Balance of the Class M-3 Certificates (after taking
into account the payment of the Class M-3 Principal Distribution Amount on such
Distribution Date), (v) the Principal Balance of the Class M-4 Certificates
(after taking into account the payment of the Class M-4 Principal Distribution
Amount on such Distribution Date), (vi) the Principal Balance of the Class M-5
Certificates (after taking into account the payment of the Class M-5 Principal
Distribution Amount on such Distribution Date), (vii) the Principal Balance of
the Class M-6 Certificates (after taking into account the payment of the Class
M-6 Principal Distribution Amount on such Distribution Date) and (viii) the
Principal Balance of the Class B Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) [___]% and (ii)
the Pool Balance as of the last day of the related Collection Period and (B) the
Pool Balance as of the last day of the related Collection Period minus the
product of 0.50% and the Cut-off Date Aggregate Principal Balance.
"Class B Realized Loss Amortization Amount": As to the Class B
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class B Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (xxiii) hereof, in each
case for such Distribution Date.
"Class CE Certificates": Any one of the Class CE Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit C-7, executed by the Trustee on behalf of the Trust and authenticated
and delivered by the Certificate Registrar, representing the right to
distributions as set forth herein and therein.
"Class CE Distributable Amount": With respect to any Distribution
Date, the sum of (i) the interest accrued on such Class CE Certificate at its
Pass-Through Rate calculated on its Notional Amount less the amount (without
duplication) of Cap Carryover Amounts paid pursuant to Section 4.02(b)(xxv),
(ii) any remaining Aggregate Overcollateralization Release Amounts and (iii) the
aggregate of amounts remaining in the Reserve Account after the distributions in
Section 3.04(g)(i)(B).
"Class CE Uncertificated Principal Balance": As of any date of
determination, the Initial Overcollateralization Amount minus the sum of (i) any
Realized Losses allocated thereto and (ii) any amounts distributed (or deemed
distributed) to the Class CE Certificates with respect thereto.
"Class M Certificate": Any one of the Certificates with an "M"
designated on the face thereof substantially in the form annexed hereto as
Exhibit C-1, Exhibit C-2, Exhibit C-3, Exhibit C-4, Exhibit C-5 and Exhibit C-6,
executed by the Trustee on behalf of the Trust and authenticated and delivered
by the Certificate Registrar, representing the right to distributions as set
forth herein and therein.
"Class M Certificateholders": Collectively, the Holders of the Class
M Certificates.
"Class M-1 Applied Realized Loss Amount": As to the Class M-1
Certificates and as of any Distribution Date, the lesser of (x) the Principal
Balance thereof (after taking into account the distribution of the Principal
Distribution Amount on such Distribution Date, but prior to the application of
the Class M-1 Applied Realized Loss Amount, if any, on such Distribution Date)
and (y) the excess of (i) the Applied Realized Loss Amount as of such
Distribution Date over (ii) the sum of the Class M-2 Applied Realized Loss
Amount, the Class M-3 Applied Realized Loss Amount, the Class M-4 Applied
Realized Loss Amount, the Class M-5 Applied Realized Loss Amount, the Class M-6
Applied Realized Loss Amount and the Class B Applied Realized Loss Amount, in
each case as of such Distribution Date.
"Class M-1 Certificate Margin": For each Distribution Date (i) on or
prior to the Optional Termination Date, [___]% per annum, and (ii) following the
Optional Termination Date, [___]% per annum.
"Class M-1 Formula Rate": For each Distribution Date, the lesser of
(a) One-Month LIBOR as of the related LIBOR Determination Date, plus the Class
M-1 Certificate Margin and (b) the Pool Maximum Rate Cap.
"Class M-1 Principal Distribution Amount": As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the sum of (i) the Principal Balances of the Class A
Certificates (after taking into account the payment of the Senior Principal
Distribution Amount on such Distribution Date) and (ii) the Principal Balance of
the Class M-1 Certificates immediately prior to such Distribution Date over (y)
the lesser of (A) the product of (i) [___]% and (ii) the Pool Balance as of the
last day of the related Collection Period and (B) the Pool Balance as of the
last day of the related Collection Period minus the product of 0.50% and the
Cut-off Date Aggregate Principal Balance.
"Class M-1 Realized Loss Amortization Amount": As to the Class M-1
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-1 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (v) hereof, in each case
for such Distribution Date.
"Class M-2 Applied Realized Loss Amount": As to the Class M-2
Certificates and as of any Distribution Date, the lesser of (x) the Principal
Balance thereof (after taking into account the distribution of the Principal
Distribution Amount on such Distribution Date, but prior to the application of
the Class M-2 Applied Realized Loss Amount, if any, on such Distribution Date)
and (y) the excess of (i) the related Applied Realized Loss Amount as of such
Distribution Date over (ii) the sum of the Class M-3 Applied Realized Loss
Amount, the Class M-4 Applied Realized Loss Amount, the Class M-5 Applied
Realized Loss Amount, the Class M-6 Applied Realized Loss Amount and the Class B
Applied Realized Loss Amount as of such Distribution Date.
"Class M-2 Certificate Margin": For each Distribution Date (i) on or
prior to the Optional Termination Date, [___]% per annum, and (ii) following the
Optional Termination Date, [___]% per annum.
"Class M-2 Formula Rate": For each Distribution Date, the lesser of
(a) One-Month LIBOR as of the related LIBOR Determination Date, plus the Class
M-2 Certificate Margin and (b) the Pool Maximum Rate Cap.
"Class M-2 Principal Distribution Amount": As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the sum of (i) the Principal Balances of the Class A
Certificates (after taking into account the payment of the Senior Principal
Distribution Amount on such Distribution Date), (ii) the Principal Balance of
the Class M-1 Certificates (after taking into account the payment of the Class
M-1 Principal Distribution Amount on such Distribution Date) and (iii) the
Principal Balance of the Class M-2 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) [___]% and (ii)
the Pool Balance as of the last day of the related Collection Period and (B) the
Pool Balance as of the last day of the related Collection Period minus the
product of 0.50% and the Cut-off Date Aggregate Principal Balance.
"Class M-2 Realized Loss Amortization Amount": As to the Class M-2
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-2 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (viii) hereof, in each
case for such Distribution Date.
"Class M-3 Applied Realized Loss Amount": As to the Class M-3
Certificates and as of any Distribution Date, the lesser of (x) the Principal
Balance thereof (after taking into account the distribution of the Principal
Distribution Amount on such Distribution Date, but prior to the application of
the Class M-3 Applied Realized Loss Amount, if any, on such Distribution Date)
and (y) the excess of (i) the related Applied Realized Loss Amount as of such
Distribution Date over (ii) the sum of the Class M-4 Applied Realized Loss
Amount, the Class M-5 Applied Realized Loss Amount, the Class M-6 Applied
Realized Loss Amount and the Class B Applied Realized Loss Amount as of such
Distribution Date.
"Class M-3 Certificate Margin": For each Distribution Date (i) on or
prior to the Optional Termination Date, [___]% per annum, and (ii) following the
Optional Termination Date, [___]% per annum.
"Class M-3 Formula Rate": For each Distribution Date, the lesser of
(a) One-Month LIBOR as of the related LIBOR Determination Date, plus the Class
M-3 Certificate Margin and (b) the Pool Maximum Rate Cap.
"Class M-3 Principal Distribution Amount": As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the sum of (i) the sum of the Principal Balances of
the Class A Certificates (after taking into account the payment of the Senior
Principal Distribution Amount on such Distribution Date), (ii) the Principal
Balance of the Class M-1 Certificates (after taking into account the payment of
the Class M-1 Principal Distribution Amount on such Distribution Date), (iii)
the Principal Balance of the Class M-2 Certificates (after taking into account
the payment of the Class M-2 Principal Distribution Amount on such Distribution
Date), and (iv) the Principal Balance of the Class M-3 Certificates immediately
prior to such Distribution Date over (y) the lesser of (A) the product of (i)
[___]% and (ii) the Pool Balance as of the last day of the related Collection
Period and (B) the Pool Balance as of the last day of the related Collection
Period minus the product of 0.50% and the Cut-off Date Aggregate Principal
Balance.
"Class M-3 Realized Loss Amortization Amount": As to the Class M-3
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-3 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (xi) hereof, in each case
for such Distribution Date.
"Class M-4 Applied Realized Loss Amount": As to the Class M-4
Certificates and as of any Distribution Date, the lesser of (x) the Principal
Balance thereof (after taking into account the distribution of the Principal
Distribution Amount on such Distribution Date, but prior to the application of
the Class M-4 Applied Realized Loss Amount, if any, on such Distribution Date)
and (y) the excess of (i) the related Applied Realized Loss Amount as of such
Distribution Date over (ii) the sum of the Class M-5 Applied Realized Loss
Amount, the Class M-6 Applied Realized Loss Amount and the Class B Applied
Realized Loss Amount as of such Distribution Date.
"Class M-4 Certificate Margin": For each Distribution Date (i) on or
prior to the Optional Termination Date, [___]% per annum, and (ii) following the
Optional Termination Date, [___]% per annum.
"Class M-4 Formula Rate": For each Distribution Date, the lesser of
(a) One-Month LIBOR as of the related LIBOR Determination Date, plus the Class
M-4 Certificate Margin and (b) the Pool Maximum Rate Cap.
"Class M-4 Principal Distribution Amount": As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the sum of (i) the sum of the Principal Balances of
the Class A Certificates (after taking into account the payment of the Senior
Principal Distribution Amount on such Distribution Date), (ii) the Principal
Balance of the Class M-1 Certificates (after taking into account the payment of
the Class M-1 Principal Distribution Amount on such Distribution Date), (iii)
the Principal Balance of the Class M-2 Certificates (after taking into account
the payment of the Class M-2 Principal Distribution Amount on such Distribution
Date), (iv) the Principal Balance of the Class M-3 Certificates (after taking
into account the payment of the Class M-3 Principal Distribution Amount on such
Distribution Date) and (v) the Principal Balance of the Class M-4 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) [___]% and (ii) the Pool Balance as of the last day of the
related Collection Period and (B) the Pool Balance as of the last day of the
related Collection Period minus the product of 0.50% and the Cut-off Date
Aggregate Principal Balance.
"Class M-4 Realized Loss Amortization Amount": As to the Class M-4
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-4 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (xiv) hereof, in each
case for such Distribution Date.
"Class M-5 Applied Realized Loss Amount": As to the Class M-5
Certificates and as of any Distribution Date, the lesser of (x) the Principal
Balance thereof (after taking into account the distribution of the Principal
Distribution Amount on such Distribution Date, but prior to the application of
the Class M-5 Applied Realized Loss Amount, if any, on such Distribution Date)
and (y) the excess of (i) the related Applied Realized Loss Amount as of such
Distribution Date over (ii) the sum of the Class M-6 Applied Realized Loss
Amount and the Class B Applied Realized Loss Amount as of such Distribution
Date.
"Class M-5 Certificate Margin": For each Distribution Date (i) on or
prior to the Optional Termination Date, [___]% per annum, and (ii) following the
Optional Termination Date, [___]% per annum.
"Class M-5 Formula Rate": For each Distribution Date, the lesser of
(a) One-Month LIBOR as of the related LIBOR Determination Date, plus the Class
M-5 Certificate Margin and (b) the Pool Maximum Rate Cap.
"Class M-5 Principal Distribution Amount": As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the sum of (i) the sum of the Principal Balances of
the Class A Certificates (after taking into account the payment of the Senior
Principal Distribution Amount on such Distribution Date), (ii) the Principal
Balance of the Class M-1 Certificates (after taking into account the payment of
the Class M-1 Principal Distribution Amount on such Distribution Date), (iii)
the Principal Balance of the Class M-2 Certificates (after taking into account
the payment of the Class M-2 Principal Distribution Amount on such Distribution
Date), (iv) the Principal Balance of the Class M-3 Certificates (after taking
into account the payment of the Class M-3 Principal Distribution Amount on such
Distribution Date), (v) the Principal Balance of the Class M-4 Certificates
(after taking into account the payment of the Class M-4 Principal Distribution
Amount on such Distribution Date) and (vi) the Principal Balance of the Class
M-5 Certificates immediately prior to such Distribution Date over (y) the lesser
of (A) the product of (i) [___]% and (ii) the Pool Balance as of the last day of
the related Collection Period and (B) the Pool Balance as of the last day of the
related Collection Period minus the product of 0.50% and the Cut-off Date
Aggregate Principal Balance.
"Class M-5 Realized Loss Amortization Amount": As to the Class M-5
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-5 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (xvii) hereof, in each
case for such Distribution Date.
"Class M-6 Applied Realized Loss Amount": As to the Class M-6
Certificates and as of any Distribution Date, the lesser of (x) the Principal
Balance thereof (after taking into account the distribution of the Principal
Distribution Amount on such Distribution Date, but prior to the application of
the Class M-6 Applied Realized Loss Amount, if any, on such Distribution Date)
and (y) the excess of (i) the related Applied Realized Loss Amount as of such
Distribution Date over (ii) the Class B Applied Realized Loss Amount as of such
Distribution Date.
"Class M-6 Certificate Margin": For each Distribution Date (i) on or
prior to the Optional Termination Date, [___]% per annum, and (ii) following the
Optional Termination Date, [___]% per annum.
"Class M-6 Formula Rate": For each Distribution Date, the lesser of
(a) One-Month LIBOR as of the related LIBOR Determination Date, plus the Class
M-6 Certificate Margin and (b) the Pool Maximum Rate Cap.
"Class M-6 Principal Distribution Amount": As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the sum of (i) the sum of the Principal Balances of
the Class A Certificates (after taking into account the payment of the Senior
Principal Distribution Amount on such Distribution Date), (ii) the Principal
Balance of the Class M-1 Certificates (after taking into account the payment of
the Class M-1 Principal Distribution Amount on such Distribution Date), (iii)
the Principal Balance of the Class M-2 Certificates (after taking into account
the payment of the Class M-2 Principal Distribution Amount on such Distribution
Date), (iv) the Principal Balance of the Class M-3 Certificates (after taking
into account the payment of the Class M-3 Principal Distribution Amount on such
Distribution Date), (v) the Principal Balance of the Class M-4 Certificates
(after taking into account the payment of the Class M-4 Principal Distribution
Amount on such Distribution Date), (vi) the Principal Balance of the Class M-5
Certificates (after taking into account the payment of the Class M-5 Principal
Distribution Amount on such Distribution Date) and (vii) the Principal Balance
of the Class M-6 Certificates immediately prior to such Distribution Date over
(y) the lesser of (A) the product of (i) [___]% and (ii) the Pool Balance as of
the last day of the related Collection Period and (B) the Pool Balance as of the
last day of the related Collection Period minus the product of 0.50% and the
Cut-off Date Aggregate Principal Balance.
"Class M-6 Realized Loss Amortization Amount": As to the Class M-6
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-6 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (xx) hereof, in each case
for such Distribution Date.
"Class P Certificate": Any one of the Certificates with a "P"
designated on the face thereof substantially in the form annexed hereto as
Exhibit C-8, executed by the Trustee on behalf of the Trust and authenticated
and delivered by the Certificate Registrar, representing the right to
distributions as set forth herein and therein.
"Class R Certificate": The Class R Certificate executed by the
Trustee on behalf of the Trust, and authenticated and delivered by the
Certificate Registrar, substantially in the form annexed hereto as Exhibit C-9
and evidencing the ownership of the Residual Interest in each of REMIC 1 and
REMIC 2. The Class R Certificate represents the ownership of the Class R-1
Interest and the Class R-2 Interest.
"Class R-1 Interest": The uncertificated residual interest in REMIC
1.
"Class R-2 Interest": The uncertificated residual interest in REMIC
2.
"Closing Date": [______], 20 .
"Code": The Internal Revenue Code of 1986, as it may be amended from
time to time.
"Collection Account": The account or accounts created and maintained
by the Servicer pursuant to Section 3.04, which shall be entitled "Collection
Account, ▇▇▇▇▇ Fargo Home Mortgage, Inc., as Servicer for [_______], as Trustee,
in trust for registered Holders of ▇▇▇▇▇ Fargo Home Equity Asset-Backed
Securities 20 - Trust, Home Equity Asset-Backed Certificates, Series 20 - ," and
which must be an Eligible Account.
"Collection Period": With respect to any Distribution Date, the
period from the second day of the calendar month preceding the month in which
such Distribution Date occurs through the first day of the month in which such
Distribution Date occurs.
"Compensating Interest": As defined in Section 3.23 hereof.
"Condemnation Proceeds": All awards or settlements in respect of a
taking of a Mortgaged Property by exercise of the power of eminent domain or
condemnation.
"Consulting Agreement": The Consulting Agreement, dated as of
[______], 20 , between [____________], as Credit Risk Manager, and the
Depositor.
"Corporate Trust Office": The principal corporate trust office of
the Trustee at which at any particular time its corporate trust business in
connection with this Agreement shall be administered, which office at the date
of the execution of this instrument is located at [______________], Attention:
[______________] or at such other address as the Trustee may designate from time
to time by notice to the Certificateholders, the Depositor, the Securities
Administrator and the Servicer.
"Corresponding Classes": With respect to REMIC 1 and REMIC 2, the
following Classes shall be Corresponding Classes:
--------------------------------------------------------------------------------
Corresponding REMIC 1 Classes Corresponding REMIC 2 Classes
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LT1A1 Class A-1 Certificates
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LT1A1A Class A-1A Certificates
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LT1A2 Class A-2 Certificates
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LT1M1 Class M-1 Certificates
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LT1M2 Class M-2 Certificates
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LT1M3 Class M-3 Certificates
--------------------------------------------------------------------------------
LT1M4 Class M-4 Certificates
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LT1M5 Class M-5 Certificates
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LT1M6 Class M-6 Certificates
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LT1B Class B Certificates
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"Credit Risk Manager": [_________], a [______] corporation.
"Credit Risk Manager Fee": The fee payable to the Credit Risk
Manager on each Distribution Date for its services as Credit Risk Manager, in an
amount equal to the product of (i) one-twelfth of the Credit Risk Manager Fee
Rate and (ii) the Pool Balance as of the opening of business on the first day of
the related Collection Period.
"Credit Risk Manager Fee Rate": With respect to any Distribution
Date, [___]% per annum.
"Credit Risk Management Agreement": The Credit Risk Management
Agreement between the Servicer and the Credit Risk Manager dated [______], 20 .
"Custodian": ▇▇▇▇▇ Fargo Bank, National Association, as custodian
pursuant to the Custody Agreement, and any successor custodian, if any,
hereafter appointed by the Trustee pursuant to Section 8.16. The Custodian may
(but need not) be the Trustee or any Person directly or indirectly controlling
or controlled by or under common control of either of them.
"Custody Agreement": That certain Custody Agreement, dated as of
[______], 20 , among the Custodian, the Depositor, the Servicer, the Securities
Administrator and the Trustee.
"Cut-off Date": [_________], 20 .
"Cut-off Date Aggregate Principal Balance": The aggregate of the
Cut-off Date Principal Balances of the Mortgage Loans.
"Cut-off Date Principal Balance": With respect to any Mortgage Loan,
the unpaid principal balance thereof as of the Cut-off Date after application of
funds received or advanced on or before such date (or as of the applicable date
of substitution with respect to an Eligible Substitute Mortgage Loan).
"Debt Service Reduction": With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of
competent jurisdiction in a proceeding under the Bankruptcy Code, except such a
reduction resulting from a Deficient Valuation.
"Document Transfer Event": The 60th day following the day on which
either (i) ▇▇▇▇▇ Fargo Home Mortgage, Inc. is no longer the Servicer of any of
the Mortgage Loans or (ii) the senior, unsecured long-term debt rating of ▇▇▇▇▇
Fargo & Company is less than "BBB-" by Fitch.
"Defective Mortgage Loan": A Mortgage Loan replaced or to be
replaced by one or more Eligible Substitute Mortgage Loans.
"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 Bankruptcy
Code.
"Definitive Certificates": As defined in Section 5.02(c) hereof.
"Delinquent": Any Mortgage Loan with respect to which the Monthly
Payment due on a Due Date is not made by the close of business on the next
scheduled Due Date for such Mortgage Loan.
"Depositor": ▇▇▇▇▇ Fargo Asset Securities Corporation, a Delaware
corporation, or any successor in interest.
"Depository": The initial depository shall be The Depository Trust
Company, whose nominee is Cede & Co., or any other organization registered as a
"clearing agency" pursuant to Section 17A of the Exchange Act. The Depository
shall initially be the registered Holder of the Book-Entry Certificates. 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.
"Depository Participant": A broker, dealer, bank or other financial
institution or other person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
"Determination Date": With respect to any Distribution Date, the
17th day of the calendar month in which such Distribution Date occurs or, if
such 17th day is not a Business Day, the Business Day immediately preceding such
17th day.
"Directly Operate": With respect to any REO Property, the furnishing
or rendering of services to the tenants thereof, the management or operation of
such REO Property, the holding of such REO Property primarily for sale to
customers, the performance of any construction work thereon or any use of such
REO Property in a trade or business conducted by the Trust other than through an
Independent Contractor; provided, however, that the Trustee (or the Servicer
under this Agreement) shall not be considered to Directly Operate an REO
Property solely because the Trustee (or the Servicer under this Agreement)
establishes rental terms, chooses tenants, enters into or renews leases, deals
with taxes and insurance, or makes decisions as to repairs or capital
expenditures with respect to such REO Property.
"Disqualified Organization": A "disqualified organization" under
Section 860E of the Code, which as of the Closing Date is any of: (i) the United
States, any state or political subdivision thereof, any possession of the United
States, any foreign government, any international organization, or any agency or
instrumentality of any of the foregoing, (ii) any organization (other than a
cooperative described in Section 521 of the Code) which is exempt from the tax
imposed by Chapter 1 of the Code unless such organization is subject to the tax
imposed by Section 511 of the Code, (iii) any organization described in Section
1381(a)(2)(C) of the Code, or (iv) any other Person so designated by the Trustee
based upon an Opinion of Counsel provided by nationally recognized counsel to
the Trustee that the holding of an ownership interest in the Class R Certificate
by such Person may cause the Trust Fund 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. A corporation will not be treated as an instrumentality of the
United States or of any state or political subdivision thereof if all of its
activities are subject to tax and a majority of its board of directors is not
selected by a governmental unit. The term "United States," "state" and
"international organization" shall have the meanings set forth in Section 7701
of the Code.
"Distribution Account": The trust account or accounts created and
maintained by the Trustee pursuant to Section 3.04(b) which shall be entitled
"Distribution Account, [____________], as Trustee, in trust for the registered
Holders of ▇▇▇▇▇ Fargo Home Equity Asset-Backed Securities 20 - Trust, Home
Equity Asset-Backed Certificates, Series 20 - ," and which must be an Eligible
Account.
"Distribution Date": The 25th day of any calendar month, or if such
25th day is not a Business Day, the Business Day immediately following such 25th
day, commencing in [______] 20 .
"Distribution Date Statement": As defined in Section 4.06(a) hereof.
"Due Date": With respect to each Mortgage Loan and any Distribution
Date, the day of the calendar month in which such Distribution Date occurs on
which the Monthly Payment for such Mortgage Loan was due, exclusive of any grace
period.
"Eligible Account": Any of (i) an account or accounts maintained
with a federal or state chartered depository institution or trust company the
short-term unsecured debt obligations of which (or, in the case of a depository
institution or trust company that is the principal subsidiary of a holding
company, the short-term unsecured debt obligations of such holding company) are
rated "A-1+" by S&P, "P-1" by ▇▇▇▇▇'▇ and "F-1" by Fitch (or comparable ratings
if S&P, ▇▇▇▇▇'▇ and Fitch are not the Rating Agencies) by each of the Rating
Agencies at the time any amounts are held on deposit therein, (ii) an account or
accounts the deposits in which are fully insured by the FDIC, (iii) a trust
account or accounts maintained with the trust department of a federal or state
chartered depository institution, national banking association or trust company
acting in its fiduciary capacity or (iv) an account otherwise acceptable to each
Rating Agency without reduction or withdrawal of their then current ratings of
the Certificates as evidenced by a letter from each Rating Agency to the
Trustee. Eligible Accounts may bear interest.
"Eligible Investments": Any one or more of the following obligations
or securities acquired at a purchase price of not greater than par, regardless
of whether issued or managed by the Depositor, the Servicer, the Securities
Administrator, the Trustee or any of their respective Affiliates or for which an
Affiliate of the Trustee or the Securities Administrator serves as an advisor:
(i) direct obligations of, or obligations fully guaranteed as to
timely payment of principal and interest by, the United States or any
agency or instrumentality thereof, provided such obligations are backed by
the full faith and credit of the United States;
(ii) (A) demand and time deposits in, certificates of deposit of,
bankers' acceptances issued by or federal funds sold by any depository
institution or trust company (including the Trustee, the Securities
Administrator or their respective agents acting in their respective
commercial capacities) incorporated under the laws of the United States of
America or any state thereof and subject to supervision and examination by
federal and/or state authorities, so long as, at the time of such
investment or contractual commitment providing for such investment, such
depository institution or trust company or its ultimate parent has a
short-term uninsured debt rating in one of the two highest available
rating categories of S&P and ▇▇▇▇▇'▇ and the highest available rating
category of Fitch and provided that each such investment has an original
maturity of no more than 365 days and (B) any other demand or time deposit
or deposit which is fully insured by the FDIC;
(iii) repurchase obligations with a term not to exceed 30 days with
respect to any security described in clause (i) above and entered into
with a depository institution or trust company (acting as principal) rated
A or higher by S&P and Fitch and A2 or higher by ▇▇▇▇▇'▇, provided,
however, that collateral transferred pursuant to such repurchase
obligation must be of the type described in clause (i) above and must (A)
be valued daily at current market prices plus accrued interest or (B)
pursuant to such valuation, be equal, at all times, to 105% of the cash
transferred by the Trustee or the Securities Administrator in exchange for
such collateral and (C) be delivered to the Trustee, the Securities
Administrator or, if the Trustee or the Securities Administrator is
supplying the collateral, an agent for the Trustee or the Securities
Administrator, as the case may be, in such a manner as to accomplish
perfection of a security interest in the collateral by possession of
certificated securities;
(iv) securities bearing interest or sold at a discount that are
issued by any corporation incorporated under the laws of the United States
of America or any State thereof and that are rated by each Rating Agency
in its highest long-term unsecured rating categories at the time of such
investment or contractual commitment providing for such investment;
(v) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a
specified date not more than 30 days after the date of acquisition
thereof) that is rated by each Rating Agency in its highest short-term
unsecured debt rating available at the time of such investment;
(vi) units of money market funds registered under the Investment
Company Act of 1940 (including funds managed or advised by the Trustee or
the Securities Administrator or affiliates thereof) that, if rated by each
Rating Agency, are rated in its highest rating category (if so rated by
such Rating Agency); and
(vii) if previously confirmed in writing to the Trustee and the
Securities Administrator, any other demand, money market or time deposit,
or any other obligation, security or investment, as may be acceptable to
the Rating Agencies in writing as an eligible investment of funds backing
securities having ratings equivalent to its highest initial rating of the
Senior Certificates;
provided, that no instrument described hereunder shall evidence either the right
to receive (a) only interest with respect to the obligations underlying such
instrument or (b) both principal and interest payments derived from obligations
underlying such instrument and the interest and principal payments with respect
to such instrument provide a yield to maturity at par greater than 120% of the
yield to maturity at par of the underlying obligations.
"Eligible Substitute Mortgage Loan": A mortgage loan substituted for
a Defective Mortgage Loan pursuant to the terms of this Agreement which must, on
the date of such substitution, (i) have an outstanding principal balance, after
application of all scheduled payments of principal and interest due during or
prior to the month of substitution, not in excess of, and not more than 5% less
than, the outstanding principal balance of the Defective Mortgage Loan as of the
Due Date in the calendar month during which the substitution occurs, (ii) have a
Mortgage Interest Rate, with respect to a Fixed-Rate Mortgage Loan, not less
than the Mortgage Interest Rate of the Defective Mortgage Loan and not more than
1% in excess of the Mortgage Interest Rate of such Defective Mortgage Loan,
(iii) have the same Due Date as the Defective Mortgage Loan; (iv) if an
Adjustable-Rate Mortgage Loan, have a Maximum Mortgage Interest Rate not less
than the Maximum Mortgage Interest Rate for the Defective Mortgage Loan, (v) if
an Adjustable-Rate Mortgage Loan, have a Minimum Mortgage Interest Rate not less
than the Minimum Mortgage Interest Rate of the Defective Mortgage Loan, (vi) if
an Adjustable-Rate Mortgage Loan, have a Gross Margin equal to or greater than
the Gross Margin of the Defective Mortgage Loan, (vii) if an Adjustable-Rate
Mortgage Loan, have the same Index as the Defective Mortgage Loan (viii) if an
Adjustable-Rate Mortgage Loan, have a next Adjustment Date not more than two
months later than the next Adjustment Date on the Defective Mortgage Loan, an
Eligible Substitute Mortgage Loan must have all Adjustment Dates occurring
during the same Interest Accrual Period during which Adjustment Dates occur with
respect to the substituted Mortgage Loan, (ix) have a remaining term to maturity
not greater than (and not more than one year less than) that of the Defective
Mortgage Loan, (x) be current as of the date of substitution, (xi) have a
Loan-to-Value Ratio as of the date of substitution equal to or lower than the
Loan-to-Value Ratio of the Defective Mortgage Loan as of such date, (xii) have a
risk grading at least equal to the risk grading assigned on the Defective
Mortgage Loan, (xiii) have been underwritten or reunderwritten in accordance
with the same underwriting criteria and guidelines as the Defective Mortgage
Loan, (xiv) have the same lien priority as the Defective Mortgage Loan; (xv)
have a Prepayment Charge at least equal in amount and duration of that of the
Defective Mortgage Loan and (xvi) conform to each representation and warranty
set forth in Section [___] of the Mortgage Loan Purchase Agreement applicable to
the Defective Mortgage Loan. In the event that one or more mortgage loans are
substituted for one or more Defective Mortgage Loans, the amounts described in
clause (i) hereof shall be determined on the basis of aggregate principal
balance, the Mortgage Interest Rates described in clause (ii) hereof shall be
determined on the basis of weighted average Mortgage Interest Rates, the risk
gradings described in clause (xii) hereof shall be satisfied as to each such
mortgage loan, the terms described in clause (ix) hereof shall be determined on
the basis of weighted average remaining term to maturity, the Loan-to-Value
Ratios described in clause (xi) hereof shall be satisfied as to each such
mortgage loan and, except to the extent otherwise provided in this sentence, the
representations and warranties described in clause (xvi) hereof must be
satisfied as to each Eligible Substitute Mortgage Loan or in the aggregate, as
the case may be. Any Defective Mortgage Loan that is a Group 1 Mortgage Loan or
Group 2 Mortgage Loan must be replaced by an Eligible Substitute Mortgage Loan
that will be a Group 1 Mortgage Loan or Group 2 Mortgage Loan, as applicable.
"ERISA": The Employee Retirement Income Security Act of 1974, as
amended.
"ERISA-Restricted Certificates": Any of the Class B, Class CE, Class
P and Class R Certificates.
"Escrow Account": The account or accounts created and maintained
pursuant to Section 3.06.
"Escrow Payments": The amounts constituting ground rents, taxes,
assessments, water rates, mortgage insurance premiums, fire and hazard insurance
premiums and other payments required to be escrowed by the Mortgagor with the
mortgagee pursuant to any Mortgage Loan.
"Estate in Real Property": A fee simple estate in a parcel of real
property.
"Exchange Act": The Securities Exchange Act of 1934, as amended.
"Expense Fee Rate": The sum of (i) the Securities Administrator Fee
Rate, (ii) the Servicing Fee Rate and (iii) the Credit Risk Manager Fee Rate.
"Extended Period": As defined in Section 9.04(b).
"Extra Principal Distribution Amount": As of any Distribution Date,
the lesser of (x) the Monthly Excess Interest Amount for such Distribution Date
and (y) the Overcollateralization Deficiency for such Distribution Date.
"FDIC": Federal Deposit Insurance Corporation or any successor
thereto.
"Fidelity Bond": Shall have the meaning assigned thereto in Section
3.12.
"Final Recovery Determination": With respect to any defaulted
Mortgage Loan or any REO Property (other than a Mortgage Loan or REO Property
(i) purchased by the Depositor pursuant to or as contemplated by Section 2.03,
(ii) purchased by the Depositor pursuant to Section 3.16 or (iii) purchased by
the Depositor pursuant to Section 10.01), a determination made by the Servicer
that all Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds and
other payments or recoveries which the Servicer, in its reasonable good faith
judgment, expects to be finally recoverable in respect thereof have been so
recovered. The Servicer shall maintain records, prepared by a Servicing Officer,
of each Final Recovery Determination made thereby.
"Fitch": Fitch Ratings and its successors, and if such company shall
for any reason no longer perform the functions of a securities rating agency,
"Fitch" shall be deemed to refer to any other "nationally recognized statistical
rating organization" as set forth on the most current list of such organizations
released by the Securities and Exchange Commission.
"Fixed-Rate Mortgage Loan": A Mortgage Loan which has a constant
annual rate at which interest accrues in accordance with the provisions of the
related Mortgage Note.
"Foreclosure Price": The amount reasonably expected to be received
from the sale of the related Mortgaged Property net of any expenses associated
with foreclosure proceedings.
"Form 10-K": As defined in Section 3.31(a) hereof.
"Formula Rate": Any of the Class A-1 Formula Rate, the Class A-1A
Formula Rate, the Class A-2 Formula Rate, the Class M-1 Formula Rate, the Class
M-2 Formula Rate, the Class M-3 Formula Rate, the Class M-4 Formula Rate, the
Class M-5 Formula Rate, the Class M-6 Formula Rate and the Class B Formula Rate.
"Grantor Trust": That portion of the Trust exclusive of REMIC 1 and
REMIC 2 consisting of (a) the Prepayment Charges and the right of the Class P
Certificateholders to receive such Prepayment Charges, (b) the right of the
Offered Certificates to receive Cap Carryover Amounts, (c) the Yield Maintenance
Agreement, the Reserve Account and the beneficial interest of the Class CE
Certificates with respect thereto and (d) the obligation of the Class CE
Certificates to pay Cap Carryover Amounts.
"Gross Margin": With respect to each Adjustable-Rate Mortgage Loan,
the fixed percentage set forth in the related Mortgage Note that is added to the
Index on each Adjustment Date in accordance with the terms of the related
Mortgage Note used to determine the Mortgage Interest Rate for such Mortgage
Loan.
"Group 1 Cap": As of any Distribution Date and the Class A-1 and
Class A-1A Certificates, a per annum rate, adjusted by multiplying such rate by
a fraction equal to 30 over the actual number of days in the related Interest
Accrual Period, equal to the Weighted Average Net Mortgage Interest Rate for the
Group 1 Mortgage Loans.
"Group 1 Interest Remittance Amount": As of any Distribution Date,
the sum, without duplication, of (i) all interest due and collected or advanced
with respect to the related Collection Period on the Group 1 Mortgage Loans
received by the Servicer on or prior to the Determination Date for such
Distribution Date (less the Servicing Fee, amounts available for reimbursement
of Advances and Servicing Advances pursuant to Section 3.05 and expenses
reimbursable pursuant to Section 6.03), (ii) all Compensating Interest paid by
the Servicer on the related Distribution Date with respect to such Mortgage
Loans, (iii) the portion of any payment in connection with any Principal
Prepayment, substitution, Purchase Price, Termination Price, Insurance Proceeds
or Net Liquidation Proceeds relating to interest with respect to such Mortgage
Loans received during the related Prepayment Period and (iv) the portion of any
Reimbursement Amount relating to such Mortgage Loans received during the related
Prepayment Period.
"Group 1 Maximum Rate Cap": With respect to any Distribution Date
and for the Class A-1 and Class A-1A Certificates, a per annum rate, adjusted by
multiplying such rate by a fraction equal to 30 over the actual number of days
in the related Interest Accrual Period, equal to the average of the Net Maximum
Mortgage Interest Rates for the Adjustable-Rate Mortgage Loans which are Group 1
Mortgage Loans and the Net Mortgage Interest Rates for the Fixed-Rate Mortgage
Loans which are Group 1 Mortgage Loans, weighted on the basis of the Principal
Balances of the Group 1 Mortgage Loans as of the first day of the related
Collection Period.
"Group 1 Mortgage Loan": Each Mortgage Loan listed on Exhibit D-1
hereto. Each Group 1 Mortgage Loan had, as of the Cut-off Date, a Principal
Balance that conforms to ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac guidelines.
"Group 1 Principal Percentage": With respect to any Distribution
Date and the Class A-1 and Class A-1A Certificates, the percentage equivalent to
a fraction, the numerator of which is the Principal Remittance Amount allocable
to the Group 1 Mortgage Loans for such Distribution Date and the denominator of
which is the Principal Remittance Amount allocable to the Mortgage Loans for
such Distribution Date.
"Group 1 Senior Principal Distribution Amount": With respect to any
Distribution Date, (i) before the Stepdown Date or as to which a Trigger Event
is in effect, the lesser of (a) the aggregate Principal Balance of the Class A-1
and Class A-1A Certificates immediately prior to such Distribution Date and (b)
the Group 1 Principal Percentage of the Principal Distribution Amount and (ii)
on or after the Stepdown Date and as long as a Trigger Event is not in effect,
the excess of (a) the aggregate Principal Balance of the Class A-1 and Class
A-1A Certificates immediately prior to such Distribution Date over (b) the
lesser of (x) the product of (1) [___]% and (2) the aggregate Principal Balance
of the Group 1 Mortgage Loans as of the last day of the related Collection
Period and (y) the amount by which the aggregate Principal Balance of the Group
1 Mortgage Loans as of the last day of the related Collection Period exceeds the
product of (1) 0.50% and (2) the aggregate Principal Balance of the Group 1
Mortgage Loans on the Cut-off Date.
"Group 2 Cap": As of any Distribution Date and the Class A-2
Certificates, a per annum rate, adjusted by multiplying such rate by a fraction
equal to 30 over the actual number of days in the related Interest Accrual
Period, equal to the Weighted Average Net Mortgage Interest Rate for the Group 2
Mortgage Loans.
"Group 2 Interest Remittance Amount": As of any Distribution Date,
the sum, without duplication, of (i) all interest due and collected or advanced
with respect to the related Collection Period on the Group 2 Mortgage Loans
received by the Servicer on or prior to the Determination Date for such
Distribution Date (less the Servicing Fee, amounts available for reimbursement
of Advances and Servicing Advances pursuant to Section 3.05 and expenses
reimbursable pursuant to Section 6.03), (ii) all Compensating Interest paid by
the Servicer on the related Distribution Date with respect to such Mortgage
Loans, (iii) the portion of any payment in connection with any Principal
Prepayment, substitution, Purchase Price, Termination Price, Insurance Proceeds
or Net Liquidation Proceeds relating to interest with respect to such Mortgage
Loans received during the related Prepayment Period and (iv) the portion of any
Reimbursement Amount relating to such Mortgage Loans received during the related
Prepayment Period.
"Group 2 Maximum Rate Cap": With respect to any Distribution Date
and for the Class A-2 Certificates, a per annum rate, adjusted by multiplying
such rate by a fraction equal to 30 over the actual number of days in the
related Interest Accrual Period, equal to the average of the Net Maximum
Mortgage Interest Rates for the Adjustable-Rate Mortgage Loans which are Group 2
Mortgage Loans and the Net Mortgage Interest Rates for the Fixed-Rate Mortgage
Loans which are Group 2 Mortgage Loans, weighted on the basis of the Principal
Balances of the Group 2 Mortgage Loans as of the first day of the related
Collection Period.
"Group 2 Mortgage Loan": Each Mortgage Loan listed on Exhibit D-2
hereto. Each Group 2 Mortgage Loan had, as of the Cut-off Date, a Principal
Balance that does not conform to ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac guidelines.
"Group 2 Principal Percentage": With respect to any Distribution
Date and the Class A-2 Certificates, the percentage equivalent to a fraction,
the numerator of which is the Principal Remittance Amount allocable to the Group
2 Mortgage Loans for such Distribution Date and the denominator of which is the
Principal Remittance Amount allocable to the Mortgage Loans for such
Distribution Date.
"Group 2 Senior Principal Distribution Amount": With respect to any
Distribution Date (i) before the Stepdown Date or as to which a Trigger Event is
in effect, the lesser of (a) the Principal Balance of the Class A-2 Certificates
immediately prior to such Distribution Date and (b) the Group 2 Principal
Percentage of the Principal Distribution Amount and (ii) on or after the
Stepdown Date and as long as a Trigger Event is not in effect, the excess of (a)
the Principal Balance of the Class A-2 Certificates immediately prior to such
Distribution Date over (b) the lesser of (x) the product of (1) [___]% and (2)
the aggregate Principal Balance of the Group 2 Mortgage Loans as of the last day
of the related Collection Period and (y) the amount by which the aggregate
Principal Balance of the Group 2 Mortgage Loans as of the last day of the
related Collection Period exceeds the product of (1) 0.50% and (2) the aggregate
Principal Balance of the Group 2 Mortgage Loans on the Cut-off Date.
"Group Subordinate Amount" for any Distribution Date and (i) Loan
Group 1, will be equal to the excess of the aggregate Principal Balance of the
Group 1 Mortgage Loans as of the first day of the related Collection Period over
the aggregate Principal Balance of the Class A-1 and Class A-1A Certificates
immediately prior to such Distribution Date and (ii) Loan Group 2, will be equal
to the excess of the aggregate Principal Balance of the Group 2 Mortgage Loans
as of the first day of the related Collection Period over the Principal Balance
of the Class A-2 Certificates immediately prior to such Distribution Date.
"Independent": When used with respect to any specified Person, any
such Person who (i) is in fact independent of the Depositor, the Securities
Administrator, the Servicer and their respective Affiliates, (ii) does not have
any direct financial interest in or any material indirect financial interest in
the Depositor, the Securities Administrator or the Servicer or any Affiliate
thereof, and (iii) is not connected with the Depositor, the Securities
Administrator or the Servicer or any Affiliate thereof as an officer, employee,
promoter, underwriter, trustee, partner, director or Person performing similar
functions; provided, however, that a Person shall not fail to be Independent of
the Depositor, the Securities Administrator or the Servicer or any Affiliate
thereof merely because such Person is the beneficial owner of 1% or less of any
class of securities issued by the Depositor, the Securities Administrator or the
Servicer or any Affiliate thereof, as the case may be.
"Independent Contractor": Either (i) any Person (other than the
Servicer or the Securities Administrator) that would be an "independent
contractor" with respect to the Trust Fund within the meaning of Section
856(d)(3) of the Code if the Trust Fund were a real estate investment trust
(except that the ownership tests set forth in that section shall be considered
to be met by any Person that owns, directly or indirectly, 35 percent or more of
any Class of Certificates), so long as the Trust Fund does not receive or derive
any income from such Person and provided that the relationship between such
Person and the Trust Fund is at arm's length, all within the meaning of Treasury
Regulations Section 1.856-4(b)(5), or (ii) any other Person (including the
Servicer or the Securities Administrator) if the Trustee has received an Opinion
of Counsel, which Opinion of Counsel shall be an expense of the Trust Fund, to
the effect that the taking of any action in respect of any REO Property by such
Person, subject to any conditions therein specified, that is otherwise herein
contemplated to be taken by an Independent Contractor will not cause such REO
Property to cease to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code (determined without regard to the exception
applicable for purposes of Section 860D(a) of the Code), or cause any income
realized in respect of such REO Property to fail to qualify as Rents from Real
Property.
"Index": With respect to each Adjustable-Rate Mortgage Loan and with
respect to each related Adjustment Date, the index as specified in the related
Mortgage Note.
"Initial Principal Balance": With respect to any Certificate of a
Class other than a Class CE, Class P or Class R Certificate, the amount
designated "Initial Principal Balance" on the face thereof.
"Initial Overcollateralization Amount": $[________].
"Insurance Proceeds": Proceeds of any title policy, hazard policy or
other insurance policy covering a Mortgage Loan, to the extent such proceeds are
not to be applied to the restoration of the related Mortgaged Property or
released to the Mortgagor in accordance with the procedures that the Servicer
would follow in servicing mortgage loans held for its own account, subject to
the terms and conditions of the related Mortgage Note and Mortgage.
"Interest Accrual Period": With respect to any Distribution Date and
(i) the Offered Certificates, the period from the preceding Distribution Date to
the day prior to the current Distribution Date (or, in the case of the first
Distribution Date, the period from the Closing Date through [________], 20 ),
and (ii) the Class B Certificates, the calendar month immediately preceding the
month in which such Distribution Date occurs.
"Interest Carry Forward Amount": For any Class of Certificates
(other than the Class CE, Class P and Class R Certificates) and any Distribution
Date, the sum of (a) the excess, if any, of the Accrued Certificate Interest and
any Interest Carry Forward Amount for the prior Distribution Date, over the
amount in respect of interest actually distributed on such Class on such prior
Distribution Date and (b) interest on such excess at the applicable Certificate
Interest Rate (x) with respect to the Offered Certificates, for the actual
number of days elapsed on the basis of a 360-day year since the prior
Distribution Date, and (y) with respect to the Class B Certificates, on the
basis of a 360-day year consisting of twelve 30-day months.
"Interest Percentage": With respect to any Class of Certificates and
any Distribution Date, the ratio (expressed as a decimal carried to six places)
of the Accrued Certificate Interest for such Class to the sum of the Accrued
Certificate Interest for all Classes, in each case with respect to such
Distribution Date, without regard to Relief Act Interest Shortfalls.
"Interest Remittance Amount": As of any Determination Date, the sum
of the Group 1 Interest Remittance Amount and the Group 2 Interest Remittance
Amount.
"Late Collections": With respect to any Mortgage Loan, all amounts
received subsequent to the Determination Date immediately following any related
Collection Period, whether as late payments of Monthly Payments or as Insurance
Proceeds, Condemnation Proceeds, Liquidation Proceeds or otherwise, which
represent late payments or collections of principal and/or interest due (without
regard to any acceleration of payments under the related Mortgage and Mortgage
Note) but delinquent on a contractual basis for such Collection Period and not
previously recovered.
"LIBOR Business Day": Any day on which banks in London, England and
The City of New York are open and conducting transactions in foreign currency
and exchange.
"LIBOR Determination Date": With respect to the Offered
Certificates, (i) for the first Distribution Date, the second LIBOR Business Day
preceding the Closing Date and (ii) for each subsequent Distribution Date, the
second LIBOR Business Day prior to the immediately preceding Distribution Date.
"Liquidated Mortgage Loan": As to any Distribution Date, any
Mortgage Loan in respect of which the Servicer has determined, in accordance
with the servicing procedures specified herein, as of the end of the related
Prepayment Period, that all Liquidation Proceeds, Condemnation Proceeds and
Insurance Proceeds which it expects to recover with respect to the liquidation
of the Mortgage Loan or disposition of the related REO Property have been
recovered.
"Liquidation Proceeds": The amount (other than amounts received in
respect of the rental of any REO Property prior to REO Disposition) received by
the Servicer in connection with (i) the taking of all or a part of a Mortgaged
Property by exercise of the power of eminent domain or condemnation or (ii) the
liquidation of a defaulted Mortgage Loan by means of a trustee's sale,
foreclosure sale or otherwise.
"Liquidation Report": The report with respect to a Liquidated
Mortgage Loan in such form as is agreed to by the Servicer, the Trustee and the
Securities Administrator listing (i) the sale price of the related Mortgaged
Property or amount of the REO Disposition, (ii) the amount of any Realized Loss
(or gain) with respect to such Liquidated Mortgage Loan, (iii) the expenses
relating to the liquidation of such Liquidated Mortgage Loan and (iv) such other
information as is agreed to by the Servicer, the Trustee and the Securities
Administrator.
"Loan Group": Any of Loan Group 1 or Loan Group 2.
"Loan Group 1": The Group 1 Mortgage Loans.
"Loan Group 2": The Group 2 Mortgage Loans.
"Loan-to-Value Ratio": For any Mortgage Loan, the fraction,
expressed as a percentage, the numerator of which is the Principal Balance of
the Mortgage Loan at origination and the denominator of which is the Value of
the related Mortgaged Property.
"Losses": As defined in Section 9.03.
"Lost Note Affidavit": With respect to any Mortgage Loan as to which
the original Mortgage Note has been permanently lost or destroyed and has not
been replaced, an affidavit from the Seller certifying that the original
Mortgage Note has been lost, misplaced or destroyed (together with a copy of the
related Mortgage Note and indemnifying the Trust against any loss, cost or
liability resulting from the failure to deliver the original Mortgage Note) in
the form of Exhibit H hereto.
"Majority Certificateholders": The Holders of Certificates
evidencing at least 51% of the Voting Interests.
"Marker Rate": With respect to the Class CE Certificates and any
Distribution Date, a per annum rate equal to two (2) times the weighted average
of the Uncertificated REMIC Pass-Through Rates for REMIC 1 Regular Interest
LT1A1, REMIC 1 Regular ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, REMIC 1 Regular Interest LT1A2, REMIC 1
Regular Interest LT1M1, REMIC 1 Regular Interest LT1M2, REMIC 1 Regular Interest
LT1M3, REMIC 1 Regular Interest LT1M4, REMIC 1 Regular Interest LT1M5, REMIC 1
Regular Interest LT1M6, REMIC 1 Regular Interest LT1B and REMIC 1 Regular
Interest LT1ZZ, (i) with the rate on each such REMIC Regular Interest (other
than REMIC 1 Regular Interest LT1ZZ) subject to a cap equal to the Pass-Through
Rate of its Corresponding Class (taking into account in determining any such
Pass-through Rate the imposition of the Group 1 Cap, the Group 2 Cap or the Pool
Cap, as applicable, as described in footnotes (1) through (9) to the table in
the Preliminary Statement relating to the Certificates) for the purposes of this
calculation and (ii) with the rate on REMIC 1 Regular Interest LT1ZZ subject to
a cap of zero for the purpose of this calculation; provided, however, that for
this purpose, calculations of the Uncertificated REMIC 1 Pass-Through Rate and
the related caps with respect to each such REMIC Regular Interest (other than
REMIC 1 Regular Interest LT1ZZ) shall be multiplied by a fraction, the numerator
of which is the actual number of days in the Interest Accrual Period and the
denominator of which is 30.
"Maximum LT1ZZ Uncertificated Accrued Interest Deferral Amount":
With respect to any Distribution Date, the excess of (a) accrued interest at the
Uncertificated REMIC 1 Pass-Through Rate applicable to REMIC 1 Regular Interest
LT1ZZ for such Distribution Date on a balance equal to the Uncertificated
Principal Balance of REMIC 1 Regular Interest LT1ZZ minus the REMIC 1
Overcollateralized Amount, in each case for such Distribution Date, over (b)
Uncertificated Accrued Interest on REMIC 1 Regular Interest LT1A1, REMIC 1
Regular ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, REMIC 1 Regular Interest LT1A2, REMIC 1 Regular
Interest LT1M1, REMIC 1 Regular Interest LT1M2, REMIC 1 Regular Interest LT1M3,
REMIC 1 Regular Interest LT1M4, REMIC 1 Regular Interest LT1M5, REMIC 1 Regular
Interest LT1M6 and REMIC 1 Regular Interest LT1B each subject to a cap equal to
the Pass-Through Rate of the related Corresponding Class for the purpose of this
calculation; provided, however, that for this purpose, calculations of the
Uncertificated REMIC 1 Pass-Through Rate and the related caps with respect to
Uncertificated Accrued Interest on REMIC 1 Regular Interest LT1A1, REMIC 1
Regular ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, REMIC 1 Regular Interest LT1A2, REMIC 1 Regular
Interest LT1M1, REMIC 1 Regular Interest LT1M2, REMIC 1 Regular Interest LT1M3,
REMIC 1 Regular Interest LT1M4, REMIC 1 Regular Interest LT1M5 and REMIC 1
Regular Interest LT1M6 shall be multiplied by a fraction, the numerator of which
is the actual number of days in the Interest Accrual Period and the denominator
of which is 30.
"Maximum Mortgage Interest Rate": With respect to each
Adjustable-Rate Mortgage Loan, the percentage set forth in the related Mortgage
Note as the maximum Mortgage Interest Rate thereunder.
"Minimum Mortgage Interest Rate": With respect to each
Adjustable-Rate Mortgage Loan, the percentage set forth in the related Mortgage
Note as the minimum Mortgage Interest Rate thereunder.
"Monthly Excess Cashflow Amount": The sum of the Monthly Excess
Interest Amount, the Overcollateralization Release Amount and (without
duplication) any portion of the Principal Distribution Amount remaining after
principal distributions on the Offered Certificates and the Class B
Certificates.
"Monthly Excess Interest Amount": With respect to each Distribution
Date, the amount, if any, by which the Interest Remittance Amount for such
Distribution Date exceeds the aggregate amount distributed on such Distribution
Date pursuant to paragraphs (i) through (xii) under Section 4.01.
"Monthly Form 8-K": As defined in Section 3.31(a) hereof.
"Monthly Payment": With respect to any Mortgage Loan, the scheduled
monthly payment of principal and interest on such Mortgage Loan which is payable
by the related Mortgagor from time to time under the related Mortgage Note,
determined: (a) after giving effect to (i) any Deficient Valuation and/or Debt
Service Reduction with respect to such Mortgage Loan and (ii) any reduction in
the amount of interest collectible from the related Mortgagor pursuant to the
Relief Act or similar state laws; (b) without giving effect to any extension
granted or agreed to by the Servicer pursuant to Section 3.01; and (c) on the
assumption that all other amounts, if any, due under such Mortgage Loan are paid
when due.
"Moody's": ▇▇▇▇▇'▇ Investors Service, Inc., and its successors, and
if such company shall for any reason no longer perform the functions of a
securities rating agency, "Moody's" shall be deemed to refer to any other
"nationally recognized statistical rating organization" as set forth on the most
current list of such organizations released by the Securities and Exchange
Commission.
"Mortgage": The mortgage, deed of trust or other instrument creating
a first or second lien on, or first or second priority security interest in, a
Mortgaged Property securing a Mortgage Note.
"Mortgage File": The mortgage documents listed in Section 2.01
pertaining to a particular Mortgage Loan and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
"Mortgage Interest Rate": With respect to each Mortgage Loan, the
annual rate at which interest accrues on such Mortgage Loan from time to time in
accordance with the provisions of the related Mortgage Note, which rate (i) in
the case of each Fixed-Rate Mortgage Loan shall remain constant at the rate set
forth in the applicable Mortgage Loan Schedule as the Mortgage Interest Rate in
effect immediately following the Cut-off Date and (ii) in the case of each
Adjustable-Rate Mortgage Loan (A) as of any date of determination until the
first Adjustment Date following the Cut-off Date shall be the rate set forth in
the applicable Mortgage Loan Schedule as the Mortgage Interest Rate in effect
immediately following the Cut-off Date and (B) as of any date of determination
thereafter shall be the rate as adjusted on the most recent Adjustment Date, to
equal the sum, rounded as provided in the Mortgage Note, of the Index,
determined as set forth in the related Mortgage Note, plus the related Gross
Margin subject to the limitations set forth in the related Mortgage Note. With
respect to each Mortgage Loan that becomes an REO Property, as of any date of
determination, the annual rate determined in accordance with the immediately
preceding sentence as of the date such Mortgage Loan became an REO Property.
"Mortgage Loan": Each mortgage loan transferred and assigned to the
Trustee pursuant to Section 2.01 or Section 2.03(d) as from time to time held as
a part of the Trust Fund, the Mortgage Loans so held being identified in the
Mortgage Loan Schedules.
"Mortgage Loan Purchase Agreement": The agreement between the Seller
and the Depositor, dated as of [________], 20 , regarding the transfer of the
Mortgage Loans by the Seller to or at the direction of the Depositor.
"Mortgage Loan Schedule": As of any date with respect to the
Mortgage Loans, the lists of such Mortgage Loans included in the Trust Fund on
such date, separately identifying the Fixed-Rate Mortgage Loans and the
Adjustable-Rate Mortgage Loans, attached hereto as Exhibits D-1 and D-2. The
Mortgage Loan Schedules shall set forth the following information with respect
to each Mortgage Loan:
(1) the Mortgage Loan identifying number;
(2) the state and zip code of the Mortgaged Property;
(3) the type of Residential Dwelling constituting the Mortgaged Property;
(4) the occupancy status of the Mortgaged Property at origination;
(5) the original months to maturity;
(6) the date of origination;
(7) the first payment date;
(8) the stated maturity date;
(9) the stated remaining months to maturity;
(10) the original principal amount of the Mortgage Loan;
(11) the Principal Balance of each Mortgage Loan as of the Cut-off Date;
(12) the Mortgage Interest Rate of the Mortgage Loan as of the Cut-off
Date;
(13) the current principal and interest payment of the Mortgage Loan as of
the Cut-off Date;
(14) the contractual interest paid to date of the Mortgage Loan;
(15) the Loan-to-Value Ratio;
(16) a code indicating the loan performance status of the Mortgage Loan as
of the Cut-off Date;
(17) a code indicating the Index that is associated with such Mortgage
Loan;
(18) the Gross Margin;
(19) the Periodic Rate Cap;
(20) the Minimum Mortgage Interest Rate;
(21) the Maximum Mortgage Interest Rate;
(22) a code indicating whether the Mortgage Loan has a Prepayment Charge
and the type of Prepayment Charge and the term;
(23) the first Adjustment Date immediately following the Cut-off Date;
(24) the rate adjustment frequency;
(25) the payment adjustment frequency;
(26) the purpose of the Mortgage Loan; and
(27) a code indicating whether the Mortgage Loan is a second lien.
The Mortgage Loan Schedules shall set forth the following
information, as of the Cut-off Date, with respect to the Mortgage Loans in the
aggregate, for the Fixed-Rate Mortgage Loans and for the Adjustable-Rate
Mortgage Loans: (1) the number of Mortgage Loans; (2) the current Principal
Balance of the Mortgage Loans; (3) the weighted average Mortgage Interest Rate
of the Mortgage Loans; and (4) the weighted average maturity of the Mortgage
Loans. The Mortgage Loan Schedules shall be amended from time to time in
accordance with the provisions of this Agreement. With respect to any Eligible
Substitute Mortgage Loan, Cut-off Date shall refer to the applicable date of
substitution.
"Mortgage Note": The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.
"Mortgage Pool": The pool of Mortgage Loans, identified on Exhibits
D-1 and D-2 from time to time, and any REO Properties acquired in respect
thereof.
"Mortgaged Property": The underlying property securing a Mortgage
Loan, including any REO Property, consisting of an Estate in Real Property
improved by a Residential Dwelling.
"Mortgagor": The obligor on a Mortgage Note.
"Net Liquidation Proceeds": With respect to any Liquidated Mortgage
Loan or any other disposition of related Mortgaged Property (including REO
Property) the related Liquidation Proceeds net of unreimbursed Advances,
unreimbursed Servicing Advances, unpaid Servicing Fees and any other accrued and
unpaid servicing fees received and retained in connection with the liquidation
of such Mortgage Loan or Mortgaged Property.
"Net Maximum Mortgage Interest Rate": With respect to any
Adjustable-Rate Mortgage Loan, the applicable Maximum Mortgage Interest Rate
minus the Expense Fee Rate.
"Net Mortgage Interest Rate": With respect to any Mortgage Loan, the
Mortgage Interest Rate borne by such Mortgage Loan minus the Expense Fee Rate.
"New Lease": Any lease of REO Property entered into on behalf of the
Trust, including any lease renewed or extended on behalf of the Trust if the
Trust has the right to renegotiate the terms of such lease.
"Nonrecoverable Advance": Any Advance or Servicing Advance
previously made or proposed to be made in respect of a Mortgage Loan that, in
the good faith business judgment of the Servicer, will not or, in the case of a
proposed Advance or Servicing Advance, would not be ultimately recoverable from
Late Collections on such Mortgage Loan as provided herein.
"Notional Amount": With respect to the Class CE Certificates, an
amount equal to the aggregate principal balance of the REMIC 1 Regular
Interests.
"Offered Certificates": The Class ▇-▇, ▇▇▇▇▇ ▇-▇▇, ▇▇▇▇▇ ▇-▇, Class
M-1, Class M-2, Class M-3, Class M-4, Class M-5 and Class M-6 Certificates.
"Officers' Certificate": A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, a vice president (however
denominated), and by the Treasurer, the Secretary, or one of the assistant
treasurers or assistant secretaries of the Servicer, the Securities
Administrator or the Depositor, as applicable.
"One-Month LIBOR": With respect to each Interest Accrual Period, the
rate determined by the Securities Administrator on the related LIBOR
Determination Date on the basis of the offered rate for one-month United States
dollar deposits, as such rate appears on the Telerate Page 3750, as of 11:00
a.m. (London time) on such LIBOR Determination Date. If no such quotations are
available on an LIBOR Determination Date, One-Month LIBOR for the related
Interest Accrual Period will be established by the Securities Administrator as
follows:
(i) If on such LIBOR Determination Date two or more Reference Banks
provide such offered quotations, One-Month LIBOR for the related Interest
Accrual Period shall be the arithmetic mean of such offered quotations
(rounded upwards if necessary to the nearest whole multiple of 0.001%);
(ii) If on such LIBOR Determination Date fewer than two Reference
Banks provide such offered quotations, One-Month LIBOR for the related
Interest Accrual Period shall be the arithmetic mean of the rates quoted
by one or more major banks in New York City, selected by the Securities
Administrator after consultation with the Depositor, as of 11:00 A.M., New
York City time, on such date for loans in U.S. Dollars to leading European
banks for a period of one month in amounts approximately equal to the
aggregate Principal Balance of the Offered Certificates; and
(iii) If no such quotations can be obtained, One-Month LIBOR for the
related Interest Accrual Period shall be One-Month LIBOR for the prior
Distribution Date.
"Opinion of Counsel": A written opinion of counsel, who may, without
limitation, be a salaried counsel for the Depositor, the Securities
Administrator, the Trustee or the Servicer except that any opinion of counsel
relating to (a) the qualification of any REMIC as a REMIC or (b) compliance with
the REMIC Provisions must be an opinion of Independent counsel.
"Optional Termination Date": The first Distribution Date on which
the Depositor may opt to terminate the Mortgage Pool pursuant to Section 10.01.
"Original Principal Balance": With respect to each Class of
Certificates, the Principal Balance thereof on the Closing Date, as set forth
opposite such Class in the Preliminary Statement, except with respect to (i) the
Class P and Class R Certificates, which have an Original Principal Balance of
zero and (ii) the Class CE Certificates, which, solely for REMIC purposes, have
an Original Principal Balance equal to the Initial Overcollateralization Amount.
"Originator": ▇▇▇▇▇ Fargo Home Mortgage, Inc. and its successors.
"Overcollateralization Amount": As of any Distribution Date, the
excess, if any, of (x) the Pool Balance as of the last day of the related
Collection Period over (y) the aggregate Principal Balance of all Classes of
Offered Certificates and the Class B Certificates (after taking into account all
distributions of principal on such Distribution Date).
"Overcollateralization Deficiency": As of any Distribution Date, the
excess, if any, of (x) the Targeted Overcollateralization Amount for such
Distribution Date over (y) the Overcollateralization Amount for such
Distribution Date, calculated for this purpose after taking into account the
reduction on such Distribution Date of the Principal Balances of all Classes of
Offered Certificates and the Class B Certificates resulting from the
distribution of the Principal Distribution Amount (but not the Extra Principal
Distribution Amount) on such Distribution Date, but prior to taking into account
any Applied Realized Loss Amounts on such Distribution Date.
"Overcollateralization Release Amount": With respect to any
Distribution Date after the Stepdown Date on which a Trigger Event is not in
effect, the excess, if any, of (i) the Overcollateralization Amount for such
Distribution Date, assuming that 100% of the Principal Remittance Amount is
applied as a principal payment on the Offered Certificates and the Class B
Certificates on such Distribution Date, over (ii) the Targeted
Overcollateralization Amount for such Distribution Date. With respect to any
Distribution Date on which a Trigger Event is in effect, the
Overcollateralization Release Amount will be zero.
"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.
"Pass-Through Rate": With respect to any Regular Interest (other
than the Class CE Certificates), the Pass-Through Rate described opposite such
Class in the table in the Preliminary Statement. With respect to the Class CE
Certificates and any Distribution Date, a per annum rate equal to the percentage
equivalent of a fraction, the numerator of which is the sum of the amounts
calculated pursuant to clauses (A) through (K) below, and the denominator of
which is the aggregate of the Uncertificated Principal Balances of REMIC 1
Regular Interest LT1AA, REMIC 1 Regular Interest LT1A1, REMIC 1 Regular ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, REMIC 1 Regular Interest LT1A2, REMIC 1 Regular Interest LT1M1, REMIC 1
Regular Interest LT1M2, REMIC 1 Regular Interest LT1M3, REMIC 1 Regular Interest
LT1M4, REMIC 1 Regular Interest LT1M5, REMIC 1 Regular Interest LT1M6, REMIC 1
Regular Interest LT1B and REMIC 1 Regular Interest LT1ZZ. For purposes of
calculating the Pass-Through Rate for the Class CE Certificates, the numerator
is equal to the sum of the following components:
(A) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1AA minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1AA;
(B) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1A1 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1A1;
(C) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1A1A minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1A1A;
(D) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1A2 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1A2;
(E) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1M1 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1M1;
(F) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1M2 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1M2;
(G) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1M3 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1M3;
(H) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1M4 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1M4;
(I) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1M5 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1M5;
(J) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1M6 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1M6;
(K) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1B minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1B; and
(L) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1ZZ minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1ZZ.
"Paying Agent": Any paying agent appointed pursuant to Section 5.05.
"Percentage Interest": With respect to any Certificate (other than a
Class CE, Class P or Class R Certificate), a fraction, expressed as a
percentage, the numerator of which is the Initial Principal Balance, as the case
may be, represented by such Certificate and the denominator of which is the
Original Principal Balance of the related Class. With respect to a Class CE or
Class P Certificate, the portion of the Class evidenced thereby, expressed as a
percentage, as stated on the face of such Certificate; provided, however, that
the sum of all such percentages for each such Class totals 100%. With respect to
the Class R Certificate, 100%.
"Periodic Rate Cap": With respect to each Adjustable-Rate Mortgage
Loan and any Adjustment Date therefor, the fixed percentage set forth in the
related Mortgage Note, which is the maximum amount by which the Mortgage
Interest Rate for such Mortgage Loan may increase or decrease (without regard to
the Maximum Mortgage Interest Rate or the Minimum Mortgage Interest Rate) on
such Adjustment Date from the Mortgage Interest Rate in effect immediately prior
to such Adjustment Date.
"Permitted Transferee": Any transferee of a Class R Certificate
other than a Disqualified Organization, a non-U.S. Person or a U.S. Person with
respect to whom income on the Class R Certificate is attributable to a foreign
permanent establishment or fixed base, within the meaning of an applicable
income tax treaty, of such Person or any other U.S. Person.
"Person": Any individual, corporation, partnership, joint venture,
association, joint stock company, trust, limited liability company,
unincorporated organization or government or any agency or political subdivision
thereof.
"Pool Balance": As of any date of determination, the aggregate
Principal Balance of the Mortgage Loans.
"Pool Cap": As of any Distribution Date, a per annum rate, adjusted
by multiplying such rate by a fraction equal to 30 over the actual number of
days in the related Interest Accrual Period, equal to the weighted average of
the Group 1 Cap and the Group 2 Cap, weighted on the basis of the related Group
Subordinate Amount. For federal income tax purposes, the economic equivalent of
such rate shall be expressed as the weighted average of the REMIC 1 Remittance
Rate on (a) REMIC 1 Regular Interest LT1SUB, subject to a cap and floor equal to
the Weighted Average Net Mortgage Interest Rates of the Group 1 Mortgage Loans
and (b) REMIC 1 Regular Interest LT2SUB, subject to a cap and floor equal to the
Weighted Average Net Mortgage Interest Rates of the Group 2 Mortgage Loans,
weighted on the basis of the Uncertificated Balance of such REMIC 1 Regular
Interest.
"Pool Maximum Rate Cap": With respect to any Distribution Date and
for the Class M Certificates, a per annum rate, adjusted by multiplying such
rate by a fraction equal to 30 over the actual number of days in the related
Interest Accrual Period, equal to the weighted average of the Group 1 Maximum
Rate Cap and the Group 2 Maximum Rate Cap, weighted on the basis of the related
Group Subordinate Amount.
"Prepayment Charge": With respect to any Prepayment Period, any
prepayment premium, penalty or charge collected by the Servicer from a Mortgagor
in connection with any voluntary Principal Prepayment in full pursuant to the
terms of the related Mortgage Note as from time to time held as a part of the
Trust Fund, the Prepayment Charges so held being identified in the Mortgage Loan
Schedules.
"Prepayment Interest Shortfall": With respect to any Distribution
Date, for each Mortgage Loan that was the subject of a Principal Prepayment in
full during the portion of the related Prepayment Period occurring in the prior
calendar month that was applied by the Servicer to reduce the outstanding
Principal Balance of such Mortgage Loan on a date preceding the related Due
Date, an amount equal to interest at the applicable Mortgage Interest Rate (net
of the Servicing Fee Rate) on the amount of such Principal Prepayment for the
number of days commencing on the date on which the Principal Prepayment is
applied and ending on the last day of the calendar month in which applied.
"Prepayment Period": With respect to any Distribution Date, the
period commencing on the day after the Determination Date in the calendar month
preceding the calendar month in which such Distribution Date occurs (or, in the
case of the first Distribution Date, on [______], 20 ) and ending on the
Determination Date in the calendar month in which such Distribution Date occurs.
"Principal Balance": With respect to any Class of Certificates
(other than the Class CE, Class P and Class R Certificates) and any Distribution
Date, the Original Principal Balance reduced by the sum of (i) all amounts
actually distributed in respect of principal of such Class on all prior
Distribution Dates and (ii) Applied Realized Loss Amounts allocated thereto. The
Class CE, Class P and Class R Certificates do not have a Principal Balance. With
respect to any Certificate (other than a Class CE, Class P or Class R
Certificate) of a Class and any Distribution Date, the portion of the Principal
Balance of such Class represented by such Certificate equal to the product of
the Percentage Interest evidenced by such Certificate and the Principal Balance
of such Class.
As to any Mortgage Loan and any day, other than a Liquidated
Mortgage Loan, the related Cut-off Date Principal Balance, minus the sum of (i)
all collections and other amounts credited against the principal balance of any
such Mortgage Loan, (ii) the principal portion of Advances, (iii) any Deficient
Valuation and (iv) any principal reduction resulting from a Servicer
Modification. For purposes of this definition, a Liquidated Mortgage Loan shall
be deemed to have a Principal Balance equal to the Principal Balance of the
related Mortgage Loan as of the final recovery of related Liquidation Proceeds
and a Principal Balance of zero thereafter. As to any REO Property and any day,
the Principal Balance of the related Mortgage Loan immediately prior to such
Mortgage Loan becoming REO Property minus any REO Principal Amortization
received with respect thereto on or prior to such day.
"Principal Distribution Amount": As to any Distribution Date, the
sum of (i) the Principal Remittance Amount minus the Overcollateralization
Release Amount, if any, and (ii) the Extra Principal Distribution Amount, if
any.
"Principal Prepayment": Any payment of principal made by the
Mortgagor on a Mortgage Loan which is received in advance of its scheduled Due
Date and which is not accompanied by an amount of interest representing the full
amount of scheduled interest due on any Due Date in any month or months
subsequent to the month of prepayment.
"Principal Remittance Amount": With respect to any Distribution
Date, to the extent of funds available therefor, the sum (less amounts available
for reimbursement of Advances and Servicing Advances pursuant to Section 3.05
and expenses reimbursable pursuant to Section 6.03) of: (i) each payment of
principal on a Mortgage Loan due during the related Collection Period and
received by the Servicer on or prior to the related Determination Date, and any
Advances with respect thereto, (ii) all full and partial Principal Prepayments
received by the Servicer during the related Prepayment Period, (iii) Subsequent
Recoveries, Insurance Proceeds and Net Liquidation Proceeds allocable to
principal actually collected by the Servicer during the related Prepayment
Period, (iv) with respect to Defective Mortgage Loans repurchased with respect
to such Prepayment Period, the portion of the Purchase Price allocable to
principal, (v) any Substitution Adjustment Amounts received during the related
Prepayment Period and (vi) on the Distribution Date on which the Trust is to be
terminated in accordance with Section 10.01 hereof, that portion of the
Termination Price in respect of principal.
"Private Certificates": Any of the Class B, Class CE, Class P and
Class R Certificates.
"Prospectus Supplement": That certain Prospectus Supplement dated
[______], 20 relating to the public offering of the Offered Certificates.
"Purchase Price": With respect to any Mortgage Loan or REO Property
to be purchased pursuant to or as contemplated by Section 2.03 or 10.01, an
amount equal to the sum of (i) 100% of the Principal Balance thereof as of the
date of purchase (or such other price as provided in Section 10.01), (ii) in the
case of a Mortgage Loan, accrued interest on such Principal Balance at the
applicable Mortgage Interest Rate in effect from time to time from the Due Date
as to which interest was last covered by a payment by the Mortgagor or an
Advance by the Servicer, which payment or Advance had as of the date of purchase
been distributed pursuant to Section 4.01, through the end of the calendar month
in which the purchase is to be effected, (iii) any unreimbursed Servicing
Advances and Advances and any unpaid Servicing Fees allocable to such Mortgage
Loan or REO Property, (iv) any amounts previously withdrawn from the Collection
Account in respect of such Mortgage Loan or REO Property pursuant to Section
3.13 and (v) in the case of a Mortgage Loan required to be purchased pursuant to
Section 2.03, expenses reasonably incurred or to be incurred by the Servicer,
the Securities Administrator or the Trustee in respect of the breach or defect
giving rise to the purchase obligation.
"Rating Agency or Rating Agencies": Fitch, ▇▇▇▇▇'▇ and S&P, or their
respective successors. If such agencies or their successors are no longer in
existence, "Rating Agencies" shall be such nationally recognized statistical
rating organizations as set forth on the most current list of such organizations
released by the Securities and Exchange Commission and designated by the
Depositor, notice of which designation shall be given to the Trustee and the
Servicer.
"Realized Loss": With respect to a Liquidated Mortgage Loan, the
amount by which the remaining unpaid principal balance of the Mortgage Loan
exceeds the amount of Net Liquidation Proceeds applied to the principal balance
of the related Mortgage Loan. With respect to any Mortgage Loan, a Deficient
Valuation or a reduction in the Principal Balance thereof resulting from a
Servicer Modification.
"Realized Loss Amortization Amount": Any of the Class A-1A Realized
Loss Amortization Amount, the Class M-1 Realized Loss Amortization Amount, the
Class M-2 Realized Loss Amortization Amount, the Class M-3 Realized Loss
Amortization Amount, the Class M-4 Realized Loss Amortization Amount, the Class
M-5 Realized Loss Amortization Amount, the Class M-6 Realized Loss Amortization
Amount and the Class B Realized Loss Amortization Amount.
"Record Date": With respect to all of the Certificates (other than
the Private Certificates), the Business Day immediately preceding such
Distribution Date; provided, however, that if any such Certificate becomes a
Definitive Certificate, the Record Date for such Certificate shall be the last
Business Day of the month immediately preceding the month in which the related
Distribution Date occurs. With respect to the Private Certificates, the last
Business Day of the month immediately preceding the month in which the related
Distribution Date occurs.
"Reference Banks": Those banks (i) with an established place of
business in London, England, (ii) not controlling, under the control of or under
common control with the Depositor or the Securities Administrator, (iii) whose
quotations appear on the Telerate Page 3750 on the relevant LIBOR Determination
Date and (iv) which have been designated as such by the Securities
Administrator; provided, however, that if fewer than two of such banks provide a
One-Month LIBOR rate, then any leading banks selected by the Securities
Administrator which are engaged in transactions in United States dollar deposits
in the international Eurocurrency market.
"Regular Certificate": Any of the Offered Certificates, the Class B
Certificates and the Class CE Certificates.
"Reimbursement Amount": With respect to any Mortgage Loan, any costs
or damages incurred by the Trust in connection with a breach of the Depositor's
representation set forth in Section 2.04(i) hereof.
"Related Documents": With respect to any Mortgage Loan, the related
Mortgage Notes, Mortgages and other related documents.
"Relief Act": The Servicemembers Civil Relief Act, as it may be
amended from time to time.
"Relief Act Interest Shortfall": With respect to any Distribution
Date, for any Mortgage Loan with respect to which there has been a reduction in
the amount of interest collectible thereon for the most recently ended
Collection Period as a result of the application of the Relief Act or similar
state laws, the amount by which (i) interest collectible on such Mortgage Loan
during such Collection Period is less than (ii) one month's interest on the
Principal Balance of such Mortgage Loan at the Mortgage Interest Rate for such
Mortgage Loan before giving effect to the application of the Relief Act or
similar state laws.
"REMIC": A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
"REMIC 1 Interest Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to (a) the product of (i) 50% of the sum of
the aggregate Principal Balance of the Mortgage Loans and related REO Properties
then outstanding and (ii) the Uncertificated REMIC 1 Pass-Through Rate for REMIC
1 Regular Interest LT1AA minus the Marker Rate, divided by (b) 12.
"REMIC 1 Interest Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to (a) the product of (i) 50% of the sum of
the aggregate Principal Balance of the Mortgage Loans and related REO Properties
then outstanding and (ii) the Uncertificated REMIC 1 Pass-Through Rate for REMIC
1 Regular Interest LT1AA minus the Marker Rate, divided by (b) 12.
"REMIC 1 Marker Allocation Percentage": 50% of any amount payable
from or loss attributable to the Mortgage Loans, which shall be allocated to
REMIC 1 Regular Interest LT1AA, REMIC 1 Regular Interest LT1A1, REMIC 1 Regular
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, REMIC 1 Regular Interest LT1A2, REMIC 1 Regular Interest LT1M1,
REMIC 1 Regular Interest LT1M2, REMIC 1 Regular Interest LT1M3, REMIC 1 Regular
Interest LT1M4, REMIC 1 Regular Interest LT1M5, REMIC 1 Regular Interest LT1M6,
REMIC 1 Regular Interest LT1B and REMIC 1 Regular Interest LT1ZZ.
"REMIC 1 Overcollateralization Target Amount": 0.50% of the Targeted
Overcollateralization Amount.
"REMIC 1 Overcollateralized Amount": With respect to any date of
determination, (i) 0.50% of the aggregate Uncertificated Principal Balances of
the REMIC 1 Regular Interests minus (ii) the aggregate of the Uncertificated
Principal Balances of REMIC 1 Regular Interest LT1A1, REMIC 1 Regular ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, REMIC 1 Regular Interest LT1A2, REMIC 1 Regular Interest LT1M1, REMIC 1
Regular Interest LT1M2, REMIC 1 Regular Interest LT1M3, REMIC 1 Regular Interest
LT1M4, REMIC 1 Regular Interest LT1M5, REMIC 1 Regular Interest LT1M6 and REMIC
1 Regular Interest LT1B, in each case as of such date of determination.
"REMIC 1 Principal Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to (a) the product of (i) 50% of the
aggregate Principal Balance of the Mortgage Loans and related REO Properties
then outstanding and (ii) 1 minus a fraction, the numerator of which is two
times the aggregate of the Uncertificated Principal Balances of REMIC 1 Regular
Interest LT1A1, REMIC 1 Regular ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, REMIC 1 Regular Interest LT1A2,
REMIC 1 Regular Interest LT1M1, REMIC 1 Regular Interest LT1M2, REMIC 1 Regular
Interest LT1M3, REMIC 1 Regular Interest LT1M4, REMIC 1 Regular Interest LT1M5,
REMIC 1 Regular Interest LT1M6 and REMIC 1 Regular Interest LT1B and the
denominator of which is the aggregate of the Uncertificated Principal Balances
of REMIC 1 Regular Interest LT1A1, REMIC 1 Regular ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, REMIC 1
Regular Interest LT1A2, REMIC 1 Regular Interest LT1M1, REMIC 1 Regular Interest
LT1M2, REMIC 1 Regular Interest LT1M3, REMIC 1 Regular Interest LT1M4, REMIC 1
Regular Interest LT1M5, REMIC 1 Regular Interest LT1M6, REMIC 1 Regular Interest
LT1B and REMIC 1 Regular Interest LT1ZZ.
"REMIC 1 Regular Interest LT1AA": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1AA
shall accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1A1": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1A1
shall accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1A1A": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
shall accrue interest at the related Uncertificated REMIC 1 Pass- Through Rate
in effect from time to time, and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance asset forth in the
Preliminary Statement hereto.
"REMIC 1 Regular Interest LT1A2": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1A2
shall accrue interest at the related Uncertificated REMIC 1 Pass- Through Rate
in effect from time to time, and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance asset forth in the
Preliminary Statement hereto.
"REMIC 1 Regular Interest LT1M1": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1M1
shall accrue interest at the related Uncertificated REMIC 1 Pass- Through Rate
in effect from time to time, and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
"REMIC 1 Regular Interest LT1M2": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1M2
shall accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1M3": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1M3
shall accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1M4": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1M4
shall accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1M5": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1M5
shall accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1M6": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1M6
shall accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1B": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1B shall
accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1SUB": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1SUB
shall accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1GRP": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1GRP
shall accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT2SUB": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT2SUB
shall accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT2GRP": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT2GRP
shall accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1XX": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1XX
shall accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1ZZ": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1ZZ
shall accrue interest at the related Uncertificated REMIC 1 Pass- Through Rate
in effect from time to time, and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
"REMIC 1 Regular Interests": REMIC 1 Regular Interest LT1AA, REMIC 1
Regular Interest LT1A1, REMIC 1 Regular ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, REMIC 1 Regular
Interest LT1A2, REMIC 1 Regular Interest LT1M1, REMIC 1 Regular Interest LT1M2,
REMIC 1 Regular Interest LT1M3, REMIC 1 Regular Interest LT1M4, REMIC 1 Regular
Interest LT1M5, REMIC 1 Regular Interest LT1M6, REMIC 1 Regular Interest LT1B,
REMIC 1 Regular Interest LT1SUB, REMIC 1 Regular Interest LT1GRP, REMIC 1
Regular Interest LT2SUB, REMIC 1 Regular Interest LT2GRP, REMIC 1 Regular
Interest LT1XX and REMIC 1 Regular Interest LT1ZZ.
"REMIC 1 Sub WAC Allocation Percentage": 50% of any amount payable
or loss attributable from the Mortgage Loans, which shall be allocated to REMIC
1 Regular Interest LT1SUB, REMIC 1 Regular Interest LT1GRP, REMIC 1 Regular
Interest LT2SUB, REMIC 1 Regular Interest LT2GRP and REMIC 1 Regular Interest
LT1XX.
"REMIC 1 Subordinated Balance Ratio": The ratio among the
Uncertificated Principal Balances of each REMIC 1 Regular Interest ending with
the designation "SUB," equal to the ratio among, with respect to each such REMIC
1 Regular Interest, the excess of (x) the aggregate Principal Balance of the
Mortgage Loans in the related Loan Group over (y) the current Certificate
Principal Amount of the Class A Certificates in the related Loan Group.
"REMIC Provisions": Provisions of the federal income tax law
relating to real estate mortgage investment conduits which appear at Section
860A through 860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and regulations and rulings promulgated thereunder, as the foregoing
may be in effect from time to time.
"REMIC Regular Interest": Any REMIC 1 Regular Interest or any of the
Certificates (other than the Class P and Class R Certificates).
"Remittance Report": A report prepared by the Servicer and delivered
to the Securities Administrator pursuant to Section 4.07, containing the
information attached hereto as Exhibit M.
"Rents from Real Property": With respect to any REO Property, gross
income of the character described in Section 856(d) of the Code.
"REO Disposition": The sale or other disposition of an REO Property
on behalf of the Trust.
"REO Imputed Interest": As to any REO Property, for any Collection
Period, an amount equivalent to interest (at the Net Mortgage Interest Rate that
would have been applicable to the related Mortgage Loan had it been outstanding)
for such Collection Period on the unpaid Principal Balance of the Mortgage Loan
as of the date of acquisition.
"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 Principal Amortization": With respect to any REO Property, for
any calendar month, the aggregate of all amounts received in respect of such REO
Property during such calendar month, whether in the form of rental income, sale
proceeds (including, without limitation, that portion of the Termination Price
paid in connection with a purchase of all of the Mortgage Loans and REO
Properties pursuant to Section 10.01 that is allocable to such REO Property) or
otherwise, net of any portion of such amounts (i) payable pursuant to Section
3.13 in respect of the proper operation, management and maintenance of such REO
Property or (ii) payable or reimbursable to the Servicer pursuant to Section
3.13 for unpaid Servicing Fees in respect of the related Mortgage Loan and
unreimbursed Servicing Advances and Advances in respect of such REO Property or
the related Mortgage Loan.
"REO Property": A Mortgaged Property acquired by the Servicer on
behalf of the Trust through foreclosure or deed-in-lieu of foreclosure, as
described in Section 3.13.
"Request for Release": A release signed by a Servicing Officer, in
the form of Exhibit E attached hereto.
"Reserve Account": The trust account created and maintained by the
Trustee pursuant to Section 3.04(g) which shall be entitled "Reserve Account,
[____________], as Trustee, in trust for the registered Holders of ▇▇▇▇▇ Fargo
Home Equity Asset-Backed Securities 20 - Trust, Home Equity Asset-Backed
Certificates, Series 20 - ," and which must be an Eligible Account. Amounts on
deposit in the Reserve Account shall not be invested. The Reserve Account shall
not be an asset of any REMIC formed under this Agreement.
"Residential Dwelling": Any one of the following: (i) a detached
one-family dwelling, (ii) a detached two- to four-family dwelling, (iii) a
one-family dwelling unit in a ▇▇▇▇▇▇ Mae eligible condominium project, (iv) a
manufactured home, or (v) a detached one-family dwelling in a planned unit
development, none of which is a co-operative or mobile home.
"Residual Interest": The sole Class of "residual interests" in each
REMIC within the meaning of Section 860G(a)(2) of the Code.
"Responsible Officer": When used with respect to the Trustee or the
Securities Administrator, any officer assigned to its Corporate Trust Office or
Securities Administration Office (or any successor thereto), including any Vice
President, Assistant Vice President, Trust Officer, any Assistant Secretary, any
trust officer or any other officer of the Trustee or the Securities
Administrator customarily performing functions similar to those performed by any
of the above designated officers and in each case having direct responsibility
for the administration of this Agreement.
"S&P": Standard & Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies,
Inc., and its successors, and if such company shall for any reason no longer
perform the functions of a securities rating agency, "S&P" shall be deemed to
refer to any other "nationally recognized statistical rating organization" as
set forth on the most current list of such organizations released by the
Securities and Exchange Commission.
"Securities Administration Office": The principal office of the
Securities Administrator at which at any particular time its securities
administration business in connection with this Agreement shall be administered,
which office at the date of the execution of this instrument is located at ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Client Manager, WFHET
20 - or at such other address as the Securities Administrator may designate from
time to time by notice to the Certificateholders, the Depositor, the Trustee and
the Servicer.
"Securities Administrator": ▇▇▇▇▇ Fargo Bank, National Association,
a national banking association, or any successor Securities Administrator
appointed as herein provided.
"Securities Administrator Fee": With respect to any Distribution
Date, the product of (x) one-twelfth of the Securities Administrator Fee Rate
and (y) the aggregate of the Principal Balances of all Mortgage Loans as of the
opening of business on the first day of the related Collection Period.
"Securities Administrator Fee Rate": With respect to any
Distribution Date, [____]% per annum.
"Seller": ▇▇▇▇▇ Fargo Home Mortgage, Inc., or its successor in
interest, in its capacity as seller under the Mortgage Loan Purchase Agreement.
"Senior Certificates": The Class A-1, Class A-1A and Class A-2
Certificates.
"Senior Enhancement Percentage": For any Distribution Date, the
percentage obtained by dividing (x) the sum of (i) the aggregate Principal
Balance of the Subordinated Certificates and (ii) the Overcollateralization
Amount, in each case after taking into account the distribution of the Principal
Distribution Amount on such Distribution Date by (y) the Pool Balance as of the
last day of the related Collection Period.
"Senior Principal Distribution Amount": For any Distribution Date,
the sum of the Group 1 Senior Principal Distribution Amount and the Group 2
Senior Principal Distribution Amount.
"Senior Specified Enhancement Percentage": On any date of
determination thereof, [___]%.
"Servicer": ▇▇▇▇▇ Fargo Home Mortgage, Inc., a California
corporation, or any successor servicer appointed as herein provided, in its
capacity as Servicer hereunder.
"Servicer Event of Termination": One or more of the events described
in Section 7.01.
"Servicer Modification": A modification to the terms of a Mortgage
Loan, in accordance with the terms of Section 3.01, as to which the Mortgagor is
in default or as to which, in the judgment of the Servicer, default is
reasonably foreseeable.
"Servicer Remittance Date": With respect to any Distribution Date,
one Business Day prior to such Distribution Date.
"Servicing Advances": All customary, reasonable and necessary "out
of pocket" costs and expenses incurred by the Servicer (including reasonable
attorneys' fees and disbursements) in the performance of its servicing
obligations, including, but not limited to, the cost of (i) the preservation,
restoration, inspection and protection of the Mortgaged Property, (ii) any
enforcement or judicial proceedings, including foreclosures, (iii) the
management and liquidation of the REO Property and (iv) compliance with the
obligations under Section 3.08.
"Servicing Fee": With respect to each Mortgage Loan (including each
REO Property) and for any calendar month, an amount equal to one month's
interest (or in the event of any payment of interest which accompanies a
Principal Prepayment in full made by the Mortgagor during such calendar month,
interest for the number of days covered by such payment of interest) at the
Servicing Fee Rate on the same principal amount on which interest on such
Mortgage Loan accrues for such calendar month.
"Servicing Fee Rate": With respect to each Mortgage Loan, 0.50% per
annum.
"Servicing Officer": Any officer of the Servicer involved in, or
responsible for, the administration and servicing of Mortgage Loans, whose name
and specimen signature appear on a list of servicing officers furnished by the
Servicer to the Trustee, the Securities Administrator and the Depositor on the
Closing Date, as such list may from time to time be amended.
"Servicing Standard": The standards set forth in Section 3.01.
"Startup Day": As defined in Section 9.01(b) hereof.
"Stayed Funds": Any payment required to be made under the terms of
the Certificates and this Agreement but which is not remitted by the Servicer
because the Servicer is the subject of a proceeding under the Bankruptcy Code
and the making of such remittance is prohibited by Section 362 of the Bankruptcy
Code.
"Stepdown Date": The earlier to occur of (i) the Distribution Date
on which the aggregate Principal Balance of the Class A Certificates is reduced
to zero and (ii) the later to occur of (x) the Distribution Date in [______] 20
and (y) the Distribution Date on which the Senior Enhancement Percentage (after
taking into account distributions of principal on such Distribution Date) is
greater than or equal to the Senior Specified Enhancement Percentage.
"Subordinated Certificates": The Class M-1, Class M-2, Class M-3,
Class M-4, Class M-5, Class M-6, Class B, Class CE and Class R Certificates.
"Substitution Adjustment Amount": As defined in Section 2.03(d)
hereof.
"Targeted Overcollateralization Amount": As of any Distribution
Date, (x) prior to the Stepdown Date, [__]% of the Cut-off Date Aggregate
Principal Balance and (y) on and after the Stepdown Date, (i) if a Trigger Event
has not occurred, the greater of (A) [__]% of the Pool Balance as of the last
day of the related Collection Period and (B) 0.50% of the Cut-off Date Aggregate
Principal Balance and (ii) if a Trigger Event has occurred, the Targeted
Overcollateralization Amount for the immediately preceding Distribution Date.
"Tax Matters Person": The tax matters person appointed pursuant to
Section 9.01(e) hereof.
"Tax Returns": The federal income tax returns 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 the REMIC Taxable Income or Net Loss Allocation, or any successor
forms, to be filed on behalf of the Trust for each of the two REMICs created
pursuant to this Agreement 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 provisions of federal, state
or local tax laws.
"Telerate Page 3750": The display page currently so designated on
the Moneyline Telerate Service (or such other page as may replace the Telerate
Page 3750 page on that service for the purpose of displaying London interbank
offered rates of major banks).
"Termination Price": As defined in Section 10.01(a) hereof.
"Trigger Event": With respect to any Distribution Date, if (i) the
three-month rolling average of 60+ Day Delinquent Loans equals or exceeds 38.00%
of the Senior Enhancement Percentage or (ii) the aggregate amount of Realized
Losses incurred since the Cut-off Date through the last day of the related
Collection Period divided by the Cut-off Date Aggregate Principal Balance
exceeds the applicable percentages set forth below with respect to such
Distribution Date:
Distribution Date Occurring In Percentage
[_______] 20 through [______] 20 %
[_______] 20 through [______] 20 %
[_______] 20 through [______] 20 %
[_______] 20 and thereafter %
"Trust": ▇▇▇▇▇ Fargo Home Equity Asset-Backed Securities 20 - Trust,
the trust created hereunder.
"Trust Fund": The segregated pool of assets subject hereto,
constituting the primary trust created hereby and to be administered hereunder,
with respect to a portion of which two REMIC elections are to be made, such
entire Trust Fund consisting of: (i) such Mortgage Loans as from time to time
are subject to this Agreement, together with the Mortgage Files relating
thereto, and together with all collections thereon and proceeds thereof, (ii)
any REO Property, together with all collections thereon and proceeds thereof,
(iii) the Trustee's rights with respect to the Mortgage Loans under all
insurance policies required to be maintained pursuant to this Agreement and any
proceeds thereof, (iv) the Depositor's rights under the Mortgage Loan Purchase
Agreement (including any security interest created thereby), (v) the Trustee's
rights under the Yield Maintenance Agreement and (vi) the Collection Account,
the Distribution Account and the Reserve Account and such assets that are
deposited therein from time to time and any investments thereof, together with
any and all income, proceeds and payments with respect thereto.
"Trustee": [________________], a [________________], or any
successor Trustee appointed as herein provided.
"Uncertificated Accrued Interest": With respect to each REMIC 1
Regular Interest on each Distribution Date, an amount equal to one month's
interest at the related Uncertificated Pass-Through Rate on the Uncertificated
Principal Balance of such REMIC Regular Interest. In each case, Uncertificated
Accrued Interest will be reduced by any Prepayment Interest Shortfalls and
Relief Act Interest Shortfalls (allocated to such REMIC Regular Interests based
on their respective entitlements to interest irrespective of any Prepayment
Interest Shortfalls and Relief Act Interest Shortfalls for such Distribution
Date).
"Uncertificated Principal Balance": The amount of any REMIC 1
Regular Interest outstanding as of any date of determination. As of the Closing
Date, the Uncertificated Balance of each REMIC 1 Regular Interest shall equal
the amount set forth in the Preliminary Statement hereto as its initial
uncertificated balance. On each Distribution Date, the Uncertificated Principal
Balance of each REMIC 1 Regular Interest shall be reduced by all distributions
of principal made on such REMIC 1 Regular Interest on such Distribution Date
pursuant to Section 4.08 and, if and to the extent necessary and appropriate,
shall be further reduced on such Distribution Date by Realized Losses as
provided in Section 4.08(b). The Uncertificated Balance of REMIC 1 Regular
Interest LT1ZZ shall be increased by interest deferrals as provided in Section
4.08(a)(i). The Uncertificated Balance of each REMIC 1 Regular Interest shall
never be less than zero.
"Uncertificated REMIC 1 Pass-Through Rate": With respect to REMIC 1
Regular Interest LT1AA, REMIC 1 Regular Interest LT1A1, REMIC 1 Regular ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, REMIC 1 Regular Interest LT1A2, REMIC 1 Regular Interest LT1M1, REMIC 1
Regular Interest LT1M2, REMIC 1 Regular Interest LT1M3, REMIC 1 Regular Interest
LT1M4, REMIC 1 Regular Interest LT1M5, REMIC 1 Regular Interest LT1M6, REMIC 1
Regular Interest LT1B, REMIC 1 Regular Interest LT1ZZ, REMIC 1 Regular Interest
LT1SUB, REMIC 1 Regular Interest LT2SUB and REMIC 1 Regular Interest LT1XX, the
Weighted Average Net Mortgage Rate of the Mortgage Loans. With respect to REMIC
1 Regular Interest LT1GRP, the Weighted Average Net Mortgage Rate of the Group 1
Mortgage Loans. With respect REMIC 1 Regular Interest LT2GRP, the Weighted
Average Net Mortgage Interest Rate of the Group 2 Mortgage Loans.
"United States Person" or "U.S. Person": (i) A citizen or resident
of the United States, (ii) a corporation, partnership or other entity treated as
a corporation or partnership for United States federal income tax purposes
organized in or under the laws of the United States or any state thereof or the
District of Columbia (unless, in the case of a partnership, Treasury Regulations
provide otherwise), (iii) an estate the income of which is includible in gross
income for United States tax purposes, regardless of its source, or (iv) a trust
if a court within the United States is able to exercise primary supervision over
the administration of the trust and one or more United States persons have
authority to control all substantial decisions of the trust. Notwithstanding the
preceding sentence, to the extent provided in Treasury Regulations, certain
Trusts in existence on August 20, 1996, and treated as United States persons
prior to such date, that elect to continue to be treated as United States
persons will also be a U.S. Person; provided, that for purposes of the
definition of a "Permitted Transferee," a U.S. Person shall not include any
person whose income is attributable to a foreign permanent establishment or
fixed base, within the meaning of an applicable income tax treaty, of such
Person or any other Person.
"Unpaid Realized Loss Amount": For any Class A-1A, Class M-1, Class
M-2, Class M-3, Class M-4, Class M-5, Class M-6 and Class B Certificates and as
to any Distribution Date, the excess of (x) the aggregate Applied Realized Loss
Amounts applied with respect to such Class for all prior Distribution Dates over
(y) the aggregate Realized Loss Amortization Amounts with respect to such Class
for all prior Distribution Dates.
"Value": With respect to any Mortgaged Property, the value thereof
as determined by an independent appraisal made at the time of the origination of
the related Mortgage Loan or the sale price, if the appraisal is not available.
"Voting Interests": The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. The Voting Interests
allocated among Holders of the Offered Certificates and the Class B Certificates
shall be 98%, and shall be allocated among each such Class according to the
fraction, expressed as a percentage, the numerator of which is the aggregate
Principal Balance of all the Certificates of such Class then outstanding and the
denominator of which is the aggregate Principal Balance of all the Offered
Certificates and Class B Certificates then outstanding. The Voting Interests
allocated to each such Class of Certificates shall be allocated among all
holders of each such Class in proportion to the outstanding Principal Balance of
such Certificates; provided, however, that any Certificate registered in the
name of the Servicer, the Depositor or the Trustee or any of their respective
affiliates shall not be included in the calculation of Voting Interests;
provided that only such Certificates as are known by a Responsible Officer of
the Trustee to be so registered will be so excluded. 1% of all the Voting
Interests will be allocated to the Holders of each of the Class CE and Class P
Certificates. The Class R Certificates shall have no Voting Interests.
"Weighted Average Net Mortgage Rate": The weighted average (based on
Principal Balance as of the first day of the related Collection Period or, in
the case of the first Distribution Date, the Cut-Off Date) of the Net Mortgage
Interest Rates of the Mortgage Loans, the Group 1 Mortgage Loans or the Group 2
Mortgage Loans, as applicable, expressed for each such Mortgage Loan as an
annual rate and calculated on the basis of twelve months consisting of 30 days
each and a 360-day year.
"Written Order to Authenticate": A written order by which the
Depositor directs the Trustee to execute, authenticate and deliver the
Certificates.
"Yield Maintenance Agreement": The interest rate cap agreement
between the Trustee, on behalf of the Trust, and the Yield Maintenance Agreement
Provider substantially in the form attached hereto as Exhibit N. The Yield
Maintenance Agreement shall not be an asset of any REMIC formed under this
Agreement.
"Yield Maintenance Agreement Payment": On each Distribution Date
through the Distribution Date in [_______] 20 , the amount equal to the product
of (a) the excess of the lesser of (i) One-Month LIBOR and (ii) [___]% over the
strike rate for such Distribution Date set forth on the schedule attached to the
confirmation to the Yield Maintenance Agreement for such Distribution Date, (b)
the product of the cap notional amount and the scale factor, both as set forth
on the schedule attached to the confirmation to the Yield Maintenance Agreement
for such Distribution Date and (c) a fraction, the numerator of which is the
actual number of days elapsed since the previous Distribution Date to but
excluding the current Distribution Date and the denominator of which is 360.
"Yield Maintenance Agreement Provider": [____________] and any
successor thereto.
Section 1.02 Accounting.
Unless otherwise specified herein, for the purpose of any definition
or calculation, whenever amounts are required to be netted, subtracted or added
or any distributions are taken into account such definition or calculation and
any related definitions or calculations shall be determined without duplication
of such functions.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance of Mortgage Loans.
The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey to the Trustee, on
behalf of the Trust, without recourse for the benefit of the Certificateholders
all the right, title and interest of the Depositor, including any security
interest therein for the benefit of the Depositor, in and to (i) each Mortgage
Loan identified on the Mortgage Loan Schedules, including the related Cut-off
Date Principal Balance, all interest accruing thereon after the Cut-off Date and
all collections in respect of interest and principal due after the Cut-off Date;
(ii) property which secured each such Mortgage Loan and which has been acquired
by foreclosure or deed in lieu of foreclosure; (iii) its interest in any
insurance policies in respect of the Mortgage Loans; (iv) all other assets
included or to be included in the Trust Fund; (v) all proceeds of any of the
foregoing; (vi) the rights of the Depositor under the Consulting Agreement; and
(vii) the rights of the Depositor under the Mortgage Loan Purchase Agreement.
Such assignment includes all interest and principal due to the Depositor or the
Servicer after the Cut-off Date with respect to the Mortgage Loans.
In connection with such transfer and assignment, the Depositor does
hereby deliver to, and deposit with the Custodian on the Trustee's behalf, the
following documents or instruments with respect to each Mortgage Loan (a
"Mortgage File") so transferred and assigned:
(i) the original Mortgage Note, endorsed in blank or with respect to any
lost Mortgage Note, an original Lost Note Affidavit, together with a
copy of the related Mortgage Note;
(ii) an original Assignment of Mortgage, in form and substance acceptable
for recording. The Mortgage shall be assigned in blank; and
(iii) the original or copies of each assumption, modification, written
assurance or substitution agreement, if any.
Following a Document Transfer Event, the Depositor shall, with
respect to each Mortgage Loan, deliver, or cause to be delivered, to the
Custodian on the Trustee's behalf, within 60 days copies (which may be in
electronic form mutually agreed upon by the Depositor and the Custodian on the
Trustee's behalf) of the following additional documents or instruments with
respect to each Mortgage Loan; provided, however, that originals of such
documents or instruments shall be delivered to the Custodian on the Trustee's
behalf, if originals are required under the law in which the related Mortgaged
Property is located in order to exercise all remedies available to the Trust
under applicable law following default by the related Mortgagor:
(i) an original copy of any intervening assignment of Mortgage showing a
complete chain of assignments;
(ii) the original or a certified copy of lender's title insurance policy;
and
(iii) the original Mortgage with evidence of recording thereon, and the
original recorded power of attorney, if the Mortgage was executed
pursuant to a power of attorney, with evidence of recording thereon
or, if such Mortgage or power of attorney has been submitted for
recording but has not been returned from the applicable public
recording office, has been lost or is not otherwise available, a
copy of such Mortgage or power of attorney, as the case may be,
certified to be a true and complete copy of the original submitted
for recording;
If any of the documents referred to above has as of the Closing Date
been submitted for recording but either (x) has not been returned from the
applicable public recording office or (y) has been lost or such public recording
office has retained the original of such document, the obligations of the
Depositor to deliver such documents shall be deemed to be satisfied upon (1)
delivery to the Custodian on the Trustee's behalf no later than the Closing
Date, of a copy of each such document certified by the Seller or the Servicer in
the case of (x) above or the applicable public recording office in the case of
(y) above to be a true and complete copy of the original that was submitted for
recording and (2) if such copy is certified by the Seller, delivery to the
Custodian on the Trustee's behalf, promptly upon receipt thereof of either the
original or a copy of such document certified by the applicable public recording
office to be a true and complete copy of the original. The Depositor shall
deliver or cause to be delivered to the Custodian on the Trustee's behalf
promptly upon receipt thereof any other documents constituting a part of a
Mortgage File received with respect to any Mortgage Loan, including, but not
limited to, any original documents evidencing an assumption or modification of
any Mortgage Loan.
In lieu of recording an assignment of any Mortgage the Depositor
may, deliver or cause to be delivered to the Custodian the assignment of the
Mortgage Loan to the Trustee in a form suitable for recordation, if (i) with
respect to a particular state the Trustee has received an Opinion of Counsel
acceptable to it that such recording is not required to make the assignment
effective against the parties to the Mortgage or subsequent purchasers or
encumbrancers of the Mortgaged Property or (ii) the Depositor has been advised
by each Rating Agency that non-recordation in a state will not result in a
reduction of the rating assigned by that Rating Agency at the time of initial
issuance of the Certificates. Set forth on Exhibit Q attached hereto is a list
of all states where recordation is required by either Rating Agency to obtain
the initial ratings of the Certificates. The Custodian may rely and shall be
protected in relying upon the information contained in such Exhibit Q. In the
event that the Custodian receives notice that recording is required to protect
the right, title and interest of the Trustee in and to any such Mortgage Loan
for which recordation of an assignment has not previously been required, the
Custodian shall promptly notify the Trustee and the Custodian shall within five
Business Days (or such other reasonable period of time mutually agreed upon by
the Custodian and the Trustee) of its receipt of such notice deliver each
previously unrecorded assignment to the Servicer for recordation.
The Depositor herewith delivers to the Trustee and the Securities
Administrator an executed copy of the Mortgage Loan Purchase Agreement.
It is agreed and understood by the Depositor and the Trustee that it
is not intended that any mortgage loan be included in the Trust Fund that is a
"High-Cost Home Loan" as defined in either (i) the New Jersey Home Ownership Act
effective November 27, 2003 or (ii) the New Mexico Home Loan Protection Act
effective January 1, 2004.
Section 2.02 Acceptance by Custodian.
The Custodian, on behalf of the Trustee, acknowledges the receipt
of, subject to the provisions of Section 2.01 and subject to the review
described below and any exceptions noted on the exception report described in
the next paragraph below, the documents referred to in Section 2.01 above and
all other assets included in the definition of "Trust Fund" and declares that it
holds and will hold such documents and the other documents delivered to it
constituting a Mortgage File, and that it holds or will hold all such assets and
such other assets included in the definition of "Trust Fund" in trust for the
exclusive use and benefit of all present and future Certificateholders.
The Custodian, for the benefit of the Certificateholders, shall
execute and deliver to the Servicer, the Securities Administrator and the
Depositor on or prior to the Closing Date an initial certification in the form
attached hereto as Exhibit F-1 hereto, certifying that it has received all
documents required to be delivered to it pursuant to Section 2.01 of this
Agreement, for each Mortgage Loan listed in the Mortgage Loan Schedules (other
than any Mortgage Loan that has been paid in full, liquidated or otherwise
released as of the date of such certification, and subject to any exceptions
specifically identified in the exception report annexed to such certification).
The Custodian agrees, for the benefit of the Certificateholders, to
review each Mortgage File within 45 days after the Closing Date (or, with
respect to any document delivered after the Startup Day, within 45 days of
receipt and with respect to any Qualified Substitute Mortgage, within 45 days
after the assignment thereof) and to certify in substantially the form attached
hereto as Exhibit F-2 no later than 30 days after completion of such review
that, as to each Mortgage Loan listed in the Mortgage Loan Schedules (other than
any Mortgage Loan paid in full or any Mortgage Loan specifically identified in
the exception report annexed thereto as not being covered by such
certification), (i) all documents required to be delivered to it pursuant to
Section 2.01 of this Agreement are in its possession, (ii) such documents have
been reviewed by it and have not been mutilated, damaged or torn and relate to
such Mortgage Loan and (iii) based on its examination and only as to the
foregoing, the information set forth in the Mortgage Loan Schedules that
corresponds to items (1), (2), (3), (10) and (22) of the Mortgage Loan Schedules
accurately reflects information set forth in the Mortgage File. It is herein
acknowledged that, in conducting such review, the Custodian is under no duty or
obligation to inspect, review or examine any such documents, instruments,
certificates or other papers to determine that they are genuine, enforceable, or
appropriate for the represented purpose or that they have actually been recorded
or that they are other than what they purport to be on their face.
Prior to the first anniversary date of this Agreement the Custodian
shall deliver to the Depositor, the Trustee, the Securities Administrator and
the Servicer a final certification in the form annexed hereto as Exhibit F-3
evidencing the completeness of the Mortgage Files, with any applicable
exceptions noted thereon.
If in the process of reviewing the Mortgage Files and making or
preparing, as the case may be, the certifications referred to above, the
Custodian finds any document or documents constituting a part of a Mortgage File
to be missing or defective in any material respect, at the conclusion of its
review the Custodian shall so notify the Depositor, the Trustee, the Securities
Administrator and the Servicer.
The Depositor and the Trustee intend that the assignment and
transfer herein contemplated constitute a sale of the Mortgage Loans and the
Related Documents, conveying good title thereto free and clear of any liens and
encumbrances, from the Depositor to the Trustee and that such property not be
part of the Depositor's estate or property of the Depositor in the event of any
insolvency by the Depositor. In the event that such conveyance is deemed to be,
or to be made as security for, a loan, the parties intend that the Depositor
shall be deemed to have granted and does hereby grant to the Trustee, on behalf
of the Trust, a first priority perfected security interest in all of the
Depositor's right, title and interest in and to the Mortgage Loans and the
Related Documents, and that this Agreement shall constitute a security agreement
under applicable law.
The Trustee is hereby directed to execute and deliver, on behalf of
the Trust, the Yield Maintenance Agreement.
Section 2.03 Repurchase or Substitution of Mortgage Loans by the
Depositor.
(a) Upon discovery or receipt of written notice of any materially defective
document in, or that a document is missing from, a Mortgage File or of a breach
of a representation of warranty of the Depositor in Section 2.04 hereof, in
respect of any Mortgage Loan which materially adversely affects the value of
such Mortgage Loan, Prepayment Charge or the interest therein of the
Certificateholders, the Trustee (or the Custodian) shall promptly notify the
Depositor and the Servicer of such defect, missing document or breach and
request that the Depositor cure such defect or breach or deliver such missing
document within 60 days from the date the Depositor was notified of such missing
document, breach or defect. If the Depositor does not deliver such missing
document or cure such defect or cure such breach in all material respects during
such period, the Depositor shall repurchase such Mortgage Loan from the Trust
Fund at the Purchase Price on or prior to the Determination Date following the
expiration of such period (subject to Section 2.03(d)). The Purchase Price for
the repurchased Mortgage Loan shall be deposited in the Collection Account, and
the Custodian, upon receipt of written notice from the Servicer of such deposit,
shall release to the Depositor the related Mortgage File and shall execute and
deliver such instruments of transfer or assignment, in each case without
recourse, as the Depositor shall furnish to it and as shall be necessary to vest
in the Depositor any Mortgage Loan released pursuant hereto and the Custodian
shall have no further responsibility with regard to such Mortgage File. In lieu
of repurchasing any such Mortgage Loan as provided above, the Depositor may
cause such Mortgage Loan to be removed from the Trust Fund (in which case it
shall become a Defective Mortgage Loan) and substitute one or more Eligible
Substitute Mortgage Loans in the manner and subject to the limitations set forth
in Section 2.03(c).
It is understood and agreed that the representations and warranties
set forth in Section 2.04 hereof shall survive delivery of the Mortgage Files to
the Custodian and shall inure to the benefit of the Certificateholders
notwithstanding any restrictive or qualified endorsement or assignment. It is
understood and agreed that the obligations of the Depositor set forth in this
Section 2.03(a) to cure, substitute for or repurchase a Mortgage Loan and to pay
the Reimbursement Amount constitute the sole remedies available to the
Certificateholders and to the Trustee on their behalf respecting a breach of the
representations and warranties in Section 2.04 hereof.
In addition to the foregoing, in the case of a breach of the
Depositor's representation set forth in Section 2.04(i) hereof, the Depositor
shall pay to the Trust the Reimbursement Amount. The Reimbursement Amount shall
be delivered to the Servicer for deposit into the Collection Account within 10
days from the date the Depositor was notified by the Trustee of the amount of
such costs and damages.
(b) Within 90 days of the earlier of discovery by the Servicer or
receipt of notice by the Servicer of the breach of any representation, warranty
or covenant of the Servicer set forth in Section 2.05 which materially and
adversely affects the interests of the Certificateholders in any Mortgage Loan,
the Servicer shall cure such breach in all material respects.
(c) Any substitution of Eligible Substitute Mortgage Loans for
Defective Mortgage Loans made pursuant to Section 2.03(a) must be effected prior
to the last Business Day that is within two years after the Closing Date. As to
any Defective Mortgage Loan for which the Depositor substitutes an Eligible
Substitute Mortgage Loan or Loans, such substitution shall be effected by the
Depositor delivering to the Trustee for such Eligible Substitute Mortgage Loan
or Loans, the documents required by Section 2.01, together with an Officers'
Certificate providing that each such Eligible Substitute Mortgage Loan satisfies
the definition thereof and specifying the Substitution Adjustment Amount (as
described below), if any, in connection with such substitution. The Custodian
shall acknowledge receipt for such Eligible Substitute Mortgage Loan or Loans
and, within ten Business Days thereafter, the Custodian shall review such
documents as specified in Section 2.02 and deliver to the Servicer, with respect
to such Eligible Substitute Mortgage Loan or Loans, a certification
substantially in the form attached hereto as Exhibit F-1, with any applicable
exceptions noted thereon. Within one year of the date of substitution, the
Custodian shall deliver to the Servicer a certification substantially in the
form of Exhibit F-3 hereto with respect to such Eligible Substitute Mortgage
Loan or Loans, with any applicable exceptions noted thereon. Monthly Payments
due with respect to Eligible Substitute Mortgage Loans in the month of
substitution are not part of the Trust Fund and will be retained by the
Depositor. For the month of substitution, distributions to Certificateholders
will reflect the collections and recoveries in respect of such Defective
Mortgage Loan in the Collection Period or Prepayment Period, as applicable,
preceding the date of substitution and the Depositor shall thereafter be
entitled to retain all amounts subsequently received in respect of such
Defective Mortgage Loan. The Depositor shall give or cause to be given written
notice to the Certificateholders that such substitution has taken place, shall
amend the applicable Mortgage Loan Schedule to reflect the removal of such
Defective Mortgage Loan from the terms of this Agreement and the substitution of
the Eligible Substitute Mortgage Loan or Loans and shall deliver a copy of such
amended Mortgage Loan Schedule to the Trustee. Upon such substitution, such
Eligible Substitute Mortgage Loan or Loans shall constitute part of the Mortgage
Pool and shall be subject in all respects to the terms of this Agreement,
including all applicable representations and warranties as of the date of
substitution.
For any month in which the Depositor substitutes one or more
Eligible Substitute Mortgage Loans for one or more Defective Mortgage Loans, the
Servicer will determine the amount (the "Substitution Adjustment Amount"), if
any, by which the aggregate Purchase Price of all such Defective Mortgage Loans
exceeds the aggregate, as to each such Eligible Substitute Mortgage Loan, of the
principal balance thereof as of the date of substitution, together with one
month's interest on such principal balance at the applicable Net Mortgage
Interest Rate. On the date of such substitution, the Depositor will deliver or
cause to be delivered to the Servicer for deposit in the Collection Account an
amount equal to the Substitution Adjustment Amount, if any, and the Trustee,
upon receipt of the related Eligible Substitute Mortgage Loan or Loans and
notice by the Servicer of such deposit, shall release to the Depositor the
related Mortgage File or Files and shall execute and deliver such instruments of
transfer or assignment, in each case without recourse, as the Depositor shall
deliver to it and as shall be necessary to vest therein any Defective Mortgage
Loan released pursuant hereto.
In addition, the Depositor shall obtain at its own expense and
deliver to the Trustee an Opinion of Counsel to the effect that such
substitution will not cause (a) any federal tax to be imposed on the Trust Fund,
including without limitation, any federal tax imposed on "prohibited
transactions" under Section 860F(a)(l) of the Code or on "contributions after
the startup date" under Section 860G(d)(l) of the Code, or (b) any REMIC to fail
to qualify as a REMIC at any time that any Certificate is outstanding. If such
Opinion of Counsel can not be delivered, then such substitution may only be
effected at such time as the required Opinion of Counsel can be given.
(d) Upon discovery by the Depositor, the Seller, the Servicer, the
Securities Administrator, the Custodian or the Trustee that any Mortgage Loan
does not constitute a "qualified mortgage" within the meaning of Section
860G(a)(3) of the Code, the party discovering such fact shall within two
Business Days give written notice thereof to the other parties. In connection
therewith, the Depositor shall repurchase or, subject to the limitations set
forth in Section 2.03(c), substitute one or more Eligible Substitute Mortgage
Loans for the affected Mortgage Loan within 60 days of the earlier of discovery
or receipt of such notice with respect to such affected Mortgage Loan. In
addition, upon discovery that a Mortgage Loan is defective in a manner that
would cause it to be a "defective obligation" within the meaning of Treasury
Regulations relating to REMICs, the Depositor shall cure the defect or make the
required purchase or substitution no later than 60 days after the discovery of
the defect. Any such repurchase or substitution shall be made in the same manner
as set forth in Section 2.03(a). The Trustee shall reconvey to the Depositor the
Mortgage Loan to be released pursuant hereto in the same manner, and on the same
terms and conditions, as it would a Mortgage Loan repurchased for breach of a
representation or warranty.
Section 2.04 Representations and Warranties of the Depositor with
respect to the Mortgage Loans.
The Depositor hereby represents and warrants to the Trustee for the
benefit of the Certificateholders that as of the Closing Date or as of such
other date specifically provided herein:
(a) The information set forth in the Mortgage Loan Schedules
attached hereto is true and correct, including, without limitation, the
information regarding any Prepayment Charge;
(b) No payment required under any Mortgage Loan will be 30 days or
more delinquent on the Closing Date. No Mortgage Loan will have been 30 days
delinquent more than once during the 12 months preceding the Closing Date;
(c) There are no defaults in complying with the terms of the
Mortgages, and all taxes, governmental assessments, insurance premiums,
leasehold payments, water, sewer and municipal charges, which previously became
due and owing have been paid, or an escrow of funds has been established in an
amount sufficient to pay for every such item which remains unpaid and which has
been assessed but is not yet due and payable. Neither the Seller nor the
Depositor has advanced funds, or induced, or solicited directly or indirectly,
the payment of any amount required under the Mortgage Loan, except for interest
accruing from the date of the Mortgage Note or date of disbursement of the
Mortgage Loan proceeds, whichever is later, to the day which precedes by one
month the Due Date of the first installment of principal and interest;
(d) The terms of the Mortgage Note and Mortgage have not been
impaired, waived, altered or modified in any respect, except by a written
instrument which has been recorded, if necessary, to protect the interests of
the Certificateholders and which has been delivered to the Custodian. The
substance of any such waiver, alteration or modification has been approved by
the issuer of any related primary mortgage insurance policy and the title
insurer, to the extent required by the policy, and its terms are reflected on
the applicable Mortgage Loan Schedule. No Mortgagor has been released, in whole
or in part, except in connection with an assumption agreement approved by the
issuer of any related primary mortgage insurance policy and the title insurer,
to the extent required by the policy, and which assumption agreement is part of
the Mortgage File delivered to the Custodian and the terms of which are
reflected in the applicable Mortgage Loan Schedule;
(e) The Mortgage Loan is not subject to any right of rescission,
set-off, counterclaim or defense, including without limitation the defense of
usury, nor will the operation of any of the terms of the Mortgage Note or the
Mortgage, or the exercise of any right thereunder, render either the Mortgage
Note or the Mortgage unenforceable, in whole or in part, or subject to any right
of rescission, set-off, counterclaim or defense, including without limitation
the defense of usury, and no such right of rescission, set-off, counterclaim or
defense has been asserted with respect thereto;
(f) Neither the Mortgage nor the Mortgage Note has been satisfied,
canceled, subordinated or rescinded, in whole or in part, and the Mortgaged
Property has not been released from the lien of the Mortgage, in whole or in
part, nor has any instrument been executed that would effect any such release,
cancellation, subordination or rescission;
(g) The Mortgage Note and the Mortgage and all other documents
executed in connection with the Mortgage Loan are genuine, and each is the
legal, valid and binding obligation of the maker thereof enforceable in
accordance with its terms. All parties to the Mortgage Note, the Mortgage and
any other related document had legal capacity to enter into the Mortgage Loan
and to execute and deliver the Mortgage Note, the Mortgage and any other related
document, and the Mortgage Note, the Mortgage and any other related document
have been duly and properly executed by such parties. The Seller has reviewed
all of the documents constituting the Mortgage File and has made such inquiries
as it deems necessary to make and confirm the accuracy of the representations
set forth herein;
(h) All the documents executed in connection with the Mortgage Loan
including, but not limited to, the Mortgage Note and the Mortgage are free of
fraud and any misrepresentation and are signed by the persons they purport to be
signed by, and witnessed or, as appropriate, notarized by the persons whose
signatures appear as witnesses or notaries, and each such document constitutes
the valid and binding legal obligation of the signatories and is enforceable in
accordance with its terms;
(i) Any and all requirements of any federal, state or local law
including, without limitation, usury, truth-in-lending, real estate settlement
procedures, consumer credit protection, equal credit opportunity, disclosure, or
predatory and abusive lending laws applicable to the Mortgage Loan have been
complied with, and the Seller shall maintain in its possession, evidence of
compliance with all such requirements. The consummation of the transactions
contemplated hereby will not violate any such laws or regulations. All
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with respect to
the use and occupancy of the same, including, but not limited to, certificates
of occupancy and fire underwriting certificates, have been made or obtained from
the appropriate authorities;
(j) The Mortgaged Property is located in the state identified in the
applicable Mortgage Loan Schedule and consists of a contiguous parcel of real
property with a detached single family residence erected thereon, or a two- to
four-family dwelling, or an individual condominium unit in a condominium
project, or an individual unit in a planned unit development or a townhouse, or
a manufactured dwelling, and no residence or dwelling is a mobile home. As of
the respective appraisal date for each Mortgaged Property, no portion of the
Mortgaged Property was being used for commercial purposes, except as allowed
under the underwriting guidelines of the Seller. If the Mortgaged Property is a
condominium unit or a planned unit development (other than a de minimus planned
unit development) such condominium or planned unit development meets the
requirements under the underwriting guidelines of the Seller.
(k) The Mortgage is a valid, subsisting and enforceable first or
second lien on the Mortgaged Property, including all buildings on the Mortgaged
Property and all installations and mechanical, electrical, plumbing, heating and
air conditioning systems located in or annexed to such buildings, and all
additions, alterations and replacements made at any time with respect to the
foregoing. The lien of the Mortgage is subject only to:
(i) the lien of current real property taxes and assessments not yet
due and payable;
(ii) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to mortgage lending institutions generally and
specifically referred to in the lender's title insurance policy delivered
to the originator of the Mortgage Loan and (i) referred to or otherwise
considered in the appraisal made for the originator of the Mortgage Loan
and (ii) which do not adversely affect the Appraised Value of the
Mortgaged Property set forth in such appraisal; and
(iii) other matters to which like properties are commonly subject
which do not materially interfere with the benefits of the security
intended to be provided by the mortgage or the use, enjoyment, value or
marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document
related to and delivered in connection with the Mortgage Loan establishes and
creates a valid, subsisting and enforceable first or second lien and first or
second priority security interest on the property described therein and the
Depositor has full right to sell and assign the same;
(l) The Mortgage Loan has been closed and the proceeds of the
Mortgage Loan have been fully disbursed, except for Mortgage Loans with escrow
holdbacks established or created due to seasonal weather conditions, as allowed
under the underwriting guidelines of the Seller, and there is no requirement for
future advances thereunder. All costs, fees and expenses incurred in making or
closing the Mortgage Loan and the recording of the Mortgage were paid, and the
Mortgagor is not entitled to any refund of any amounts paid or due under the
Mortgage Note or Mortgage;
(m) Any future advances made prior to the Cut-off Date, have been
consolidated with the outstanding principal amount secured by the Mortgage, and
the secured principal amount, as consolidated, bears a single interest rate and
single repayment term reflected on the applicable Mortgage Loan Schedule. The
lien of the Mortgage securing the consolidated principal amount is expressly
insured as having first or second lien priority by a title insurance policy, an
endorsement to the policy insuring the mortgagee's consolidated interest or by
other title evidence acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac; the consolidated
principal amount does not exceed the original principal amount of the Mortgage
Loan; the Seller shall not make future advances after the Cut-off Date;
(n) The Depositor is the sole owner of record and holder of the
Mortgage Loan and the related Mortgage Note and the Mortgage are not assigned or
pledged, and the Depositor has good and marketable title thereto and has full
right and authority to transfer and sell the Mortgage Loan. The Depositor is
transferring the Mortgage Loan free and clear of any and all encumbrances,
liens, pledges, equities, participation interests, claims, charges or security
interests of any nature encumbering such Mortgage Loan;
(o) The Mortgage Loan was originated by a savings and loan
association, a savings bank, a commercial bank, a credit union, an insurance
company, or similar institution that is supervised and examined by a federal or
state authority, or by a mortgagee approved by the Secretary of Housing and
Urban Development pursuant to Sections 203 and 211 of the National Housing Act.
All parties which have had any interest in the Mortgage Loan, whether as
mortgagee, assignee, pledgee or otherwise, are (or, during the period in which
they held and disposed of such interest, were) (1) in compliance with any and
all applicable licensing requirements of the laws of the state wherein the
Mortgaged Property is located, and (2) organized under the laws of such state,
or (3) qualified to do business in such state, or (4) federal savings and loan
associations or national banks having principal offices in such state, or (5)
not doing business in such state;
(p) The Mortgage Loan is covered by an ALTA lender's title insurance
policy (or in the case of any Mortgage Loan secured by a Mortgaged Property
located in a jurisdiction where such policies are generally not available, an
opinion of counsel of the type customarily rendered in such jurisdiction in lieu
of title insurance and acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac) or other
generally acceptable form of policy of insurance acceptable to ▇▇▇▇▇▇ Mae or
▇▇▇▇▇▇▇ Mac, issued by a title insurer acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac
and qualified to do business in the jurisdiction where the Mortgaged Property is
located, insuring the Company, its successors and assigns, as to the first or
second priority lien of the Mortgage in the original principal amount of the
Mortgage Loan, subject only to the exceptions contained in clauses (1), (2) and
(3) of Paragraph (k) above, and against any loss by reason of the invalidity or
unenforceability of the lien resulting from the provisions of the Mortgage
providing for adjustment to the Mortgage Interest Rate and Monthly Payment. The
Depositor is the sole insured of such lender's title insurance policy, and such
lender's title insurance policy is in full force and effect and will be in force
and effect upon the consummation of the transactions contemplated by this
Agreement. No claims have been made under such lender's title insurance policy,
and no prior holder of the Mortgage, including the Depositor, has done, by act
or omission, anything which would impair the coverage of such lender's title
insurance policy;
(q) There is no default, breach, violation or event of acceleration
existing under the Mortgage or the Mortgage Note or related documents and no
event which, with the passage of time or with notice and the expiration of any
grace or cure period, would constitute a default, breach, violation or event of
acceleration, and neither the Depositor nor its predecessors have waived any
default, breach, violation or event of acceleration;
(r) There are no mechanics' or similar liens or claims which have
been filed for work, labor or material (and no rights are outstanding that under
the law could give rise to such liens) affecting the related Mortgaged Property
which are or may be liens prior to, or equal or coordinate with, the lien of the
related Mortgage which are not insured against by the title insurance policy
referenced in Paragraph (p) above;
(s) All improvements which were considered in determining the
Appraised Value of the Mortgaged Property lay wholly within the boundaries and
building restriction lines of the Mortgaged Property and except as insured
against by the title insurance policy referenced in Paragraph (p) above, no
improvements on adjoining properties encroach upon the Mortgaged Property. No
improvement located on or being part of the Mortgaged Property is in violation
of any applicable zoning law or regulation;
(t) Principal payments commenced no more than 60 days after the
funds were disbursed to the Mortgagor in connection with the Mortgage Loan. Each
Mortgage Loan is payable each month in equal monthly installments of principal
and interest, with interest calculated and payable in arrears, sufficient to
amortize the Mortgage Loan fully by the stated maturity date set for in the
Mortgage Note over an original term to maturity of not more than 30 years. No
Mortgage Loan contains terms or provisions which would result in negative
amortization;
(u) The Mortgage Loans have an original term to maturity of not more
than 30 years, with interest payable in arrears each month. As to each
Adjustable Rate Mortgage Loan on each applicable adjustment date, the Mortgage
Rate will be adjusted to equal the sum of the Index plus the applicable gross
margin, rounded up or down to the nearest multiple of 0.125% indicated by the
Mortgage Note; provided that the Mortgage Interest Rate will not increase or
decrease by more than the Periodic Cap on any Adjustment Date, and will in no
event exceed the Maximum Mortgage Interest Rate or be lower than the Minimum
Mortgage Interest Rate listed on the related Mortgage Loan Schedule for such
Mortgage Loan. Each Mortgage Note requires a monthly payment which is
sufficient, during the period prior to the first adjustment to the Mortgage
Rate, to fully amortize the outstanding principal balance as of the first day of
such period over the then remaining term of such Mortgage Note and to pay
interest at the related Mortgage Rate. As to each Adjustable Rate Mortgage Loan,
if the related Mortgage Interest Rate changes on an Adjustment Date, the then
outstanding Principal Balance will be reamortized over the remaining life of
such Mortgage Loan. No Mortgage Loan contains terms or provisions which would
result in negative amortization;
(v) The Mortgage and related Mortgage Note contain customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure and upon the exercise of such rights and remedies under the
law, the holder of the Mortgage and Mortgage Note will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to a Mortgagor which would interfere with the right to sell
the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage;
(w) As of the date of origination, the Mortgaged Property was
lawfully occupied under applicable law;
(x) The Mortgage Note is not and has not been secured by any
collateral, pledged account or other security except the lien of the
corresponding Mortgage and the security interest of any applicable security
agreement or chattel mortgage referred to in (k) above;
(y) In the event the Mortgage constitutes a deed of trust, a
trustee, duly qualified under applicable law to serve as such, has been properly
designated and currently so serves and is named in the Mortgage, and no fees or
expenses are or will become payable by the Mortgagee to the trustee under the
deed of trust, except in connection with a trustee's sale after default by the
Mortgagor;
(z) The Assignment of Mortgage upon the insertion of the name of the
assignee and recording information is in recordable form and is acceptable for
recording under the laws of the jurisdiction in which the Mortgaged Property is
located;
(aa) The Mortgaged Property is undamaged by waste, fire, earthquake
or earth movement, windstorm, flood, tornado or other casualty so as to affect
adversely the value of the Mortgaged Property as security for the Mortgage Loan
or the use for which the premises were intended;
(bb) The origination and collection practices used with respect to
the Mortgage Loan have been in accordance with the Servicing Standard, and have
been in all material respects legal and proper. With respect to escrow deposits
and escrow payments, all such payments are in the possession of the Depositor
and there exist no deficiencies in connection therewith for which customary
arrangements for repayment thereof have not been made. All escrow payments have
been collected in full compliance with state and federal law. No escrow deposits
or escrow payments or other charges or payments due the Depositor have been
capitalized under the Mortgage Note;
(cc) There is no proceeding pending or to the best of the
Depositor's knowledge threatened for the total or partial condemnation of the
related Mortgaged Property;
(dd) The Related Documents contains an appraisal of the related
Mortgaged Property by an appraiser who is licensed in the state where the
Mortgaged Property is located, and who had no interest, direct or indirect, in
the Mortgaged Property or in any loan made on the security thereof; and whose
compensation is not affected by the approval or disapproval of the Mortgage
Loan, and the appraisal and the appraiser both satisfy the applicable
requirements of Title XI of the Financial Institution Reform, Recovery, and
Enforcement Act of 1989 and the regulations promulgated thereunder, all as in
effect on the date the Mortgage Loan was originated;
(ee) The Mortgaged Property securing each Mortgage Loan is insured
by an insurer acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac against loss by fire and
such hazards as are covered under a standard extended coverage endorsement and
such other hazards as are customary in the area where the Mortgaged Property is
located pursuant to insurance policies conforming to the requirements of this
Agreement, in an amount which is not less than the lesser of 100% of the
insurable value of the Mortgaged Property and the outstanding principal balance
of the Mortgage Loan, but in no event less than the minimum amount necessary to
fully compensate for any damage or loss on a replacement cost basis. If the
Mortgaged Property is a condominium unit, it is included under the coverage
afforded by a blanket policy for the project. If the improvements on the
Mortgaged Property are in an area identified in the Federal Register by the
Federal Emergency Management Agency as having special flood hazards, a flood
insurance policy meeting the requirements of the current guidelines of the
Federal Insurance Administration is in effect with a generally acceptable
insurance carrier, in an amount representing coverage not less than the least of
(A) the outstanding principal balance of the Mortgage Loan, (B) the full
insurable value and (C) the maximum amount of insurance which was available
under the Flood Disaster Protection Act of 1973, as amended. All individual
insurance policies contain a standard mortgagee clause naming the Company and
its successors and assigns as mortgagee, and all premiums thereon have been
paid. The Mortgage obligates the Mortgagor thereunder to maintain a hazard
insurance policy at the Mortgagor's cost and expense, and on the Mortgagor's
failure to do so, authorizes the holder of the Mortgage to obtain and maintain
such insurance at such Mortgagor's cost and expense, and to seek reimbursement
therefor from the Mortgagor. The hazard insurance policy is the valid and
binding obligation of the insurer, is in full force and effect, and will be in
full force and effect and inure to the benefit of the Trustee on behalf of the
Certificateholders upon the consummation of the transactions contemplated by
this Agreement. The Depositor has not acted or failed to act so as to impair the
coverage of any such insurance policy or the validity, binding effect and
enforceability thereof;
(ff) The Mortgagor has not notified the Depositor and the Depositor
has no knowledge of any relief requested or allowed to the Mortgagor under the
Servicemembers Civil Relief Act, as amended;
(gg) The Mortgage Loan is not a graduated payment mortgage loan and
the Mortgage Loan does not have a shared appreciation or other contingent
interest feature. The Mortgage Loan (other than with respect to any Subsidy
Loan) does not contain provisions pursuant to which Monthly Payments are paid or
partially paid with funds deposited in any separate account established by the
Depositor, the Mortgagor, or any one on behalf of the Mortgagor, or paid by any
source other than the Mortgagor;
(hh) No Mortgage Loan was made in connection with (i) the
construction or rehabilitation of a Mortgaged Property or (ii) facilitating the
trade-in or exchange of a Mortgaged Property other than a
construction-to-permanent loan which has converted to a permanent Mortgage Loan;
(ii) Each Mortgage Loan was underwritten in accordance with the
underwriting guidelines of the Seller; and the Mortgage Note and Mortgage are on
forms acceptable to ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ ▇▇▇;
(jj) No Mortgagor was a debtor in any state or federal bankruptcy or
insolvency proceeding as of the date the Mortgage Loan was closed and the
proceeds of the Mortgage Loan were distributed;
(kk) With respect to Mortgage Loans that are secured by a leasehold
estate, the lease is valid, in full force and effect, and conforms to the
underwriting guidelines of the Seller for leasehold estates;
(ll) The Mortgage or Mortgage Note contains an enforceable
provision, to the extent not prohibited by federal law, for the acceleration of
the payment of the unpaid principal balance of the Mortgage Loan in the event
that the Mortgaged Property is sold or transferred without the prior written
consent of the Mortgagee thereunder;
(mm) The Mortgagor is one or more natural persons and/or trustees
for an Illinois land trust or a trustee under a "living trust" and such "living
trust" is in compliance with the underwriting guidelines of the Seller;
(nn) None of the proceeds of the Mortgage Loan were used to finance
single-premium credit life insurance policies;
(oo) Each original Mortgage has been, or is in the process of being
duly recorded in the appropriate recording office, and all subsequent
assignments of the original Mortgage (other than the assignment to the
Depositor) have been recorded, are in the process of being recorded or will be
recorded (in the event the original mortgage has not been returned by the
applicable recording office) if required pursuant to the terms of this
Agreement, in the appropriate jurisdictions wherein such recordation is
necessary to perfect the lien thereof as against creditors of the Depositor;
(pp) There is no pending action or proceeding directly involving any
Mortgaged Property of which the Depositor is aware in which compliance with any
environmental law, rule or regulation is an issue; and to the best of the
Depositor's knowledge, nothing further remains to be done to satisfy in full all
requirements of each such law, rule or regulation constituting a prerequisite to
use, value and enjoyment of said property;
(qq) Except as set forth on the Mortgage Loan Schedules, each
Mortgage Loan with an LTV of greater than 80% is insured as to payment defaults
by a primary mortgage insurance policy issued by a primary mortgage insurer
having a claims paying ability rating acceptable to FHLMC or FNMA. All
provisions of such primary mortgage insurance policy have been and are being
complied with, such policy is in full force and effect, and all premiums due
thereunder have been paid;
(rr) From and after the date of origination, each Mortgage Loan has
been serviced in accordance with the terms of all federal, state and local laws
and regulations, the terms of the Mortgage Note and the Servicing Standard in
all respects;
(ss) None of the Mortgage Loans are classified as "high cost"
Mortgage Loans under Section 32 of the Home Ownership and Equity Protection Act
of 1994 or any comparable state law;
(tt) The Mortgage Note and any other documents required to be
delivered by the Depositor under this Agreement for the Mortgage Loans have been
delivered to the Custodian (or the Trustee). The Seller has retained the other
documents set forth in Section 2.01 and will deliver such documents upon a
Document Transfer Event;
(uu) With respect to each Mortgage Loan, the Servicer has furnished
accurate and complete information on the related borrower credit files to
Equifax, Experian and Trans Union Credit Information Company, in accordance with
the Fair Credit Reporting Act and its implementing regulations;
(vv) The Seller has complied with all applicable anti-money
laundering laws and regulations, (the "Anti-Money Laundering Laws"), and has
established an anti-money laundering compliance program as required by the
Anti-Money Laundering Laws;
(ww) Each Mortgage Loan originated in the state of Texas pursuant to
Article XVI, Section 50(a)(6) of the Texas Constitution (a "Texas Refinance
Loan") has been originated in compliance with the provisions of Article XVI,
Section 50(a)(6) of the Texas Constitution, Texas Civil Statutes and the Texas
Finance Code;
(xx) With respect to each Mortgage Loan that has a Prepayment
Charge, each such Prepayment Charge shall be enforceable, and each Prepayment
Charge shall be permitted pursuant to federal, state and local law. Each such
Prepayment Charge is in an amount equal to the maximum amount permitted under
applicable law and no such Prepayment Charge may be imposed for a term in excess
of five (5) years with respect to Mortgage Loans originated on or after October
1, 2002;
(yy) No Mortgage Loan secured by mortgaged property located in the
State of Georgia was originated during the period beginning on and including
October 1, 2002, and ending on and including March 7, 2003;
(zz) Each Mortgage Loan that is secured by residential real property
has a Loan-to-Value ratio of 100% or less as of the Cut-off Date;
(aaa) Each Mortgage Loan is a "qualified mortgage" within the
meaning of Section 860G of the Code and Treas. Reg.ss.1.860G-2;
(bbb) No Mortgage Loan originated on or after November 27, 2003, is
a "High-Cost Home Loan" subject to the New Jersey Home Ownership Security Act of
2003 (N.J.S.A. 46:10B-22 et seq.);
(ccc) No Mortgage Loan originated on or after January 1, 2004, is a
"High-Cost Home Loan" subject to the New Mexico Home Loan Protection Act (N.M.
Stat. ▇▇▇. 58-21A-1 et seq.); and
(ddd) No Mortgage Loan is a "high-cost," "high-cost home," "covered"
(excluding home loans defined as "covered home loans" pursuant to clause (1) of
the definition of that term in the New Jersey Home Ownership Security Act of
2002), "high-risk home" or "predatory" loan under any applicable federal, state
or local predatory or abusive lending law.
Section 2.05 Representations, Warranties and Covenants of the
Servicer.
The Servicer hereby represents, warrants and covenants to the
Trustee, for the benefit of each of the Trustee and the Certificateholders and
to the Depositor and the Securities Administrator that as of the Closing Date or
as of such date specifically provided herein:
(i) The Servicer is a corporation duly organized, validly existing
and in good standing under the laws of the State of California and has all
licenses necessary to carry on its business as now being conducted, except
for such licenses, certificates and permits the absence of which,
individually or in the aggregate, would not have a material adverse effect
on the ability of the Servicer to conduct its business as it is presently
conducted, and is licensed, qualified and in good standing in the states
where the Mortgaged Property is located if the laws of such state require
licensing or qualification in order to conduct business of the type
conducted by the Servicer or to ensure the enforceability or validity of
each Mortgage Loan; the Servicer has the power and authority to execute
and deliver this Agreement and to perform in accordance herewith; the
execution, delivery and performance of this Agreement (including all
instruments of transfer to be delivered pursuant to this Agreement) by the
Servicer and the consummation of the transactions contemplated hereby have
been duly and validly authorized; and all requisite corporate action has
been taken by the Servicer to make this Agreement valid and binding upon
the Servicer in accordance with its terms;
(ii) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Servicer and will
not result in the breach of any term or provision of the articles of
incorporation or by-laws of the Servicer or result in the breach of any
term or provision of, or conflict with or constitute a default under or
result in the acceleration of any obligation under, any agreement,
indenture or loan or credit agreement or other instrument to which the
Servicer or its property is subject, or result in the violation of any
law, rule, regulation, order, judgment or decree to which the Servicer or
its property is subject;
(iii) The Servicer is an approved seller/servicer of conventional
residential mortgage loans for ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, with the
facilities, procedures, and experienced personnel necessary for the sound
servicing of mortgage loans of the same type as the Mortgage Loans. The
Servicer is a HUD approved mortgagee pursuant to Section 203 of the
National Housing Act and is in good standing to sell mortgage loans to and
service mortgage loans for ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, and no event has
occurred, including but not limited to a change in insurance coverage,
which would make the Servicer unable to comply with ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇
Mac eligibility requirements or which would require notification to either
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac;
(iv) This Agreement, and all documents and instruments contemplated
hereby which are executed and delivered by the Servicer, constitute and
will constitute valid, legal and binding obligations of the Servicer,
enforceable in accordance with their respective terms, except as the
enforcement thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement
of creditors' rights generally (whether considered in a proceeding at law
or in equity);
(v) The Servicer does not believe, nor does it have any reason or
cause to believe, that it cannot perform each and every covenant contained
in this Agreement;
(vi) There is no action, suit, proceeding or investigation pending
or, to its knowledge, threatened against the Servicer that, either
individually or in the aggregate, may result in any material adverse
change in the business, operations, financial condition, properties or
assets of the Servicer, or in any material impairment of the right or
ability of the Servicer to carry on its business substantially as now
conducted, or in any material liability on the part of the Servicer, or
that would draw into question the validity or enforceability of this
Agreement or of any action taken or to be taken in connection with the
obligations of the Servicer contemplated herein, or that would be likely
to impair materially the ability of the Servicer to perform under the
terms of this Agreement;
(vii) No consent, approval 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 by this Agreement, except
for such consents, approvals, authorizations and orders, if any, that have
been obtained; and
(viii) No information in this Agreement provided by the Servicer nor
any information, certificate of an officer, statement furnished in writing
or report delivered to the Trustee or the Securities Administrator by the
Servicer in connection with the transactions contemplated hereby contains
or will contain any untrue statement of a material fact or omits or will
omit to state a material fact necessary in order to make the statements
contained therein, in light of the circumstances under which they were
made, not misleading.
(ix) The Servicer has fully furnished, and shall continue to fully
furnish for so long as it is servicing the Mortgage Loans hereunder, in
accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete information on the Mortgagor credit
files to Equifax, Experian and Trans Union Credit Information Company on a
monthly basis.
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.05 shall survive delivery of the Mortgage
Files to the Custodian and shall inure to the benefit of the Trustee, the
Depositor, the Securities Administrator and the Certificateholders. Upon
discovery by any of the Depositor, the Servicer, the Securities Administrator or
the Trustee of a breach of any of the foregoing representations, warranties and
covenants which materially and adversely affects the value of any Mortgage Loan,
Prepayment Charge or the interests therein of the Certificateholders, the party
discovering such breach shall give prompt written notice (but in no event later
than two Business Days following such discovery) to the other parties hereto.
Section 2.06 Representations and Warranties of the Depositor.
The Depositor represents and warrants to the Trust and the Trustee
on behalf of the Certificateholders and to the Servicer and Securities
Administrator as follows:
(i) This agreement constitutes a legal, valid and binding obligation
of the Depositor, enforceable against the Depositor in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect affecting the enforcement of creditors' rights in
general and except as such enforceability may be limited by general
principles of equity (whether considered in a proceeding at law or in
equity);
(ii) Immediately prior to the sale and assignment by the Depositor
to the Trustee on behalf of the Trust of each Mortgage Loan, the Depositor
had good and marketable title to each Mortgage Loan (insofar as such title
was conveyed to it by the Seller) subject to no prior lien, claim,
participation interest, mortgage, security interest, pledge, charge or
other encumbrance or other interest of any nature;
(iii) As of the Closing Date, the Depositor has transferred all
right, title interest in the Mortgage Loans to the Trustee on behalf of
the Trust;
(iv) The Depositor has not transferred the Mortgage Loans to the
Trustee on behalf of the Trust with any intent to hinder, delay or defraud
any of its creditors;
(v) The Depositor has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware,
with full corporate power and authority to own its assets and conduct its
business as presently being conducted;
(vi) The Depositor is not in violation of its certificate of
incorporation or by-laws or in default in the performance or observance of
any material obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Depositor is a party or by which it or its
properties may be bound, which default might result in any material
adverse changes in the financial condition, earnings, affairs or business
of the Depositor or which might materially and adversely affect the
properties or assets, taken as a whole, of the Depositor;
(vii) The execution, delivery and performance of this Agreement by
the Depositor, and the consummation of the transactions contemplated
thereby, do not and will not result in a material breach or violation of
any of the terms or provisions of, or, to the knowledge of the Depositor,
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Depositor is a
party or by which the Depositor is bound or to which any of the property
or assets of the Depositor is subject, nor will such actions result in any
violation of the provisions of the certificate of incorporation or by-laws
of the Depositor or, to the best of the Depositor's knowledge without
independent investigation, any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over the
Depositor or any of its properties or assets (except for such conflicts,
breaches, violations and defaults as would not have a material adverse
effect on the ability of the Depositor to perform its obligations under
this Agreement);
(viii) To the best of the Depositor's knowledge without any
independent investigation, no consent, approval, authorization, order,
registration or qualification of or with any court or governmental agency
or body of the United States or any other jurisdiction is required for the
issuance of the Certificates, or the consummation by the Depositor of the
other transactions contemplated by this Agreement, except such consents,
approvals, authorizations, registrations or qualifications as (a) may be
required under State securities or Blue Sky laws, (b) have been previously
obtained or (c) the failure of which to obtain would not have a material
adverse effect on the performance by the Depositor of its obligations
under, or the validity or enforceability of, this Agreement; and
(ix) There are no actions, proceedings or investigations pending
before or, to the Depositor's knowledge, threatened by any court,
administrative agency or other tribunal to which the Depositor is a party
or of which any of its properties is the subject: (a) which if determined
adversely to the Depositor would have a material adverse effect on the
business, results of operations or financial condition of the Depositor;
(b) asserting the invalidity of this Agreement or the Certificates; (c)
seeking to prevent the issuance of the Certificates or the consummation by
the Depositor of any of the transactions contemplated by this Agreement,
as the case may be; or (d) which might materially and adversely affect the
performance by the Depositor of its obligations under, or the validity or
enforceability of, this Agreement.
Section 2.07 Issuance of Certificates and the Uncertificated Regular
Interests.
The Trustee acknowledges the assignment to it of the Mortgage Loans
and the delivery to the Custodian on its behalf of the Mortgage Files, subject
to the provisions of Sections 2.01 and 2.02, and the Trustee acknowledges the
assignment to it of all other assets included in the Trust Fund, receipt of
which is hereby acknowledged. Concurrently with such assignment and delivery and
in exchange therefor, the Trustee, pursuant to the Written Order to Authenticate
executed by an officer of the Depositor, has executed, and the Certificate
Registrar has authenticated and delivered to or upon the order of the Depositor,
the Certificates (other than the Class CE, Class P and Class R Certificates) in
minimum dollar denominations or $25,000 and integral dollar multiples of $1 in
excess. The Class CE and Class P and Class R Certificates are issuable only in
minimum Percentage Interests of 10%. The Class R Certificate is issuable only as
a single certificate. The Trustee acknowledges the issuance of the
uncertificated REMIC 1 Regular Interests and declares that it hold such regular
interests as assets of REMIC 2. The Trustee acknowledges the obligation of the
Class CE Certificates to pay Cap Carryover Amounts, and declares that it hold
the same as assets of the Grantor Trust on behalf of the Holders of the Class
A-1, Class A-1A, Class A-2, Class M-1, Class M-2, Class M-3, Class M-4, Class
M-5 and Class M-6 Certificates, respectively. In addition to the assets
described in the preceding sentence, the assets of the Grantor Trust shall also
include (i) Prepayment Charges and the beneficial interest of the Class P
Certificates with respect thereto and (ii) the Yield Maintenance Agreement, the
Reserve Account and the beneficial interest of the Class CE Certificates with
respect thereto, subject to the obligation to pay Cap Carryover Amounts. The
interests evidenced by the Certificates constitute the entire beneficial
ownership interest in the Trust Fund.
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE TRUST FUND
Section 3.01 Servicer to Act as Servicer.
The Servicer, as independent contract servicer, shall service and
administer the Mortgage Loans in accordance with this Agreement and the normal
and usual standards of practice of sub-prime mortgage servicers servicing
similar mortgage loans in the same jurisdictions as the Mortgaged Properties,
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
the Servicer may deem necessary or desirable and consistent with the terms of
this Agreement (the "Servicing Standard").
Consistent with the terms of this Agreement, the Servicer may waive,
modify or vary any term of any Mortgage Loan or consent to the postponement of
strict compliance with any such term or in any manner grant indulgence to any
Mortgagor if in the Servicer's reasonable determination such waiver,
modification, postponement or indulgence is not materially adverse to the
Certificateholders; provided, however, that the Servicer shall not make future
advances and (unless the Mortgagor is in default with respect to the Mortgage
Loan or such default is, in the judgment of the Servicer, imminent) the Servicer
shall not permit any modification with respect to any Mortgage Loan that would
(i) change the Mortgage Interest Rate, defer or forgive the payment thereof of
any principal or interest payments, reduce the outstanding principal amount
(except for actual payments of principal) or extend the final maturity date with
respect to such Mortgage Loan, (ii) affect adversely the status of any REMIC
constituting part of the Trust Fund as a REMIC or (iii) cause any such REMIC to
be subject to a tax on "prohibited transactions" or "contributions" pursuant to
the REMIC Provisions. Notwithstanding the foregoing, the Servicer shall not
permit any modification with respect to any Mortgage Loan that would both (x)
effect an exchange or reissuance of such Mortgage Loan under Section 1.860G-2(b)
of the Treasury Regulations and (y) cause any REMIC constituting part of the
Trust Fund to fail to qualify as a REMIC under the Code or the imposition of any
tax on "prohibited transactions" or "contributions" after the Startup Day under
the REMIC Provisions. Without limiting the generality of the foregoing, the
Servicer shall continue, and is hereby authorized and empowered to execute and
deliver on behalf of itself, and the Trustee, all instruments of satisfaction or
cancellation, or of partial or full release, discharge and all other comparable
instruments, with respect to the Mortgage Loans and with respect to the
Mortgaged Properties. The Servicer shall make all required Servicing Advances
and shall service and administer the Mortgage Loans in accordance with
Applicable Regulations, and shall provide to the Mortgagor any reports required
to be provided to them thereby. By the execution of this Agreement, the Trustee
hereby grants to the Servicer a power of attorney to enable the Servicer to
carry out its duties hereunder.
In servicing and administering the Mortgage Loans, the Servicer
shall employ procedures including collection procedures and exercise the same
care that it customarily employs and exercises in servicing and administering
mortgage loans for its own account giving due consideration to accepted mortgage
servicing practices of prudent lending institutions and the Certificateholders'
reliance on the Servicer.
The Servicer shall give prompt notice to the Trustee 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.
Section 3.02 Collection of Mortgage Loan Payments.
Continuously from the date hereof until the principal and interest
on all Mortgage Loans are paid in full or as long as the Mortgage Loan remains
subject to this Agreement, the Servicer will diligently collect all payments due
under each Mortgage Loan when the same shall become due and payable and shall,
to the extent such procedures shall be consistent with the Servicing Standard
set froth in this Agreement and Applicable Regulations, follow such collection
procedures as it follows with respect to mortgage loans comparable to the
Mortgage Loans and held for its own account. Further, where applicable, the
Servicer will take special care in ascertaining and estimating annual Escrow
Payments that, as provided in the Mortgage, will become due and payable to that
end that the installments payable by the Mortgagors will be sufficient to pay
such charges as and when they become due and payable.
Section 3.03 Realization Upon Defaulted Mortgage Loans.
In the event that any payment due under any Mortgage Loan is not
paid when the same becomes due and payable, or in the event the Mortgagor fails
to perform any other covenant or obligation under the Mortgage Loan and such
failure continues beyond any applicable grace period, the Servicer shall take
such action as it shall deem to be in the best interest of the
Certificateholders.
In connection with a foreclosure or other conversion, the Servicer
shall exercise such rights and powers vested in it hereunder and use the same
degree of care and skill in its exercise as prudent mortgage servicers would
exercise or use under the circumstances in the conduct of their own affairs and
consistent with Applicable Regulations and the Servicing Standards, including,
without limitation, advancing funds for the payment of taxes and insurance
premiums.
Notwithstanding the foregoing provisions of this Section 3.03, with
respect to any Mortgage Loan as to which the Servicer has received actual notice
of, or has actual knowledge of, the presence of any toxic or hazardous substance
on the related Mortgaged Property, the Servicer shall not either (i) obtain
title to such Mortgaged Property as a result of or in lieu of foreclosure or
otherwise, or (ii) otherwise acquire possession of, or take any other action
with respect to, such Mortgaged Property if, as a result of any such action, the
Trust would be considered to hold title to, to be a mortgagee-in-possession of,
or to be an owner or operator of such Mortgaged Property within the meaning of
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended from time to time, or any comparable law, unless the Servicer
has also previously determined, based on its reasonable judgment and a report
prepared by a Person who regularly conducts environmental audits using customary
industry standards, that:
A. such Mortgaged Property is in compliance with applicable
environmental laws or, if not, that it would be in the best economic interest of
the Certificateholders to take such actions as are necessary to bring the
Mortgaged Property into compliance therewith; and
B. there are no circumstances present at such Mortgaged Property
relating to the use, management or disposal of any hazardous substances,
hazardous materials, hazardous wastes, or petroleum-based materials for which
investigation, testing, monitoring, containment, clean-up or remediation could
be required under any federal, state or local law or regulation, or that if any
such materials are present for which such action could be required, that it
would be in the best economic interest of the Certificateholders to take such
actions with respect to the affected Mortgaged Property.
The cost of the environmental audit report contemplated by this
Section 3.03 shall be advanced by the Servicer, subject to the Servicer's right
to be reimbursed therefor from the Collection Account as provided in Section
3.05(iv).
If the Servicer determines, as described above, that it is in the
best economic interest of the Certificateholders to take such actions as are
necessary to bring any such Mortgaged Property into compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials, hazardous
wastes, or petroleum-based materials affecting any such Mortgaged Property, then
the Servicer shall take such action as it deems to be in the best economic
interest of the Certificateholders. The cost of any such compliance,
containment, clean-up or remediation shall be advanced by the Servicer, subject
to the Servicer's right to be reimbursed therefor from the Collection Account as
provided in Section 3.05.
Section 3.04 Collection Account, Distribution Account and Reserve
Account.
(a) The Servicer shall segregate and hold all funds collected and
received pursuant to each Mortgage Loan separate and apart from any of its own
funds and general assets and shall establish and maintain one or more Collection
Accounts. Each Collection Account shall be an Eligible Account.
The Servicer shall deposit in the Collection Account on a daily
basis within three Business Days of receipt, and retain therein, the following
payments and collections received or made by it after the Cut-off Date with
respect to the Mortgage Loans, without duplication:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest on the Mortgage Loans
adjusted to the Mortgage Interest Rate less the Servicing Fee Rate;
(iii) all Liquidation Proceeds;
(iv) all Insurance Proceeds including amounts required to be
deposited pursuant to Section 3.10, other than proceeds to be held in the
Escrow Account and applied to the restoration or repair of the Mortgaged
Property or released to the Mortgagor in accordance with the Servicer's
normal servicing procedures, the loan documents or applicable law;
(v) all Condemnation Proceeds affecting any Mortgaged Property which
are not released to the Mortgagor in accordance with the Servicer's normal
servicing procedures, the loan documents or applicable law;
(vi) any amounts required to be deposited by the Servicer in
connection with any REO Property pursuant to Section 3.13;
(vii) all Prepayment Charges collected by the Servicer in connection
with the voluntary Principal Prepayment in full of any Mortgage Loan; and
(viii) all amounts required to be deposited by the Servicer pursuant
to Section 2.03.
Any interest paid on funds deposited in the Collection Account,
subject to Section 3.25, shall accrue to the benefit of the Servicer and the
Servicer shall be entitled to retain and withdraw such interest from the
Collection Account pursuant to Section 3.05(v). The foregoing requirements for
deposit from the Collection Account shall be exclusive, it being understood and
agreed that, without limiting the generality of the foregoing, payments in the
nature of late payment charges, bad check fees, prepayment charges that are not
Prepayment Charges, assumption fees and other similar fees need not be deposited
by the Servicer in the Collection Account. Amounts deposited in the Collection
Account in error may be withdrawn by the Servicer at any time.
(b) On behalf of the Trust Fund, the Trustee shall establish and
maintain one or more accounts (such account or accounts, the "Distribution
Account"), held in trust for the benefit of the Certificateholders. On behalf of
the Trust Fund, the Servicer shall deliver to the Trustee in immediately
available funds for deposit in the Distribution Account by the close of business
New York time on the Servicer Remittance Date, (i) that portion of the Available
Funds (calculated without regard to the references in the definition thereof to
amounts that may be deposited to the Distribution Account from a different
source as provided herein) then on deposit in the Collection Account, and (ii)
the amount of all Prepayment Charges collected by the Servicer in connection
with the voluntary Principal Prepayment in full of any of the Mortgage Loans
then on deposit in the Collection Account (other than any such Prepayment
Charges received after the related Prepayment Period). Amounts in the
Distribution Account shall be deemed to be held on behalf of the related REMICs
and the Grantor Trust in accordance with the REMIC distributions set forth in
Section 4.08. The Securities Administrator shall be entitled to cause the
Trustee to withdraw from the Distribution Account any amounts owing to it
pursuant to Section 8.05 and Section 9.01(c) prior to the distribution of any
amounts on deposit to the Certificateholders; provided, however, in the case of
amounts owing to it other than the Securities Administrator Fee, the Securities
Administrator shall provide the Depositor and the Servicer with a written
account of such amounts five Business Days prior to withdrawing such funds.
(c) Funds in the Collection Account and the Distribution Account may
be invested in Eligible Investments in accordance with the provisions set forth
in Section 3.25. The Servicer shall give notice to the Trustee and the
Securities Administrator of the location of the Collection Account maintained by
it when established and prior to any change thereof. The Trustee shall give
notice to the Servicer, the Securities Administrator and the Depositor of the
location of the Distribution Account when established and prior to any change
thereof.
(d) In the event the Servicer shall deliver to the Trustee for
deposit in the Distribution Account any amount not required to be deposited
therein, it may at any time request that the Trustee withdraw such amount from
the Distribution Account and remit to the Servicer any such amount, any
provision herein to the contrary notwithstanding. In addition, the Servicer
shall deliver to the Trustee from time to time for deposit, and the Trustee
shall so deposit, in the Distribution Account in respect of REMIC 1:
(i) any Advances, as required pursuant to Section 4.07;
(ii) any Stayed Funds, as soon as permitted by the federal
bankruptcy court having jurisdiction in such matters;
(iii) any amounts required to be deposited in the Distribution
Account by the Servicer or the Depositor pursuant to Sections 2.03, 3.04,
3.13, 3.15, 3.16, 3.23, 3.24, 4.07 or 10.01; and
(iv) any amounts required to be deposited by the Servicer pursuant
to Section 3.11 in connection with the deductible clause in any blanket
hazard insurance policy, such deposit being made from the Servicer's own
funds, without reimbursement therefor.
(e) Promptly upon receipt of any Stayed Funds, whether from the
Servicer, a trustee in bankruptcy, or federal bankruptcy court or other source,
the Trustee shall notify the Servicer of such receipt and deposit such funds in
the Distribution Account, subject to withdrawal thereof as permitted hereunder.
In addition, the Securities Administrator shall deposit in the Distribution
Account any amounts required to be deposited pursuant to Section 3.25(b) in
connection with losses realized on Eligible Investments with respect to funds
held in the Distribution Account.
(f) Any Prepayment Charges, Originator Prepayment Charge Payment
Amounts and Servicer Prepayment Charge Payment Amounts deposited pursuant to
Section 3.04(a)(vii) shall not be assets of any REMIC created hereunder, but
shall be considered assets of the Grantor Trust held by the Trustee for the
benefit of the Class P Certificateholders.
(g) (i) The Trustee shall establish and maintain the Reserve
Account, held in trust for the benefit of the Holders of the Offered
Certificates. The Trustee shall deposit in the Reserve Account on the date
received by it, any Yield Maintenance Agreement Payment received from the Yield
Maintenance Agreement Provider for the related Distribution Date. On each
Distribution Date, the Trustee shall withdraw from the Reserve Account any Yield
Maintenance Agreement Payment and apply it in the following order of priority:
(A) to the Offered Certificates, any remaining unpaid Cap
Carryover Amounts for such Classes for such Distribution Date (after
distributions pursuant to Section 4.02(b)(xxv) hereof), in each case
only up to the Cap Amount for the related Class, distributed in the
following order of priority:
(1) concurrently, to the Class A Certificates, pro rata,
based on the Cap Amount for each such Class; and
(2) sequentially, to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class
M-3, Class M-4, Class M-5 and Class M-6 Certificates, in that
order; and
(B) to the Offered Certificates, any remaining unpaid Cap
Carryover Amounts for such Classes for such Distribution Date (after
distributions pursuant to Section 4.02(b)(xxv) hereof and clause (A)
above) distributed in the following order of priority:
(1) concurrently, to the Class A Certificates, pro rata,
based on the related unpaid Cap Carryover Amount for each such
Class; and
(2) sequentially, to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class
M-3, Class M-4, Class M-5 and Class M-6 Certificates, in that
order; and
(C) to the Class CE Certificates, any remaining amount on
deposit in the Reserve Account.
(ii) The Securities Administrator shall account for the Reserve
Account as an asset of a grantor trust under subpart E, part I of
subchapter J of the Code and not an asset of any REMIC created pursuant to
this Agreement. The beneficial owner of the Reserve Account is the Class
CE Certificateholder. For all federal tax purposes, amounts transferred or
reimbursed by REMIC 2 to the Reserve Account shall be treated as
distributions by the Trustee to the Class CE Certificateholder.
(iii) Any Cap Carryover Amounts paid by the Trustee pursuant to this
Section 3.04(g) to the Offered Certificates shall be accounted for by the
Securities Administrator as amounts paid first to the Class CE
Certificates and then to the respective Class or Classes of Offered
Certificates. In addition, the Securities Administrator shall account for
the Offered Certificates' rights to receive payments of Cap Carryover
Amounts as rights in a limited recourse interest rate cap contract written
by the Class CE Certificates in favor of the Offered Certificates.
(iv) For federal tax return and information reporting, the right of
the Holders of the Offered Certificates to receive payments under the
Yield Maintenance Agreement in respect of any Yield Maintenance Agreement
Payments shall be assigned a value of zero.
Section 3.05 Permitted Withdrawals From the Collection Account.
The Servicer may, from time to time, withdraw from the Collection
Account for the following purposes:
(i) to remit to the Trustee for deposit in the Distribution Account
the amounts required to be so remitted pursuant to Section 3.04(b) or
permitted to be so remitted pursuant to the first sentence of Section
3.04(d);
(ii) to reimburse itself for (a) any unreimbursed Advances to the
extent of amounts received which represent Late Collections (net of the
related Servicing Fees) of Monthly Payments, Liquidation Proceeds and
Insurance Proceeds on Mortgage Loans with respect to which such Advances
were made in accordance with the provisions of Section 4.07; (b) any
unreimbursed Advances with respect to the final liquidation of a Mortgage
Loan that are Nonrecoverable Advances, but only to the extent that Late
Collections, Liquidation Proceeds and Insurance Proceeds received with
respect to such Mortgage Loan are insufficient to reimburse the Servicer
for such unreimbursed Advances; or (c) subject to Section 4.07(b), any
unreimbursed Advances to the extent of funds held in the Collection
Account for future distribution that were not included in Available Funds
for the preceding Distribution Date;
(iii) to reimburse itself for (a) any unpaid Servicing Fees, (b) any
unreimbursed Servicing Advances with respect to each Mortgage Loan, but
only to the extent of any Late Collections, Liquidation Proceeds,
Insurance Proceeds and condemnation proceeds received with respect to such
Mortgage Loan, and (c) any Servicing Advances with respect to the final
liquidation of a Mortgage Loan that are Nonrecoverable Advances, but only
to the extent that Late Collections, Liquidation Proceeds and Insurance
Proceeds received with respect to such Mortgage Loan are insufficient to
reimburse the Servicer for Servicing Advances;
(iv) to reimburse itself for any amounts paid or expenses incurred
pursuant to Section 3.03 (and not otherwise previously reimbursed);
(v) to pay to itself as servicing compensation (a) any interest
earned on funds in the Collection Account (all such interest to be
withdrawn monthly not later than each Servicer Remittance Date), (b) the
Servicing Fee from that portion of any payment or recovery as to interest
to a particular Mortgage Loan to the extent not retained pursuant to
Section 3.04(a)(ii) and (c) any Prepayment Interest Excess;
(vi) to pay or reimburse itself for any amounts payable or paid
pursuant to Section 6.03 (and not otherwise previously reimbursed); and
(vii) to clear and terminate the Collection Account upon the
termination of this Agreement.
The foregoing requirements for withdrawal from the Collection
Account shall be exclusive. In the event the Servicer shall deposit 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.
Section 3.06 Establishment of Escrow Accounts; Deposits in Escrow
Accounts.
The Servicer shall segregate and hold all funds collected and
received pursuant to each Mortgage Loan which constitute Escrow Payments
separate and apart from any of its own funds and general assets and shall
establish and maintain one or more Escrow Accounts, in the form of time deposit
or demand accounts. A copy of such letter agreement shall be furnished to the
Trustee upon request. The Escrow Account shall be an Eligible Account.
The Servicer shall deposit in the Escrow Account or Accounts on a
daily basis within three Business Days of receipt, in no event more than one
Business Day after deposit of such funds in the clearing account, and retain
therein, (i) all Escrow Payments collected on account of the Mortgage Loans, for
the purpose of effecting timely payment of any such items as required under the
terms of this Agreement, and (ii) all Insurance Proceeds which are to be applied
to the restoration or repair of any Mortgaged Property. The Servicer shall make
withdrawals therefrom only to effect such payments as are required under this
Agreement, and for such other purposes as shall be set forth in, or in
accordance with, Section 3.07. The Servicer shall be entitled to retain any
interest paid on funds deposited in the Escrow Account by the depository
institution other than interest on escrowed funds required by law to be paid to
the Mortgagor and, to the extent required by the related Mortgage Loan or
Applicable Regulations, the Servicer shall pay interest on escrowed funds to the
Mortgagor notwithstanding that the Escrow Account is non-interest bearing or
that interest paid thereon is insufficient for such purposes.
Section 3.07 Permitted Withdrawals From Escrow Account.
Withdrawals from the Escrow Account may be made by the Servicer (i)
to effect timely payments of Escrow Payments, (ii) to reimburse the Servicer for
any Servicing Advance made by the Servicer with respect to a related Mortgage
Loan but only from amounts received on the related Mortgage Loan which represent
late payments or Late Collections of Escrow Payments thereunder, (iii) to refund
to the Mortgagor any funds as may be determined to be overages, (iv) for
transfer to the Collection Account in accordance with the terms of this
Agreement, (v) for application to restoration or repair of the Mortgaged
Property, (vi) to pay to the Servicer, or to the Mortgagor to the extent
required by the related Mortgage Loan or Applicable Regulations, any interest
paid on the funds deposited in the Escrow Account, (vii) to clear and terminate
the Escrow Account on the termination of this Agreement, or (viii) to transfer
to the Collection Account any Insurance Proceeds. As part of its servicing
duties, the Servicer shall pay to the Mortgagor interest on funds in the Escrow
Account, to the extent required by the related Mortgage Loan or Applicable
Regulations, and to the extent that interest earned on funds in the Escrow
Account is insufficient, shall pay such interest from its own funds, without any
reimbursement therefor.
In the event the Servicer shall deposit in the Escrow Account any
amount not required to be deposited therein, it may at any time withdraw such
amount from the Escrow Account, any provision herein to the contrary
notwithstanding.
Section 3.08 Payment of Taxes, Insurance and Other Charges;
Collections Thereunder; Primary Mortgage Insurance.
(a) With respect to each Mortgage Loan that provides for Escrow
Payments, the Servicer shall maintain accurate records reflecting the status of
taxes, which are or may become a lien upon the Mortgaged Property and the status
of fire, flood (if applicable) and hazard 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 the 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
Note or Applicable Regulations. To the extent that a Mortgage Loan does not
provide for Escrow Payments, the Servicer shall determine that any such payments
are made by the Mortgagor. The Servicer assumes full responsibility for the
payment of all such bills and shall effect payments of all such bills
irrespective of the Mortgagor's faithful performance in the payment of same or
the making of the Escrow Payments and shall make Servicing Advances from its own
funds to effect such payments.
(b) The Servicer shall maintain coverage under primary mortgage
insurance policies for all Mortgage Loans with Loan-to-Value Ratios at
origination of 80% or greater, until the Loan-to-Value Ratio on any such
Mortgage Loan is reduced to 78% or lower as a result of principal payments on
such Mortgage Loan or based upon an appraisal of the related Mortgaged Property
after the Closing Date. The Seller shall be required, pursuant to the Mortgage
Loan Purchase Agreement, to make all premium payments with respect to such
primary mortgage insurance policies.
Section 3.09 Transfer of Accounts.
The Servicer may transfer the Collection Account and the Escrow
Account to a different depository institution from time to time. Upon such
transfer, the Servicer shall deliver to the Trustee, the Securities
Administrator and the Depositor, a certification or letter agreement, as the
case may be, as required pursuant to Sections 3.04 and 3.06.
Section 3.10 Maintenance of Hazard Insurance.
The Servicer shall cause to be maintained for each Mortgage Loan
fire and hazard insurance with extended coverage as is customary in the area
where the Mortgaged Property is located in an amount which is at least equal to
the lesser of (i) the amount necessary to fully compensate for any damage or
loss to the improvements which are a part of such property on a replacement cost
basis or (ii) the Principal Balance of the Mortgage Loan, in each case in an
amount not less than such amount as is necessary to prevent the Mortgagor and/or
the Mortgagee from becoming a co-insurer. If the Mortgaged Property is in an
area identified in the Federal Register by the Flood Emergency Management Agency
as having special flood hazards and flood insurance has been made available, the
Servicer will cause to be maintained a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
with a generally acceptable insurance carrier, in an amount representing
coverage not less than the least of (i) the Principal Balance of the Mortgage
Loan, (ii) the maximum insurable value of the improvements securing such
Mortgage Loan or (iii) the maximum amount of insurance which is available under
the National Flood Insurance Act of 1968, as amended. The Servicer shall also
maintain on the REO Property for the benefit of the Certificateholders, (x) fire
and hazard insurance with extended coverage in an amount which is at least equal
to the replacement cost of the improvements which are a part of such property,
(y) public liability insurance and, (z) to the extent required and available
under the National Flood Insurance Act of 1968, as amended, flood insurance in
an amount as provided above. Any amounts collected by the Servicer under any
such policies other than amounts to be deposited in the Escrow Account and
applied to the restoration or repair of the Mortgaged Property or REO Property,
or released to the Mortgagor in accordance with the Servicer's normal servicing
procedures, shall be deposited in the Collection Account, subject to withdrawal
pursuant to Section 3.05. It is understood and agreed that no earthquake or
other additional insurance is required to be maintained by the Servicer or the
Mortgagor or maintained on property acquired in respect of the Mortgage Loan,
other than pursuant to such Applicable Regulations as shall at any time be in
force and as shall require such additional insurance. All such policies shall be
endorsed with standard mortgagee clauses with loss payable to the Servicer and
shall provide for at least thirty days prior written notice of any cancellation,
reduction in the amount of or material change in coverage to the Servicer. The
Servicer shall not interfere with the Mortgagor's freedom of choice in selecting
either his insurance carrier or agent, provided, however, that the Servicer
shall not accept any such insurance policies from insurance companies unless
such companies currently reflect a general policy rating of B:III or better in
Best's Key Rating Guide and are licensed to do business in the state wherein the
property subject to the policy is located.
Section 3.11 Maintenance of Mortgage Impairment Insurance Policy.
In the event that the Servicer shall obtain and maintain a blanket
policy issued by an insurer that has a general policy rating of B:III or better
in Best's Key Rating Guide insuring against hazard losses on all of the Mortgage
Loans, then, to the extent such policy provides coverage in an amount equal to
the amount required pursuant to Section 3.10 and otherwise complies with all
other requirements of Section 3.10, it shall conclusively be deemed to have
satisfied its obligations as set forth in Section 3.10, 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 Section 3.10,
and there shall have been a loss which would have been covered by such policy,
deliver to the Trustee for deposit in the Distribution Account the amount not
otherwise payable under the blanket policy because of such deductible clause,
which amount shall not be reimbursable to the Servicer from the Trust Fund. In
connection with its activities as servicer of the Mortgage Loans, the Servicer
agrees to prepare and present, on behalf of the Trustee, claims under any such
blanket policy in a timely fashion in accordance with the terms of such policy.
Upon request of the Trustee, the Servicer shall cause to be delivered to the
Trustee a certified true copy of such policy and a statement from the insurer
thereunder that such policy shall in no event be terminated or materially
modified without thirty days prior written notice to the Trustee.
Section 3.12 Fidelity Bond, Errors and Omissions Insurance.
The Servicer shall maintain, at its own expense, a blanket fidelity
bond (the "Fidelity Bond") and an errors and omissions insurance policy, with
broad coverage with financially responsible companies on all officers, employees
or other persons acting in any capacity with regard to the Mortgage Loans to
handle funds, money, documents and papers relating to the Mortgage Loans. The
Fidelity Bond and errors and omissions insurance shall be in the form of the
Mortgage Banker's Blanket Bond and shall protect and insure the Servicer against
losses, including forgery, theft, embezzlement, fraud, errors and omissions and
negligent acts of such persons. Such Fidelity Bond shall also protect and insure
the Servicer against losses in connection with the failure to maintain any
insurance policies required pursuant to this Agreement and the release or
satisfaction of a Mortgage Loan without having obtained payment in full of the
indebtedness secured thereby. No provision of this Section 3.12 requiring the
Fidelity Bond and errors and omissions insurance shall diminish or relieve the
Servicer from its duties and obligations as set forth in this Agreement. The
minimum coverage under any such bond and insurance policy shall be at least
equal to the corresponding amounts required by ▇▇▇▇▇▇ ▇▇▇ in the ▇▇▇▇▇▇ Mae MBS
Selling and Servicing Guide or by ▇▇▇▇▇▇▇ Mac in the ▇▇▇▇▇▇▇ Mac Servicer's
Guide. Upon request of the Trustee, the Servicer shall cause to be delivered to
the requesting party a certified true copy of the Fidelity Bond and errors and
omissions insurance policy and a statement from the surety and the insurer that
such Fidelity Bond and errors and omissions insurance policy shall in no event
be terminated or materially modified without thirty days' prior written notice
to the Trustee.
Section 3.13 Title, Management and Disposition of REO Property.
(a) In the event that title to a Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be taken in the name of the Trustee or its nominee, on behalf of the
Certificateholders, or in the event the Trustee or its nominee is not authorized
or permitted to hold title to real property in the state where the REO Property
is located, or would be adversely affected under the "doing business" or tax
laws of such state by so holding title, the deed or certificate of sale shall be
taken in the name of such Person or Persons as shall be consistent with an
Opinion of Counsel obtained by the Servicer from an attorney duly licensed to
practice law in the state where the REO Property is located. Any Person or
Persons holding such title other than the Trustee shall acknowledge in writing
that such title is being held as nominee for the benefit of the Trustee.
Pursuant to the power of attorney granted in Section 3.01, the Servicer is
hereby authorized to acquire, transfer and dispose of any REO Property taken in
the name of the Trustee pursuant to this Section 3.13 without further
documentation of its authority as attorney in fact for the Trustee on behalf of
the Trust.
(b) In the event that the Trust Fund acquires any REO Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the Servicer shall dispose of such REO Property before the end of
the third calendar year beginning after the year of its acquisition by the Trust
Fund for purposes of Section 860G(a)(8) of the Code unless the Servicer has
received a grant of extension from the Internal Revenue Service of the
above-mentioned grace period such that the holding by the Trust Fund of such REO
Property subsequent to such period will not: (i) result in the imposition of any
tax on "prohibited transactions" as defined in Section 860F of the Code; or (ii)
cause any REMIC constituting any part of the Trust Fund to fail to qualify as a
REMIC at any time that any Certificates are outstanding, in which case the Trust
Fund may continue to hold such REO Property.
Subject to compliance with applicable laws and regulations as shall
at any time be in force, and notwithstanding any other provisions of this
Agreement, no REO Property acquired by the Trust Fund shall be rented (or
allowed to continue to be rented) or otherwise used by or on behalf of the Trust
Fund in such a manner or pursuant to any terms that would: (i) cause such REO
Property to fail to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code; or (ii) subject any REMIC constituting part of
the Trust Fund to the imposition of any federal income taxes on the income
earned from such REO Property, including any taxes imposed by reason of Sections
860F or 860G(c) of the Code, unless the Servicer has agreed to indemnify and
hold harmless the Trust Fund with respect to the imposition of any such taxes.
The Servicer shall manage, conserve, protect and operate each REO
Property for the Certificateholders and the Trust Fund 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 the related REMIC 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. The Servicer shall cause each
REO Property to be inspected promptly upon the acquisition of title thereto and
shall cause each REO Property to be inspected at least annually thereafter. The
Servicer shall make or cause to be made a written or electronic report of each
such inspection. Such reports shall be retained in the Mortgage File and copies
thereof shall be forwarded by the Servicer to the Trustee upon request. The
Servicer shall attempt to sell the same (and may temporarily rent the same) on
such terms and conditions as the Servicer deems to be in the best interest of
the Certificateholders and the Trust Fund.
With respect to each REO Property, the Servicer shall account
separately for each REO Property with respect to all funds collected and
received in connection with the operation of such REO Property.
The Servicer shall deposit or cause to be deposited, on a daily
basis, within three Business Days of receipt, in the Collection Account, all
revenues received with respect to each REO Property and shall withdraw therefrom
funds necessary for the proper operation, management and maintenance of the
related REO Property, including the cost of maintaining any hazard insurance
pursuant to Section 3.10 hereof and the fees of any managing agent acting on
behalf of the Servicer.
The Servicer shall furnish to the Securities Administrator and the
Trustee, on each Servicer Remittance Date, an operating statement for each REO
Property covering the operation of each REO Property for the previous month.
Such operating statement shall be accompanied by such other information as the
Trustee shall reasonably request.
The Servicer shall use its best efforts to dispose of the REO
Property as promptly as is practically consistent with protecting the
Certificateholders' interests.
Each REO Disposition shall be carried out by the Servicer at such
price and upon such terms and conditions as the Servicer deems to be in the best
interest of the Certificateholders. If as of the date title to any REO Property
was acquired by the Servicer there were outstanding unreimbursed Servicing
Advances, Servicing Fees and Advances with respect to the REO Property, the
Servicer, upon an REO Disposition of such REO Property, shall be entitled to
reimbursement for any related unreimbursed Servicing Advances, Servicing Fees
and Advances from proceeds received in connection with such REO Disposition. The
proceeds from the REO Disposition, net of any payment to the Servicer as
provided above, shall be deposited in the Collection Account for transfer to the
Distribution Account on the succeeding Servicer Remittance Date in accordance
with Section 3.04(a)(vi).
Any REO Disposition shall be for cash only (unless changes in the
REMIC Provisions made subsequent to the Startup Day allow a sale for other
consideration and an Opinion of Counsel is obtained by the Servicer to the
effect that such sale shall not cause any REMIC constituting part of the Trust
Fund to fail to qualify as a REMIC).
Section 3.14 Due-on-Sale Clauses; Assumption and Substitution
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 make reasonable efforts to enter into an assumption and
modification agreement with the Person to whom such property has been or is
about to be conveyed, pursuant to which such Person becomes liable under the
Mortgage Note and, unless prohibited by applicable law or the Mortgage, 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 Note. The Mortgage Loan, as assumed, shall conform in
all respects to the requirements, representations and warranties of this
Agreement. The Servicer shall notify the Trustee that any such assumption or
substitution agreement has been completed by forwarding to the Trustee (or the
Custodian, as the case may be) 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 (or the Custodian, as the case may be) 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, the Monthly Payment on the related
Mortgage Loan shall not be changed but shall remain as in effect immediately
prior to the assumption or substitution, the stated maturity or outstanding
principal amount of such Mortgage Loan shall not be changed nor shall any
required monthly payments of principal or interest be deferred or forgiven. Any
fee collected by the Servicer 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 3.15 Notification of Adjustments.
On each Adjustment Date, the Servicer shall make Mortgage Interest
Rate adjustments for each Adjustable-Rate Mortgage Loan in compliance with the
requirements of the related Mortgage and Mortgage Note and Applicable
Regulations. The Servicer shall execute and deliver the notices required by each
Mortgage and Mortgage Note and Applicable Regulations regarding Mortgage
Interest Rate adjustments. Upon the discovery by the Servicer or the Trustee
that the Servicer has failed to adjust or has incorrectly adjusted a Mortgage
Interest Rate or a Monthly Payment pursuant to the terms of the related Mortgage
Note and Mortgage, the Servicer shall deliver to the Trustee for deposit in the
Distribution Account from its own funds the amount of any interest loss caused
thereby without reimbursement therefor; provided, however, the Servicer shall be
held harmless with respect to any Mortgage Interest Rate adjustments made by any
servicer prior to the Servicer.
Section 3.16 Optional Purchases of Mortgage Loans by the Depositor.
The Depositor shall have a limited option to repurchase any
defaulted Mortgage Loan or REO Mortgage Loan during the following time periods:
(i) beginning on the first day of the second month following the month in which
the Servicer has initiated foreclosure proceedings with respect to such a
defaulted Mortgage Loan, with such repurchase option expiring on the last day of
such second following month; (ii) beginning on the first day of the second month
following the month in which the Servicer has reported that such defaulted
Mortgage Loan has become an REO Mortgage Loan, with such repurchase option
expiring on the last day of such second following month; and (iii) beginning on
the day on which the Servicer accepts a contractual commitment by a third party
to purchase the Mortgaged Property related to the defaulted Mortgage Loan or REO
Mortgage Loan, with such repurchase option expiring on the earlier of the last
day of the month in which such contractual commitment was accepted by the
Servicer or the day immediately prior to the day on which the closing occurs
with respect to such third party purchase of the Mortgaged Property related to
the defaulted Mortgage Loan or REO Mortgage Loan.
The Depositor shall purchase such REO Mortgage Loan at a price equal
to the Purchase Price. Any such purchase of an REO Mortgage Loan pursuant to
this Section 3.16 shall be accomplished by delivery to the Trustee for deposit
in the Distribution Account of the amount of the Purchase Price. The Trustee (or
the Custodian, as the case may be) shall immediately effectuate the conveyance
of such REO Mortgage Loan to the Depositor to the extent necessary, including
the prompt delivery of all documentation to the Depositor.
Section 3.17 Trustee to Cooperate; Release of 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, as the case may be) an executed copy of a completed
"Request for Release" in the form of Exhibit E. Upon receipt of such Request for
Release of Documents, the Trustee (or the Custodian, as the case may be) shall
promptly release the related Mortgage File, in trust, to (i) the Servicer, or
(ii) such other party identified in the related Request for Release. No expense
incurred in connection with such instrument of satisfaction or assignment, as
the case may be, shall be chargeable to the Collection Account.
(b) 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 insurance policy relating
to a Mortgage Loan, the Trustee shall (except in the case of the payment or
liquidation pursuant to which the related Mortgage File is released to an escrow
agent or an employee, agent or attorney of the Trustee), upon written request of
the Servicer and delivery to the Trustee (or the Custodian, as the case may be),
an executed copy of a "Request for Release" in the form of Exhibit E signed by a
Servicing Officer, release the related Mortgage File to the Servicer and shall
execute such documents as shall be necessary to the prosecution of any such
proceedings, including, without limitation, an assignment without recourse of
the related Mortgage to the Servicer. Such receipt shall obligate the Servicer
to return the Mortgage File to the Trustee (or the Custodian, as the case may
be)when the need therefor by the Servicer no longer exists unless the Mortgage
Loan shall be liquidated, in which case, upon receipt of a Request for Release
evidencing such liquidation, the receipt shall be released by the Trustee (or
the Custodian, as the case may be) to the Servicer.
(c) Subject to Section 3.01, the Servicer shall have the right to
accept applications of Mortgagors for consent to (i) partial releases of
Mortgages, (ii) alterations and (iii) removal, demolition or division of
properties subject to Mortgages. No application for approval shall be considered
by the Servicer unless: (w) either (A) it has received an Opinion of Counsel,
addressed to the Trustee (which opinion shall not be an expense of the Trustee
or the Trust Fund) that such sale, disposition, substitution, acquisition or
contribution will not affect adversely the status of any REMIC constituting part
of the Trust Fund as a REMIC or cause any REMIC constituting part of the Trust
Fund to be subject to a tax on "prohibited transactions" or "contributions"
pursuant to the REMIC Provisions or (B) other evidence satisfactory to the
Servicer; (x) the provisions of the related Note and Mortgage have been complied
with; (y) the Loan-to-Value Ratio and debt-to-income ratio after any release
does not exceed the maximum Loan-to-Value Ratio and debt-to-income ratio
established in accordance with the underwriting standards of the Mortgage Loans;
and (z) the lien priority of the related Mortgage is not affected. Upon receipt
by the Trustee of a Servicing Officer's certificate setting forth the action
proposed to be taken in respect of a particular Mortgage Loan and certifying
that the criteria set forth in the immediately preceding sentence have been
satisfied, the Trustee shall execute and deliver to the Servicer the consent or
partial release so requested by the Servicer. A proposed form of consent or
partial release, as the case may be, shall accompany any Servicing Officer's
certificate delivered by the Servicer pursuant to this paragraph.
Section 3.18 Servicing Compensation.
As compensation for its activities hereunder, the Servicer shall be
entitled to retain the amount of the Servicing Fee with respect to each Mortgage
Loan (including REO Properties). The Servicer shall be entitled to retain
additional servicing compensation in the form of release fees, bad check
charges, assumption fees, modification or extension fees, late payment charges,
prepayment charges that are not Prepayment Charges, or any other service-related
fees and similar items, to the extent collected from Mortgagors.
Section 3.19 Annual Statement as to Compliance.
(a) The Servicer, at its own expense, will deliver to the Securities
Administrator, not later than February 28 following the end of each calendar
year, commencing in February 20 , a Servicing 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
officer's 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 Securities Administrator shall
forward such certificate to the Depositor and the Trustee immediately upon
receipt.
(b) Delivery of such reports, information and documents to the
Securities Administrator is for informational purposes only and the Trustee's,
Securities Administrator's and Depositor's receipt of such shall not constitute
constructive notice of any information contained therein or determinable, from
information contained therein, including the Servicer's compliance with any of
its covenants hereunder (as to which the Trustee, the Securities Administrator
and the Depositor are entitled to rely exclusively on Officers' Certificates).
Section 3.20 Annual Independent Certified Public Accountants'
Reports.
(a) Not later than February 28 following the end of each calendar
year commencing with 20 , the Servicer, at its expense, shall cause a nationally
recognized firm of independent certified public accountants to furnish to the
Securities Administrator, a report 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 either the Uniform
Single Attestation Program for Mortgage Bankers established by the Mortgage
Bankers Association of America or the Audit Program for Mortgages serviced by
▇▇▇▇▇▇▇ Mac, 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. The Securities Administrator shall
forward a copy of such report to the Depositor, the Trustee and each Rating
Agency immediately upon receipt. Copies of such statement shall be provided by
the Trustee to any Certificateholder upon request, provided that such statement
is delivered by the Servicer to the Trustee.
(b) Delivery of such reports, information and documents to the
Trustee and the Securities Administrator is for informational purposes only and
their receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Servicer's compliance with any of its covenants hereunder
(as to which the Trustee and the Securities Administrator are entitled to rely
exclusively on Officers' Certificates).
Section 3.21 Access to Certain Documentation and Information
Regarding the Mortgage Loans.
The Servicer shall provide to the Trustee, the Securities
Administrator, Certificateholders that are federally insured savings and loan
associations, the Office of Thrift Supervision, the FDIC and the supervisory
agents and examiners of each of the foregoing (which, in the case of supervisory
agents and examiners, may be required by applicable state and federal
regulations) access to the available documentation regarding the Mortgage Loans,
such access being afforded without charge but only upon reasonable advance
request and during normal business hours at the offices of the Servicer
designated by it.
Section 3.22 Duties of Credit Risk Manager.
For and on behalf of the Depositor, the Credit Risk Manager shall
provide reports and recommendations as to loss mitigation activities concerning
Mortgage Loans that are past due, are in default, as to which there has been
commencement of foreclosure, as to which there has been forbearance in exercise
of remedies, as to which any obligor is the subject of bankruptcy, receivership,
or an arrangement of creditors, or which have become REO Properties. Such
reports and recommendations will be based upon information provided pursuant to
the Credit Risk Management Agreement. The Credit Risk Manager shall look solely
to the Servicer for all information and data (including loss and delinquency
information and data) and loan-level information and data relating to the
servicing of the Mortgage Loans.
The Credit Risk Manager may be removed at any time by a vote of
Certificateholders holding Certificates evidencing at least 66 2/3% of the
aggregate Voting Interests of the Certificates. After any such termination, the
Credit Risk Manager shall have no further obligations hereunder, and shall no
longer be entitled to the Credit Risk Manager Fee.
Section 3.23 Obligations of the Servicer in Respect of Compensating
Interest.
Not later than the close of business on each Servicer Remittance
Date, the Servicer shall deliver to the Trustee for deposit in the Distribution
Account an amount ("Compensating Interest") equal to the lesser of (A) the
aggregate of the Prepayment Interest Shortfalls on the Mortgage Loans for the
related Distribution Date resulting from Principal Prepayments on the Mortgage
Loans during the related Prepayment Period and (B) its aggregate Servicing Fee
received in the related Collection Period. The Servicer shall apply Compensating
Interest to offset any Prepayment Interest Shortfalls on the Mortgage Loans. The
Servicer shall not have the right to reimbursement for any amounts remitted to
the Trustee in respect of Compensating Interest. Such amounts so remitted shall
be included in the Available Funds and distributed therewith on the next
Distribution Date.
Section 3.24 Obligations of the Servicer in Respect of Mortgage
Interest Rates and Monthly Payments.
In the event that a shortfall in any collection on or liability with
respect to any Mortgage Loan results from or is attributable to adjustments to
Mortgage Interest Rates, Monthly Payments or Principal Balances that were made
by the Servicer in a manner not consistent with the terms of the related
Mortgage Note and this Agreement, the Servicer, upon discovery or receipt of
notice thereof, immediately shall deliver to the Trustee for deposit in the
Distribution Account from its own funds the amount of any such shortfall and
shall indemnify and hold harmless the Trust Fund, the Trustee, the Securities
Administrator, the Depositor and any successor servicer in respect of any such
liability. Such indemnities shall survive the termination or discharge of this
Agreement. Notwithstanding the foregoing, this Section 3.24 shall not limit the
ability of the Servicer to seek recovery of any such amounts from the related
Mortgagor under the terms of the related Mortgage Note, as permitted by law.
Section 3.25 Investment of Funds in the Collection Account and the
Distribution Account.
(a) The Servicer may direct any depository institution maintaining
the Collection Account and the Securities Administrator may direct any
depository institution maintaining the Distribution Account (for purposes of
this Section 3.25, each an "Investment Account"), to invest the funds in such
Investment Account in one or more Eligible Investments bearing interest or sold
at a discount, and maturing, unless payable on demand, (i) no later than the
Business Day immediately preceding the date on which such funds are required to
be withdrawn from such account pursuant to this Agreement, if a Person other
than the Trustee is the obligor thereon, and (ii) no later than the date on
which such funds are required to be withdrawn from such account pursuant to this
Agreement, if the Trustee is the obligor thereon. All such Eligible Investments
shall be held to maturity, unless payable on demand. Any investment of funds in
an Investment Account shall be made in the name of the Securities Administrator
or the Servicer, as applicable (in its capacity as such) or in the name of a
nominee of the Trustee. The Servicer or the Securities Administrator shall be
entitled to sole possession (except with respect to investment direction of
funds held in the Collection Account) over each such investment and the income
thereon, and any certificate or other instrument evidencing any such investment
shall be delivered directly to the Securities Administrator or its agent,
together with any document of transfer necessary to transfer title to such
investment to the Securities Administrator or its nominee. In the event amounts
on deposit in an Investment Account are at any time invested in an Eligible
Investment payable on demand, the Trustee shall at the direction of the Servicer
or the Securities Administrator:
(x) consistent with any notice required to be given
thereunder, demand that payment thereon be made on the
last day such Eligible Investment may otherwise mature
hereunder in an amount equal to the lesser of (1) all
amounts then payable thereunder and (2) the amount
required to be withdrawn on such date; and
(y) demand payment of all amounts due thereunder promptly
upon determination by a Responsible Officer of the
Trustee that such Eligible Investment would not
constitute an Eligible Investment in respect of funds
thereafter on deposit in the Investment Account.
(b) All income and gain realized from the investment of funds in the
Collection Account shall be for the benefit of the Servicer. The Servicer shall
deposit in the Collection Account the amount of any loss incurred in respect of
any such Eligible Investment made with funds in such account immediately upon
realization of such loss. All income and gain realized from the investment of
funds in the Distribution Account shall be for the benefit of the Securities
Administrator. The Securities Administrator shall remit to the Trustee for
deposit in the Distribution Account the amount of any loss incurred on Eligible
Investments in the Distribution Account.
(c) Except as otherwise expressly provided in this Agreement, if any
default occurs in the making of a payment due under any Eligible Investment, or
if a default occurs in any other performance required under any Eligible
Investment, the Trustee may and, subject to Section 8.01 and Section 8.02(a)(v),
upon the request of the Holders of Certificates representing more than 50% of
the Voting Interests allocated to any Class of Certificates, shall take such
action as may be appropriate to enforce such payment or performance, including
the institution and prosecution of appropriate proceedings.
Section 3.26 Liability of Servicer; Indemnification.
(a) Subject to clause (b) below and Section 6.03, the Servicer
(except the shall if it is required to succeed the Servicer hereunder)
indemnifies and holds the Trustee, the Securities Administrator, the Depositor
(and their respective officers, directors and affiliates) and the Trust Fund
harmless against any and all claims, losses, penalties, fines, forfeitures,
reasonable legal fees and related costs, judgments, and any other costs, fees
and expenses that the Trustee, the Securities Administrator, the Depositor and
the Trust Fund may sustain in any way related to the failure of the Servicer to
perform its duties and service the Mortgage Loans in compliance with the
Servicing Standard. The Servicer shall immediately notify the Trustee, the
Securities Administrator and the Depositor if a claim is made that may result in
such claims, losses, penalties, fines, forfeitures, legal fees or related costs,
judgments, or any other costs, fees and expenses, and the Servicer shall assume
(with the consent of the Securities Administrator) 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 and/or the Trust Fund
in respect of such claim. The provisions of this Section 3.26 shall survive the
termination of this Agreement and the payment of the outstanding Certificates.
(b) None of the Depositor, the Servicer, or any of the directors,
officers, employees or agents of the Depositor or the Servicer shall be under
any liability to the Trust Fund or the Certificateholders for any action taken,
or for refraining from the taking of any action, in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Depositor or the Servicer or any such Person against any
breach of warranties or representations made by such party herein, or against
any specific liability imposed on the Servicer for a breach of the Servicing
Standard and/or this Agreement, or against any liability which would otherwise
be imposed by reason of its respective willful misfeasance, bad faith, fraud or
negligence in the performance of its duties or by reasons of negligent disregard
of its respective obligations or duties hereunder.
The Depositor, the Servicer and any director, officer, employee or
agent of the Depositor or the Servicer, may rely in good faith on any document
of any kind which, prima facie, is properly executed and submitted by any
appropriate Person with respect to any matters arising hereunder. The Depositor,
the Servicer and any director, officer, employee or agent of the Depositor or
the Servicer shall be indemnified and held harmless by the Trust 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
incurred in connection with any legal action incurred by reason of its
respective misfeasance, bad faith, fraud or negligence, a breach of a
representation or warranty made by such party hereunder or (in the case of the
Servicer) a breach of the Servicing Standard in the performance of its
respective duties or by reason of negligent disregard of its respective
obligations or duties hereunder. Neither the Depositor nor the Servicer shall be
under any obligation to appear in, prosecute or defend any legal action unless
such action is related to its respective duties under this Agreement and in its
opinion does not expose it to any expense or liability; provided, however, that
the Depositor or the Servicer may in their discretion undertake any action
related to their obligations hereunder which they 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. The
Servicer's right to indemnity or reimbursement pursuant to this Section shall
survive any resignation or termination of the Servicer pursuant to Section 6.04
or 7.01 with respect to any losses, expenses, costs or liabilities arising prior
to such resignation or termination (or arising from events that occurred prior
to such resignation or termination).
Section 3.27 Reports of Foreclosure and Abandonment of Mortgaged
Properties.
On or before April 30 of each year beginning in 20 , the Servicer
shall file the reports of foreclosure and abandonment of any Mortgaged Property
required by Section 6050J of the Code with the Internal Revenue Service and
provide an Officer's Certificate to the Trustee certifying its compliance with
this Section 3.27. The reports from the Servicer shall be in form and substance
sufficient to meet the reporting requirements imposed by such Section 6050J.
Section 3.28 Protection of Assets.
(a) Except for transactions and activities entered into in
connection with the securitization that is the subject of this Agreement, the
Trust is not authorized and has no power to:
(1) borrow money or issue debt;
(2) merge with another entity, reorganize, liquidate or sell assets;
or
(3) engage in any business or activities.
(b) Each party to this Agreement agrees that it will not file an
involuntary bankruptcy petition against the Trustee or the Trust Fund or
initiate any other form of insolvency proceeding until after the Certificates
have been paid.
Section 3.29 Limitation of Liability of the Credit Risk Manager.
Neither the Credit Risk Manager, nor any of the directors, officers,
employees or agents of the Credit Risk Manager, shall be under any liability to
the Depositor, the Securities Administrator, the Servicer, the Trustee or the
Certificateholders for any action taken or for refraining from the taking of any
action in good faith pursuant to this Agreement, in reliance upon information
provided by the Servicer under the Credit Risk Management Agreement or for
errors in judgment; provided, however, that this provision shall not protect the
Credit Risk Manager or any such person against liability that would otherwise be
imposed by reason of willful malfeasance, bad faith or negligence in its
performance of its duties or by reason of reckless disregard for its obligations
and duties under this Agreement or the applicable Credit Risk Management
Agreement. The Credit Risk Manager and any director, officer, employee or agent
of the Credit Risk Manager 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, and may rely in good faith upon the accuracy of information
furnished by the Servicer pursuant to the applicable Credit Risk Management
Agreement in the performance of its duties thereunder and hereunder.
Section 3.30 No Personal Solicitation.
From and after the Closing Date, the Servicer agrees that it will
not take any action or permit or cause any action to be taken by any of its
agents and Affiliates, or by any independent contractors or independent mortgage
brokerage companies on the Servicer's behalf, to personally, by telephone, mail
or electronic mail, solicit the Mortgagor under any Mortgage Loan for the
purpose of refinancing such Mortgage Loan; provided, that the Servicer may
solicit any Mortgagor for whom the Servicer has received a request for
verification of mortgage, a request for demand for payoff, a mortgagor initiated
written or verbal communication indicating a desire to prepay the related
Mortgage Loan, or the mortgagor initiates a title search; provided further, it
is understood and agreed that promotions undertaken by the Servicer or any of
its Affiliates which (i) concern optional insurance products or other additional
products or (ii) are directed to the general public at large, including, without
limitation, mass mailings based on commercially acquired mailing lists,
newspaper, radio and television advertisements shall not constitute solicitation
under this Section, nor is the Servicer prohibited from responding to
unsolicited requests or inquiries made by a Mortgagor or an agent of a
Mortgagor. Furthermore, the Servicer shall be permitted to include in its
monthly statements to borrowers or otherwise, statements regarding the
availability of the Servicer's counseling services with respect to refinancing
mortgage loans.
Section 3.31 Periodic Filings.
(a) The Securities Administrator and the Servicer shall reasonably
cooperate with the Depositor in connection with the Trust's satisfying its
reporting requirements under the Exchange Act. Without limiting the generality
of the foregoing, the Securities Administrator shall prepare on behalf of the
Trust any monthly Current Reports on Form 8-K (each, a "Monthly Form 8-K") and
Annual Reports on Form 10-K (each, a "Form 10-K") customary for similar
securities as required by the Exchange Act and the rules and regulations of the
Securities and Exchange Commission thereunder, and the Securities Administrator
shall sign (other than any Form 10-K) and file (via the Securities and Exchange
Commission's Electronic Data Gathering and Retrieval System) such Forms on
behalf of the Trust. The Servicer shall sign any Form 10-K.
(b) Each Monthly Form 8-K shall be filed by the Securities
Administrator within 15 days after each Distribution Date, including a copy of
the Distribution Date Statement for such Distribution Date as an exhibit
thereto. Prior to March 30th of each year (or such earlier date as may be
required by the Exchange Act and the rules and regulations of the Securities and
Exchange Commission), the Securities Administrator shall file a Form 10-K, in
substance as required by applicable law or applicable Securities and Exchange
Commission staff's interpretations. Such Form 10-K shall include as exhibits the
Servicer's annual statement of compliance described under Section 3.19 and the
accountant's report described under Section 3.20, in each case, to the extent
they have been timely delivered to the Securities Administrator. If they are not
so timely delivered, the Securities Administrator shall file an amended Form
10-K including such documents as exhibits reasonably promptly after they are
delivered to the Securities Administrator. The Securities Administrator shall
have no liability with respect to any failure to properly prepare or file such
periodic reports resulting from or relating to the Securities Administrator's
inability or failure to obtain any information not resulting from its own
negligence, willful misconduct or bad faith. The Form 10-K shall also include a
certification in the form attached hereto as Exhibit O (the "Certification"),
which shall be signed by a senior officer of the Servicer in charge of the
servicing function. The Servicer shall deliver the Certification to the Trustee
three (3) Business Days prior to the latest date on which the Form 10-K may be
timely filed. The Securities Administrator, the Depositor and the Servicer shall
reasonably cooperate to enable the Securities and Exchange Commission
requirements with respect to the Trust to be met in the event that the
Securities and Exchange Commission issues additional interpretive guidelines or
promulgates rules or regulations, or in the event of any other change of law
that would require reporting arrangements or the allocation of responsibilities
with respect thereto, as described in this Section 3.31, to be conducted or
allocated in a different manner.
(c) Prior to the latest date on which the Form 10-K may be timely
filed each year, the Securities Administrator shall sign and deliver to the
Securities Administrator a certification (in the form attached hereto as Exhibit
P) for the benefit of the Depositor and its officers, directors and Affiliates
(provided, however, that the Securities Administrator shall not undertake an
analysis of the accountant's report attached as an exhibit to the Form 10-K). In
addition, (i) the Securities Administrator shall also indemnify and hold
harmless the Servicer and its officers, directors and Affiliates from and
against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments and other costs and expenses
arising out of or based upon any inaccuracy in the certification provided by the
Securities Administrator pursuant to this Section 3.31(c), any breach of the
Securities Administrator's obligations under this Section 3.31(c) or the
Securities Administrator's negligence, bad faith or willful misconduct in
connection therewith. If the indemnification provided for herein is unavailable
or insufficient to hold harmless the Servicer and its officers, directors and
Affiliates, then the Securities Administrator agrees that it shall contribute to
the amount paid or payable by the Servicer, its officers, directors or
Affiliates as a result of the losses, claims, damages or liabilities of the
Servicer, its officers, directors or Affiliates in such proportion as is
appropriate to reflect the relative fault of the Servicer and its officers,
directors and Affiliates on the one hand and the Securities Administrator on the
other in connection with a breach of the Securities Administrator's obligations
under this Section 3.31(c) or the Securities Administrator's negligence, bad
faith or willful misconduct in connection therewith.
(d) Upon any filing with the Securities and Exchange Commission, the
Securities Administrator shall promptly deliver to the Depositor and the
Servicer a copy of any such executed report, statement or information.
(e) The obligations set forth in paragraphs (a) through (d) of this
Section shall only apply with respect to periods for which the Securities
Administrator is obligated to file reports on Form 8-K or 10-K pursuant to
paragraph (b) of this Section. Upon request of the Depositor, the Securities
Administrator shall prepare, execute and file with the Securities and Exchange
Commission a Form 15 Suspension Notification with respect to the Trust, and
thereafter there shall be no further obligations under paragraphs (a) through
(d) of this Section commencing with the calendar year in which the Form 15 is
filed (other than the obligations to be performed in such calendar year that
relate back to the prior calendar year).
ARTICLE IV
FLOW OF FUNDS
Section 4.01 Interest Distributions.
No later than 11:00 AM Eastern Time on each Distribution Date, the
Securities Administrator shall furnish instructions to the Trustee reporting the
amount of the related Interest Remittance Amount, and instructing the Trustee as
to how to apply such Interest Remittance Amount in accordance with clauses (i)
through (xiii) below. On each Distribution Date, the Trustee shall withdraw from
the Distribution Account the Interest Remittance Amount, to the extent available
in the Distribution Account, and apply it in the following order of priority
(based upon the information provided to it by the Securities Administrator
pursuant to the preceding sentence, upon which the Trustee may conclusively
rely), and the calculations required to be made by the Trustee, to the extent
available:
(i) concurrently, to the Securities Administrator, the Securities
Administrator Fee for such Distribution Date, and to the Credit Risk
Manager, the Credit Risk Manager Fee for such Distribution Date, pro rata;
(ii) concurrently, as follows:
(a) concurrently, from the Group 1 Interest Remittance Amount
to the Class A-1 and Class A-1A Certificates, pro rata, the
applicable Accrued Certificate Interest thereon for such
Distribution Date; and
(b) from the Group 2 Interest Remittance Amount to the Class
A-2 Certificates, the Accrued Certificate Interest thereon for such
Distribution Date;
(iii) concurrently, as follows:
(a) concurrently, from the Group 1 Interest Remittance Amount
to the Class A-1 and Class A-1A Certificates, pro rata, the
applicable Interest Carry Forward Amount thereon for such
Distribution Date; and
(b) from the Group 2 Interest Remittance Amount to the Class
A-2 Certificates, the Interest Carry Forward Amount thereon for such
Distribution Date;
(iv) concurrently, as follows:
(a) if the Group 1 Interest Remittance Amount is insufficient
to pay the Class A-1 and Class A-1A Certificates' applicable Accrued
Certificate Interest for such Distribution Date pursuant to Section
4.01(ii)(a) above, concurrently, from the remaining Group 2 Interest
Remittance Amount, to the Class A-1 and Class A-1A Certificates, pro
rata, to cover such shortfall for such Distribution Date; and
(b) if the Group 2 Interest Remittance Amount is insufficient
to pay the Class A-2 Certificates' Accrued Certificate Interest for
such Distribution Date pursuant to Section 4.01(ii)(b) above, from
the remaining Group 1 Interest Remittance Amount, to the Class A-2
Certificates, to cover such shortfall for such Distribution Date;
(v) concurrently, as follows:
(a) if the Group 1 Interest Remittance Amount is insufficient
to pay the Class A-1 and Class A-1A Certificates' applicable
Interest Carry Forward Amount for such Distribution Date pursuant to
Section 4.01(iii)(a) above, concurrently, from the remaining Group 2
Interest Remittance Amount, to the Class A-1 and Class A-1A
Certificates, pro rata, to cover such shortfall for such
Distribution Date; and
(b) if the Group 2 Interest Remittance Amount is insufficient
to pay the Class A-2 Certificates' Interest Carry Forward Amount for
such Distribution Date pursuant to Section 4.01(iii)(b) above, from
the remaining Group 1 Interest Remittance Amount, to the Class A-2
Certificates, to cover such shortfall for such Distribution Date;
(vi) to the Class M-1 Certificates, the Accrued Certificate Interest
thereon for such Distribution Date;
(vii) to the Class M-2 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date;
(viii) to the Class M-3 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date;
(ix) to the Class M-4 Certificates, the Accrued Certificate Interest
thereon for such Distribution Date;
(x) to the Class M-5 Certificates, the Accrued Certificate Interest
thereon for such Distribution Date;
(xi) to the Class M-6 Certificates, the Accrued Certificate Interest
thereon for such Distribution Date;
(xii) to the Class B Certificates, the Accrued Certificate Interest
thereon for such Distribution Date; and
(xiii) the amount, if any, of the Interest Remittance Amount
remaining after application with respect to the priorities set forth above
will be applied as described under Section 4.02(b) hereof.
Section 4.02 Distributions of Principal and Monthly Excess Cashflow
Amounts.
(a) No later than 11:00 AM Eastern Time on each Distribution Date,
the Securities Administrator shall furnish instructions to the Trustee reporting
the amount of the related Principal Distribution Amount, and instructing the
Trustee as to how to apply such Principal Distribution Amount in accordance with
clause (i) or (ii) below, as applicable. On each Distribution Date, the Trustee
shall make the following distributions in the following order of priority (based
upon the information provided to it by the Securities Administrator pursuant to
the preceding sentence, and the calculations required to be made by the
Securities Administrator), in reduction of the Principal Balances of the Classes
to which such amounts are paid, to the extent of the Principal Distribution
Amount:
(i) before the Stepdown Date or with respect to which a Trigger
Event is in effect, sequentially, as follows:
first, concurrently, as follows:
(a) concurrently, the Group 1 Senior Principal
Distribution Amount to the Class A-1 and Class A-1A
Certificates, pro rata, until the Principal Balances thereof
have been reduced to zero; and
(b) the Group 2 Senior Principal Distribution Amount to
the Class A-2 Certificates, until the Principal Balance
thereof has been reduced to zero;
second, concurrently, as follows:
(a) concurrently, the Group 2 Senior Principal
Distribution Amount remaining after priority first of this
Section 4.02(a)(i), to the Class A-1 and Class A-1A
Certificates, pro rata, until the Principal Balances thereof
has been reduced to zero; and
(b) the Group 1 Senior Principal Distribution Amount
remaining after priority first of this Section 4.02(a)(i), to
the Class A-2 Certificates, until the Principal Balance
thereof has been reduced to zero;
third, to the Class M-1 Certificates, until the Principal
Balance thereof has been reduced to zero;
fourth, to the Class M-2 Certificates, until the Principal
Balance thereof has been reduced to zero;
fifth, to the Class M-3 Certificates, until the Principal
Balance thereof has been reduced to zero;
sixth, to the Class M-4 Certificates, until the Principal
Balance thereof has been reduced to zero;
seventh, to the Class M-5 Certificates, until the Principal
Balance thereof has been reduced to zero;
eighth, to the Class M-6 Certificates, until the Principal
Balance thereof has been reduced to zero;
ninth, to the Class B Certificates, until the Principal
Balance thereof has been reduced to zero; and
tenth, any remaining Principal Distribution Amount will be
distributed as part of the Monthly Excess Cashflow Amount as set
forth in Section 4.02(b).
(ii) on or after the Stepdown Date and as long as a Trigger Event is
not in effect:
first, concurrently, as follows:
(a) concurrently, the Group 1 Senior Principal
Distribution Amount to the Class A-1 and Class A-1A
Certificates, pro rata, until the Principal Balances thereof
have been reduced to zero; and
(b) the Group 2 Senior Principal Distribution Amount to
the Class A-2 Certificates, until the Principal Balance
thereof has been reduced to zero;
second, concurrently, as follows:
(a) concurrently, the Group 2 Senior Principal
Distribution Amount remaining after priority first of this
Section 4.02(a)(ii), to the Class A-1 and Class A-1A
Certificates, pro rata, until the Principal Balances thereof
has been reduced to zero; and
(b) the Group 1 Senior Principal Distribution Amount
remaining after priority first of this Section 4.02(a)(ii), to
the Class A-2 Certificates, until the Principal Balance
thereof has been reduced to zero;
third, to the Class M-1 Certificates, up to the Class M-1
Principal Distribution Amount, until the Principal Balance thereof
has been reduced to zero;
fourth, to the Class M-2 Certificates, up to the Class M-2
Principal Distribution Amount, until the Principal Balance thereof
has been reduced to zero;
fifth, to the Class M-3 Certificates, up to the Class M-3
Principal Distribution Amount, until the Principal Balance thereof
has been reduced to zero;
sixth, to the Class M-4 Certificates, up to the Class M-4
Principal Distribution Amount, until the Principal Balance thereof
has been reduced to zero;
seventh, to the Class M-5 Certificates, up to the Class M-5
Principal Distribution Amount, until the Principal Balance thereof
has been reduced to zero;
eighth, to the Class M-6 Certificates, up to the Class M-6
Principal Distribution Amount, until the Principal Balance thereof
has been reduced to zero;
ninth, to the Class B Certificates, up to the Class B
Principal Distribution Amount, until the Principal Balance thereof
has been reduced to zero; and
tenth, any remaining Principal Distribution Amount will be
distributed as part of the Monthly Excess Cashflow Amount as set
forth in Section 4.02(b).
(b) On each Distribution Date, any Monthly Excess Cashflow Amount shall be
distributed, to the extent available, in the following order of priority on such
Distribution Date:
(i) to pay any remaining Accrued Certificate Interest for such
Distribution Date, pro rata, for the Class A Certificates;
(ii) to pay any Interest Carry Forward Amounts for such Distribution
Date, pro rata, for the Class A Certificates;
(iii) to pay the Class A-1A Realized Loss Amortization Amount for
such Distribution Date;
(iv) to pay any remaining unpaid Accrued Certificate Interest for
such Distribution Date for the Class M-1 Certificates;
(v) to pay the remaining Interest Carry Forward Amount, if any, for
the Class M-1 Certificates;
(vi) to pay the Class M-1 Realized Loss Amortization Amount for such
Distribution Date;
(vii) to pay any remaining unpaid Accrued Certificate Interest for
such Distribution Date for the Class M-2 Certificates;
(viii) to pay the remaining Interest Carry Forward Amount, if any,
for the Class M-2 Certificates;
(ix) to pay the Class M-2 Realized Loss Amortization Amount for such
Distribution Date;
(x) to pay any remaining unpaid Accrued Certificate Interest for
such Distribution Date for the Class M-3 Certificates;
(xi) to pay the remaining Interest Carry Forward Amount, if any, for
the Class M-3 Certificates;
(xii) to pay the Class M-3 Realized Loss Amortization Amount for
such Distribution Date;
(xiii) to pay any remaining unpaid Accrued Certificate Interest for
such Distribution Date for the Class M-4 Certificates;
(xiv) to pay the remaining Interest Carry Forward Amount, if any,
for the Class M-4 Certificates;
(xv) to pay the Class M-4 Realized Loss Amortization Amount for such
Distribution Date;
(xvi) to pay any remaining unpaid Accrued Certificate Interest for
such Distribution Date for the Class M-5 Certificates;
(xvii) to pay the remaining Interest Carry Forward Amount, if any,
for the Class M-5 Certificates;
(xviii) to pay the Class M-5 Realized Loss Amortization Amount for
such Distribution Date;
(xix) to pay any remaining unpaid Accrued Certificate Interest for
such Distribution Date for the Class M-6 Certificates;
(xx) to pay the remaining Interest Carry Forward Amount, if any, for
the Class M-6 Certificates;
(xxi) to pay the Class M-6 Realized Loss Amortization Amount for
such Distribution Date;
(xxii) to pay any remaining unpaid Accrued Certificate Interest for
such Distribution Date for the Class B Certificates;
(xxiii) to pay the remaining Interest Carry Forward Amount, if any,
for the Class B Certificates;
(xxiv) to pay the Class B Realized Loss Amortization Amount for such
Distribution Date;
(xxv) first, to the Class A-1, Class A-1A and Class A-2
Certificates, pro rata, and then sequentially, to the Class ▇-▇, ▇▇▇▇▇
▇-▇, Class M-3, Class M-4, Class M-5 and Class M-6 Certificates, in that
order, any Cap Carryover Amount for each such Class; and
(xxvi) to the Class CE Certificates, up to the Class CE
Distributable Amount for such Distribution Date.
On each Distribution Date, there shall be distributed to the Holder
of the Class R Certificate in respect of the Class R-1 Interest, any remaining
amount in the Distribution Account on such date after the application pursuant
to Sections 4.01, 4.02(a) and 4.02(b)(i)-(xxvi).
(c) On each Distribution Date, the Trustee shall withdraw any
amounts then on deposit in the Distribution Account that represent Prepayment
Charges collected by the Servicer in connection with the Principal Prepayment in
full of any of the Mortgage Loans, and shall distribute such amounts to the
Holders of the Class P Certificates. Such amounts shall be treated as having
been distributed to the Holders of the Class P Certificates from the Grantor
Trust.
(d) Any amounts distributed to the Offered Certificates in respect
of interest pursuant to Sections 4.01(b)(xxv) which constitute Cap Carryover
Amounts shall first be deemed distributed by REMIC 2 as a distribution to the
Class CE Certificates, and then distributed to the Offered Certificates from the
Grantor Trust as payments on notional principal contracts in the nature of cap
contracts. Any remaining amount with respect to the Class CE Certificates or any
remaining Yield Maintenance Agreement Payment shall be treated as having been
distributed to the Holders of the Class CE Certificates from the Grantor Trust.
Section 4.03 Allocation of Losses.
Realized Losses shall be allocated first against the Monthly Excess
Interest Amount and then against the Overcollateralization Amount until such
amount has been reduced to zero. If, after giving effect to the distribution of
the Principal Distribution Amount on any Distribution Date the aggregate
Principal Balance of the Offered Certificates and the Class B Certificates
exceeds the Pool Balance as of the end of the related Collection Period, such
excess will be allocated against the Class B, Class M-6, Class M-5, Class M-4,
Class M-3, Class M-2 and Class M-1 Certificates, in that order and until the
respective Principal Balances thereof are reduced to zero. In addition, if after
giving effect to the distribution of the Principal Distribution Amount on any
Distribution Date, the aggregate Principal Balance of the Class A-1 and Class
A-1A Certificates exceeds the aggregate Principal Balance of the Group 1
Mortgage Loans as of the end of the related Collection Period, such excess will
be allocated against the Class A-1A Certificates until their Principal Balance
has been reduced to zero.
Section 4.04 Method of Distribution.
The Trustee shall make distributions in respect of a Distribution
Date to each Certificateholder of record on the related Record Date (other than
as provided in Section 10.01 respecting the final distribution), in the case of
Certificateholders of the Certificates, by wire transfer in immediately
available funds to the account of the Person entitled thereto if such Person
shall have so notified the Trustee in writing at least five Business Days prior
to the Record Date immediately prior to such Distribution Date and is the
registered owner of such Certificates, or by check mailed by first class mail to
the address of the Person entitled thereto, as such name and address shall
appear on the Certificate Register, provided that the Trustee may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Distributions among Certificateholders shall be made in proportion to the
Percentage Interests evidenced by the Certificates held by such
Certificateholders.
Section 4.05 Distributions on Book-Entry Certificates.
Each distribution with respect to a Book-Entry Certificate shall be
paid to the Depository, which shall credit the amount of such distribution to
the accounts of its Depository Participants in accordance with its normal
procedures. Each Depository Participant shall be responsible for disbursing such
distribution to the Certificate Owners that it represents and to each indirect
participating brokerage firm (a "brokerage firm" or "indirect participating
firm") for which it acts as agent. Each brokerage firm shall be responsible for
disbursing funds to the Certificate Owners that it represents. All such credits
and disbursements with respect to a Book-Entry Certificate are to be made by the
Depository and the Depository Participants in accordance with the provisions of
the Certificates. None of the Trustee, the Depositor or the Servicer shall have
any responsibility therefor except as otherwise provided by applicable law.
Section 4.06 Statements.
(a) On each Distribution Date, based on the Mortgage Loan
information contained in the Remittance Report, the Securities Administrator
shall prepare and post on its website at ▇▇▇.▇▇▇▇▇▇▇.▇▇▇, a statement (the
"Distribution Date Statement") as to the distributions made on such Distribution
Date:
(i) the amount of the distribution made on such Distribution Date to
the Holders of each Class of Certificates allocable to principal,
separately identified and the amount of the distribution made on such
Distribution Date to the Holders of the Class P Certificates allocable to
Prepayment Charges;
(ii) the amount of the distribution made on such Distribution Date
to the Holders of each Class of Certificates allocable to interest or
Class CE Distributable Amount, separately identified;
(iii) the Overcollateralization Amount, the Overcollateralization
Release Amount, the Overcollateralization Deficiency and the Targeted
Overcollateralization Amount as of such Distribution Date and the Monthly
Excess Interest Amount and Monthly Excess Cashflow Amount for such
Distribution Date;
(iv) the aggregate amount of servicing compensation received by the
Servicer during the related Collection Period;
(v) the aggregate amount of Advances for the related Collection
Period, cumulative unreimbursed Advances and Servicing Advances and
cumulative Nonrecoverable Advances;
(vi) the Pool Balance, at the close of business at the end of the
related Collection Period;
(vii) the number, weighted average remaining term to maturity and
weighted average Mortgage Interest Rate of the Mortgage Loans as of the
related Due Date;
(viii) the number and aggregate unpaid principal balance of Mortgage
Loans (a) 30 to 59 days past due on a contractual basis, (b) 60 to 89 days
past due on a contractual basis, (c) 90 or more days past due on a
contractual basis, (d) as to which foreclosure proceedings have been
commenced and (e) in bankruptcy as of the close of business on the last
day of the calendar month preceding such Distribution Date;
(ix) with respect to any Mortgage Loan that became an REO Property
during the preceding calendar month, the loan number of such Mortgage
Loan, the unpaid Principal Balance of the REO Property as of the close of
business on the last Business Day of such calendar month and the Principal
Balance of such Mortgage Loan as of the date it became an REO Property;
(x) the book value of any REO Property as of the close of business
on the last Business Day of the calendar month preceding the Distribution
Date, and, cumulatively, the total number and cumulative principal balance
of all REO Properties as of the close of business of the last day of the
preceding Collection Period;
(xi) separately stated for each Loan Group, the aggregate amount of
Principal Prepayments made during the related Prepayment Period;
(xii) separately stated for each Loan Group, the aggregate amount of
Realized Losses incurred during the related Collection Period and the
cumulative amount of Realized Losses;
(xiii) the Principal Balance of each Class of Certificates, after
giving effect to the distributions, and allocations of Realized Losses or
Applied Realized Loss Amounts, as applicable, made on such Distribution
Date, separately identifying any reduction thereof due to allocations of
Realized Losses or Applied Realized Loss Amounts;
(xiv) the Accrued Certificate Interest in respect of each Class of
Certificates for such Distribution Date and any related Cap Carryover
Amounts, and the respective portions thereof, if any, remaining unpaid
following the distributions made in respect of such Certificates on such
Distribution Date;
(xv) the aggregate amount of any Prepayment Interest Shortfalls for
such Distribution Date, to the extent not covered by payments by the
Servicer pursuant to Section 3.23;
(xvi) the amount of the Securities Administrator Fee paid;
(xvii) the Cap Carryover Amounts distributed on such Distribution
Date, the amounts remaining after giving effect to distributions thereof
on such Distribution Date and the amount of all Cap Carryover Amounts
covered by withdrawals from the Reserve Account on such Distribution Date;
(xviii) any Overcollateralization Deficiency after giving effect to
the distribution of principal on such Distribution Date;
(xix) whether a Trigger Event has occurred and is continuing, and
the cumulative Realized Losses, as a percentage of the original Pool
Balance;
(xx) the Available Funds;
(xxi) the Pass-Through Rate for each Class of Certificates for such
Distribution Date;
(xxii) the information contained in the Liquidation Report for such
Distribution Date;
(xxiii) the aggregate Principal Balance of Mortgage Loans purchased
by the Servicer or the Depositor during the related Prepayment Period and
indicating the section of this Agreement requiring or allowing the
purchase of each such Mortgage Loan;
(xxiv) the aggregate Principal Balance of the Mortgage Loans
repurchased by the Depositor during the related Prepayment Period in
connection with Section 3.16;
(xxv) the amount of the Credit Risk Manager Fee paid; and
(xxvi) the Mortgage Loan identifying number of each Mortgage Loan
with a Prepayment Charge that was the subject of a Principal Prepayment in
full during the related Collection Period, the Prepayment Charge listed on
each related Mortgage Note and the Prepayment Charge collected, the
Servicer Prepayment Charge Payment Amount paid by the Servicer or the
Originator Prepayment Charge Payment Amount paid by the Originator with
respect to each such Mortgage Loan.
Assistance in using the Securities Administrator's website can be
obtained by calling the Securities Administrator's customer service desk at
(▇▇▇) ▇▇▇-▇▇▇▇. Parties that are unable to use the above distribution option are
entitled to have a paper copy mailed to them via first class mail by calling the
customer service desk and indicating such. The Securities Administrator shall
have the right to change the way such reports are distributed in order to make
such distribution more convenient and/or more accessible to the parties, and the
Securities Administrator shall provide timely and adequate notification to all
parties regarding any such change.
The Trustee may fully rely upon and shall have no liability with
respect to information with respect to the Mortgage Loans provided by the
Servicer.
In the case of information furnished pursuant to subclauses (i),
(ii) and (xiii) above, the amounts shall be expressed in a separate section of
the report as a dollar amount for each Class for each $1,000 original dollar
amount as of the Cut-off Date.
(b) Within a reasonable period of time after the end of each
calendar year, the Securities Administrator shall furnish to each Person who at
any time during the calendar year was a Certificateholder of a Regular
Certificate, if requested in writing by such Person, such information as is
reasonably necessary to provide to such Person a statement containing the
information set forth in subclauses (i), (ii), (xiv) and (xvii) above,
aggregated for such calendar year or applicable portion thereof during which
such Person was a Certificateholder. Such obligation of the Securities
Administrator shall be deemed to have been satisfied to the extent that
substantially comparable information shall be prepared and furnished by the
Securities Administrator to Certificateholders pursuant to any requirements of
the Code as are in force from time to time.
(c) On each Distribution Date, the Securities Administrator shall
forward to the Class R Certificateholder a copy of the reports forwarded to the
Regular Certificateholders in respect of such Distribution Date with such other
information as the Securities Administrator deems necessary or appropriate. Such
obligation of the Securities Administrator shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
prepared and furnished to Class R Certificateholder by the Securities
Administrator pursuant to any requirements of the Code as from time to time in
force.
Section 4.07 Remittance Reports; Advances.
(a) On the 17th calendar day of each month, or the preceding
Business Day if such 17th calendar day is not a Business Day, the Servicer shall
deliver to the Securities Administrator by telecopy (or by such other means as
the Servicer and the Securities Administrator may agree from time to time) a
Remittance Report with respect to the related Distribution Date. On the same
date, the Servicer shall electronically forward to the Securities Administrator
in such medium as may be agreed between the Servicer and the Securities
Administrator the information set forth in such Remittance Report with respect
to the related Distribution Date and such information reasonably available to
the Servicer necessary in order for the Trustee to perform the calculations
necessary to make the distributions contemplated by Section 4.01, 4.02 and 4.03
and to prepare the Distribution Date Statement. The Trustee shall not be
responsible to recompute, recalculate or verify any information provided to it
by the Servicer.
(b) The amount of Advances to be made by the Servicer for any
Distribution Date shall equal, subject to Section 4.07(d), the sum of (i) the
aggregate amount of Monthly Payments (net of the related Servicing Fee), due
during the related Collection Period in respect of the Mortgage Loans, which
Monthly Payments were delinquent on a contractual basis as of the close of
business on the related Determination Date and (ii) with respect to each REO
Property, which REO Property was acquired during or prior to the related
Collection Period and as to which REO Property an REO Disposition did not occur
during the related Collection Period, an amount equal to the excess, if any, of
the REO Imputed Interest on such REO Property for such Collection Period, over
the net income from such REO Property transferred to the Distribution Account
pursuant to Section 3.13 for distribution on such Distribution Date.
On or before the close of business New York time on the Servicer
Remittance Date, the Servicer shall remit in immediately available funds to the
Trustee for deposit in the Distribution Account an amount equal to the aggregate
amount of Advances, if any, to be made in respect of the Mortgage Loans for the
related Distribution Date either (i) from its own funds or (ii) from the
Collection Account, to the extent of funds held therein for future distribution
(in which case it will cause to be made an appropriate entry in the records of
the Collection Account that amounts held for future distribution have been, as
permitted by this Section 4.07, used by the Servicer in discharge of any such
Advance) or (iii) in the form of any combination of (i) and (ii) aggregating the
total amount of Advances to be made by the Servicer with respect to the Mortgage
Loans. Any amounts held for future distribution and so used shall be
appropriately reflected in the Servicer's records and replaced by the Servicer
by deposit in the Collection Account on or before any future Servicer Remittance
Date to the extent that the Available Funds for the related Distribution Date
(determined without regard to Advances to be made on the Servicer Remittance
Date) shall be less than the total amount that would be distributed to the
Classes of Certificateholders pursuant to Section 4.01 and 4.02 on such
Distribution Date if such amounts held for future distributions had not been so
used to make Advances. The Trustee will provide notice to the Servicer by
telecopy by the close of business on any Servicer Remittance Date in the event
that the amount remitted by the Servicer to the Trustee on such date is less
than the Advances required to be made by the Servicer for the related
Distribution Date, as set forth in the related Remittance Report.
(c) The obligation of the Servicer to make such Advances is
mandatory, notwithstanding any other provision of this Agreement but subject to
(d) below, and, with respect to any Mortgage Loan, shall continue until the
earlier of such time as the Trust acquires title to the related Mortgaged
Property or such Mortgage Loan is paid in full by the Mortgagor or disposed of
by the Trust, or until the recovery of all Liquidation Proceeds thereon.
(d) Notwithstanding anything herein to the contrary, no Advance or
Servicing Advance shall be required to be made hereunder by the Servicer if such
Advance would, if made, constitute a Nonrecoverable Advance. The determination
by the Servicer that it has made a Nonrecoverable Advance or that any proposed
Advance, if made, would constitute a Nonrecoverable Advance, shall be evidenced
by an Officers' Certificate of the Servicer delivered to the Depositor, the
Securities Administrator and the Trustee.
Section 4.08 REMIC Distributions.
(a) On each Distribution Date, the Trustee shall cause in the
following order of priority, the following amounts to be distributed by REMIC 1
to REMIC 2 on account of the REMIC 1 Regular Interests or withdrawn from the
Distribution Account and distributed to the Holders of the Class R Certificates
(in respect of the Class R-1 Interest), as the case may be:
(i) to Holders of REMIC 1 Regular Interest LT1AA, REMIC 1 Regular
Interest LT1A1, REMIC 1 Regular ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, REMIC 1 Regular Interest
LT1A2, REMIC 1 Regular Interest LT1M1, REMIC 1 Regular Interest LT1M2,
REMIC 1 Regular Interest LT1M3, REMIC 1 Regular Interest LT1M4, REMIC 1
Regular Interest LT1M5, REMIC 1 Regular Interest LT1M6, REMIC 1 Regular
Interest LT1B and REMIC 1 Regular Interest LT1ZZ, pro rata, in an amount
equal to (A) the Uncertificated Accrued Interest for such Distribution
Date, plus (B) any amounts in respect thereof remaining unpaid from
previous Distribution Dates. Amounts payable as Uncertificated Accrued
Interest in respect of REMIC 1 Regular Interest LT1ZZ shall be reduced and
deferred when the REMIC 1 Overcollateralized Amount is less than the REMIC
1 Overcollateralization Target Amount, by the lesser of (x) the amount of
such difference and (y) the Maximum LT1ZZ Uncertificated Accrued Interest
Deferral Amount and such amount will be payable to the Holders of REMIC 1
Regular Interest LT1A1, REMIC 1 Regular ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, REMIC 1 Regular
Interest LT1A2, REMIC 1 Regular Interest LT1M1, REMIC 1 Regular Interest
LT1M2, REMIC 1 Regular Interest LT1M3, REMIC 1 Regular Interest LT1M4,
REMIC 1 Regular Interest LT1M5, REMIC 1 Regular Interest LT1M6 and REMIC 1
Regular Interest LT1B in the same proportion as the Overcollateralization
Deficiency is allocated to the Corresponding Certificates;
(ii) to Holders of REMIC 1 Regular Interest LT1SUB, REMIC 1 Regular
Interest LT1GRP, REMIC 1 Regular Interest LT2SUB, REMIC 1 Regular Interest
LT2GRP and REMIC 1 Regular Interest LT1XX, pro rata, in an amount equal to
(A) the Uncertificated Accrued Interest for such Distribution Date, plus
(B) any amounts in respect thereof remaining unpaid from previous
Distribution Dates;
(iii) to the Holders of REMIC 1 Regular Interests, in an amount
equal to the remainder of the REMIC 1 Marker Allocation Percentage of
Available Funds for such Distribution Date after the distributions made
pursuant to clause (i) above, allocated as follows:
(1) to REMIC 1 Regular Interest LT1AA, 98.00% of such
remainder, until the Uncertificated Principal Balance of such
Uncertificated REMIC 1 Regular Interest is reduced to zero;
(2) to REMIC 1 Regular Interest LT1A1, REMIC 1 Regular
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, REMIC 1 Regular Interest LT1A2, REMIC 1 Regular
Interest LT1M1, REMIC 1 Regular Interest LT1M2, REMIC 1 Regular
Interest LT1M3, REMIC 1 Regular Interest LT1M4, REMIC 1 Regular
Interest LT1M5, REMIC 1 Regular Interest LT1M6 and REMIC 1 Regular
Interest LT1B, 1.00% of such remainder, in the same proportion as
principal payments are allocated to the Corresponding Certificates,
until the Uncertificated Principal Balances of such REMIC 1 Regular
Interests are reduced to zero; then
(3) to REMIC 1 Regular Interest LT1ZZ, 1.00% of such
remainder, until the Uncertificated Principal Balance of such REMIC
1 Regular Interest is reduced to zero;
provided, however, that (i) 98.00% and (ii) 2.00% of any
principal payments that are attributable to an Aggregate
Overcollateralization Release Amount shall be allocated to (i)
REMIC 1 Regular Interest LT1AA and (ii) REMIC 1 Regular
Interest LT1ZZ, respectively; and
(iv) to the Holders of REMIC 1 Regular Interests, in an amount equal
to the REMIC 1 Sub WAC Allocation Percentage of Available Funds for such
Distribution Date after the distributions made pursuant to clause (i)
above, such that distributions of principal shall be deemed to be made to
the REMIC 1 Regular Interests first, so as to keep the Uncertificated
Principal Balance of each REMIC 1 Regular Interest ending with the
designation "GRP" equal to 0.01% of the aggregate Principal Balance of the
Mortgage Loans in the related group of Mortgage Loans; second, to each
REMIC 1 Regular Interest ending with the designation "SUB," so that the
Uncertificated Principal Balance of each such REMIC 1 Regular Interest is
equal to 0.01% of the excess of (x) the aggregate Principal Balance of the
Mortgage Loans in the related group of Mortgage Loans over (y) the
aggregate current Principal Balance of the Class A Certificates in the
related group of Mortgage Loans (except that if any such excess is a
larger number than in the preceding distribution period, the least amount
of principal shall be distributed to such REMIC 1 Regular Interests such
that the REMIC 1 Subordinated Balance Ratio is maintained); and third, any
remaining principal to REMIC 1 Regular Interest LT1XX.
(b) The Trustee shall cause the following allocation of losses:
(i) The REMIC 1 Marker Allocation Percentage of the aggregate amount
of any Prepayment Interest Shortfalls and the REMIC 1 Marker Allocation
Percentage of the aggregate amount of any Relief Act Interest Shortfalls
incurred in respect of the Mortgage Loans for any Distribution Date shall
be allocated first, to Uncertificated Accrued Interest payable to REMIC 1
Regular Interest LT1AA and REMIC 1 Regular Interest LT1ZZ up to an
aggregate amount equal to the REMIC 1 Interest Loss Allocation Amount, 98%
and 2%, respectively, and thereafter among REMIC 1 Regular Interest LT1A1,
REMIC 1 Regular ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, REMIC 1 Regular Interest LT1A2, REMIC 1
Regular Interest LT1M1, REMIC 1 Regular Interest LT1M2, REMIC 1 Regular
Interest LT1M3, REMIC 1 Regular Interest LT1M4, REMIC 1 Regular Interest
LT1M5, REMIC 1 Regular Interest LT1M6, REMIC 1 Regular Interest LT1B and
REMIC 1 Regular Interest LT1ZZ pro rata based on, and to the extent of,
one month's interest at the then applicable respective Uncertificated
REMIC 1 Pass-Through Rate on the respective Uncertificated Principal
Balance of each such REMIC 1 Regular Interest;
(ii) The REMIC 1 Sub WAC Allocation Percentage of the aggregate
amount of any Prepayment Interest Shortfalls and the REMIC 1 Sub WAC
Allocation Percentage of the aggregate amount of any Relief Act Interest
Shortfalls incurred in respect of the Mortgage Loans for any Distribution
Date shall be allocated first, to Uncertificated Accrued Interest payable
to REMIC 1 Regular Interest LT1SUB, REMIC 1 Regular Interest LT1GRP, REMIC
1 Regular Interest LT2SUB, REMIC 1 Regular Interest LT2GRP and REMIC 1
Regular Interest LT1XX, pro rata based on, and to the extent of, one
month's interest at the then applicable respective Uncertificated REMIC 1
Pass-Through Rate on the respective Uncertificated Principal Balance of
each such REMIC 1 Regular Interest;
(iii) The REMIC 1 Marker Percentage of all Realized Losses on the
Mortgage Loans shall be allocated by the Trustee on each Distribution Date
to the following REMIC 1 Regular Interests in the specified percentages,
as follows: first, to Uncertificated Accrued Interest payable to REMIC 1
Regular Interest LT1AA and REMIC 1 Regular Interest LT1ZZ up to an
aggregate amount equal to the REMIC 1 Interest Loss Allocation Amount, 98%
and 2%, respectively; second, to the Uncertificated Principal Balances of
REMIC 1 Regular Interest LT1AA and REMIC 1 Regular Interest LT1ZZ up to an
aggregate amount equal to the REMIC 1 Principal Loss Allocation Amount,
98% and 2%, respectively; third, to the Uncertificated Principal Balances
of REMIC 1 Regular Interest LT1AA, REMIC 1 Regular Interest LT1B and REMIC
1 Regular Interest LT1ZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1B has been
reduced to zero; fourth, to the Uncertificated Principal Balances of REMIC
1 Regular Interest LT1AA, REMIC 1 Regular Interest LT1M6 and REMIC 1
Regular Interest LT1ZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1M6 has
been reduced to zero; fifth, to the Uncertificated Principal Balances of
REMIC 1 Regular Interest LT1AA, REMIC 1 Regular Interest LT1M5 and REMIC 1
Regular Interest LT1ZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1M5 has
been reduced to zero; sixth, to the Uncertificated Principal Balances of
REMIC 1 Regular Interest LT1AA, REMIC 1 Regular Interest LT1M4 and REMIC 1
Regular Interest LT1ZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1M4 has
been reduced to zero; seventh to the Uncertificated Principal Balances of
REMIC 1 Regular Interest LT1AA, REMIC 1 Regular Interest LT1M3 and REMIC 1
Regular Interest LT1ZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1M3 has
been reduced to zero; eighth, to the Uncertificated Principal Balances of
REMIC 1 Regular Interest LT1AA, REMIC 1 Regular Interest LT1M2 and REMIC 1
Regular Interest LT1ZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1M2 has
been reduced to zero; and ninth, to the Uncertificated Principal Balances
of REMIC 1 Regular Interest LT1AA, REMIC 1 Regular Interest LT1M1 and
REMIC 1 Regular Interest LT1ZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balances of REMIC 1 Regular Interest LT1M1 has
been reduced to zero; and
(iv) The REMIC 1 Sub WAC Allocation Percentage of all Realized
Losses shall be applied after all distributions have been made on each
Distribution Date first, so as to keep the Uncertificated Principal
Balance of each REMIC 1 Regular Interest ending with the designation "GRP"
equal to 0.01% of the aggregate Stated Principal Balance of the Mortgage
Loans in the related Loan Group; second, to each REMIC 1 Regular Interest
ending with the designation "SUB," so that the Uncertificated Principal
Balance of each such REMIC 1 Regular Interest is equal to 0.01% of the
excess of (x) the aggregate Principal Balance of the Mortgage Loans in the
related Loan Group over (y) the aggregate current Principal Balances of
the Class A Certificates in the related group of Mortgage Loans (except
that if any such excess is a larger number than in the preceding
distribution period, the least amount of Realized Losses shall be applied
to such REMIC 1 Regular Interests such that the REMIC 1 Subordinated
Balance Ratio is maintained); and third, any remaining Realized Losses
shall be allocated to REMIC 1 Regular Interest LT1XX.
(c) Notwithstanding anything to the contrary contained herein, the
above distributions in this Section 4.08 (other than on the Certificates) are
deemed distributions, and distributions of funds from the Distribution Account
shall be made only in accordance with Sections 4.01 and 4.02 hereof.
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates.
Each of the Class A-1, Class A-1A, Class A-2, Class M-1, Class M-2,
Class M-3, Class M-4, Class M-4, Class M-6, Class B, Class CE, Class P and Class
R Certificates shall be substantially in the forms annexed hereto as exhibits,
and shall, on original issue, be executed and authenticated and delivered by the
Certificate Registrar to or upon the receipt of a Written Order to Authenticate
from the Depositor concurrently with the sale and assignment to the Trustee of
the Trust Fund. Each Class of the Offered Certificates and the Class B
Certificates shall be initially evidenced by one or more Certificates
representing a Percentage Interest with a minimum dollar denomination of $25,000
and integral multiples of $1 in excess thereof. The Class CE and Class P
Certificates are issuable only in minimum Percentage Interests of 10%. The Class
R Certificate is issuable only as a single certificate.
The Certificates shall be executed on behalf of the Trust by manual
or facsimile signature on behalf of the Trustee by a Responsible Officer.
Certificates bearing the manual or facsimile signatures of individuals who were,
at the time when such signatures were affixed, authorized to sign on behalf of
the Trustee shall bind the Trust, notwithstanding that such individuals or any
of them have ceased to be so authorized prior to the authentication and delivery
of such Certificates or did not hold such offices at the date of such
Certificate. No Certificate shall be entitled to any benefit under this
Agreement or be valid for any purpose, unless such Certificate shall have been
manually authenticated by the Certificate Registrar substantially in the form
provided for herein, and such authentication upon any Certificate shall be
conclusive evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the date
of their authentication. Subject to Section 5.02(c), the Offered Certificates
shall be Book-Entry Certificates. The Class B, Class CE, Class P and Class R
Certificates shall not be Book-Entry Certificates but shall be issued in fully
registered certificate form.
Section 5.02 Registration of Transfer and Exchange of Certificates.
(a) The Certificate Registrar shall cause to be kept at the
Corporate Trust Office of the Trustee a Certificate Register in which, subject
to such reasonable regulations as it may prescribe, the Certificate Registrar
shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as herein provided. The Trustee shall initially serve
as Certificate Registrar for the purpose of registering Certificates and
transfers and exchanges of Certificates as herein provided. The Trustee as
Certificate Registrar shall be subject to the same standards of care,
limitations on liability and rights to indemnity as the Trustee, and the
provisions of Sections 8.01, 8.02, 8.03, 8.04, 8.05, 8.14, 8.15 and 8.16 shall
apply to the Certificate Registrar to the same extent as they apply to the
Trustee. Any Certificate Registrar appointed in accordance with this Section
5.02(a) may at any time resign by giving at least 30 days' advance written
notice of resignation to the Trustee, the Securities Administrator, the Servicer
and the Depositor, such resignation to become effective upon appointment of a
successor Certificate Registrar.
Upon surrender for registration of transfer of any Certificate at
any office or agency of the Certificate Registrar maintained for such purpose
pursuant to the foregoing paragraph and, in the case of the Class R Certificate,
upon satisfaction of the conditions set forth below, the Trustee on behalf of
the Trust shall execute and the Certificate Registrar shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Certificates of the same aggregate Percentage Interest.
At the option of the Certificateholders, Certificates may be
exchanged for other Certificates in authorized denominations and the same
aggregate Percentage Interests, upon surrender of the Certificates to be
exchanged at any such office or agency. Whenever any Certificates are so
surrendered for exchange, the Trustee shall execute on behalf of the Trust and
the Certificate Registrar shall authenticate and deliver the Certificates which
the Certificateholder making the exchange is entitled to receive. Every
Certificate presented or surrendered for registration of transfer or exchange
shall (if so required by the Trustee or the Certificate Registrar) be duly
endorsed by, or be accompanied by a written instrument of transfer satisfactory
to the Trustee and the Certificate Registrar duly executed by, the Holder
thereof or his attorney duly authorized in writing.
(b) Upon original issuance, the Book-Entry Certificates shall be
issued in the form of one or more typewritten certificates, to be delivered to
the Depository by, or on behalf of, the Depositor; or to, and deposited with the
Certificate Custodian, on behalf of the Depository, if directed to do so
pursuant to instructions from the Depository. Except as provided in paragraph
(c) below, the Book-Entry Certificates shall at all times remain registered in
the name of the Depository or its nominee and at all times: (i) registration of
such Certificates may not be transferred by the Trustee except to another
Depository; (ii) the Depository shall maintain book-entry records with respect
to the Certificate Owners and with respect to ownership and transfers of such
Certificates; (iii) ownership and transfers of registration of such Certificates
on the books of the Depository shall be governed by applicable rules established
by the Depository; (iv) the Depository may collect its usual and customary fees,
charges and expenses from its Depository Participants; (v) the Trustee shall for
all purposes deal with the Depository as representative of the Certificate
Owners of the Certificates for purposes of exercising the rights of Holders
under this Agreement, and requests and directions for and votes of such
representative shall not be deemed to be inconsistent if they are made with
respect to different Certificate Owners; (vi) the Trustee may rely and shall be
fully protected in relying upon information furnished by the Depository with
respect to its Depository Participants and furnished by the Depository
Participants with respect to indirect participating firms and Persons shown on
the books of such indirect participating firms as direct or indirect Certificate
Owners; and (vii) the direct participants of the Depository shall have no rights
under this Agreement under or with respect to any of the Certificates held on
their behalf by the Depository, and the Depository may be treated by the Trustee
and its agents, employees, officers and directors as the absolute owner of the
Certificates for all purposes whatsoever.
All transfers by Certificate Owners of Book-Entry Certificates shall
be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owners. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners that it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures. The parties hereto
are hereby authorized to execute a Letter of Representations with the Depository
or take such other action as may be necessary or desirable to register a
Book-Entry Certificate to the Depository. In the event of any conflict between
the terms of any such Letter of Representation and this Agreement, the terms of
this Agreement shall control.
(c) If 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 Depository and the Trustee or the Depositor is unable to
locate a qualified successor and upon surrender to the Certificate Registrar of
the Book-Entry Certificates by the Depository, accompanied by registration
instructions from the Depository for registration, the Trustee shall, at the
Trust's expense, execute on behalf of the Trust and the Certificate Registrar
shall authenticate definitive, fully registered certificates (the "Definitive
Certificates"). None of the Depositor or the Trustee shall be liable for any
delay in delivery of such instructions and may conclusively rely on, and shall
be protected in relying on, such instructions. Upon the issuance of Definitive
Certificates, the Trustee, the Certificate Registrar, the Servicer, the
Securities Administrator, any Paying Agent and the Depositor shall recognize the
Holders of the Definitive Certificates as Certificateholders hereunder.
(d) Except with respect to a transfer of the Private Certificates
between or among the Depositor, the Seller, their affiliates or both, no
transfer, sale, pledge or other disposition of any Private Certificate shall be
made unless such disposition is exempt from the registration requirements of the
1933 Act, and any applicable state securities laws or is made in accordance with
the 1933 Act and laws. In the event of any such transfer, (i) unless such
transfer is made in reliance upon Rule 144A (as evidenced by the investment
letter delivered to the Certificate Registrar, in substantially the form
attached hereto as Exhibit J) under the 1933 Act, the Certificate Registrar and
the Depositor shall require a written Opinion of Counsel (which may be in-house
counsel) acceptable to and in form and substance reasonably satisfactory to the
Certificate Registrar and the Depositor that such transfer may be made pursuant
to an exemption, describing the applicable exemption and the basis therefor,
from the 1933 Act or is being made pursuant to the 1933 Act, which Opinion of
Counsel shall not be an expense of the Certificate Registrar or the Depositor or
(ii) the Certificate Registrar shall require the transferor to execute a
transferor certificate (in substantially the form attached hereto as Exhibit L)
and the transferee to execute an investment letter (in substantially the form
attached hereto as Exhibit J) acceptable to and in form and substance reasonably
satisfactory to the Depositor and the Certificate Registrar certifying to the
Depositor and the Certificate Registrar the facts surrounding such transfer,
which investment letter shall not be an expense of the Certificate Registrar or
the Depositor. The Holder of a Private Certificate desiring to effect such
transfer shall, and does hereby agree to, indemnify the Certificate Registrar
and the Depositor against any liability that may result if the transfer is not
so exempt or is not made in accordance with such federal and state laws.
No transfer of an ERISA-Restricted Certificate shall be made unless
the Certificate Registrar shall have received either (i) a representation from
the transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Certificate Registrar and the Depositor, (such requirement
is satisfied only by the Certificate Registrar's receipt of a representation
letter from the transferee substantially in the form of Exhibit I hereto, as
appropriate), to the effect that such transferee is not an employee benefit plan
or arrangement subject to Section 406 of ERISA or a plan subject to Section 4975
of the Code, nor a person acting on behalf of any such plan or arrangement nor
using the assets of any such plan or arrangement to effect such transfer or (ii)
(except in the case of a Class P, Class R or Class CE Certificate) if the
purchaser is an insurance company, a representation that the purchaser is an
insurance company which is purchasing such Certificates with funds contained in
an "insurance company general account" (as such term is defined in Section V(c)
of Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60") and that the
purchase and holding of such Certificates are covered under Sections I and III
of PTCE 95-60 or (iii) (except in the case of the Class R Certificate) in the
case of any such ERISA Restricted Certificate presented for registration in the
name of an employee benefit plan subject to ERISA or a plan or arrangement
subject to Section 4975 of the Code (or comparable provisions of any subsequent
enactments), or a trustee of any such plan or any other person acting on behalf
of any such plan or arrangement or using such plan's or arrangement's assets, an
Opinion of Counsel satisfactory to the Certificate Registrar, to the effect that
the purchase or holding of such ERISA Restricted Certificate will not result in
the assets of the Trust being deemed to be "plan assets" and subject to the
prohibited transaction provisions of ERISA and the Code and will not subject the
Depositor, the Servicer, the Trustee or the Certificate Registrar to any
obligation in addition to those expressly undertaken in this Agreement or to any
liability. For purposes of clause (i) of the preceding sentence, such
representation shall be deemed to have been made to the Certificate Registrar by
the acceptance by a Certificate Owner of the beneficial interest in any such
Class of ERISA-Restricted Certificates, unless the Certificate Registrar shall
have received from the transferee an alternative representation acceptable in
form and substance to the Depositor. Notwithstanding anything else to the
contrary herein, any purported transfer of an ERISA-Restricted Certificate to or
on behalf of an employee benefit plan subject to ERISA or to the Code without
the delivery to the Certificate Registrar of an Opinion of Counsel satisfactory
to the Certificate Registrar as described above shall be void and of no effect.
Each Person who has or who acquires any Ownership Interest in the
Class R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions and to
have irrevocably appointed the Depositor or its designee as its attorney-in-fact
to negotiate the terms of any mandatory sale under clause (v) 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 the Class R Certificate are expressly subject to the
following provisions:
(i) Each Person holding or acquiring any Ownership Interest in the
Class R Certificate shall be a Permitted Transferee and shall promptly
notify the Certificate Registrar of any change or impending change in its
status as a Permitted Transferee.
(ii) No Person shall acquire an Ownership Interest in the Class R
Certificate unless such Ownership Interest is a pro rata undivided
interest.
(iii) In connection with any proposed transfer of any Ownership
Interest in the Class R Certificate, the Certificate Registrar shall as a
condition to registration of the transfer, require delivery to it, in form
and substance satisfactory to it, of each of the following:
A. an affidavit in the form of Exhibit K hereto from the proposed
transferee to the effect that, among other things, such transferee is a
Permitted Transferee and that it is not acquiring its Ownership Interest in the
Class R Certificate that is the subject of the proposed transfer as a nominee,
trustee or agent for any Person who is not a Permitted Transferee; and
B. a covenant of the proposed transferee to the effect that the
proposed transferee agrees to be bound by and to abide by the transfer
restrictions applicable to the Class R Certificate.
(iv) Any attempted or purported transfer of any Ownership Interest
in the Class R Certificate in violation of the provisions of this Section
shall be absolutely null and void and shall vest no rights in the
purported transferee. If any purported transferee shall, in violation of
the provisions of this Section, become the Holder of the Class R
Certificate, then the prior Holder of such Class R Certificate that is a
Permitted Transferee shall, upon discovery that the registration of
transfer of such Class R Certificate was not in fact permitted by this
Section, be restored to all rights as Holder thereof retroactive to the
date of registration of transfer of such Class R Certificate. The
Certificate Registrar shall be under no liability to any Person for any
registration of transfer of the Class R Certificate that is in fact not
permitted by this Section or for making any distributions due on such
Class R 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 Certificate Registrar received the documents specified in clause
(iii). The Trustee shall be entitled to recover from any Holder of the
Class R Certificate that was in fact not a Permitted Transferee at the
time such distributions were made all distributions made on such Class R
Certificate. Any such distributions so recovered by the Trustee shall be
distributed and delivered by the Trustee to the prior Holder of such Class
R Certificate that is a Permitted Transferee.
(v) If any Person other than a Disqualified Organization acquires
any Ownership Interest in the Class R Certificate in violation of the
restrictions in this Section, then the Certificate Registrar shall have
the right but not the obligation, without notice to the Holder of the
Class R Certificate or any other Person having an Ownership Interest
therein, to notify the Depositor to arrange for the sale of the Class R
Certificate. The proceeds of such sale, net of commissions (which may
include commissions payable to the Depositor or its affiliates in
connection with such sale), expenses and taxes due, if any, will be
remitted by the Trustee to the previous Holder of the Class R Certificate
that is a Permitted Transferee, except that in the event that the Trustee
determines that the Holder of the Class R Certificate may be liable for
any amount due under this Section or any other provisions of this
Agreement, the Trustee may withhold a corresponding amount from such
remittance as security for such claim. The terms and conditions of any
sale under this clause (v) shall be determined in the sole discretion of
the Trustee and it shall not be liable to any Person having an Ownership
Interest in the Class R Certificate as a result of its exercise of such
discretion.
(vi) If any Person other than a Permitted Transferee acquires any
Ownership Interest in the Class R Certificate in violation of the
restrictions in this Section, then the Securities Administrator will
provide to the Internal Revenue Service, and to the persons specified in
Sections 860E(e)(3) and (6) of the Code, information needed to compute the
tax imposed under Section 860E(e)(5) of the Code on transfers of residual
interests to disqualified organizations. The Securities Administrator
shall be entitled to reasonable compensation for providing such
information from the person to whom it is provided.
The foregoing provisions of this Section shall cease to apply to transfers
occurring on or after the date on which there shall have been delivered to the
Certificate Registrar, in form and substance satisfactory to the Certificate
Registrar, (i) written notification from each Rating Agency that the removal of
the restrictions on Transfer set forth in this Section will not cause such
Rating Agency to downgrade its rating of the Certificates and (ii) an Opinion of
Counsel to the effect that such removal will not cause any REMIC hereunder to
fail to qualify as a REMIC.
(e) No service charge shall be made for any registration of transfer
or exchange of Certificates of any Class, but the Certificate Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
All Certificates surrendered for registration of transfer or
exchange shall be cancelled by the Certificate Registrar and disposed of
pursuant to its standard procedures.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.
If (i) any mutilated Certificate is surrendered to the Certificate
Registrar or the Certificate Registrar receives evidence to its satisfaction of
the destruction, loss or theft of any Certificate and (ii) there is delivered to
the Trustee, the Depositor and the Certificate Registrar such security or
indemnity as may be required by them to save each of them harmless, then, in the
absence of notice to the Trustee or the Certificate Registrar that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute on behalf of the Trust, and the Certificate Registrar shall authenticate
and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Certificate, a new Certificate of like tenor and Percentage Interest.
Upon the issuance of any new Certificate under this Section, the Trustee or the
Certificate Registrar may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Trustee and the
Certificate Registrar) in connection therewith. Any duplicate Certificate issued
pursuant to this Section, shall constitute complete and indefeasible evidence of
ownership in the Trust, as if originally issued, whether or not the lost, stolen
or destroyed Certificate shall be found at any time.
Section 5.04 Persons Deemed Owners.
The Servicer, the Depositor, the Trustee, the Securities
Administrator, the Certificate Registrar, any Paying Agent and any agent of the
Servicer, the Depositor, the Certificate Registrar, any Paying Agent or the
Trustee may treat the Person, including a Depository, in whose name any
Certificate is registered as the owner of such Certificate for the purpose of
receiving distributions pursuant to Section 4.01 and 4.02 and for all other
purposes whatsoever, and none of the Servicer, the Trust, the Trustee, the
Securities Administrator nor any agent of any of them shall be affected by
notice to the contrary.
Section 5.05 Appointment of Paying Agent.
The Paying Agent shall make distributions to Certificateholders from
the Distribution Account pursuant to Section 4.01 and 4.02 and shall report the
amounts of such distributions to the Trustee. The duties of the Paying Agent may
include the obligation to distribute statements and provide information to
Certificateholders as required hereunder. The Paying Agent hereunder shall at
all times be an entity duly incorporated and validly existing under the laws of
the United States of America or any state thereof, authorized under such laws to
exercise corporate trust powers and subject to supervision or examination by
federal or state authorities. The Paying Agent shall initially be the Trustee.
The Trustee may appoint a successor to act as Paying Agent, which appointment
shall be reasonably satisfactory to the Depositor and the Rating Agencies. The
Trustee as Paying Agent shall be subject to the same standards of care,
limitations on liability and rights to indemnity as the Trustee, and the
provisions of Sections 8.01, 8.02, 8.03, 8.04, 8.05, 8.14, 8.15 and 8.16 shall
apply to the Paying Agent to the same extent as they apply to the Trustee. Any
Paying Agent appointed in accordance with this Section 5.05 may at any time
resign by giving at least 30 days' advance written notice of resignation to the
Trustee, the Servicer and the Depositor, such resignation to become effective
upon appointment of a successor Paying Agent.
ARTICLE VI
THE SERVICER AND THE DEPOSITOR
Section 6.01 Liability of the Servicer and the Depositor.
The Servicer shall be liable in accordance herewith only to the
extent of the obligations specifically imposed upon and undertaken by the
Servicer herein. The Depositor shall be liable in accordance herewith only to
the extent of the obligations specifically imposed upon and undertaken by the
Depositor.
Section 6.02 Merger or Consolidation of, or Assumption of the
Obligations of, the Servicer or the Depositor.
Any entity into which the Servicer or the Depositor may be merged or
consolidated, or any entity resulting from any merger, conversion or
consolidation to which the Servicer or the Depositor shall be a party, or any
corporation succeeding to the business of the Servicer or the Depositor, shall
be the successor of the Servicer or the Depositor, as the case may be,
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the successor servicer shall satisfy
all the requirements of Section 7.02 with respect to the qualifications of a
successor servicer.
Section 6.03 Limitation on Liability of the Servicer and Others.
Neither the Servicer nor any of the directors or officers or
employees or agents of the Servicer shall be under any liability to the Trust or
the Certificateholders for any action taken or for refraining from the taking of
any action by the Servicer in good faith pursuant to this Agreement, or for
errors in judgment; provided, however, that this provision shall not protect the
Servicer or any such Person against any liability which would otherwise be
imposed by reason of its willful misfeasance, bad faith or negligence in the
performance of duties of the Servicer or by reason of its reckless disregard of
its obligations and duties of the Servicer hereunder. The Servicer and any
director or officer or employee or agent of the Servicer may rely in good faith
on any document of any kind prima facie properly executed and submitted by any
Person respecting any matters arising hereunder. The Servicer and any director
or officer or employee or agent of the Servicer shall be indemnified by the
Trust and held harmless against any loss, liability or expense incurred in
connection with any legal action relating to this Agreement or the Certificates,
other than any loss, liability or expense related to any specific Mortgage Loan
or Mortgage Loans (except as any such loss, liability or expense shall be
otherwise reimbursable pursuant to this Agreement) and any loss, liability or
expense incurred by reason of its willful misfeasance, bad faith or negligence
in the performance of duties hereunder or by reason of its reckless disregard of
obligations and duties hereunder. The Servicer may undertake any such action
which it may deem necessary or desirable in respect of this Agreement, and the
rights and duties of the parties hereto and the interests of the
Certificateholders hereunder. In such event, the reasonable legal expenses and
costs of such action and any liability resulting therefrom shall be expenses,
costs and liabilities of the Trust and the Servicer shall be entitled to be
reimbursed therefor pursuant to Section 3.05. The Servicer's right to indemnity
or reimbursement pursuant to this Section shall survive any resignation or
termination of the Servicer pursuant to Section 6.04 or 7.01 with respect to any
losses, expenses, costs or liabilities arising prior to such resignation or
termination (or arising from events that occurred prior to such resignation or
termination). This paragraph shall apply to the Servicer solely in its capacity
as Servicer hereunder and in no other capacities.
Section 6.04 Servicer Not to Resign.
Subject to the provisions of Section 7.01 and Section 6.02, the
Servicer shall not resign from the obligations and duties hereby imposed on it
except (i) upon determination that the performance of its obligations or duties
hereunder are no longer permissible under applicable law or are in material
conflict by reason of applicable law with any other activities carried on by it
or its subsidiaries or Affiliates, the other activities of the Servicer so
causing such a conflict being of a type and nature carried on by the Servicer or
its subsidiaries or Affiliates at the date of this Agreement or (ii) upon
satisfaction of the following conditions: (a) the Servicer has proposed a
successor servicer to the Trustee and the Securities Administrator in writing
and such proposed successor servicer is reasonably acceptable to the Trustee and
the Securities Administrator; and (b) each Rating Agency shall have delivered a
letter to the Trustee prior to the appointment of the successor servicer stating
that the proposed appointment of such successor servicer as Servicer hereunder
will not result in the reduction or withdrawal of the then current rating of the
Regular Certificates or the ratings that are in effect; provided, however, that
no such resignation by the Servicer shall become effective until such successor
servicer or, in the case of (i) above, the Securities Administrator shall have
assumed the Servicer's responsibilities and obligations hereunder or the
Securities Administrator shall have designated a successor servicer in
accordance with Section 7.02. Any such resignation shall not relieve the
Servicer of responsibility for any of the obligations specified in Sections 7.01
and 7.02 as obligations that survive the resignation or termination of the
Servicer. Any such determination permitting the resignation of the Servicer
shall be evidenced by an Opinion of Counsel to such effect delivered to the
Trustee and the Securities Administrator.
Section 6.05 Delegation of Duties.
In the ordinary course of business, the Servicer at any time may
delegate any of its duties hereunder to any Person, including any of its
Affiliates, who agrees to conduct such duties in accordance with standards
comparable to those set forth in Section 3.01. Such delegation shall not relieve
the Servicer of its liabilities and responsibilities with respect to such duties
and shall not constitute a resignation within the meaning of Section 6.04. The
Servicer shall provide the Trustee and the Rating Agencies with 60 days prior
written notice prior to the delegation of any of its duties to any Person other
than any of the Servicer's Affiliates or their respective successors and
assigns.
ARTICLE VII
DEFAULT
Section 7.01 Servicer Events of Termination.
(a) If any one of the following events ("Servicer Events of
Termination") shall occur and be continuing:
(i) (A) The failure by the Servicer to make any Advance, Servicing
Advance or to pay Compensating Interest; or (B) any other failure by the
Servicer to deposit in the Collection Account or Distribution Account any
deposit required to be made under the terms of this Agreement, which
failure continues unremedied for a period of three Business Days after the
first date on which written notice of such failure is given to the
Servicer; or
(ii) The failure by the Servicer duly to observe or perform, in any
material respect, any other covenants, obligations or agreements of the
Servicer as set forth in this Agreement, which failure continues
unremedied for a period of 60 days, after the date (A) on which written
notice of such failure, requiring the same to be remedied, shall have been
given to the Servicer by the Trustee or by any Holder of a Regular
Certificate evidencing at least 25% of the Voting Interests or (B) actual
knowledge of such failure by a Servicing Officer of the Servicer; or
(iii) The entry against the Servicer of a decree or order by a court
or agency or supervisory authority having jurisdiction in the premises for
the appointment of a trustee, conservator, receiver or liquidator in any
insolvency, conservatorship, receivership, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for the
winding up or liquidation of its affairs, and the continuance of any such
decree or order unstayed and in effect for a period of 60 days; or
(iv) The Servicer shall voluntarily go into liquidation, consent to
the appointment of a conservator or receiver or liquidator or similar
person in any insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings of or relating to the Servicer or of or
relating to all or substantially all of its property; or a decree or order
of a court or agency or supervisory authority having jurisdiction in the
premises for the appointment of a conservator, receiver, liquidator or
similar person in any insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Servicer
and such decree or order shall have remained in force undischarged,
unbonded or unstayed for a period of 60 days; or the Servicer shall admit
in writing its inability to pay its debts generally as they become due,
file a petition to take advantage of any applicable insolvency or
reorganization statute, make an assignment for the benefit of its
creditors or voluntarily suspend payment of its obligations; or
(v) the Servicer becoming ineligible to service for both ▇▇▇▇▇▇ ▇▇▇
and ▇▇▇▇▇▇▇ Mac (unless remedied within 90 days).
(b) Then, and in each and every such case, so long as a Servicer
Event of Termination shall not have been remedied within the applicable grace
period, (x) with respect solely to clause (i)(A) above, if such Advance is not
made by 2:00 P.M., New York time, on the Business Day immediately following the
Servicer Remittance Date, the Trustee may terminate all of the rights and
obligations of the Servicer under this Agreement and the Securities
Administrator, or a successor servicer appointed in accordance with Section
7.02, shall immediately make such Advance and assume, pursuant to Section 7.02,
the duties of a successor servicer and (y) in the case of (i)(B), (ii), (iii),
(iv) and (v) above, the Trustee shall, at the direction of the Holders of each
Class of Regular Certificates evidencing Percentage Interests aggregating not
less than 51%, by notice then given in writing to the Servicer (and to the
Trustee if given by Holders of Certificates), terminate all of the rights and
obligations of the Servicer as servicer under this Agreement. Any such notice to
the Servicer shall also be given to each Rating Agency and the Depositor. On or
after the receipt by the Servicer (and by the Trustee if such notice is given by
the Holders) of such written notice, all authority and power of the Servicer
under this Agreement, whether with respect to the Certificates or the Mortgage
Loans or otherwise, shall pass to and be vested in the Trustee pursuant to and
under this Section or successor servicer appointed in connection with Section
7.02; and, without limitation, the Securities Administrator or successor
servicer is hereby authorized and empowered to execute and deliver, on behalf of
the Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement of each Mortgage Loan and Related
Documents or otherwise. The Servicer agrees to cooperate with the Securities
Administrator (or the applicable successor servicer) in effecting the
termination of the responsibilities and rights of the Servicer hereunder,
including, without limitation, the delivery to the Securities Administrator (or
the applicable successor servicer) of all documents and records requested by it
to enable it to assume the Servicer's functions under this Agreement within ten
Business Days subsequent to such notice, the transfer within one Business Day
subsequent to such notice to the Securities Administrator (or the applicable
successor servicer) for the administration by it of all cash amounts that shall
at the time be held by the Servicer and to be deposited by it in the Collection
Account, the Distribution Account or any Escrow Account or that have been
deposited by the Servicer in such accounts or thereafter received by the
Servicer with respect to the Mortgage Loans or any REO Property received by the
Servicer. All reasonable out-of-pocket costs and expenses (including attorneys'
fees) incurred in connection with transferring the servicing to the successor
servicer and amending this Agreement to reflect such succession as Servicer
pursuant to this Section shall be paid by the predecessor servicer (or if the
predecessor servicer is the Securities Administrator, the initial servicer) upon
presentation of reasonable documentation of such costs and expenses, and if such
predecessor Servicer defaults in its obligation to pay such costs, such costs
shall be paid by the successor Servicer or the Securities Administrator (in
which case the successor Servicer or the Securities Administrator shall be
entitled to reimbursement therefor from the assets of the Trust).
Notwithstanding any termination of the activities of a Servicer
hereunder, the Servicer shall be entitled to receive payment of all accrued and
unpaid Servicing Fees and reimbursement for all outstanding Advances and
Servicing Advances properly made prior to the date of termination.
Section 7.02 Securities Administrator to Act; Appointment of
Successor.
(a) Within 90 days of the time the Servicer (and the Trustee, if
notice is sent by the Holders) receives a notice of termination pursuant to
Section 7.01 or 6.04, the Securities Administrator (or such other successor
servicer as is approved in accordance with this Agreement) 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 and after
its succession. As compensation therefor, the Securities Administrator (or such
other successor servicer) shall be entitled to such compensation as the Servicer
would have been entitled to hereunder if no such notice of termination had been
given. Notwithstanding the above, (i) if the Securities Administrator is
unwilling to act as successor servicer or (ii) if the Securities Administrator
is legally unable so to act, the Securities Administrator shall appoint or
petition a court of competent jurisdiction to appoint, any established housing
and home finance institution, bank or other mortgage loan or home equity loan
servicer having a net worth of not less than $50,000,000 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; provided, that the appointment
of any such successor servicer will not result in the qualification, reduction
or withdrawal of the ratings assigned to the Certificates or the ratings that
are in effect by the Rating Agencies as evidenced by a letter to such effect
from the Rating Agencies. Pending appointment of a successor to the Servicer
hereunder, unless the Securities Administrator is prohibited by law from so
acting, the Securities Administrator shall act in such capacity as hereinabove
provided. In connection with such appointment and assumption, the successor
shall be entitled to receive compensation out of payments on Mortgage Loans in
an amount equal to the compensation which the Servicer would otherwise have
received pursuant to Section 3.18 (or such other compensation as the Securities
Administrator and such successor shall agree, not to exceed the Servicing Fee).
The successor servicer shall be entitled to withdraw from the Collection Account
all costs and expenses associated with the transfer of the servicing to the
successor servicer, including costs and expenses of the Securities
Administrator. The appointment of a successor servicer shall not affect any
liability of the predecessor servicer which may have arisen under this Agreement
prior to its termination as Servicer to pay any deductible under an insurance
policy pursuant to Section 3.12 or to indemnify the parties indicated in Section
3.26 pursuant to the terms thereof, 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. The Securities Administrator and such successor
shall take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession.
(b) Any successor, including the Securities Administrator, to the
Servicer as servicer shall during the term of its service as servicer continue
to service and administer the Mortgage Loans for the benefit of
Certificateholders, and maintain in force a policy or policies of insurance
covering errors and omissions in the performance of its obligations as Servicer
hereunder and a Fidelity Bond in respect of its officers, employees and agents
to the same extent as the Servicer is so required pursuant to Section 3.12.
Section 7.03 Waiver of Defaults.
The Holders of Certificates entitled to at least 66 2/3% of the
Voting Interests allocated to the Classes of Certificates affected by a Servicer
Event of Termination may, on behalf of all Certificateholders, waive any events
permitting removal of the Servicer as servicer pursuant to this Article VII,
provided, however, that such Holders 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 Servicer Event of Termination arising therefrom shall be deemed to
have been remedied for every purpose of this Agreement. No such waiver shall
extend to any subsequent or other default or impair any right consequent thereto
except to the extent expressly so waived. Notice of any such waiver shall be
given by the Trustee to the Securities Administrator and the Rating Agencies.
Section 7.04 Notification to Certificateholders.
(a) On any termination or appointment of a successor to the Servicer
pursuant to this Article VII or Section 6.04, the Trustee shall give prompt
written notice thereof to the Securities Administrator and the
Certificateholders at their respective addresses appearing in the Certificate
Register and each Rating Agency.
(b) No later than 60 days after the occurrence of any event which
constitutes or which, with notice or a lapse of time or both, would constitute a
Servicer Event of Termination for five Business Days after a Responsible Officer
of the Trustee becomes aware of the occurrence of such an event, the Trustee
shall transmit by mail to the Securities Administrator and all
Certificateholders notice of such occurrence unless such default or Servicer
Event of Termination shall have been waived or cured. Such notice shall be given
to the Rating Agencies promptly after any such occurrence.
Section 7.05 Survival of Servicer Liabilities.
Notwithstanding anything herein to the contrary, upon termination of
the Servicer hereunder, any liabilities of the Servicer which accrued prior to
such termination shall survive such termination.
ARTICLE VIII
THE TRUSTEE AND THE SECURITIES ADMINISTRATOR
Section 8.01 Duties of Trustee and Securities Administrator.
The Trustee, prior to the occurrence of a Servicer Event of
Termination of which a Responsible Officer of the Trustee shall have actual
knowledge and after the curing of all Servicer Events of Termination which may
have occurred, and the Securities Administrator, each undertakes to perform such
duties and only such duties as are specifically set forth in this Agreement as
duties of the Trustee and the Securities Administrator, respectively. If a
Servicer Event of Termination has occurred (which has not been cured), 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 their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
Upon receipt of all resolutions, certificates, statements, opinions,
reports, documents, orders or other instruments furnished to the Trustee and the
Securities Administrator which are specifically required to be furnished
pursuant to any provision of this Agreement, the Trustee and the Securities
Administrator shall examine them to determine whether they conform to the
requirements of this Agreement; provided, however, that neither the Trustee or
the Securities Administrator shall be responsible for the accuracy or content of
any resolution, certificate, statement, opinion, report, document, order or
other instrument furnished by the Servicer, the Seller or the Depositor
hereunder. If any such instrument is found not to conform in any material
respect to the requirements of this Agreement, the Trustee shall notify the
Certificateholders of such instrument in the event that the Trustee, after so
requesting, does not receive a satisfactorily corrected instrument.
No provision of this Agreement shall be construed to relieve the
Trustee and the Securities Administrator from liability for its own negligent
action, its own negligent failure to act or its own misconduct; provided,
however, that:
(i) prior to the occurrence of a Servicer Event of Termination, and
after the curing of all such Servicer Events of Termination which may have
occurred, the duties and obligations of the Trustee and the Securities
Administrator shall be determined solely by the express provisions of this
Agreement, neither the Trustee nor the Securities Administrator shall 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 the
Securities Administrator and, in the absence of bad faith on the part of
the Trustee or the Securities Administrator, the Trustee or the Securities
Administrator, as the case may be, 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 or the
Securities Administrator and conforming to the requirements of this
Agreement;
(ii) neither the Trustee nor the Securities Administrator shall be
personally liable for an error of judgment made in good faith by a
Responsible Officer of the Trustee or the Securities Administrator, unless
it shall be proved that the Trustee or the Securities Administrator,
respectively, was negligent in ascertaining or investigating the facts
related thereto
(iii) neither the Trustee nor the Securities Administrator shall 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
Majority Certificateholders relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee or the
Securities Administrator or exercising or omitting to exercise any trust
or power conferred upon the Trustee or the Securities Administrator under
this Agreement; and
(iv) neither the Trustee nor the Securities Administrator shall be
charged with knowledge of any failure by the Servicer to comply with the
obligations of the Servicer referred to in clauses (i) and (ii) of Section
7.01(a) or any Servicer Event of Termination unless a Responsible Officer
of the Trustee or the Securities Administrator obtains actual knowledge of
such failure or the Trustee or the Securities Administrator receives
written notice of such failure from the Servicer or the Majority
Certificateholders.
Neither the Trustee nor the Securities Administrator shall be
required to expend or risk its own funds or otherwise incur financial liability
in the performance of any of its duties hereunder, or in the exercise of any of
its rights or powers, if there is reasonable ground for believing that the
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it, and none of the provisions contained in this
Agreement shall in any event require the Trustee or the Securities Administrator
to perform, or be responsible for the manner of performance of, any of the
obligations of the Servicer under this Agreement, except during such time, if
any, as the Securities Administrator shall be the successor to, and be vested
with the rights, duties, powers and privileges of, the Servicer in accordance
with the terms of this Agreement.
Section 8.02 Certain Matters Affecting the Trustee and the
Securities Administrator.
(a) Except as otherwise provided in Section 8.01:
(i) the Trustee and the Securities Administrator may request and
rely upon, and shall be protected in acting or refraining from acting
upon, any resolution, Officer's Certificate, certificate of auditors or
any other certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond or other paper or document
reasonably believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(ii) the Trustee and the Securities Administrator may consult with
counsel and any advice or Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or suffered or
omitted by it hereunder in good faith and in accordance with such advice
or Opinion of Counsel;
(iii) neither the Trustee nor the Securities Administrator shall be
under any obligation to exercise any of the rights or powers vested in it
by this Agreement, or to institute, conduct or defend any litigation
hereunder or in relation hereto, at the request, order or direction of the
Certificateholders pursuant to the provisions of this Agreement, unless
such Certificateholders shall have offered to the Trustee or the
Securities Administrator, as the case may be, reasonable security or
indemnity against the costs, expenses and liabilities which may be
incurred therein or thereby; the right of the Trustee or the Securities
Administrator to perform any discretionary act enumerated in this
Agreement shall not be construed as a duty, and neither the Trustee nor
the Securities Administrator shall be answerable for other than its
negligence or willful misconduct in the performance of any such act;
(iv) neither the Trustee nor the Securities Administrator shall be
personally liable for any action taken, suffered or omitted by it in good
faith and believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Agreement;
(v) prior to the occurrence of a Servicer Event of Termination and
after the curing of all Servicer Events of Termination which may have
occurred, neither the Trustee nor the Securities Administrator shall be
bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond or other paper or documents,
unless requested in writing to do so by the Majority Certificateholders;
provided, however, that if the payment within a reasonable time to the
Trustee or the Securities Administrator of the costs, expenses or
liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee or the Securities
Administrator, not reasonably assured to the Trustee or the Securities
Administrator by the security afforded to it by the terms of this
Agreement, the Trustee and the Securities Administrator may require
reasonable indemnity against such cost, expense or liability as a
condition to such proceeding. The reasonable expense of every such
examination shall be paid by the Servicer or, if paid by the Trustee or
the Securities Administrator, shall be reimbursed by the Servicer upon
demand. Nothing in this clause (v) shall derogate from the obligation of
the Servicer to observe any applicable law prohibiting disclosure of
information regarding the Mortgagors;
(vi) neither the Trustee nor the Securities Administrator shall be
accountable, have any liability or make any representation as to any acts
or omissions hereunder of the Servicer until such time as the Securities
Administrator may be required to act as Servicer pursuant to Section 7.02;
(vii) each of the Trustee and the Securities Administrator may
execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents or attorneys or a
custodian and neither the Trustee nor the Securities Administrator shall
be responsible for any misconduct or negligence on the part of any such
agent, attorney or custodian appointed by it with due care; and
(viii) the right of the Trustee or the Securities Administrator to
perform any discretionary act enumerated in this Agreement shall not be
construed as a duty, and neither the Trustee nor the Securities
Administrator shall be answerable for other than its negligence or willful
misconduct in the performance of such act.
Section 8.03 Trustee and Securities Administrator Not Liable for
Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates (other than
the authentication of the Trustee on the Certificates) shall be taken as the
statements of the Depositor, and neither the Trustee nor the Securities
Administrator assumes any responsibility for the correctness of the same.
Neither the Trustee nor the Securities Administrator makes any representations
as to the validity or sufficiency of this Agreement or of the Certificates
(other than the signature and authentication of the Trustee on the Certificates,
in the case of the Trustee) or of any Mortgage Loan or Related Document. Neither
the Trustee nor the Securities Administrator shall be accountable for the use or
application by the Servicer, or for the use or application of any funds paid to
the Servicer in respect of the Mortgage Loans or deposited in or withdrawn from
the Collection Account by the Servicer. Neither the Trustee nor the Securities
Administrator shall at any time have any responsibility or liability for or with
respect to the legality, validity and enforceability of any Mortgage or any
Mortgage Loan, or the perfection and priority of any Mortgage or the maintenance
of any such perfection and priority, or for or with respect to the sufficiency
of the Trust or its ability to generate the payments to be distributed to
Certificateholders under this Agreement, including, without limitation: the
existence, condition and ownership of any Mortgaged Property; the existence and
enforceability of any hazard insurance thereon (other than the Securities
Administrator's responsibility if the Securities Administrator shall assume the
duties of the Servicer pursuant to Section 7.02); the validity of the assignment
of any Mortgage Loan to the Trustee or of any intervening assignment; the
completeness of any Mortgage Loan; the performance or enforcement of any
Mortgage Loan (other than the Securities Administrator's responsibility if the
Securities Administrator shall assume the duties of the Servicer pursuant to
Section 7.02); the compliance by the Depositor or the Servicer with any warranty
or representation made under this Agreement or in any related document or the
accuracy of any such warranty or representation (except, in the case of the
Trustee, after receipt of notice of any non-compliance therewith or any breach
thereof); any investment of monies by or at the direction of the Servicer or any
loss resulting therefrom, it being understood that the Trustee shall remain
responsible for any Trust property that it may hold in its individual capacity;
the acts or omissions of any of the Servicer (other than the Securities
Administrator's responsibility if the Securities Administrator shall assume the
duties of the Servicer pursuant to Section 7.02), or any Mortgagor; any action
of the Servicer (other than the Securities Administrator's responsibility if the
Securities Administrator shall assume the duties of the Servicer pursuant to
Section 7.02), taken in the name of the Trust; the failure of the Servicer to
act or perform any duties required of it as agent of the Trust hereunder (other
than the Securities Administrator's responsibility if the Securities
Administrator shall assume the duties of the Servicer pursuant to Section 7.02);
or any action by the Trustee or the Securities Administrator taken at the
instruction of the Servicer (other than the Securities Administrator's
responsibility if the Securities Administrator shall assume the duties of the
Servicer pursuant to Section 7.02); provided, however, that the foregoing shall
not relieve the Trustee and the Securities Administrator of their obligation to
perform their respective duties under this Agreement. The Trustee shall have no
responsibility for filing any financing or continuation statement in any public
office at any time or to otherwise perfect or maintain the perfection of any
security interest or lien granted to it hereunder.
Section 8.04 Trustee and Securities Administrator May Own
Certificates.
Each of the Trustee and the Securities Administrator in its
individual or any other capacity may become the owner or pledgee of Certificates
with the same rights as it would have if it were not Trustee or Securities
Administrator and may transact any banking and trust business with the Servicer,
the Depositor or their Affiliates.
Section 8.05 Securities Administrator and Custodian Fees and
Expenses.
The Securities Administrator shall be entitled to the Securities
Administrator Fee plus investment income on funds on deposit in the Distribution
Account as set forth in Section 3.25. This shall constitute compensation to the
Securities Administrator for its activities hereunder. The fees and expenses of
the Trustee shall be paid in accordance with a side letter agreement between the
Trustee and the Securities Administrator. The Trustee shall withdraw from the
Distribution Account on each Distribution Date and pay to the Securities
Administrator the Securities Administrator Fee pursuant to Section 4.01(i). The
Trust shall reimburse the Trustee and the Securities Administrator for all
reasonable expenses, disbursements and advances incurred or made by the Trustee
or the Securities Administrator in accordance with any of the provisions of this
Agreement (including the reasonable compensation and the expenses and
disbursements of its counsel and of all persons not regularly in its employ),
pursuant to Section 4.01(ii), except any such expense, disbursement or advance
as may arise from its negligence or bad faith or which is the responsibility of
Certificateholders or the Trustee or Securities Administrator hereunder. In
addition, the Trustee, the Securities Administrator and their respective
officers, directors, employees and agents shall be indemnified by the Trust
from, and held harmless against, any and all losses, liabilities, damages,
claims or expenses incurred in connection with any legal action relating to this
Agreement or the Certificates, other than any loss, liability or expense (i)
that constitutes a specific liability of the Trustee or the Securities
Administrator under this Agreement or (ii) incurred by reason of willful
misfeasance, bad faith or negligence of the Trustee or Securities Administrator
in the performance of their respective duties hereunder or by reason of the
Trustee's or the Securities Administrator's, as the case may be, reckless
disregard of obligations and duties hereunder. The Custodian and its officers,
directors, employees and agents shall be indemnified by the Trust from, and held
harmless against, any and all losses, liabilities, damages, claims or expenses,
including reasonable attorneys' fees, that may be imposed on, incurred by or
asserted against it or them in any way related to or arising out of the Custody
Agreement, to the extent not provided for in the Custody Agreement, or any
action taken or not taken by it or them under the Custody Agreement, other than
any loss, liability or expense (i) that constitutes a specific liability of the
Custodian under the Custody Agreement or (ii) or incurred by reason of willful
misfeasance, bad faith or negligence of the Custodian in the performance of its
duties under the Custody Agreement or by reason of the Custodian's reckless
disregard of its obligations under the Custody Agreement. Subject to the
provisions of this Article VIII, the Trustee and its officers, directors,
employees and agents shall be indemnified by the Securities Administrator from,
and held harmless against, any and all losses, liabilities, damages, claims or
expenses incurred by the Trustee in connection with or arising out of the
willful misfeasance, bad faith or negligence of the Securities Administrator in
the performance of its duties under this Agreement or by reason of the
Securities Administrator's reckless disregard of its obligations and duties
under this Agreement. Subject to the provisions of this Article VIII, the
Securities Administrator and its officers, directors, employees and agents shall
be indemnified by the Trustee from, and held harmless against, any and all
losses, liabilities, damages, claims or expenses incurred by the Securities
Administrator in connection with or arising out of willful misfeasance, bad
faith or negligence of the Trustee in the performance of its duties under this
Agreement or by reason of the Trustee's reckless disregard of its obligations
and duties under this Agreement. This Section shall survive termination of this
Agreement or the resignation or removal of any Trustee or Securities
Administrator hereunder.
Section 8.06 Eligibility Requirements for Trustee and Securities
Administrator.
Each of the Trustee and the Securities Administrator shall at all
times be an entity duly organized and validly existing under the laws of the
United States of America or any state thereof, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least $50,000,000 and a minimum long-term debt rating of BBB by Fitch and S&P
and Baa3 by ▇▇▇▇▇'▇ and a long term debt rating of at least A1 or better by
▇▇▇▇▇'▇, and subject to supervision or examination by federal or state
authority. If such entity publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section 8.06, the combined capital and
surplus of such entity shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. The principal
office of the Trustee and the Securities Administrator (other than the initial
Trustee or Securities Administrator) shall be in a state with respect to which
an Opinion of Counsel has been delivered to such Trustee or Securities
Administrator at the time such Trustee or Securities Administrator is appointed
Trustee or Securities Administrator, at such entity's expense, to the effect
that the Trust will not be a taxable entity under the laws of such state. In
case at any time the Trustee or Securities Administrator shall cease to be
eligible in accordance with the provisions of this Section 8.06, the Trustee or
Securities Administrator shall resign immediately in the manner and with the
effect specified in Section 8.07.
Section 8.07 Resignation or Removal of Trustee and Securities
Administrator.
The Trustee or the Securities Administrator may at any time resign
and be discharged from the trusts hereby created by giving written notice
thereof to the Depositor, the Servicer and each Rating Agency. Upon receiving
such notice of resignation, the Depositor shall promptly appoint a successor
Trustee or Securities Administrator by written instrument, in duplicate, one
copy of which instrument shall be delivered to the resigning Trustee or
Securities Administrator and one copy to the successor Trustee or Securities
Administrator. If no successor Trustee or Securities Administrator shall have
been so appointed and having accepted appointment within 30 days after the
giving of such notice of resignation, the resigning Trustee or Securities
Administrator may petition any court of competent jurisdiction for the
appointment of a successor Trustee or Securities Administrator.
If at any time the Trustee or the Securities Administrator shall
cease to be eligible in accordance with the provisions of Section 8.06 and shall
fail to resign after written request therefor by the Depositor, or if at any
time the Trustee or the Securities Administrator shall be legally unable to act,
or shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or
the Securities Administrator or of its property shall be appointed, or any
public officer shall take charge or control of the Trustee or the Securities
Administrator or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Depositor may remove the Trustee or the
Securities Administrator, as the case may be. If the Depositor or the Servicer
removes the Trustee or the Securities Administrator under the authority of the
immediately preceding sentence, the Depositor shall promptly appoint a successor
Trustee or Securities Administrator by written instrument, in duplicate, one
copy of which instrument shall be delivered to the Trustee so removed and one
copy to the successor Trustee or Securities Administrator.
The Majority Certificateholders may at any time remove the Trustee
or the Securities Administrator by written instrument or instruments delivered
to the Servicer, the Depositor, the Securities Administrator and the Trustee;
the Depositor shall thereupon use its best efforts to appoint a successor
Trustee or Securities Administrator in accordance with this Section.
Any resignation or removal of the Trustee or the Securities
Administrator and appointment of a successor Trustee or Securities Administrator
pursuant to any of the provisions of this Section 8.07 shall not become
effective until acceptance of appointment by the successor Trustee or Securities
Administrator as provided in Section 8.08.
Section 8.08 Successor Trustee and Successor Securities
Administrator.
Any successor Trustee or Securities Administrator appointed as
provided in Section 8.07 shall execute, acknowledge and deliver to the
Depositor, the Rating Agencies, the Servicer and to its predecessor Trustee or
Securities Administrator an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the predecessor Trustee or Securities
Administrator shall become effective, and such successor Trustee or Securities
Administrator, without any further act, deed or conveyance, shall become fully
vested with all the rights, powers, duties and obligations of its predecessor
hereunder, with like effect as if originally named as Trustee or Securities
Administrator. The Depositor, the Servicer and the predecessor Trustee or
Securities Administrator shall execute and deliver such instruments and do such
other things as may reasonably be required for fully and certainly vesting and
confirming in the successor Trustee or Securities Administrator all such rights,
powers, duties and obligations.
No successor Trustee or Securities Administrator shall accept
appointment as provided in this Section 8.08 unless at the time of such
acceptance such successor Trustee or Securities Administrator shall be eligible
under the provisions of Section 8.06 and the appointment of such successor
Trustee or Securities Administrator shall not result in a downgrading of the
Regular Certificates by any Rating Agency, as evidenced by a letter from each
Rating Agency.
Upon acceptance of appointment by a successor Trustee or Securities
Administrator as provided in this Section 8.08, the successor Trustee or
Securities Administrator shall mail notice of the appointment of a successor
Trustee hereunder to all Holders of Certificates at their addresses as shown in
the Certificate Register and to each Rating Agency.
Section 8.09 Merger or Consolidation of Trustee or Securities
Administrator.
Any entity into which the Trustee or the Securities Administrator
may be merged or converted or with which it may be consolidated, or any entity
resulting from any merger, conversion or consolidation to which the Trustee or
the Securities Administrator shall be a party, or any entity succeeding to the
business of the Trustee or the Securities Administrator, shall be the successor
of the hereunder, provided such entity shall be eligible under the provisions of
Section 8.06 and 8.08, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
Section 8.10 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust or any Mortgaged Property may at the time be located, the
Depositor and the Trustee acting jointly shall have the power and shall execute
and deliver all instruments to appoint one or more Persons approved by the
Trustee to act as co-trustee or co-trustees, jointly with the Trustee, or
separate trustee or separate trustees, of all or any part of the Trust, and to
vest in such Person or Persons, in such capacity and for the benefit of the
Certificateholders, such title to the Trust, or any part thereof, and, subject
to the other provisions of this Section 8.10, such powers, duties, obligations,
rights and trusts as the Servicer and the Trustee may consider necessary or
desirable. Any such co-trustee or separate trustee shall be subject to the
written approval of the Servicer. If the Servicer shall not have joined in such
appointment within 15 days after the receipt by it of a request so to do, or in
the case a Servicer Event of Termination shall have occurred and be continuing,
the Trustee alone shall have the power to make such appointment. No co-trustee
or separate trustee hereunder shall be required to meet the terms of eligibility
as a successor Trustee under Section 8.06, and no notice to Certificateholders
of the appointment of any co-trustee or separate trustee shall be required under
Section 8.08. The Servicer shall be responsible for the fees of any co-trustee
or separate trustee appointed hereunder.
Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co-trustee jointly
(it being understood that such separate trustee or co-trustee is not
authorized to act separately without the Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed, the Trustee shall be
incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations (including the holding of
title to the Trust or any portion thereof in any such jurisdiction) shall
be exercised and performed singly by such separate trustee or co-trustee,
but solely at the direction of the Trustee;
(ii) no trustee hereunder shall be held personally liable by reason
of any act or omission of any other trustee hereunder; and
(iii) the Securities Administrator and the Trustee, acting jointly
may at any time accept the resignation of or remove any separate trustee
or co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Depositor, the Securities Administrator, the Rating Agencies and the Servicer.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor Trustee.
Section 8.11 Limitation of Liability.
The Certificates are executed by the Trustee, not in its individual
capacity but solely as Trustee of the Trust, in the exercise of the powers and
authority conferred and vested in it by this Agreement. Each of the undertakings
and agreements made on the part of the Trustee in the Certificates is made and
intended not as a personal undertaking or agreement by the Trustee but is made
and intended for the purpose of binding only the Trust.
Section 8.12 Trustee May Enforce Claims Without Possession of
Certificates.
(a) All rights of action and claims under this Agreement or the
Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and such proceeding instituted by the Trustee shall
be brought in its own name or in its capacity as Trustee for the benefit of all
Holders of such Certificates, subject to the provisions of this Agreement. Any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursement and advances of the Trustee, its agents and
counsel, be for the ratable benefit of the Certificateholders in respect of
which such judgment has been recovered.
(b) The Trustee shall afford the Depositor, the Servicer, the
Securities Administrator and each Certificateholder upon reasonable notice
during normal business hours, access to all records maintained by the Trustee in
respect of its duties hereunder and access to officers of the Trustee
responsible for performing such duties. The Trustee shall cooperate fully with
the Servicer, the Depositor, the Securities Administrator and such
Certificateholder and shall make available to the Servicer, the Depositor, the
Securities Administrator and such Certificateholder for review and copying at
the expense of the party requesting such copies, such books, documents or
records as may be requested with respect to the Trustee's duties hereunder. The
Depositor, the Servicer, the Securities Administrator and the Certificateholders
shall not have any responsibility or liability for any action or failure to act
by the Trustee and are not obligated to supervise the performance of the Trustee
under this Agreement or otherwise.
Section 8.13 Suits for Enforcement.
In case a Servicer Event of Termination or other default by the
Servicer hereunder shall occur and be continuing, the Trustee may proceed to
protect and enforce its rights and the rights of the Certificateholders under
this Agreement by a suit, action or proceeding in equity or at law or otherwise,
whether for the specific performance of any covenant or agreement contained in
this Agreement or in aid of the execution of any power granted in this Agreement
or for the enforcement of any other legal, equitable or other remedy, as the
Trustee, being advised by counsel, and subject to the foregoing, shall deem most
effectual to protect and enforce any of the rights of the Trustee and the
Certificateholders.
Section 8.14 Waiver of Bond Requirement.
The Trustee shall be relieved of, and each Certificateholder hereby
waives, any requirement of any jurisdiction in which the Trust, or any part
thereof, may be located that the Trustee post a bond or other surety with any
court, agency or body whatsoever.
Section 8.15 Waiver of Inventory, Accounting and Appraisal
Requirement.
The Trustee shall be relieved of, and each Certificateholder hereby
waives, any requirement of any jurisdiction in which the Trust, or any part
thereof, may be located that the Trustee file any inventory, accounting or
appraisal of the Trust with any court, agency or body at any time or in any
manner whatsoever.
Section 8.16 Appointment of Custodian.
▇▇▇▇▇ Fargo Bank, National Association, has been appointed Custodian
by the Trustee pursuant to the Custody Agreement. If such entity resigns or is
terminated as Custodian pursuant to the Custody Agreement, the Trustee shall
serve as Custodian or the Trustee may, with the consent of the Depositor and the
Servicer, appoint one or more Custodians to hold all or a portion of the
Mortgage Files as agent for the Trustee, by entering into a custodial agreement
in the form of the Custody Agreement or otherwise in a form acceptable to the
Depositor and the Servicer. Subject to this Article VIII, the Trustee agrees to
comply with the terms of the Custody Agreement and any such custodial agreement
and to enforce the terms and provisions thereof against the Custodian for the
benefit of the Certificateholders. Each Custodian will be a depositary
institution subject to supervision by federal or state authority, shall have a
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 and afforded
the same protections hereunder as the Trustee.
ARTICLE IX
REMIC AND GRANTOR TRUST ADMINISTRATION
Section 9.01 REMIC Administration.
(a) The Trustee shall make or cause to be made REMIC elections for
each of REMIC 1 and REMIC 2 as set forth in the Preliminary Statement on Forms
1066 as prepared by the Securities Administrator or other appropriate federal
tax or information return for the taxable year ending on the last day of the
calendar year in which the Certificates are issued. The Securities Administrator
shall prepare such Forms 1066 and any other appropriate federal tax or
information return and deliver them to the Trustee on a timely basis for the
Trustee's execution. The Trustee shall execute and file such forms. The regular
interests and residual interest in each REMIC shall be as designated in the
Preliminary Statement.
(b) The Closing Date is hereby designated as the "Startup Day" of
each REMIC within the meaning of section 860G(a)(9) of the Code.
(c) The Securities Administrator shall pay any and all tax related
expenses (not including taxes) of each REMIC, including but not limited to any
professional fees or expenses related to audits or any administrative or
judicial proceedings with respect to such REMIC that involve the Internal
Revenue Service or state tax authorities, but only to the extent that (i) such
expenses are ordinary or routine expenses, including expenses of a routine audit
but not expenses of litigation (except as described in (ii)); or (ii) such
expenses or liabilities (including taxes and penalties) are attributable to the
negligence or willful misconduct of the Securities Administrator in fulfilling
its duties hereunder. The Securities Administrator shall be entitled to
reimbursement of expenses to the extent provided in clause (i) above from the
Trust.
(d) The Securities Administrator shall prepare or cause to be
prepared, sign and file or cause to be filed, each REMIC's federal and state tax
and information returns as such REMIC's direct representative. The expenses of
preparing and filing such returns shall be borne by the Securities
Administrator. The Securities Administrator will apply for an Employer
Identification Number from the Internal Revenue Service via a form SS-4 or any
other acceptable method for all REMICs and other tax entities and will also file
a Form 8811 with respect to all such REMICs with the Internal Revenue Service.
(e) The Holder of the Class R Certificate shall be the "tax matters
person" as defined in the REMIC Provisions (the "Tax Matters Person") with
respect to each REMIC, and the Securities Administrator is irrevocably
designated as and shall act as attorney-in-fact and agent for such Tax Matters
Person for each REMIC. The Securities Administrator, as agent for the Tax
Matters Person, shall perform, on behalf of each REMIC, all reporting and other
tax compliance duties that are the responsibility of such REMIC under the Code,
the REMIC Provisions, or other compliance guidance issued by the Internal
Revenue Service or any state or local taxing authority. Among its other duties,
if required by the Code, the REMIC Provisions, or other such guidance, the
Securities Administrator, as agent for the Tax Matters Person, shall provide (i)
to the Treasury or other governmental authority such information as is necessary
for the application of any tax relating to the transfer of the Class R
Certificate to any disqualified person or organization and (ii) to the
Certificateholders such information or reports as are required by the Code or
REMIC Provisions.
(f) The Trustee, the Securities Administrator, the Servicer, and the
Holders of Certificates shall take any action or cause any REMIC formed under
this Agreement to take any action necessary to create or maintain the status of
such REMIC as a REMIC under the REMIC Provisions and shall assist each other as
necessary to create or maintain such status. None of the Trustee, the Servicer,
the Securities Administrator or the Holder of the Class R Certificate shall take
any action or cause any REMIC formed under this Agreement 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 such REMIC as a REMIC or (ii) result in the imposition of a tax upon
such REMIC (including but not limited to the tax on prohibited transactions as
defined in Code Section 860F(a)(2) and the tax on prohibited contributions set
forth on Section 860G(d) of the Code) (either such event, an "Adverse REMIC
Event") unless the Securities Administrator, the Trustee and the Servicer have
received an Opinion of Counsel (at the expense of the party seeking to take such
action) to the effect that the contemplated action will not endanger such status
or result in the imposition of such a tax. In addition, prior to taking any
action with respect to any REMIC formed under this Agreement or the assets
therein, or causing such REMIC to take any action, which is not expressly
permitted under the terms of this Agreement, any Holder of the Class R
Certificate will consult with the Securities Administrator, the Trustee and the
Servicer, or their respective designees, in writing, with respect to whether
such action could cause an Adverse REMIC Event to occur with respect to such
REMIC, and no such Person shall take any such action or cause such REMIC to take
any such action as to which the Securities Administrator, the Trustee or the
Servicer has advised it in writing that an Adverse REMIC Event could occur.
(g) The Holder of the Class R Certificate shall pay when due any and
all taxes imposed on any REMIC formed under this Agreement by federal or state
governmental authorities, but only from amounts, if any, distributable thereon.
To the extent that such REMIC taxes are not paid by the Class R
Certificateholder, the Securities Administrator shall pay any remaining REMIC
taxes out of future amounts otherwise distributable to the Holder of the Class R
Certificate or, if no such amounts are available, out of other amounts held in
the Distribution Account, and shall reduce amounts otherwise payable to Holders
of the REMIC Regular Interests or the Certificates, as the case may be.
(h) The Securities Administrator, shall, for federal income tax
purposes, maintain or cause to be maintained books and records with respect to
each REMIC formed under this Agreement on a calendar year and on an accrual
basis.
(i) No additional contributions of assets shall be made to any
REMIC, except as expressly provided in this Agreement with respect to Eligible
Substitute Mortgage Loans.
(j) None of the Trustee, the Securities Administrator or the
Servicer shall enter into any arrangement by which any REMIC will receive a fee
or other compensation for services.
(k) On or before April 15 of each calendar year, beginning in 2005,
the Securities Administrator shall deliver to each Rating Agency an Officer's
Certificate stating the Securities Administrator's compliance with the
provisions of this Section 9.01.
(l) The Securities Administrator shall treat (i) the rights of the
Offered Certificates to receive Cap Carryover Amounts as a right in interest
rate cap contracts written by the Class CE Certificateholders in favor of the
Holders of the Offered Certificates and (ii) the rights of the Class CE
Certificates under the Yield Maintenance Agreement in accordance with the terms
thereof and shall assign such rights for federal tax return and information
reporting a value of zero. The Securities Administrator shall account for such
as property held separate and apart from the regular interests it holds in each
of the REMICs created hereunder. The provisions of this paragraph are intended
to satisfy the requirements of Treasury Regulations Section 1.860G-2(i) for the
treatment of property rights coupled with regular interests to be separately
respected and shall be interpreted consistent with such regulation. On each
Distribution Date, to the extent the Offered Certificates receive interest in
excess of their Certificate Interest Rate, such interest will be treated as
distributed to the Class CE Certificates, together with any amount deposited in
the Reserve Account in respect of the Yield Maintenance Agreement, and then paid
to the respective Classes of Offered Certificates pursuant to the related
interest rate cap agreement.
Section 9.02 Prohibited Transactions and Activities.
None of the Depositor, the Servicer, the Securities Administrator or
the Trustee shall sell, dispose of, or substitute for any of the Mortgage Loans,
except in a disposition pursuant to (i) the foreclosure of a Mortgage Loan, (ii)
the bankruptcy of the Trust Fund, (iii) the termination of any REMIC pursuant to
Article X of this Agreement, (iv) a substitution pursuant to Article II of this
Agreement, (v) a repurchase of Mortgage Loans pursuant to Article II of this
Agreement or (vi) an optional purchase by the Depositor pursuant to Section 3.16
of this Agreement, nor acquire any assets for any REMIC constituting part of the
Trust Fund, nor sell or dispose of any investments in the Distribution Account
for gain, nor accept any contributions to any REMIC constituting part of the
Trust Fund after the Closing Date, unless it has received an Opinion of Counsel
(at the expense of the party causing such sale, disposition, or substitution)
that such disposition, acquisition, substitution, or acceptance will not (a)
affect adversely the status of such REMIC as a REMIC or of the interests therein
other than the Class R Certificate as the regular interests therein, (b) affect
the distribution of interest or principal on the Certificates, (c) result in the
encumbrance of the assets transferred or assigned to the Trust Fund (except
pursuant to the provisions of this Agreement) or (d) cause such REMIC to be
subject to a tax on prohibited transactions or prohibited contributions pursuant
to the REMIC Provisions.
Section 9.03 Indemnification with Respect to Certain Taxes and Loss
of REMIC Status.
In the event that any REMIC formed hereunder fails to qualify as a
REMIC, loses its status as a REMIC, or incurs federal, state or local taxes as a
result of a prohibited transaction or prohibited contribution under the REMIC
Provisions due to the negligent performance by the Servicer, the Trustee or the
Securities Administrator of its duties and obligations set forth herein, such
person shall indemnify the Holder of the Class R Certificate against any and all
losses, claims, damages, liabilities or expenses ("Losses") resulting from such
negligence; provided, however, that no such person shall be liable for any such
Losses attributable to the action or inaction of the Trustee, the Depositor or
the Holder of the Class R Certificate, as applicable, nor for any such Losses
resulting from misinformation provided by the Holder of the Class R Certificate
on which such person has relied. The foregoing shall not be deemed to limit or
restrict the rights and remedies of the Holder of the Class R Certificate now or
hereafter existing at law or in equity. Notwithstanding the foregoing, however,
in no event shall the Servicer have any liability (1) for any action or omission
that is taken in accordance with and in compliance with the express terms of, or
which is expressly permitted by the terms of, this Agreement, (2) for any Losses
other than arising out of a negligent performance by the Servicer, the Trustee
or the Securities Administrator of its duties and obligations set forth herein,
and (3) for any special or consequential damages to Certificateholders (in
addition to payment of principal and interest on the Certificates).
Section 9.04 REO Property.
(a) Subject to compliance with applicable laws and regulations as
shall at any time be in force, and notwithstanding any other provision of this
Agreement, the Servicer, acting on behalf of the Trust hereunder, shall not
rent, lease, or otherwise earn income on behalf of any REMIC with respect to any
REO Property which might 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 of any "income from non-permitted assets"
within the meaning of section 860F(a)(2) of the Code or any "net income from
foreclosure property" which is subject to tax under the REMIC Provisions unless
the Servicer has advised the Trustee in writing to the effect that, under the
REMIC Provisions, such action would not adversely affect the status of any REMIC
as a REMIC and any income generated for such REMIC by the REO Property would not
result in the imposition of a tax upon such REMIC.
(b) The Servicer shall make reasonable efforts to sell any REO
Property for its fair market value. In any event, however, the Servicer shall
dispose of any REO Property before the close of the third calendar year
beginning after the year of its acquisition by the Trust Fund unless the
Servicer has received a grant of extension from the Internal Revenue Service to
the effect that, under the REMIC Provisions and any relevant proposed
legislation and under applicable state law, any REMIC constituting part of the
Trust Fund may hold REO Property for a longer period without adversely affecting
its REMIC status or causing the imposition of a Federal or state tax upon any
REMIC constituting part of the Trust Fund. If the Servicer has received such an
extension, then the Servicer shall continue to attempt to sell the REO Property
for its fair market value as determined in good faith by the Servicer for such
longer period as such extension permits (the "Extended Period"). If the Servicer
has not received such an extension and the Servicer is unable to sell the REO
Property by September 30th of the third year after its acquisition by the Trust
Fund or if the Servicer has received such an extension, and the Servicer is
unable to sell the REO Property within the period ending three months before the
close of the Extended Period, the Servicer shall, before the end of the
applicable period, (i) purchase such REO Property at a price equal to the REO
Property's fair market value as determined in good faith by the Servicer or (ii)
auction the REO Property to the highest bidder (which may be the Servicer) in an
auction reasonably designed to produce a fair price prior to the expiration of
the applicable period.
Section 9.05 Grantor Trust Administration.
The parties intend that the portions of the Trust Fund consisting of
the right of the Class P Certificates to receive Prepayment Charges, the right
of the Offered Certificates to receive Cap Carryover Amounts, the Reserve
Account and the right of the Class CE Certificates to receive Yield Maintenance
Agreement Payments subject to the obligation of the Class CE Certificates to pay
Cap Carryover Amounts, shall be treated as a "grantor trust" under the Code, and
the provisions hereof shall be interpreted consistently with this intention. In
furtherance of such intention, the Securities Administrator shall furnish or
cause to be furnished (i) to the Holders of the Offered Certificates and (ii) to
the Holder of the Class CE Certificates and shall file or cause to be filed with
the Internal Revenue Service together with Form 1041 or such other form as may
be applicable, their allocable shares of income and expenses with respect to the
property held by the Grantor Trust, at the time or times and in the manner
required by the Code.
ARTICLE X
TERMINATION
Section 10.01 Termination.
(a) The respective obligations and responsibilities of the Servicer,
the Depositor, the Trustee, the Securities Administrator and the Certificate
Registrar created hereby (other than the obligation of the Trustee to make
certain payments to Certificateholders after the final Distribution Date and the
obligation of the Servicer to send certain notices as hereinafter set forth)
shall terminate upon notice to the Trustee upon the earliest of (i) the
Distribution Date on which the Principal Balance of each Class of Certificates
has been reduced to zero, (ii) the final payment or other liquidation of the
last Mortgage Loan in the Trust, and (iii) the optional purchase by the
Depositor of the Mortgage Loans as described below. Notwithstanding the
foregoing, in no event shall the trust created hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants of
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late ambassador of the United States to the Court of St.
▇▇▇▇▇, living on the date hereof.
The Depositor may, at its option, terminate the Trust Fund and
retire the Certificates on the next succeeding Distribution Date upon which the
aggregate current Pool Balance is less than 10% of the aggregate Pool Balance of
the Mortgage Loans as of the Cut-off Date by purchasing all of the outstanding
(i) Mortgage Loans in the Trust Fund at a price equal to the sum of the
outstanding Principal Balance of the Mortgage Loans and except to the extent
previously advanced by the Servicer, accrued and unpaid interest thereon at the
weighted average of the Mortgage Interest Rates through the end of the
Collection Period preceding the final Distribution Date plus unreimbursed
Servicing Advances, Advances and any unpaid Servicing Fees allocable to such
Mortgage Loans and (ii) REO Properties in the Trust Fund at a price equal to
their fair market value as determined in good faith by the Servicer (the
"Termination Price"). If the Depositor or an affiliate of the Depositor is
subject to regulation by the OCC, the FDIC, the Federal Reserve or the Office of
Thrift Supervision, however, the option may not be exercised unless the
aggregate fair market value of the Mortgage Loans and REO Properties is greater
than or equal to the Termination Price. Notwithstanding the foregoing, the
Depositor may exercise this optional purchase right unless any Reimbursement
Amount owed to the Trust pursuant to Section 2.03 hereof has been paid.
In connection with any such purchase pursuant to the preceding
paragraph, the Servicer shall deliver to the Trustee for deposit in the
Distribution Account all amounts then on deposit in the Collection Account (less
amounts permitted to be withdrawn by the Servicer pursuant to Section 3.07),
which deposit shall be deemed to have occurred immediately following such
purchase.
Any such purchase shall be accomplished by delivery on the
Determination Date before such Distribution Date of the Termination Price to the
Trustee for deposit into the Distribution Account as part of Available Funds.
(b) Notice of any termination, specifying the Distribution Date
(which shall be a date that would otherwise be a Distribution Date) upon which
the Certificateholders may surrender their Certificates to the Trustee for
payment of the final distribution and cancellation, shall be given promptly by
the Trustee upon the Trustee receiving notice of such date from the Depositor by
letter to the Certificateholders and the Securities Administrator mailed not
earlier than the 15th day of the month preceding the month of such final
distribution and not later than the 15th day of the month of such final
distribution specifying (1) the Distribution Date upon which final distribution
of the Certificates will be made upon presentation and surrender of such
Certificates at the office or agency of the Trustee therein designated, (2) the
amount of any such final distribution and (3) that the Record Date otherwise
applicable to such Distribution Date is not applicable, distributions being made
only upon presentation and surrender of the Certificates at the office or agency
of the Trustee therein specified. Not less than five (5) Business Days prior to
such Determination Date relating to such Distribution Date, the Trustee shall
notify the Depositor of the amount of any unpaid Reimbursement Amount owed to
the Trust.
(c) Upon presentation and surrender of the Certificates, the Trustee
shall cause to be distributed to the Holders of the Certificates on the
Distribution Date for such final distribution, in proportion to the Percentage
Interests of their respective Class and to the extent that funds are available
for such purpose, an amount equal to the amount required to be distributed to
such Holders in accordance with the provisions of Sections 4.01 and 4.02 for
such Distribution Date.
(d) In the event that all Certificateholders shall not surrender
their Certificates for final payment and cancellation on or before such final
Distribution Date, the Trustee shall promptly following such date cause all
funds in the Distribution Account not distributed in final distribution to
Certificateholders to be withdrawn therefrom and credited to the remaining
Certificateholders by depositing such funds in a separate escrow account for the
benefit of such Certificateholders, and the Servicer shall give a second written
notice to the remaining Certificateholders, to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
nine months after the second notice all the Certificates shall not have been
surrendered for cancellation, the Class R Certificateholder shall be entitled to
all unclaimed funds and other assets which remain subject hereto (except with
respect to the Class B, Class CE and Class P Certificates) and the Trustee upon
transfer of such funds shall be discharged of any responsibility for such funds,
and all other Certificateholders shall look to the Class R Certificateholder for
payment.
Section 10.02 Additional Termination Requirements.
(a) In the event that the Depositor exercises its purchase option as
provided in Section 10.01, the Trust shall be terminated in accordance with the
following additional requirements, unless the Trustee shall have been furnished
with an Opinion of Counsel to the effect that the failure of the Trust to comply
with the requirements of this Section will not (i) result in the imposition of
taxes on "prohibited transactions" of the Trust as defined in Section 860F of
the Code or (ii) cause any REMIC constituting part of the Trust Fund to fail to
qualify as a REMIC at any time that any Certificates are outstanding:
(i) The Trustee shall designate a date within 90 days prior to the
final Distribution Date as the date of adoption of plans of complete
liquidation of each of REMIC 1 and REMIC 2 and shall specify such date in
the final federal income tax return of each REMIC;
(ii) After the date of adoption of such plans of complete
liquidation and at or prior to the final Distribution Date, the Trustee
shall sell all of the assets of the Trust to the Depositor 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 in the following order of priority (A) (i) to the
Holders of each of the Class A-1, Class A-1A and Class A-2 Certificates,
pro rata, and (ii) to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3, Class M-4,
Class M-5, Class M-6 and Class B Certificates, the related Principal
Balance, as applicable, plus one month's interest thereon at the
applicable Certificate Interest Rate, (B) to the Class CE Certificates,
the amount of any remaining Monthly Excess Cash Flow Amounts not
previously distributed thereon, (C) to the remaining REMIC Regular
Interests the amounts allocable thereto pursuant to Section 4.08 and (D)
to the Class R Certificateholder, all cash on hand in respect of the
REMICs after such payment (other than cash retained to meet claims) and
the Trust shall terminate at such time.
(b) By their acceptance of Certificates, the Holders thereof hereby
agree to appoint the Trustee as their attorney in fact to: (i) designate such
date of adoption of plans of complete liquidation and (ii) to take such other
action in connection therewith as may be reasonably required to carry out such
plans of complete liquidation all in accordance with the terms hereof.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Amendment.
This Agreement may be amended from time to time by the Depositor,
the Servicer, the Securities Administrator and the Trustee; and without the
consent of the Certificateholders, (i) to cure any ambiguity or mistake, (ii) to
correct or supplement any provision herein that may be inconsistent with any
other provision herein or in the Prospectus Supplement, (iii) to modify,
eliminate or add to any of its provisions to such extent as shall be necessary
to maintain the qualification of the Trust Fund (or one or more segregated pools
of assets therein) as a REMIC at all times that any Certificates are outstanding
or to avoid or minimize the risk of the imposition of any tax on the Trust Fund
pursuant to the Code that would be a claim against the Trust Fund, provided that
the Trustee has received an opinion of counsel to the effect that such action is
necessary or desirable to maintain such qualification or to avoid or minimize
the risk of the imposition of any such tax and such action will not, as
evidenced by such opinion of counsel, adversely affect in any material respect
the interests of any Certificateholder, (iv) to change the timing and/or nature
of deposits into the Collection Account or Distribution Account, provided that
such change will not, as evidenced by an opinion of counsel, adversely affect in
any material respect the interests of any Certificateholder, (v) to add to,
modify or eliminate any provisions therein restricting transfers of the Class R
Certificates to certain disqualified organizations, (vi) to make certain
provisions with respect to the denominations of, and the manner of payments on,
certain Classes of Certificates initially retained by the Depositor or an
affiliate, (vii) to provide for the rights of a net interest margin securities
insurer, if any, or (viii) to make any other provisions with respect to matters
or questions arising under such Agreement that are not inconsistent with the
provisions thereof, provided that such action will not, as evidenced by an
opinion of counsel, adversely affect in any material respect the interests of
the Certificateholders; provided, however, that such action described in clause
(iv) or (viii) will not be considered to adversely affect in any material
respect the interest of Certificateholders and no opinion of counsel to that
effect will be required if each Rating Agency rating the Certificates states in
writing that such action would not result in the downgrading or withdrawal of
the ratings then assigned to the Securities.
In addition, this Agreement may be amended from time to time by the
Depositor, the Servicer, the Securities Administrator and the Trustee, with the
consent of the Majority Certificateholders 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 or waiver shall (x)
reduce in any manner the amount of, or delay the timing of, payments on the
Certificates which are required to be made on any Certificate without the
consent of the Holder of such Certificate, (y) adversely affect in any material
respect the interests of the Holders of any Class of Certificates in a manner
other than as described in clause (x) above, without the consent of the Holders
of Certificates of such Class evidencing at least a majority of the Percentage
Interest in such Class, or (z) reduce the percentage of Voting Interests
required by clause (y) above without the consent of the Holders of all
Certificates of such Class then outstanding. Upon approval of an amendment, a
copy of such amendment shall be sent to the Rating Agencies. Prior to the
execution of any amendment to this Agreement, the Trustee will not consent to
any amendment of the applicable Agreement unless it shall first have received an
opinion stating that the execution of such amendment is authorized or permitted
by this Agreement. The Trustee may, but shall not be obligated to, enter into
any such amendment which affects the Trustee's own rights, duties or immunities
under this Agreement.
Notwithstanding any provision of this Agreement to the contrary, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel, delivered by (and at the expense of)
the Person seeking such Amendment, to the effect that such amendment will not
result in the imposition of a tax on any REMIC constituting part of the Trust
Fund pursuant to the REMIC Provisions or cause any REMIC constituting part of
the Trust Fund to fail to qualify as a REMIC at any time that any Certificates
are outstanding and that the amendment is being made in accordance with the
terms hereof.
Promptly after the execution of any such amendment the Trustee shall
furnish, at the expense of the Person that requested the amendment if such
Person is the Servicer (but in no event at the expense of the Trustee),
otherwise at the expense of the Trust, a copy of such amendment and the Opinion
of Counsel referred to in the immediately preceding paragraph to the Servicer
and each Rating Agency.
It shall not be necessary for the consent of Certificateholders
under this Section 11.01 to approve the particular form of any proposed
amendment; instead 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.
Section 11.02 Recordation of Agreement; Counterparts.
To the extent permitted by applicable law, this Agreement is subject
to recordation in all appropriate public offices for real property records in
all the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Servicer at the expense of the Trust, but only upon direction of
Certificateholders, accompanied by an Opinion of Counsel to the effect that such
recordation materially and beneficially affects the interests of the
Certificateholders.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall together constitute but
one and the same instrument.
Section 11.03 Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not (i)
operate to terminate this Agreement or the Trust, (ii) entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of the
Trust, or (iii) otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.
Except as expressly provided for herein, no Certificateholder shall
have any right to vote or in any manner otherwise control the operation and
management of the Trust, or the obligations of the parties hereto, nor shall
anything herein set forth or contained in the terms of the Certificates be
construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be under
any liability to any third person by reason of any action taken by the parties
to this Agreement pursuant to any provision hereof.
No Certificateholder shall have any right by virtue of any provision
of this Agreement to institute any suit, action or proceeding in equity or at
law upon or under or with respect to this Agreement, unless such Holder
previously shall have given to the Trustee a written notice of default and of
the continuance thereof, as herein provided, and unless also the Holders of
Certificates entitled to at least 25% of the Voting Interests shall have made
written request upon the Trustee to institute such action, suit or proceeding in
its own name as Trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee for 60 days after
its receipt of such notice, request and offer of indemnity, shall have neglected
or refused to institute any such action, suit or proceeding. It is understood
and intended, and expressly covenanted by each Certificateholder with every
other Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, which priority or
preference is not otherwise provided for herein, or to enforce any right under
this Agreement, except in the manner herein provided and for the equal, ratable
and common benefit of all Certificateholders. For the protection and enforcement
of the provisions of this Section 11.03 each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 11.04 Governing Law; Jurisdiction.
This Agreement shall be construed in accordance with the laws of the
State of New York, and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws. With respect to any
claim arising out of this Agreement, each party irrevocably submits to the
exclusive jurisdiction of the courts of the State of New York and the United
States District Court located in the Borough of Manhattan in The City of New
York, and each party irrevocably waives any objection which it may have at any
time to the laying of venue of any suit, action or proceeding arising out of or
relating hereto brought in any such courts, irrevocably waives any claim that
any such suit, action or proceeding brought in any such court has been brought
in any inconvenient forum and further irrevocably waives the right to object,
with respect to such claim, suit, action or proceeding brought in any such
court, that such court does not have jurisdiction over such party, provided that
service of process has been made by any lawful means.
Section 11.05 Notices.
All directions, demands and notices hereunder shall be in writing
and shall be deemed to have been duly given if personally delivered at or mailed
by first class mail, postage prepaid, or by express delivery service, to (a) in
the case of the Trustee, [__________], or such other address as may hereafter be
furnished to the Depositor, the Securities Administrator and the Servicer in
writing by the Trustee, (b) in the case of the Depositor, ▇▇▇▇▇ Fargo Asset
Securities Corporation, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Vice President, Structured Finance, or such other address as may be
furnished to the Servicer, the Securities Administrator and the Trustee in
writing by the Depositor, (c) in the case of the Servicer, ▇▇▇▇▇ Fargo Home
Mortgage, Inc., ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Vice
President, Structured Finance, or such other address as may be hereafter
furnished to the Depositor, the Trustee and the Securities Administrator by the
Servicer in writing and (d) in the case of the Securities Administrator, ▇▇▇▇▇
Fargo Bank, National Association, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: Client Manager-WFHET, Series 20 - , or such other address as
may be hereafter furnished to the Depositor, the Trustee and the Servicer by the
Securities Administrator in writing. Any notice required or permitted to be
mailed to a Certificateholder shall be given by first class mail, postage
prepaid, at the address of such Holder as shown in the Certificate Register.
Notice of any Servicer Event of Termination shall be given by telecopy and by
certified mail. Any notice so mailed within the time prescribed in this
Agreement shall be conclusively presumed to have duly been given when mailed,
whether or not the Certificateholder receives such notice. A copy of any notice
required to be telecopied hereunder shall also be mailed to the appropriate
party in the manner set forth above.
Section 11.06 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms
of this Agreement shall for any reason whatsoever be held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
Section 11.07 Article and Section References.
All article and section references used in this Agreement, unless
otherwise provided, are to articles and sections in this Agreement.
Section 11.08 Notice to the Rating Agencies.
(a) Each of the Trustee and the Securities Administrator shall be
obligated to use its best reasonable efforts promptly to provide notice to the
Rating Agencies with respect to each of the following of which a Responsible
Officer of the Trustee or the Securities Administrator, as the case may be, has
actual knowledge:
(i) any material change or amendment to this Agreement;
(ii) the occurrence of any Servicer Event of Termination that has
not been cured or waived;
(iii) the resignation or termination of the Servicer, the Securities
Administrator or the Trustee;
(iv) the final payment to Holders of the Certificates of any Class;
(v) any change in the location of any Account; and
(vi) if the Securities Administrator is acting as successor servicer
pursuant to Section 7.02 hereof, any event that would result in the
inability of the Securities Administrator to make Advances.
(vii) In addition, the Securities Administrator shall promptly
furnish to each Rating Agency copies of the following:
(A) each annual statement as to compliance described in
Section 3.19 hereof;
(B) each annual independent public accountants' servicing
report described in Section 3.20 hereof; and
(C) each notice delivered pursuant to Section 7.01(a) hereof
which relates to the fact that the Servicer has not made an Advance.
Any such notice pursuant to this Section 11.08 shall be in writing
and shall be deemed to have been duly given if personally delivered or mailed by
first class mail, postage prepaid, or by express delivery service to: Fitch
Ratings, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Managing
Director, Residential Mortgage-Backed Securities; ▇▇▇▇▇'▇ Investors Service,
Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Attention: Managing
Director, Residential Mortgage-Backed Securities; and Standard & Poor's, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: Mortgage Surveillance Group.
Section 11.09 Further Assurances.
Notwithstanding any other provision of this Agreement, neither the
Regular Certificateholders nor the Trustee shall have any obligation to consent
to any amendment or modification of this Agreement unless they have been
provided reasonable security or indemnity against their out-of-pocket expenses
(including reasonable attorneys' fees) to be incurred in connection therewith.
Section 11.10 Benefits of Agreement.
Nothing in this Agreement or in the Certificates, expressed or
implied, shall give to any Person, other than the Certificateholders and the
parties hereto and their successors hereunder, any benefit or any legal or
equitable right, remedy or claim under this Agreement, except that the Custodian
is an express third party beneficiary of this Agreement for purposes of Section
8.05.
Section 11.11 Acts of Certificateholders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by the
Certificateholders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Certificateholders in person or by
agent duly appointed in writing; and such action shall become effective when
such instrument or instruments are delivered to the Trustee and the Servicer.
Such instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "act" of the Certificateholders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Agreement and conclusive in favor of the Trustee and the Trust,
if made in the manner provided in this Section 11.11.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of a notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Whenever
such execution is by a signer acting in a capacity other than his or her
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority.
(c) Any request, demand, authorization, direction, notice, consent,
waiver or other action by any Certificateholder shall bind every future Holder
of such Certificate and the Holder of every Certificate issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof, in
respect of anything done, omitted or suffered to be done by the Trustee or the
Trust in reliance thereon, whether or not notation of such action is made upon
such Certificate.
IN WITNESS WHEREOF, the Depositor, the Servicer, the Securities
Administrator and the Trustee have caused their names to be signed hereto by
their respective officers thereunto duly authorized, all as of the day and year
first above written.
▇▇▇▇▇ FARGO ASSET SECURITIES CORPORATION,
as Depositor
By:____________________________________
Name:
Title:
▇▇▇▇▇ FARGO HOME MORTGAGE, INC.,
as Servicer
By:____________________________________
Name:
Title:
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
as Securities Administrator
By:____________________________________
Name:
Title:
[_________________], as Trustee
By:____________________________________
Name:
Title:
STATE OF )
) ss.:
COUNTY OF )
On the [___] day of [_______], 20 before me, a notary public in and
for said State, personally appeared [_____________], known to me to be a
[____________] of ▇▇▇▇▇ Fargo Asset Securities Corporation, a Delaware
corporation that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
Notary Public
STATE OF )
) ss.:
COUNTY OF )
On the [___] day of [_______], 20 before me, a notary public in and
for said State, personally appeared [_____], known to me to be a [_________] of
▇▇▇▇▇ Fargo Home Mortgage, Inc., a California corporation, that executed the
within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
Notary Public
STATE OF )
) ss.:
COUNTY OF )
On the [___] day of [_______], 20 before me, a notary public in and
for said State, personally appeared [_______________], known to me to be a
[_______] of ▇▇▇▇▇ Fargo Bank, National Association, a national banking
association that executed the within instrument, and also known to me to be the
person who executed it on behalf of said association, and acknowledged to me
that such association executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
Notary Public
STATE OF )
) ss.:
COUNTY OF )
On the [___] day of [_______], 20 before me, a notary public in and
for said State, personally appeared [_______________], known to me to be a
[_______] of [_______________], a [___________] that executed the within
instrument, and also known to me to be the person who executed it on behalf of
said association, and acknowledged to me that such association executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
Notary Public
EXHIBIT A-1
[FORM OF THE CLASS A-1 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR 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.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") AND CERTAIN OTHER PROPERTY.
▇▇▇▇▇ FARGO ASSET SECURITIES CORPORATION,
HOME EQUITY ASSET-BACKED CERTIFICATES
SERIES 20 - , CLASS A-1
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate and adjustable-rate one- to four-family
first and second lien mortgage loans formed and sold by
▇▇▇▇▇ FARGO ASSET SECURITIES CORPORATION
Series 20 - , Class A-1 Original Principal Balance of the
Class A-1 Certificates as of the
Certificate Interest Rate: Floating Closing Date: $
Date of Pooling and Servicing Agreement Initial Principal Balance: $[__]
and Cut-off Date: [________], 20
Servicer: ▇▇▇▇▇ Fargo Home Mortgage,
First Distribution Date: [________], Inc.
20
Trustee: [__________________________]
No.
Closing Date: [________], 20
CUSIP:
ISIN:
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS CERTIFICATE
MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING
PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN
ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ▇▇▇▇▇
FARGO ASSET SECURITIES CORPORATION, THE SERVICER, THE TRUSTEE, THE
SECURITIES ADMINISTRATOR OR ANY OF THEIR AFFILIATES. THIS CERTIFICATE IS
NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _______________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Principal Balance of this
Certificate by the Original Principal Balance of the Class A-1 Certificates) in
that certain beneficial ownership interest evidenced by all the Class A-1
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among ▇▇▇▇▇ Fargo Asset
Securities Corporation (hereinafter called the "Depositor," which term includes
any successor entity under the Agreement), the Servicer, the Securities
Administrator and the Trustee, a summary of certain of the pertinent provisions
of which is set forth hereafter. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Business Day immediately preceding such
Distribution Date (the "Record Date"), from funds in the Distribution Account in
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class
A-1 Certificates on such Distribution Date pursuant to the Agreement; provided,
however, that if any Class A-1 Certificate becomes a Definitive Certificate, the
Record Date for such Certificate will be the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date immediately
prior to such Distribution Date and is the registered owner of Class A-1
Certificates, or by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose as provided in the Agreement.
The Certificate Interest Rate for the Class A-1 Certificates for
each Distribution Date will be the least of (i) One-Month LIBOR as of the
related LIBOR Determination Date plus the Class A-1 Certificate Margin, (ii) the
Group 1 Maximum Rate Cap and (iii) the Group 1 Cap. Interest will accrue on the
Class A-1 Certificates during each Interest Accrual Period at the Certificate
Interest Rate.
This Certificate is one of a duly authorized issue of Certificates
designated as ▇▇▇▇▇ Fargo Asset Securities Corporation, Home Equity Asset Backed
Certificates of the Series specified on the face hereof (herein called the
"Certificates") and representing a Percentage Interest in the Class A-1
Certificates.
The Class A-1 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Securities Administrator and the Trustee and the
rights of the Certificateholders under the Agreement at any time by the
Depositor, the Servicer, the Securities Administrator and the Trustee with the
consent of the Holders of Certificates entitled to the Voting Interests
identified in the agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee, the
Securities Administrator and the Certificate Registrar duly executed by, the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee, the Securities
Administrator and the Certificate Registrar and any agent of the Depositor, the
Servicer, the Trustee, the Securities Administrator or the Certificate Registrar
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Depositor, the Servicer, the Trustee,
the Certificate Registrar nor any such agent shall be affected by notice to the
contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being 10% or
less of the Cut-off Date Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
[_______________________________], as
Trustee
By:______________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
[_______________________________], as
Certificate Registrar
By:______________________________________
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
---------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform
Gifts to Minors Act
JT TEN - as joint tenants with right
of survivorship and not as ________________
tenants in common (State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)______________________________________________
a Percentage Interest equal to _____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _____________________, account number ______________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________, as its agent.
EXHIBIT A-1A
[FORM OF THE CLASS A-1A CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR 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.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") AND CERTAIN OTHER PROPERTY.
▇▇▇▇▇ FARGO ASSET SECURITIES CORPORATION,
HOME EQUITY ASSET-BACKED CERTIFICATES
SERIES 20 - , CLASS A-1A
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate and adjustable-rate one- to four-family
first and second lien mortgage loans formed and sold by
▇▇▇▇▇ FARGO ASSET SECURITIES CORPORATION
Series 20 - , Class A-1A Original Principal Balance of the
Class A-1A Certificates as of the
Certificate Interest Rate: Floating Closing Date: $
Date of Pooling and Servicing Agreement Initial Principal Balance: $[__]
and Cut-off Date: [________], 20
Servicer: ▇▇▇▇▇ Fargo Home Mortgage,
First Distribution Date: [________], Inc.
20
Trustee:
No. [____________________________]
CUSIP: Closing Date: [________], 20
ISIN:
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS CERTIFICATE
MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING
PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN
ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ▇▇▇▇▇
FARGO ASSET SECURITIES CORPORATION, THE SERVICER, THE TRUSTEE, THE
SECURITIES ADMINISTRATOR OR ANY OF THEIR AFFILIATES. THIS CERTIFICATE IS
NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _______________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Principal Balance of this
Certificate by the Original Principal Balance of the Class A-1A Certificates) in
that certain beneficial ownership interest evidenced by all the Class A-1A
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among ▇▇▇▇▇ Fargo Asset
Securities Corporation (hereinafter called the "Depositor," which term includes
any successor entity under the Agreement), the Servicer, the Securities
Administrator and the Trustee, a summary of certain of the pertinent provisions
of which is set forth hereafter. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Business Day immediately preceding such
Distribution Date (the "Record Date"), from funds in the Distribution Account in
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class
A-1A Certificates on such Distribution Date pursuant to the Agreement; provided,
however, that if any Class A-1A Certificate becomes a Definitive Certificate,
the Record Date for such Certificate will be the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date immediately
prior to such Distribution Date and is the registered owner of Class A-1A
Certificates, or by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose as provided in the Agreement.
The Certificate Interest Rate for the Class A-1A Certificates for
each Distribution Date will be the least of (i) One-Month LIBOR as of the
related LIBOR Determination Date plus the Class A-1A Certificate Margin, (ii)
the Group 1 Maximum Rate Cap and (iii) the Group 1 Cap. Interest will accrue on
the Class A-1A Certificates during each Interest Accrual Period at the
Certificate Interest Rate.
This Certificate is one of a duly authorized issue of Certificates
designated as ▇▇▇▇▇ Fargo Asset Securities Corporation, Home Equity Asset Backed
Certificates of the Series specified on the face hereof (herein called the
"Certificates") and representing a Percentage Interest in the Class A-1A
Certificates.
The Class A-1A Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Securities Administrator and the Trustee and the
rights of the Certificateholders under the Agreement at any time by the
Depositor, the Servicer, the Securities Administrator and the Trustee with the
consent of the Holders of Certificates entitled to the Voting Interests
identified in the agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee, the
Securities Administrator and the Certificate Registrar duly executed by, the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee, the Securities
Administrator and the Certificate Registrar and any agent of the Depositor, the
Servicer, the Trustee, the Securities Administrator or the Certificate Registrar
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Depositor, the Servicer, the Trustee,
the Certificate Registrar nor any such agent shall be affected by notice to the
contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being 10% or
less of the Cut-off Date Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
[_______________________________], as
Trustee
By:______________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
[_______________________________], as
Certificate Registrar
By:______________________________________
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
---------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform
Gifts to Minors Act
JT TEN - as joint tenants with right
of survivorship and not as ________________
tenants in common (State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)______________________________________________
a Percentage Interest equal to _____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _____________________, account number ______________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________, as its agent.
EXHIBIT A-2
[FORM OF THE CLASS A-2 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR 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.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") AND CERTAIN OTHER PROPERTY.
▇▇▇▇▇ FARGO ASSET SECURITIES CORPORATION,
HOME EQUITY ASSET-BACKED CERTIFICATES
SERIES 20 - , CLASS A-2
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate and adjustable-rate one- to four-family
first and second lien mortgage loans formed and sold by
▇▇▇▇▇ FARGO ASSET SECURITIES CORPORATION
Series 20 - , Class A-2 Original Principal Balance of the
Class A-2 Certificates as of the
Certificate Interest Rate: Floating Closing Date: $
Date of Pooling and Servicing Agreement Initial Principal Balance: $[__]
and Cut-off Date: [________], 20
Servicer: ▇▇▇▇▇ Fargo Home Mortgage,
First Distribution Date: [________], Inc.
20
Trustee:
No. [____________________________]
CUSIP: Closing Date: [________], 20
ISIN:
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS CERTIFICATE
MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING
PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN
ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ▇▇▇▇▇
FARGO ASSET SECURITIES CORPORATION, THE SERVICER, THE TRUSTEE, THE
SECURITIES ADMINISTRATOR OR ANY OF THEIR AFFILIATES. THIS CERTIFICATE IS
NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _______________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Principal Balance of this
Certificate by the Original Principal Balance of the Class A-2 Certificates) in
that certain beneficial ownership interest evidenced by all the Class A-2
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among ▇▇▇▇▇ Fargo Asset
Securities Corporation (hereinafter called the "Depositor," which term includes
any successor entity under the Agreement), the Servicer, the Securities
Administrator and the Trustee, a summary of certain of the pertinent provisions
of which is set forth hereafter. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Business Day immediately preceding such
Distribution Date (the "Record Date"), from funds in the Distribution Account in
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class
A-2 Certificates on such Distribution Date pursuant to the Agreement; provided,
however, that if any Class A-2 Certificate becomes a Definitive Certificate, the
Record Date for such Certificate will be the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date immediately
prior to such Distribution Date and is the registered owner of Class A-2
Certificates, or by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose as provided in the Agreement.
The Certificate Interest Rate for the Class A-2 Certificates for
each Distribution Date will be the least of (i) One-Month LIBOR as of the
related LIBOR Determination Date plus the Class A-2 Certificate Margin, (ii) the
Group 2 Maximum Rate Cap and (iii) the Group 2 Cap. Interest will accrue on the
Class A-2 Certificates during each Interest Accrual Period at the Certificate
Interest Rate.
This Certificate is one of a duly authorized issue of Certificates
designated as ▇▇▇▇▇ Fargo Asset Securities Corporation, Home Equity Asset Backed
Certificates of the Series specified on the face hereof (herein called the
"Certificates") and representing a Percentage Interest in the Class A-2
Certificates.
The Class A-2 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Securities Administrator and the Trustee and the
rights of the Certificateholders under the Agreement at any time by the
Depositor, the Servicer, the Securities Administrator and the Trustee with the
consent of the Holders of Certificates entitled to the Voting Interests
identified in the agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee, the
Securities Administrator and the Certificate Registrar duly executed by, the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee, the Securities
Administrator and the Certificate Registrar and any agent of the Depositor, the
Servicer, the Trustee, the Securities Administrator or the Certificate Registrar
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Depositor, the Servicer, the Trustee,
the Certificate Registrar nor any such agent shall be affected by notice to the
contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being 10% or
less of the Cut-off Date Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
[_______________________________], as
Trustee
By:______________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
[_______________________________], as
Certificate Registrar
By:______________________________________
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
---------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform
Gifts to Minors Act
JT TEN - as joint tenants with right
of survivorship and not as ________________
tenants in common (State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)______________________________________________
a Percentage Interest equal to _____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _____________________, account number ______________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________, as its agent.
EXHIBIT B
[FORM OF CLASS B CERTIFICATE]
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A, CLASS
M-1, CLASS M-2, CLASS M-3, CLASS M-4, CLASS M-5 AND CLASS M-6 CERTIFICATES
AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "1933 ACT"), OR THE SECURITIES LAWS OF ANY STATE. ANY
RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE WITHOUT SUCH
REGISTRATION MAY BE MADE ONLY IN A TRANSACTION THAT DOES NOT REQUIRE SUCH
REGISTRATION AND IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
EXCEPT AS PROVIDED IN SECTION 5.02(d) OF THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN, THIS CERTIFICATE MAY NOT BE PURCHASED BY OR
TRANSFERRED TO ANY PERSON THAT HAS NOT DELIVERED A REPRESENTATION LETTER
STATING EITHER (A) THAT THE TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR
OTHER RETIREMENT ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR A GOVERNMENTAL
PLAN, AS DEFINED IN SECTION 3(32) OF ERISA, SUBJECT TO ANY FEDERAL, STATE
OR LOCAL LAW WHICH IS, TO A MATERIAL EXTENT, SIMILAR TO THE FOREGOING
PROVISIONS OF ERISA OR THE CODE (COLLECTIVELY, A "PLAN"), AND IS NOT
ACTING ON BEHALF OF OR INVESTING THE ASSETS OF A PLAN OR (B) SUBJECT TO
CERTAIN CONDITIONS SET FORTH IN THE POOLING AND SERVICING AGREEMENT, THAT
THE SOURCE OF FUNDS USED TO PURCHASE THIS CERTIFICATE IS AN "INSURANCE
COMPANY GENERAL ACCOUNT." THE POOLING AND SERVICING AGREEMENT PROVIDES
THAT ANY ATTEMPTED OR PURPORTED TRANSFER IN VIOLATION OF THESE TRANSFER
RESTRICTIONS WILL BE NULL AND VOID AND WILL VEST NO RIGHTS IN ANY
PURPORTED TRANSFEREE.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE").
▇▇▇▇▇ FARGO ASSET SECURITIES CORPORATION,
HOME EQUITY ASSET-BACKED CERTIFICATES
SERIES 20 - , CLASS B
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate and adjustable-rate one- to four-family
first and second lien mortgage loans formed and sold by
▇▇▇▇▇ FARGO ASSET SECURITIES CORPORATION
Series 20 - , Class B Original Principal Balance of the
Class B Certificates as of the Closing
Pass-Through Rate: Fixed Date: $
Date of Pooling and Servicing Agreement Initial Principal Balance: $[ ]
and Cut-off Date: [________], 20
Servicer: ▇▇▇▇▇ Fargo Home Mortgage,
First Distribution Date: [________], Inc.
20
Trustee: [____________________________]
No.
Closing Date: [________], 20
CUSIP:
ISIN:
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS CERTIFICATE
MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING
PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN
ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ▇▇▇▇▇
FARGO ASSET SECURITIES CORPORATION, THE SERVICER, THE TRUSTEE, THE
SECURITIES ADMINISTRATOR OR ANY OF THEIR AFFILIATES. THIS CERTIFICATE IS
NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that ______________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Principal Balance of this
Certificate by the Original Principal Balance of the Class B Certificates) in
that certain beneficial ownership interest evidenced by all the Class B
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among ▇▇▇▇▇ Fargo Asset
Securities Corporation (hereinafter called the "Depositor," which term includes
any successor entity under the Agreement), the Servicer, the Securities
Administrator and the Trustee, a summary of certain of the pertinent provisions
of which is set forth hereafter. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the last Business Day of the month immediately
preceding the month in which the related Distribution Date occurs (the "Record
Date"), from funds in the Distribution Account in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class B Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date immediately
prior to such Distribution Date and is the registered owner of Class B
Certificates, or by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose as provided in the Agreement.
The Certificate Interest Rate for the Class B Certificates for each
Distribution Date will be [____]% per annum.
This Certificate is one of a duly authorized issue of Certificates
designated as ▇▇▇▇▇ Fargo Asset Securities Corporation, Home Equity Asset Backed
Certificates of the Series specified on the face hereof (herein called the
"Certificates") and representing a Percentage Interest in the Class B
Certificates.
The Class B Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
This certificate is subordinated in right of payment to the Class A,
Class M-1, Class M-2, Class M-3, Class M-4, Class M-5 and Class M-6 Certificates
as described in the Pooling and Servicing Agreement referred to herein.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer, the Securities
Administrator and the Trustee with the consent of the Holders of Certificates
entitled to the Voting Interests identified in the agreement. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee, the
Securities Administrator and the Certificate Registrar duly executed by, the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No transfer of this Certificate shall be made unless that transfer
is made pursuant to an effective registration statement under the 1933 Act and
effective registration or qualification under applicable state securities laws,
or is made in a transaction that does not require such registration or
qualification. In the event that a transfer is to be made without registration
or qualification, the Certificate Registrar shall require, in order to assure
compliance with such laws, either (i) that the Certificateholder desiring to
effect the transfer and such Certificateholder's prospective transferee each
execute a representation letter in the form described by the Agreement
certifying to the Certificate Registrar the facts surrounding the transfer, or
(ii) unless such transfer is made in reliance upon Rule 144A under the 1933 Act,
that the Depositor and the Certificate Registrar receive an Opinion of Counsel
satisfactory to them that such transfer may be made without such registration or
qualification, which Opinion of Counsel shall not be an expense of the
Depositor, the Trustee, the Securities Administrator or the Certificate
Registrar, in their respective capacities as such. None of the Depositor, the
Certificate Registrar or the Trustee is obligated to register or qualify the
Class of Certificates specified on the face hereof under the 1933 Act or any
other securities law or to take any action not otherwise required under the
Agreement to permit the transfer of such Certificates without registration or
qualification. Any such Certificateholder desiring to effect such transfer
shall, and does hereby agree to, indemnify the Trustee, the Depositor, the
Certificate Registrar and any Servicer against any liability that may result if
the transfer is not so exempt or is not made in accordance with such federal and
state laws.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee, the Securities
Administrator and the Certificate Registrar and any agent of the Depositor, the
Servicer, the Trustee, the Securities Administrator or the Certificate Registrar
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Depositor, the Servicer, the Trustee,
the Certificate Registrar nor any such agent shall be affected by notice to the
contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being 10% or
less of the Cut-off Date Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
[_______________________________], as
Trustee
By:______________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
[_______________________________], as
Certificate Registrar
By:______________________________________
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
---------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform
Gifts to Minors Act
JT TEN - as joint tenants with right
of survivorship and not as ________________
tenants in common (State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)______________________________________________
a Percentage Interest equal to _____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _____________________, account number ______________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________, as its agent.
EXHIBIT C-1
[FORM OF CLASS M-1 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE,
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED
TO HEREIN.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") AND CERTAIN OTHER PROPERTY.
▇▇▇▇▇ FARGO ASSET SECURITIES CORPORATION,
HOME EQUITY ASSET-BACKED CERTIFICATES
SERIES 20 - , CLASS M-1
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate and adjustable-rate one- to four-family
first and second lien mortgage loans formed and sold by
▇▇▇▇▇ FARGO ASSET SECURITIES CORPORATION
Series 20 - , Class M-1 Original Principal Balance of the
Class M-1 Certificates as of the
Certificate Interest Rate: Floating Closing Date: $
Date of Pooling and Servicing Agreement Initial Principal Balance: $[ ]
and Cut-off Date: [________], 20
Servicer: ▇▇▇▇▇ Fargo Home Mortgage,
First Distribution Date: [________], Inc.
20
Trustee: [____________________________]
No.
Closing Date: [________], 20
CUSIP:
ISIN:
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS CERTIFICATE
MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING
PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN
ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ▇▇▇▇▇
FARGO ASSET SECURITIES CORPORATION, THE SERVICER, THE TRUSTEE, THE
SECURITIES ADMINISTRATOR OR ANY OF THEIR AFFILIATES. THIS CERTIFICATE IS
NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _________________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Principal Balance of this
Certificate by the Original Principal Balance of the Class M-1 Certificates) in
that certain beneficial ownership interest evidenced by all the Class M-1
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among ▇▇▇▇▇ Fargo Asset
Securities Corporation (hereinafter called the "Depositor," which term includes
any successor entity under the Agreement), the Servicer, the Securities
Administrator and the Trustee, a summary of certain of the pertinent provisions
of which is set forth hereafter. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Business Day immediately preceding such
Distribution Date (the "Record Date"), from funds in the Distribution Account in
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class
M-1 Certificates on such Distribution Date pursuant to the Agreement; provided,
however, that if any Class M-1 Certificate becomes a Definitive Certificate, the
Record Date for such Certificate will be the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date immediately
prior to such Distribution Date and is the registered owner of Class M-1
Certificates, or by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose as provided in the Agreement.
The Certificate Interest Rate for the Class M-1 Certificates for
each Distribution Date will be the least of (i) One-Month LIBOR as of the
related LIBOR Determination Date plus the Class M-1 Certificate Margin, (ii) the
Pool Maximum Rate Cap and (iii) the Pool Cap. Interest will accrue on the Class
M-1 Certificates during each Interest Accrual Period at the Certificate Interest
Rate.
This Certificate is one of a duly authorized issue of Certificates
designated as ▇▇▇▇▇ Fargo Asset Securities Corporation, Home Equity Asset Backed
Certificates of the Series specified on the face hereof (herein called the
"Certificates") and representing a Percentage Interest in the Class M-1
Certificates.
The Class M-1 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
This certificate is subordinated in right of payment to the Class A
Certificates as described in the Pooling and Servicing Agreement referred to
herein.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer, the Securities
Administrator and the Trustee with the consent of the Holders of Certificates
entitled to the Voting Interests identified in the agreement. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee, the
Securities Administrator and the Certificate Registrar duly executed by, the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee, the Securities
Administrator and the Certificate Registrar and any agent of the Depositor, the
Servicer, the Trustee, the Securities Administrator or the Certificate Registrar
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Depositor, the Servicer, the Trustee,
the Certificate Registrar nor any such agent shall be affected by notice to the
contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being 10% or
less of the Cut-off Date Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
[_______________________________], as
Trustee
By:______________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
[_______________________________], as
Certificate Registrar
By:______________________________________
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
---------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform
Gifts to Minors Act
JT TEN - as joint tenants with right
of survivorship and not as ________________
tenants in common (State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)______________________________________________
a Percentage Interest equal to _____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _____________________, account number ______________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________, as its agent.
EXHIBIT C-2
[FORM OF CLASS M-2 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE,
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A AND
CLASS M-1 CERTIFICATES AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") AND CERTAIN OTHER PROPERTY.
▇▇▇▇▇ FARGO ASSET SECURITIES CORPORATION,
HOME EQUITY ASSET-BACKED CERTIFICATES
SERIES 20 - , CLASS M-2
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate and adjustable-rate one- to four-family
first and second lien mortgage loans formed and sold by
▇▇▇▇▇ FARGO ASSET SECURITIES CORPORATION
Series 20 - , Class M-2 Original Principal Balance of the
Class M-2 Certificates as of the
Certificate Interest Rate: Floating Closing Date: $
Date of Pooling and Servicing Agreement Initial Principal Balance: $[ ]
and Cut-off Date: [________], 20
Servicer: ▇▇▇▇▇ Fargo Home Mortgage,
First Distribution Date: [________], Inc.
20
Trustee: [____________________________]
No.
Closing Date: [________], 20
CUSIP:
ISIN:
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS CERTIFICATE
MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING
PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN
ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ▇▇▇▇▇
FARGO ASSET SECURITIES CORPORATION, THE SERVICER, THE TRUSTEE, THE
SECURITIES ADMINISTRATOR OR ANY OF THEIR AFFILIATES. THIS CERTIFICATE IS
NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _________________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Principal Balance of this
Certificate by the Original Principal Balance of the Class M-2 Certificates) in
that certain beneficial ownership interest evidenced by all the Class M-2
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among ▇▇▇▇▇ Fargo Asset
Securities Corporation (hereinafter called the "Depositor," which term includes
any successor entity under the Agreement), the Servicer, the Securities
Administrator and the Trustee, a summary of certain of the pertinent provisions
of which is set forth hereafter. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Business Day immediately preceding such
Distribution Date (the "Record Date"), from funds in the Distribution Account in
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class
M-2 Certificates on such Distribution Date pursuant to the Agreement; provided,
however, that if any Class M-2 Certificate becomes a Definitive Certificate, the
Record Date for such Certificate will be the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date immediately
prior to such Distribution Date and is the registered owner of Class M-2
Certificates, or by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose as provided in the Agreement.
The Certificate Interest Rate for the Class M-2 Certificates for
each Distribution Date will be the least of (i) One-Month LIBOR as of the
related LIBOR Determination Date plus the Class M-2 Certificate Margin, (ii) the
Pool Maximum Rate Cap and (iii) the Pool Cap. Interest will accrue on the Class
M-2 Certificates during each Interest Accrual Period at the Certificate Interest
Rate.
This Certificate is one of a duly authorized issue of Certificates
designated as ▇▇▇▇▇ Fargo Asset Securities Corporation, Home Equity Asset Backed
Certificates of the Series specified on the face hereof (herein called the
"Certificates") and representing a Percentage Interest in the Class M-2
Certificates.
The Class M-2 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
This certificate is subordinated in right of payment to the Class A
Certificates and Class M-1 Certificates as described in the Pooling and
Servicing Agreement referred to herein.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer, the Securities
Administrator and the Trustee with the consent of the Holders of Certificates
entitled to the Voting Interests identified in the agreement. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee, the
Securities Administrator and the Certificate Registrar duly executed by, the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee, the Securities
Administrator and the Certificate Registrar and any agent of the Depositor, the
Servicer, the Trustee, the Securities Administrator or the Certificate Registrar
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Depositor, the Servicer, the Trustee,
the Certificate Registrar nor any such agent shall be affected by notice to the
contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being 10% or
less of the Cut-off Date Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
[_______________________________], as
Trustee
By:______________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
[_______________________________], as
Certificate Registrar
By:______________________________________
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
---------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform
Gifts to Minors Act
JT TEN - as joint tenants with right
of survivorship and not as ________________
tenants in common (State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)______________________________________________
a Percentage Interest equal to _____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _____________________, account number ______________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________, as its agent.
EXHIBIT C-3
[FORM OF CLASS M-3 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE,
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A, CLASS
M-1 AND CLASS M-2 CERTIFICATES AS DESCRIBED IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") AND CERTAIN OTHER PROPERTY.
▇▇▇▇▇ FARGO ASSET SECURITIES CORPORATION,
HOME EQUITY ASSET-BACKED CERTIFICATES
SERIES 20 - , CLASS M-3
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate and adjustable-rate one- to four-family
first and second lien mortgage loans formed and sold by
▇▇▇▇▇ FARGO ASSET SECURITIES CORPORATION
Series 20 - , Class M-3 Original Principal Balance of the
Class M-3 Certificates as of the
Certificate Interest Rate: Floating Closing Date: $
Date of Pooling and Servicing Agreement Initial Principal Balance: $[ ]
and Cut-off Date: [________], 20
Servicer: ▇▇▇▇▇ Fargo Home Mortgage,
First Distribution Date: [________], Inc.
20
Trustee: [____________________________]
No.
Closing Date: [________], 20
CUSIP:
ISIN:
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS CERTIFICATE
MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING
PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN
ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ▇▇▇▇▇
FARGO ASSET SECURITIES CORPORATION, THE SERVICER, THE TRUSTEE, THE
SECURITIES ADMINISTRATOR OR ANY OF THEIR AFFILIATES. THIS CERTIFICATE IS
NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _________________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Principal Balance of this
Certificate by the Original Principal Balance of the Class M-3 Certificates) in
that certain beneficial ownership interest evidenced by all the Class M-3
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among ▇▇▇▇▇ Fargo Asset
Securities Corporation (hereinafter called the "Depositor," which term includes
any successor entity under the Agreement), the Servicer, the Securities
Administrator and the Trustee, a summary of certain of the pertinent provisions
of which is set forth hereafter. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Business Day immediately preceding such
Distribution Date (the "Record Date"), from funds in the Distribution Account in
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class
M-3 Certificates on such Distribution Date pursuant to the Agreement; provided,
however, that if any Class M-3 Certificate becomes a Definitive Certificate, the
Record Date for such Certificate will be the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date immediately
prior to such Distribution Date and is the registered owner of Class M-3
Certificates, or by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose as provided in the Agreement.
The Certificate Interest Rate for the Class M-3 Certificates for
each Distribution Date will be the least of (i) One-Month LIBOR as of the
related LIBOR Determination Date plus the Class M-3 Certificate Margin, (ii) the
Pool Maximum Rate Cap and (iii) the Pool Cap. Interest will accrue on the Class
M-3 Certificates during each Interest Accrual Period at the Certificate Interest
Rate.
This Certificate is one of a duly authorized issue of Certificates
designated as ▇▇▇▇▇ Fargo Asset Securities Corporation, Home Equity Asset Backed
Certificates of the Series specified on the face hereof (herein called the
"Certificates") and representing a Percentage Interest in the Class M-3
Certificates.
The Class M-3 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
This certificate is subordinated in right of payment to the Class A
Certificates, Class M-1 Certificate and Class M-2 Certificates as described in
the Pooling and Servicing Agreement referred to herein.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer, the Securities
Administrator and the Trustee with the consent of the Holders of Certificates
entitled to the Voting Interests identified in the agreement. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee, the
Securities Administrator and the Certificate Registrar duly executed by, the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee, the Securities
Administrator and the Certificate Registrar and any agent of the Depositor, the
Servicer, the Trustee, the Securities Administrator or the Certificate Registrar
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Depositor, the Servicer, the Trustee,
the Certificate Registrar nor any such agent shall be affected by notice to the
contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being 10% or
less of the Cut-off Date Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
[_______________________________], as
Trustee
By:______________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
[_______________________________], as
Certificate Registrar
By:______________________________________
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
---------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform
Gifts to Minors Act
JT TEN - as joint tenants with right
of survivorship and not as ________________
tenants in common (State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)______________________________________________
a Percentage Interest equal to _____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _____________________, account number ______________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________, as its agent.
EXHIBIT C-4
[FORM OF CLASS M-4 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE,
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A, CLASS
M-1, CLASS M-2 AND CLASS M-3 CERTIFICATES AS DESCRIBED IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") AND CERTAIN OTHER PROPERTY.
▇▇▇▇▇ FARGO ASSET SECURITIES CORPORATION,
HOME EQUITY ASSET-BACKED CERTIFICATES
SERIES 20 - , CLASS M-4
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate and adjustable-rate one- to four-family
first and second lien mortgage loans formed and sold by
▇▇▇▇▇ FARGO ASSET SECURITIES CORPORATION
Series 20 - , Class M-4 Original Principal Balance of the
Class M-4 Certificates as of the
Certificate Interest Rate: Floating Closing Date: $
Date of Pooling and Servicing Agreement Initial Principal Balance: $[ ]
and Cut-off Date: [________], 20
Servicer: ▇▇▇▇▇ Fargo Home Mortgage,
First Distribution Date: [________], Inc.
20
Trustee: [____________________________]
No.
Closing Date: [________], 20
CUSIP:
ISIN:
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS CERTIFICATE
MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING
PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN
ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ▇▇▇▇▇
FARGO ASSET SECURITIES CORPORATION, THE SERVICER, THE TRUSTEE, THE
SECURITIES ADMINISTRATOR OR ANY OF THEIR AFFILIATES. THIS CERTIFICATE IS
NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _________________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Principal Balance of this
Certificate by the Original Principal Balance of the Class M-4 Certificates) in
that certain beneficial ownership interest evidenced by all the Class M-4
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among ▇▇▇▇▇ Fargo Asset
Securities Corporation (hereinafter called the "Depositor," which term includes
any successor entity under the Agreement), the Servicer, the Securities
Administrator and the Trustee, a summary of certain of the pertinent provisions
of which is set forth hereafter. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Business Day immediately preceding such
Distribution Date (the "Record Date"), from funds in the Distribution Account in
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class
M-4 Certificates on such Distribution Date pursuant to the Agreement; provided,
however, that if any Class M-4 Certificate becomes a Definitive Certificate, the
Record Date for such Certificate will be the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date immediately
prior to such Distribution Date and is the registered owner of Class M-4
Certificates, or by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose as provided in the Agreement.
The Certificate Interest Rate for the Class M-4 Certificates for
each Distribution Date will be the least of (i) One-Month LIBOR as of the
related LIBOR Determination Date plus the Class M-4 Certificate Margin, (ii) the
Pool Maximum Rate Cap and (iii) the Pool Cap. Interest will accrue on the Class
M-4 Certificates during each Interest Accrual Period at the Certificate Interest
Rate.
This Certificate is one of a duly authorized issue of Certificates
designated as ▇▇▇▇▇ Fargo Asset Securities Corporation, Home Equity Asset Backed
Certificates of the Series specified on the face hereof (herein called the
"Certificates") and representing a Percentage Interest in the Class M-4
Certificates.
The Class M-4 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
This certificate is subordinated in right of payment to the Class A
Certificates, Class M-1 Certificate, Class M-2 Certificates and Class M-3
Certificates as described in the Pooling and Servicing Agreement referred to
herein.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer, the Securities
Administrator and the Trustee with the consent of the Holders of Certificates
entitled to the Voting Interests identified in the agreement. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee, the
Securities Administrator and the Certificate Registrar duly executed by, the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee, the Securities
Administrator and the Certificate Registrar and any agent of the Depositor, the
Servicer, the Trustee, the Securities Administrator or the Certificate Registrar
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Depositor, the Servicer, the Trustee,
the Certificate Registrar nor any such agent shall be affected by notice to the
contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being 10% or
less of the Cut-off Date Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
[_______________________________], as
Trustee
By:______________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
[_______________________________], as
Certificate Registrar
By:______________________________________
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
---------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform
Gifts to Minors Act
JT TEN - as joint tenants with right
of survivorship and not as ________________
tenants in common (State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)______________________________________________
a Percentage Interest equal to _____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _____________________, account number ______________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________, as its agent.
EXHIBIT C-5
[FORM OF CLASS M-5 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE,
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A, CLASS
M-1, CLASS M-2, CLASS M-3 AND CLASS M-4 CERTIFICATES AS DESCRIBED IN THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") AND CERTAIN OTHER PROPERTY.
▇▇▇▇▇ FARGO ASSET SECURITIES CORPORATION,
HOME EQUITY ASSET-BACKED CERTIFICATES
SERIES 20 - , CLASS M-5
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate and adjustable-rate one- to four-family
first and second lien mortgage loans formed and sold by
▇▇▇▇▇ FARGO ASSET SECURITIES CORPORATION
Series 20 - , Class M-5 Original Principal Balance of the
Class M-5 Certificates as of the
Certificate Interest Rate: Floating Closing Date: $
Date of Pooling and Servicing Agreement Initial Principal Balance: $[ ]
and Cut-off Date: [________], 20
Servicer: ▇▇▇▇▇ Fargo Home Mortgage,
First Distribution Date: [________], Inc.
20
Trustee: [____________________________]
No.
Closing Date: [________], 20
CUSIP:
ISIN:
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS CERTIFICATE
MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING
PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN
ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ▇▇▇▇▇
FARGO ASSET SECURITIES CORPORATION, THE SERVICER, THE TRUSTEE, THE
SECURITIES ADMINISTRATOR OR ANY OF THEIR AFFILIATES. THIS CERTIFICATE IS
NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _________________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Principal Balance of this
Certificate by the Original Principal Balance of the Class M-5 Certificates) in
that certain beneficial ownership interest evidenced by all the Class M-5
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among ▇▇▇▇▇ Fargo Asset
Securities Corporation (hereinafter called the "Depositor," which term includes
any successor entity under the Agreement), the Servicer, the Securities
Administrator and the Trustee, a summary of certain of the pertinent provisions
of which is set forth hereafter. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Business Day immediately preceding such
Distribution Date (the "Record Date"), from funds in the Distribution Account in
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class
M-5 Certificates on such Distribution Date pursuant to the Agreement; provided,
however, that if any Class M-5 Certificate becomes a Definitive Certificate, the
Record Date for such Certificate will be the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date immediately
prior to such Distribution Date and is the registered owner of Class M-5
Certificates, or by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose as provided in the Agreement.
The Certificate Interest Rate for the Class M-5 Certificates for
each Distribution Date will be the least of (i) One-Month LIBOR as of the
related LIBOR Determination Date plus the Class M-5 Certificate Margin, (ii) the
Pool Maximum Rate Cap and (iii) the Pool Cap. Interest will accrue on the Class
M-5 Certificates during each Interest Accrual Period at the Certificate Interest
Rate.
This Certificate is one of a duly authorized issue of Certificates
designated as ▇▇▇▇▇ Fargo Asset Securities Corporation, Home Equity Asset Backed
Certificates of the Series specified on the face hereof (herein called the
"Certificates") and representing a Percentage Interest in the Class M-5
Certificates.
The Class M-5 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
This certificate is subordinated in right of payment to the Class A
Certificates, Class M-1 Certificate, Class M-2 Certificates, Class M-3
Certificates and Class M-4 Certificates as described in the Pooling and
Servicing Agreement referred to herein.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer, the Securities
Administrator and the Trustee with the consent of the Holders of Certificates
entitled to the Voting Interests identified in the agreement. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee, the
Securities Administrator and the Certificate Registrar duly executed by, the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee, the Securities
Administrator and the Certificate Registrar and any agent of the Depositor, the
Servicer, the Trustee, the Securities Administrator or the Certificate Registrar
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Depositor, the Servicer, the Trustee,
the Certificate Registrar nor any such agent shall be affected by notice to the
contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being 10% or
less of the Cut-off Date Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
[_______________________________], as
Trustee
By:______________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
[_______________________________], as
Certificate Registrar
By:______________________________________
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
---------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform
Gifts to Minors Act
JT TEN - as joint tenants with right
of survivorship and not as ________________
tenants in common (State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)______________________________________________
a Percentage Interest equal to _____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _____________________, account number ______________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________, as its agent.
EXHIBIT C-6
[FORM OF CLASS M-6 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE,
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A, CLASS
M-1, CLASS M-2, CLASS M-3, CLASS M-4 AND CLASS M-5 CERTIFICATES AS
DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") AND CERTAIN OTHER PROPERTY.
▇▇▇▇▇ FARGO ASSET SECURITIES CORPORATION,
HOME EQUITY ASSET-BACKED CERTIFICATES
SERIES 20 - , CLASS M-6
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate and adjustable-rate one- to four-family
first and second lien mortgage loans formed and sold by
▇▇▇▇▇ FARGO ASSET SECURITIES CORPORATION
Series 20 - , Class M-6 Original Principal Balance of the
Class M-6 Certificates as of the
Certificate Interest Rate: Floating Closing Date: $
Date of Pooling and Servicing Agreement Initial Principal Balance: $[ ]
and Cut-off Date: [________], 20
Servicer: ▇▇▇▇▇ Fargo Home Mortgage,
First Distribution Date: [________], Inc.
20
Trustee: [____________________________]
No.
Closing Date: [________], 20
CUSIP:
ISIN:
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS CERTIFICATE
MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING
PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN
ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ▇▇▇▇▇
FARGO ASSET SECURITIES CORPORATION, THE SERVICER, THE TRUSTEE, THE
SECURITIES ADMINISTRATOR OR ANY OF THEIR AFFILIATES. THIS CERTIFICATE IS
NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _________________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Principal Balance of this
Certificate by the Original Principal Balance of the Class M-6 Certificates) in
that certain beneficial ownership interest evidenced by all the Class M-6
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among ▇▇▇▇▇ Fargo Asset
Securities Corporation (hereinafter called the "Depositor," which term includes
any successor entity under the Agreement), the Servicer, the Securities
Administrator and the Trustee, a summary of certain of the pertinent provisions
of which is set forth hereafter. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Business Day immediately preceding such
Distribution Date (the "Record Date"), from funds in the Distribution Account in
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class
M-6 Certificates on such Distribution Date pursuant to the Agreement; provided,
however, that if any Class M-6 Certificate becomes a Definitive Certificate, the
Record Date for such Certificate will be the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date immediately
prior to such Distribution Date and is the registered owner of Class M-6
Certificates, or by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose as provided in the Agreement.
The Certificate Interest Rate for the Class M-6 Certificates for
each Distribution Date will be the least of (i) One-Month LIBOR as of the
related LIBOR Determination Date plus the Class M-6 Certificate Margin, (ii) the
Pool Maximum Rate Cap and (iii) the Pool Cap. Interest will accrue on the Class
M-6 Certificates during each Interest Accrual Period at the Certificate Interest
Rate.
This Certificate is one of a duly authorized issue of Certificates
designated as ▇▇▇▇▇ Fargo Asset Securities Corporation, Home Equity Asset Backed
Certificates of the Series specified on the face hereof (herein called the
"Certificates") and representing a Percentage Interest in the Class M-6
Certificates.
The Class M-6 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
This certificate is subordinated in right of payment to the Class A
Certificates, Class M-1 Certificate, Class M-2 Certificates, Class M-3
Certificates, Class M-4 Certificates and Class M-5 Certificates as described in
the Pooling and Servicing Agreement referred to herein.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer, the Securities
Administrator and the Trustee with the consent of the Holders of Certificates
entitled to the Voting Interests identified in the agreement. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee, the
Securities Administrator and the Certificate Registrar duly executed by, the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee, the Securities
Administrator and the Certificate Registrar and any agent of the Depositor, the
Servicer, the Trustee, the Securities Administrator or the Certificate Registrar
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Depositor, the Servicer, the Trustee,
the Certificate Registrar nor any such agent shall be affected by notice to the
contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being 10% or
less of the Cut-off Date Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
[_______________________________], as
Trustee
By:______________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
[_______________________________], as
Certificate Registrar
By:______________________________________
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
---------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform
Gifts to Minors Act
JT TEN - as joint tenants with right
of survivorship and not as ________________
tenants in common (State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)______________________________________________
a Percentage Interest equal to _____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _____________________, account number ______________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________, as its agent.
EXHIBIT C-7
[FORM OF CLASS CE CERTIFICATES]
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A DIRECT
OR INDIRECT BENEFICIAL INTEREST IN A "REGULAR INTEREST" IN A "REAL ESTATE
MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE "CODE") AND CERTAIN OTHER PROPERTY.
THIS CLASS CE CERTIFICATE IS SUBORDINATE TO THE OFFERED CERTIFICATES OF
THIS SERIES TO THE EXTENT DESCRIBED HEREIN AND IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CLASS CE CERTIFICATE WILL NOT BE ENTITLED TO PAYMENTS UNTIL SUCH TIME
AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CLASS CE CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES
LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS
CERTIFICATE WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN
A TRANSACTION THAT DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND
IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED, SECTION 4975 OF THE CODE OR ANY
MATERIALLY SIMILAR PROVISIONS OF APPLICABLE FEDERAL, STATE OR LOCAL LAW
WILL BE REGISTERED.
▇▇▇▇▇ FARGO ASSET SECURITIES CORPORATION,
HOME EQUITY ASSET-BACKED CERTIFICATES
SERIES 20 - , CLASS CE
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate and adjustable-rate one- to four-family
first and second lien mortgage loans formed and sold by
▇▇▇▇▇ FARGO ASSET SECURITIES CORPORATION
Series 20 - , Class CE Servicer: ▇▇▇▇▇ Fargo Home Mortgage,
Inc.
Date of Pooling and Servicing Agreement
and Cut-off Date: [________], 20 Trustee:
[_______________________________]
First Distribution Date: [________],
20 Closing Date: [________], 20
No.
Percentage Interest: 100%
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ▇▇▇▇▇
FARGO ASSET SECURITIES CORPORATION, THE SERVICER, THE TRUSTEE, THE
SECURITIES ADMINISTRATOR OR ANY OF THEIR AFFILIATES. THIS CERTIFICATE IS
NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that __________________________________ is the
registered owner of a Percentage Interest set forth above in that certain
beneficial ownership interest evidenced by all the Class CE Certificates in the
Trust Fund created pursuant to a Pooling and Servicing Agreement, dated as
specified above (the "Agreement"), among ▇▇▇▇▇ Fargo Asset Securities
Corporation (hereinafter called the "Depositor," which term includes any
successor entity under the Agreement), the Servicer, the Securities
Administrator and the Trustee, a summary of certain of the pertinent provisions
of which is set forth hereafter. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the last Business Day of the month immediately
preceding the month in which the related Distribution Date occurs (the "Record
Date"), from funds in the Distribution Account in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class CE Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date immediately
prior to such Distribution Date and is the registered owner of Class CE
Certificates, or by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose as provided in the Agreement.
This Certificate is one of a duly authorized issue of Certificates
designated as ▇▇▇▇▇ Fargo Asset Securities Corporation, Home Equity Asset Backed
Certificates of the Series specified on the face hereof (herein called the
"Certificates") and representing the Percentage Interest specified on the face
hereof.
The Class CE Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer, the Securities
Administrator and the Trustee with the consent of the Holders of Certificates
entitled to the Voting Interests identified in the agreement. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee, the
Securities Administrator and the Certificate Registrar duly executed by, the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No transfer of this Certificate shall be made unless that transfer
is made pursuant to an effective registration statement under the 1933 Act and
effective registration or qualification under applicable state securities laws,
or is made in a transaction that does not require such registration or
qualification. In the event that a transfer is to be made without registration
or qualification, the Certificate Registrar shall require, in order to assure
compliance with such laws, either (i) that the Certificateholder desiring to
effect the transfer and such Certificateholder's prospective transferee each
execute a representation letter in the form described by the Agreement
certifying to the Certificate Registrar the facts surrounding the transfer, or
(ii) unless such transfer is made in reliance upon Rule 144A under the 1933 Act,
that the Depositor and the Certificate Registrar receive an Opinion of Counsel
satisfactory to them that such transfer may be made without such registration or
qualification, which Opinion of Counsel shall not be an expense of the
Depositor, the Trustee, the Securities Administrator or the Certificate
Registrar, in their respective capacities as such. None of the Depositor, the
Certificate Registrar or the Trustee is obligated to register or qualify the
Class of Certificates specified on the face hereof under the 1933 Act or any
other securities law or to take any action not otherwise required under the
Agreement to permit the transfer of such Certificates without registration or
qualification. Any such Certificateholder desiring to effect such transfer
shall, and does hereby agree to, indemnify the Trustee, the Depositor, the
Certificate Registrar and any Servicer against any liability that may result if
the transfer is not so exempt or is not made in accordance with such federal and
state laws.
No transfer of a Certificate or any interest therein may be made to
employee benefit plans and certain other retirement plans and arrangements,
including individual retirement accounts and annuities, ▇▇▇▇▇ plans and
collective investment funds and separate accounts in which such plans, accounts
or arrangements are invested that are subject to the fiduciary responsibility
provisions of ERISA, Section 4975 of the Code or any materially similar
provisions of applicable federal, state or local law (collectively, "Plans") or
any person who is directly or indirectly purchasing the Certificate or interest
therein on behalf of, as named fiduciary of, as trustee of, or with assets of a
Plan.
No service charge will be made for any such 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 transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee, the Securities
Administrator and the Certificate Registrar and any agent of the Depositor, the
Servicer, the Trustee, the Securities Administrator or the Certificate Registrar
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Depositor, the Servicer, the Trustee,
the Certificate Registrar nor any such agent shall be affected by notice to the
contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being 10% or
less of the Cut-off Date Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assume no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
[_______________________________], as
Trustee
By:______________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
[_______________________________], as
Certificate Registrar
By:______________________________________
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
---------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform
Gifts to Minors Act
JT TEN - as joint tenants with right
of survivorship and not as ________________
tenants in common (State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)______________________________________________
a Percentage Interest equal to _____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _____________________, account number ______________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________, as its agent.
EXHIBIT C-8
[FORM OF CLASS P CERTIFICATE]
THIS CLASS P CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES
LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS
CERTIFICATE WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN
A TRANSACTION THAT DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND
IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED, SECTION 4975 OF THE CODE OR ANY
MATERIALLY SIMILAR PROVISIONS OF APPLICABLE FEDERAL, STATE OR LOCAL LAW
WILL BE REGISTERED.
▇▇▇▇▇ FARGO ASSET SECURITIES CORPORATION,
HOME EQUITY ASSET-BACKED CERTIFICATES
SERIES 20 - , CLASS P
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate and adjustable-rate one- to four-family
first and second lien mortgage loans formed and sold by
▇▇▇▇▇ FARGO ASSET SECURITIES CORPORATION
Series 20 - , Class P Servicer: ▇▇▇▇▇ Fargo Home Mortgage,
Inc.
Date of Pooling and Servicing Agreement
and Cut-off Date: [________], 20 Trustee:
[_______________________________]
First Distribution Date: [________],
20 Closing Date: [________], 20
No.
Percentage Interest: 100%
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ▇▇▇▇▇
FARGO ASSET SECURITIES CORPORATION, THE SERVICER, THE TRUSTEE, THE
SECURITIES ADMINISTRATOR OR ANY OF THEIR AFFILIATES. THIS CERTIFICATE IS
NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that __________________________________ is the
registered owner of a Percentage Interest set forth above in that certain
beneficial ownership interest evidenced by all the Class P Certificates in the
Trust Fund created pursuant to a Pooling and Servicing Agreement, dated as
specified above (the "Agreement"), among ▇▇▇▇▇ Fargo Asset Securities
Corporation (hereinafter called the "Depositor," which term includes any
successor entity under the Agreement), the Servicer, the Securities
Administrator and the Trustee, a summary of certain of the pertinent provisions
of which is set forth hereafter. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the last Business Day of the month immediately
preceding the month in which the related Distribution Date occurs (the "Record
Date"), from Prepayment Charges and Servicer Prepayment Charge Payment Amounts
in the Distribution Account in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to the Holders of Class P Certificates on such Distribution Date pursuant to the
Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date immediately
prior to such Distribution Date and is the registered owner of Class P
Certificates, or by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose as provided in the Agreement.
This Certificate is one of a duly authorized issue of Certificates
designated as ▇▇▇▇▇ Fargo Asset Securities Corporation, Home Equity Asset Backed
Certificates of the Series specified on the face hereof (herein called the
"Certificates") and representing the Percentage Interest specified on the face
hereof.
The Class P Certificates are limited in right of payment to
Prepayment Charges received on the Mortgage Loans, Originator Prepayment Charge
Payment Amounts and Servicer Prepayment Charge Payment Amounts, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer, the Securities
Administrator and the Trustee with the consent of the Holders of Certificates
entitled to the Voting Interests identified in the agreement. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee, the
Securities Administrator and the Certificate Registrar duly executed by, the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No transfer of this Certificate shall be made unless that transfer
is made pursuant to an effective registration statement under the 1933 Act and
effective registration or qualification under applicable state securities laws,
or is made in a transaction that does not require such registration or
qualification. In the event that a transfer is to be made without registration
or qualification, the Certificate Registrar shall require, in order to assure
compliance with such laws, either (i) that the Certificateholder desiring to
effect the transfer and such Certificateholder's prospective transferee each
execute a representation letter in the form described by the Agreement
certifying to the Certificate Registrar the facts surrounding the transfer, or
(ii) unless such transfer is made in reliance upon Rule 144A under the 1933 Act,
that the Depositor and the Certificate Registrar receive an Opinion of Counsel
satisfactory to them that such transfer may be made without such registration or
qualification, which Opinion of Counsel shall not be an expense of the
Depositor, the Trustee, the Securities Administrator or the Certificate
Registrar, in their respective capacities as such. None of the Depositor, the
Certificate Registrar or the Trustee is obligated to register or qualify the
Class of Certificates specified on the face hereof under the 1933 Act or any
other securities law or to take any action not otherwise required under the
Agreement to permit the transfer of such Certificates without registration or
qualification. Any such Certificateholder desiring to effect such transfer
shall, and does hereby agree to, indemnify the Trustee, the Depositor, the
Certificate Registrar and any Servicer against any liability that may result if
the transfer is not so exempt or is not made in accordance with such federal and
state laws.
No transfer of a Certificate or any interest therein may be made to
employee benefit plans and certain other retirement plans and arrangements,
including individual retirement accounts and annuities, ▇▇▇▇▇ plans and
collective investment funds and separate accounts in which such plans, accounts
or arrangements are invested that are subject to the fiduciary responsibility
provisions of ERISA, Section 4975 of the Code or any materially similar
provisions of applicable federal, state or local law (collectively, "Plans") or
any person who is directly or indirectly purchasing the Certificate or interest
therein on behalf of, as named fiduciary of, as trustee of, or with assets of a
Plan.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee, the Securities
Administrator and the Certificate Registrar and any agent of the Depositor, the
Servicer, the Trustee, the Securities Administrator or the Certificate Registrar
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Depositor, the Servicer, the Trustee,
the Certificate Registrar or any such agent shall be affected by notice to the
contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being 10% or
less of the Cut-off Date Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
[_______________________________], as
Trustee
By:______________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
[_______________________________], as
Certificate Registrar
By:______________________________________
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
---------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform
Gifts to Minors Act
JT TEN - as joint tenants with right
of survivorship and not as ________________
tenants in common (State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)______________________________________________
a Percentage Interest equal to _____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _____________________, account number ______________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________, as its agent.
EXHIBIT C-9
[FORM OF CLASS R CERTIFICATE]
THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON-UNITED STATES PERSON.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS THE
"RESIDUAL INTEREST" IN TWO SEPARATE "REAL ESTATE MORTGAGE INVESTMENT
CONDUITS," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND
860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
THIS CLASS R CERTIFICATE IS SUBORDINATE TO THE OFFERED CERTIFICATES OF
THIS SERIES TO THE EXTENT DESCRIBED HEREIN AND IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CLASS R CERTIFICATE WILL NOT BE ENTITLED TO PAYMENTS UNTIL SUCH TIME
AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CLASS R CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES
LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS
CERTIFICATE WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN
A TRANSACTION THAT DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND
IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED, SECTION 4975 OF THE CODE OR ANY
MATERIALLY SIMILAR PROVISIONS OF APPLICABLE FEDERAL, STATE OR LOCAL LAW
WILL BE REGISTERED.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CLASS R CERTIFICATE MAY
BE MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (1) AN AFFIDAVIT TO THE
CERTIFICATE REGISTRAR THAT SUCH TRANSFEREE IS NOT (A) THE UNITED STATES,
ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY
INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE
FOREGOING, (B) ANY ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED IN
SECTION 521 OF THE CODE) WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1
OF THE CODE UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY
SECTION 511 OF THE CODE, (C) ANY ORGANIZATION DESCRIBED IN SECTION
1381(a)(2)(C) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE FOREGOING
CLAUSES (A), (B) OR (C) BEING HEREINAFTER REFERRED TO AS A "DISQUALIFIED
ORGANIZATION"), OR (D) AN AGENT OF A DISQUALIFIED ORGANIZATION AND (2) NO
PURPOSE OF SUCH TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX,
AND (3) SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING
TO THE FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE
REGISTRATION IN THE CERTIFICATE REGISTER OR ANY TRANSFER, SALE OR OTHER
DISPOSITION OF THIS CLASS R CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR
AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED
TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE
DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT
NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH
HOLDER OF THE CLASS R CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE SHALL
BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH AND THE
PROVISIONS OF SECTION 5.02(d) OF THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN. ANY PERSON THAT IS A DISQUALIFIED ORGANIZATION IS
PROHIBITED FROM ACQUIRING BENEFICIAL OWNERSHIP OF THIS CLASS R
CERTIFICATE.
▇▇▇▇▇ FARGO ASSET SECURITIES CORPORATION,
HOME EQUITY ASSET-BACKED CERTIFICATES
SERIES 20 - , CLASS R
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate and adjustable-rate one- to four-family
first and second lien mortgage loans formed and sold by
▇▇▇▇▇ FARGO ASSET SECURITIES CORPORATION
Series 20 - , Class R Servicer: ▇▇▇▇▇ Fargo Home Mortgage,
Inc.
Date of Pooling and Servicing Agreement
and Cut-off Date: [________], 20 Trustee:
[_______________________________]
First Distribution Date: [________],
20 Closing Date: [________], 20
No.
Percentage Interest: 100%
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ▇▇▇▇▇
FARGO ASSET SECURITIES CORPORATION, THE SERVICER, THE TRUSTEE, THE
SECURITIES ADMINISTRATOR OR ANY OF THEIR AFFILIATES. THIS CERTIFICATE IS
NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _______________________ is the registered owner
of 100% Percentage Interest in that certain beneficial ownership interest
evidenced by the Class R Certificate in the Trust Fund created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among ▇▇▇▇▇ Fargo Asset Securities Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Servicer, the Securities Administrator and the Trustee, a summary of certain of
the pertinent provisions of which is set forth hereafter. To the extent not
defined herein, the capitalized terms used herein have the meanings assigned in
the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the last Business Day of the month immediately
preceding the month in which the related Distribution Date occurs (the "Record
Date"), from funds in the Distribution Account in the amount required to be
distributed to the Holder of Class R Certificate on such Distribution Date
pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date immediately
prior to such Distribution Date and is the registered owner of Class R
Certificate, or by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register, provided that the Certificate Registrar may deduct a reasonable wire
transfer fee from any payment made by wire transfer. Notwithstanding the above,
the final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.
This Certificate is one of a duly authorized issue of Certificates
designated as ▇▇▇▇▇ Fargo Asset Securities Corporation, Home Equity Asset Backed
Certificates of the Series specified on the face hereof (herein called the
"Certificates") and representing the Percentage Interest specified on the face
hereof.
The Class R Certificate is limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer, the Securities
Administrator and the Trustee with the consent of the Holders of Certificates
entitled to the Voting Interests identified in the agreement. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee, the
Securities Administrator and the Certificate Registrar duly executed by, the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No transfer of this Certificate shall be made unless that transfer
is made pursuant to an effective registration statement under the 1933 Act and
effective registration or qualification under applicable state securities laws,
or is made in a transaction that does not require such registration or
qualification. In the event that a transfer is to be made without registration
or qualification, the Certificate Registrar shall require, in order to assure
compliance with such laws, either (i) that the Certificateholder desiring to
effect the transfer and such Certificateholder's prospective transferee each
execute a representation letter in the form described by the Agreement
certifying to the Certificate Registrar the facts surrounding the transfer, or
(ii) unless such transfer is made in reliance upon Rule 144A under the 1933 Act,
that the Depositor and the Certificate Registrar receive an Opinion of Counsel
satisfactory to them that such transfer may be made without such registration or
qualification, which Opinion of Counsel shall not be an expense of the
Depositor, the Trustee, the Securities Administrator or the Certificate
Registrar, in their respective capacities as such. None of the Depositor, the
Certificate Registrar or the Trustee is obligated to register or qualify the
Class of Certificates specified on the face hereof under the 1933 Act or any
other securities law or to take any action not otherwise required under the
Agreement to permit the transfer of such Certificates without registration or
qualification. Any such Certificateholder desiring to effect such transfer
shall, and does hereby agree to, indemnify the Trustee, the Depositor, the
Certificate Registrar and any Servicer against any liability that may result if
the transfer is not so exempt or is not made in accordance with such federal and
state laws.
No transfer of this Certificate or any interest therein may be made
to employee benefit plans and certain other retirement plans and arrangements,
including individual retirement accounts and annuities, ▇▇▇▇▇ plans and
collective investment funds and separate accounts in which such plans, accounts
or arrangements are invested that are subject to the fiduciary responsibility
provisions of ERISA, Section 4975 of the Code or any materially similar
provisions of applicable federal, state or local law (collectively, "Plans") or
any person who is directly or indirectly purchasing the Certificate or interest
therein on behalf of, as named fiduciary of, as trustee of, or with assets of a
Plan.
The Holder of this Certificate, by its acceptance hereof, shall be
deemed for all purposes to have consented to the provisions of Section 5.02 of
the Agreement and to any amendment of the Agreement deemed necessary by counsel
of the Depositor to ensure that the transfer of this Certificate to any Person
other than a Permitted Transferee or any other Person will not cause the Trust
to cease to qualify as two separate REMICs or cause the imposition of a tax upon
the Trust.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee, the Securities
Administrator and the Certificate Registrar and any agent of the Depositor, the
Servicer, the Trustee, the Securities Administrator or the Certificate Registrar
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Depositor, the Servicer, the Trustee,
the Certificate Registrar nor any such agent shall be affected by notice to the
contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being 10% or
less of the Cut-off Date Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
[_______________________________], as
Trustee
By:______________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
[_______________________________], as
Certificate Registrar
By:______________________________________
Authorized Signatory
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
---------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform
Gifts to Minors Act
JT TEN - as joint tenants with right
of survivorship and not as ________________
tenants in common (State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)______________________________________________
a Percentage Interest equal to _____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _____________________, account number ______________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________, as its agent.
EXHIBIT D-1
GROUP 1 MORTGAGE LOAN SCHEDULE
EXHIBIT D-2
GROUP 2 MORTGAGE LOAN SCHEDULE
EXHIBIT E
FORM OF REQUEST FOR RELEASE OF DOCUMENTS
To: [Custodian]
Re: Pooling and Servicing Agreement dated as of [________], 20 among
▇▇▇▇▇ Fargo Asset Securities Corporation, as depositor, ▇▇▇▇▇ Fargo
Home Mortgage, Inc., as servicer, ▇▇▇▇▇ Fargo Bank, National
Association, as securities administrator and [______________], as
trustee
-------------------------------------------------------------------
All capitalized terms used herein shall have the means ascribed to
them in the Pooling and Servicing Agreement (the "Agreement") referenced above.
In connection with the administration of the Mortgage Loans held by
you as Custodian pursuant to the Agreement, we request the release, and hereby
acknowledge receipt, of the Custodian's Mortgage File for the Mortgage Loan
described below, for the reason indicated.
Mortgage Loan Number:
--------------------
Mortgagor Name, Address & Zip Code:
----------------------------------
Reason for Requesting Documents (check one):
-------------------------------------------
_____ 1. Mortgage Paid in Full
_____ 2. Foreclosure
_____ 3. Substitution
_____ 4. Other Liquidation (Repurchases, etc.)
_____ 5. Nonliquidation Reason:_________________
By:_____________________
(authorized signer)
Issuer:_________________
Address:________________
________________________
Date:___________________
Custodian
---------
[_______________________________]
Please acknowledge the execution of the above request by your
signature and date below:
____________________________________ _____________________________
Signature Date
Documents returned to Custodian:
____________________________________ _____________________________
Custodian Date
EXHIBIT F-1
FORM OF CUSTODIAN'S INITIAL CERTIFICATION
Date
▇▇▇▇▇ Fargo Asset Securities Corporation
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ Fargo Home Mortgage, Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of [________], 20 among ▇▇▇▇▇ Fargo Asset
Securities Corporation, as depositor, ▇▇▇▇▇ Fargo Home Mortgage,
Inc., as servicer, ▇▇▇▇▇ Fargo Bank, National Association, as
securities administrator and [______________], as trustee, with
respect to ▇▇▇▇▇ Fargo Asset Securities Corporation, Home Equity
Asset Backed Certificates, Series 20 -
----------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing
Agreement, the undersigned, as Custodian, hereby certifies that it has received
the documents listed in Section 2.01 of the Pooling and Servicing Agreement for
each Mortgage File pertaining to each Mortgage Loan listed on Exhibits D-1 and
D-2 to the Pooling and Servicing Agreement, subject to any exceptions noted on
Schedule I hereto.
Capitalized words and phrases used herein and not otherwise defined
herein shall have the respective meanings assigned to them in the Pooling and
Servicing Agreement. This Certificate is subject in all respects to the terms of
Section 2.02 of the Pooling and Servicing Agreement and the Pooling and
Servicing Agreement sections cross-referenced therein.
[_______________________________]
as Custodian
By:______________________________________
Name:
Title:
EXHIBIT F-2
FORM OF CUSTODIAN'S INTERIM CERTIFICATION
[Date]
▇▇▇▇▇ Fargo Asset Securities Corporation
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ Fargo Home Mortgage, Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of [________], 20 among ▇▇▇▇▇ Fargo Asset
Securities Corporation, as depositor, ▇▇▇▇▇ Fargo Home Mortgage,
Inc., as servicer, ▇▇▇▇▇ Fargo Bank, National Association, as
securities administrator and [______________], as trustee, with
respect to ▇▇▇▇▇ Fargo Asset Securities Corporation, Home Equity
Asset Backed Certificates, Series 20 -
----------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing
Agreement, the undersigned, as Custodian, hereby certifies that it has received
the documents listed in Section 2.01 of the Pooling and Servicing Agreement for
each Mortgage File pertaining to each Mortgage Loan listed on Exhibits D-1 and
D-2 to the Pooling and Servicing Agreement, subject to any exceptions noted on
Schedule I hereto and, based on an examination of such documents, the
information set forth in the Mortgage Loan Schedules that corresponds to items
(1), (2), (3), (6), (7), (8), (10) and (22) of the Mortgage Loan Schedules
accurately reflects the information in the Mortgage File.
Capitalized words and phrases used herein and not otherwise defined
herein shall have the respective meanings assigned to them in the Pooling and
Servicing Agreement. This Certificate is subject in all respects to the terms of
Section 2.02 of the Pooling and Servicing Agreement and the Pooling and
Servicing Agreement sections cross-referenced therein.
[_______________________________]
as Custodian
By:______________________________________
Name:
Title:
EXHIBIT F-3
FORM OF CUSTODIAN'S FINAL CERTIFICATION
[Date]
▇▇▇▇▇ Fargo Asset Securities Corporation
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ Fargo Home Mortgage, Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of [________], 20 among ▇▇▇▇▇ Fargo Asset
Securities Corporation, as depositor, ▇▇▇▇▇ Fargo Home Mortgage,
Inc., as servicer, ▇▇▇▇▇ Fargo Bank, National Association, as
securities administrator and [______________], as trustee, with
respect to ▇▇▇▇▇ Fargo Asset Securities Corporation, Home Equity
Asset Backed Certificates, Series 20 -
----------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing
Agreement, the undersigned, as Trustee, hereby certifies that as to each
Mortgage Loan listed in the Mortgage Loan Schedules attached as Exhibits D-1 and
D-2 to the Pooling and Servicing Agreement (other than any Mortgage Loan paid in
full or listed on Schedule I hereto), it has received the applicable documents
listed in Section 2.01 of the Pooling and Servicing Agreement.
The undersigned hereby certifies that as to each Mortgage Loan
identified on the Mortgage Loan Schedules, other than any Mortgage Loan listed
on Schedule I hereto, it has reviewed the applicable documents listed in Section
2.01 of the Pooling and Servicing Agreement and has determined that each such
document appears to be complete and, based on an examination of such documents,
the information set forth in the Mortgage Loan Schedules is correct.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement. This
Certificate is qualified in all respects by the terms of said Pooling and
Servicing Agreement.
[_______________________________]
as Custodian
By:______________________________________
Name:
Title:
EXHIBIT G
MORTGAGE LOAN PURCHASE AGREEMENT
EXHIBIT H
FORM OF LOST NOTE AFFIDAVIT
Personally appeared before me the undersigned authority to
administer oaths, ______________________ who first being duly sworn deposes and
says: Deponent is ______________________ of ______________________________,
successor by merger to _________________________________________ ("Seller") and
who has personal knowledge of the facts set out in this affidavit.
On ___________________, _________________________ did execute and
deliver a promissory note in the principal amount of $__________.
That said note has been misplaced or lost through causes unknown and
is presently lost and unavailable after diligent search has been made. Seller's
records show that an amount of principal and interest on said note is still
presently outstanding, due, and unpaid, and Seller is still owner and holder in
due course of said lost note.
Seller executes this Affidavit for the purpose of inducing [____
____________________________], as trustee on behalf of ▇▇▇▇▇ Fargo Asset
Securities Corporation, Home Equity Asset Backed Certificates, Series 20 - , to
accept the transfer of the above described loan from Seller.
Seller agrees to indemnify and hold harmless [_____________________]
and ▇▇▇▇▇ Fargo Asset Securities Corporation for any losses incurred by such
parties resulting from the above described promissory note has been lost or
misplaced.
By:_____________________________________
________________________________________
STATE OF )
) SS:
COUNTY OF )
On this ____ day of _______ 20__, before me, a Notary Public, in and
for said County and State, appeared ________________________, who acknowledged
the extension of the foregoing and who, having been duly sworn, states that any
representations therein contained are true.
Witness my hand and Notarial Seal this ____ day of _______ 20__.
________________________________
________________________________
My commission expires__________.
EXHIBIT I
FORM OF ERISA REPRESENTATION
[_______________________________]
▇▇▇▇▇ Fargo Asset Securities Corporation
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: ▇▇▇▇▇ Fargo Asset Securities Corporation,
Home Equity Asset Backed Certificates, Series 20 -
---------------------------------------------------
Ladies and Gentlemen:
1. [The undersigned is the _________________________ of (the
"Transferee") a [corporation duly organized] and existing under the laws of
__________, on behalf of which he makes this affidavit.] [The undersigned,
___________________, is the transferee (the "Transferee").]
2. The Transferee hereby acknowledges that under the terms of the
Pooling and Servicing Agreement (the "Agreement") among ▇▇▇▇▇ Fargo Asset
Securities Corporation, as depositor (the "Depositor"), ▇▇▇▇▇ Fargo Home
Mortgage, Inc., as servicer, ▇▇▇▇▇ Fargo Bank, National Association, as
securities administrator, and [__________________________], as trustee (the
"Trustee"), no transfer of the ERISA-Restricted Certificates shall be permitted
to be made to any person unless the Depositor and the Certificate Registrar (as
defined in the Agreement) have received a certificate from such transferee in
the form hereof.
3. The Transferee either (x) (i) 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") or any materially similar provisions of
applicable federal, state or local law ("Similar Law"), 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 (ii) (except in the case of the Class R, Class CE and Class
P Certificates) is an insurance company which is purchasing such Certificates
with funds contained in an "insurance company general account" (as such term is
defined in Section V(e) of Prohibited Transaction Class Exemption 95-60 ("PTCE
95-60") and that the purchase and holding of such Certificates are covered under
Sections I and III of PTCE 95-60 or (y) (except in the case of the Class R
Certificate) shall deliver to the Certificate Registrar and the Depositor an
opinion of counsel (a "Benefit Plan Opinion") satisfactory to the Certificate
Registrar, and upon which the Certificate Registrar and the Depositor shall be
entitled to rely, to the effect that the purchase or holding of such Certificate
by the 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 (or similar provisions of Similar Law) and will not subject the
Trustee, the Securities Administrator 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
Securities Administrator or the Depositor.
Capitalized terms used but not defined herein shall have the
meanings ascribed to such terms in the Agreement.
IN WITNESS WHEREOF, the Transferee has executed this certificate.
________________________________________
[Transferee]
By:_____________________________________
Name:
Title:
EXHIBIT J
FORM OF INVESTMENT LETTER [NON-RULE 144A]
[DATE]
[_______________________________]
▇▇▇▇▇ Fargo Asset Securities Corporation
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
In connection with our acquisition of the ▇▇▇▇▇ Fargo Asset
Securities Corporation, Home Equity Asset Backed Certificates, Series 20 - (the
"Certificates"), we certify that (a) we understand that the Certificates are not
being registered under the Securities Act of 1933, as amended (the "Act"), or
any state securities laws and are being transferred to us in a transaction that
is exempt from the registration requirements of the Act and any such laws, (b)
we are an "accredited investor," as defined in Regulation D under the Act, and
have such knowledge and experience in financial and business matters that we are
capable of evaluating the merits and risks of investments in the Certificates,
(c) we have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) we are acquiring the Certificates for investment
for our own account and not with a view to any distribution of such Certificates
(but without prejudice to our right at all times to sell or otherwise dispose of
the Certificates in accordance with clause (g) below), (e) we agree that the
Certificates must be held indefinitely by us and we acknowledge that we are able
to bear the economic risk of investment in the Certificates, (f) we have not
offered or sold any Certificates to, or solicited offers to buy any Certificates
from, any person, or otherwise approached or negotiated with any person with
respect thereto, or taken any other action which would result in a violation of
Section 5 of the Act, (g) we will not sell, transfer or otherwise dispose of any
Certificates unless (1) such sale, transfer or other disposition is made
pursuant to an effective registration statement under the Act or is exempt from
such registration requirements, and if requested, we will at our expense provide
an opinion of counsel satisfactory to the addressees of this Certificate that
such sale, transfer or other disposition may be made pursuant to an exemption
from the Act, (2) the purchaser or transferee of such Certificate has executed
and delivered to you a certificate to substantially the same effect as this
certificate, and (3) the purchaser or transferee has otherwise complied with any
conditions for transfer set forth in the Pooling and Servicing Agreement and (h)
we acknowledge that the Certificates will bear a legend setting forth the
applicable restrictions on transfer.
Very truly yours,
[NAME OF TRANSFEREE]
By:______________________________________
Authorized Officer
FORM OF RULE 144A INVESTMENT LETTER
[DATE]
[_______________________________]
▇▇▇▇▇ Fargo Asset Securities Corporation
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: ▇▇▇▇▇ Fargo Asset Securities Corporation,
Home Equity Asset Backed Certificates, Series 20 -
---------------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the ▇▇▇▇▇ Fargo Asset
Securities Corporation, Home Equity Asset Backed Certificates, Series 20 - (the
"Certificates"), we certify that (a) we understand that the Certificates are not
being registered under the Securities Act of 1933, as amended (the "Act"), or
any state securities laws and are being transferred to us in a transaction that
is exempt from the registration requirements of the Act and any such laws, (b)
we have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (c) we have not, nor has anyone acting on our behalf
offered, transferred, pledged, sold or otherwise disposed of the Certificates,
any interest in the Certificates or any other similar security to, or solicited
any offer to buy or accept a transfer, pledge or other disposition of the
Certificates, any interest in the Certificates or any other similar security
from, or otherwise approached or negotiated with respect to the Certificates,
any interest in the Certificates 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 Certificates under the Securities Act or that would render
the disposition of the Certificates a violation of Section 5 of the Securities
Act or require registration pursuant thereto, nor will act, nor has authorized
or will authorize any person to act, in such manner with respect to the
Certificates, (d) we are a "qualified institutional buyer" as that term is
defined in Rule 144A under the Securities Act and have completed either of the
forms of certification to that effect attached hereto as Annex 1 or Annex 2. We
are aware that the sale to us is being made in reliance on Rule 144A. We are
acquiring the Certificates for our own account or for resale pursuant to Rule
144A and further, understand that such Certificates 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 Securities Act.
Very truly yours,
[NAME OF TRANSFEREE]
By:______________________________________
Authorized Officer
ANNEX 1 TO EXHIBIT J
--------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
i. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
ii. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned
and/or invested on a discretionary basis $____________[1] in securities (except
for the excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with Rule 144A
and (ii) the Buyer satisfies the criteria in the category marked below.
----------------------
[1] Buyer must own and/or invest on a discretionary basis at least $__________
in securities unless Buyer is a dealer, and, in that case, Buyer must own
and/or invest on a discretionary basis at least $__________ in securities.
___ Corporation, etc. The Buyer is a corporation (other than a bank,
savings and loan association or similar institution), Massachusetts
or similar business trust, partnership, or charitable organization
described in Section 501(c)(3) of the Internal Revenue Code of 1986,
as amended.
___ Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the District of
Columbia, the business of which is substantially confined to banking
and is supervised by the State or territorial banking commission or
similar official or is a foreign bank or equivalent institution, and
(b) has an audited net worth of at least $25,000,000 as demonstrated
in its latest annual financial statements, a copy of which is
attached hereto.
___ Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is supervised
and examined by a State or Federal authority having supervision over
any such institutions or is a foreign savings and loan association
or equivalent institution and (b) has an audited net worth of at
least $25,000,000 as demonstrated in its latest annual financial
statements, a copy of which is attached hereto.
___ Broker-dealer. The Buyer is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
___ Insurance Company. The Buyer is an insurance company whose
primary and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by insurance
companies and which is subject to supervision by the insurance
commissioner or a similar official or agency of a State, territory
or the District of Columbia.
___ State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any agency or
instrumentality of the State or its political subdivisions, for the
benefit of its employees.
___ ERISA Plan. The Buyer is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security Act of
1974.
___ Investment Advisor. The Buyer is an investment advisor
registered under the Investment Advisors Act of 1940.
___ Small Business Investment Company. Buyer is a small business
investment company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958.
___ Business Development Company. Buyer is a business
development company as defined in Section 202(a)(22) of the
Investment Advisors Act of 1940.
iii. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer is
a dealer, (iii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iv) bank deposit notes and certificates of deposit,
(v) loan participations, (vi) repurchase agreements, (vii) securities owned but
subject to a repurchase agreement and (viii) currency, interest rate and
commodity swaps.
iv. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Buyer, the Buyer used the
cost of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
v. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
vi. Until the date of purchase of the Rule 144A Securities, the
Buyer will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
_________________________________________
Print Name of Buyer
By:______________________________________
Name:
Title:
Date:____________________________________
ANNEX 2 TO EXHIBIT J
--------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees That are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.
___ The Buyer owned $____________ in securities (other than the
excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year (such amount being calculated in accordance
with Rule 144A).
___ The Buyer is part of a Family of Investment Companies which
owned in the aggregate $________ in securities (other than the
excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year (such amount being calculated in accordance
with Rule 144A).
3. The term "Family of Investment Companies" as used herein means
two or more registered investment companies (or series thereof) that have the
same investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) securities issued or guaranteed by
the U.S. or any instrumentality thereof, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase agreements,
(vi) securities owned but subject to a repurchase agreement and (vii) currency,
interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the undersigned
will notify the parties listed in the Rule 144A Transferee Certificate to which
this certification relates of any changes in the information and conclusions
herein. Until such notice is given, the Buyer's purchase of the Certificates
will constitute a reaffirmation of this certification by the undersigned as of
the date of such purchase.
_________________________________________
Print Name of Buyer or Adviser
By:______________________________________
Name:
Title:
IF AN ADVISER:
_________________________________________
Print Name of Buyer
Date:____________________________________
EXHIBIT K
FORM OF RESIDUAL CERTIFICATE TRANSFER AFFIDAVIT
▇▇▇▇▇ FARGO ASSET SECURITIES CORPORATION,
HOME EQUITY ASSET BACKED CERTIFICATES, SERIES 20 -
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as
follows:
1. The undersigned is [an officer of] ____________________, the
proposed Transferee of an Ownership Interest in the Class R Certificates (the
"Certificate") issued pursuant to the Pooling and Servicing Agreement, (the
"Agreement"), relating to the above-referenced Certificates, among ▇▇▇▇▇ Fargo
Asset Securities Corporation, as depositor, ▇▇▇▇▇ Fargo Home Mortgage, Inc., as
servicer, ▇▇▇▇▇ Fargo Bank, National Association, as securities administrator,
and [_______________________________], as trustee (the "Trustee"). Capitalized
terms used, but not defined herein shall have the meanings ascribed to such
terms in the Agreement. The Transferee has authorized the undersigned to make
this affidavit on behalf of the Transferee.
2. The Transferee is, as of the date hereof, and will be, as of the
date of the Transfer, a Permitted Transferee. The Transferee is acquiring its
Ownership Interest in the Certificates either (i) for its own account or (ii) as
nominee, trustee or agent for another Person and has attached hereto an
affidavit from such Person in substantially the same form as this affidavit. The
Transferee has no knowledge that any such affidavit is false.
3. The Transferee has been advised of, and understands that (i) a
tax will be imposed on Transfers of the Certificate to Persons that are
Disqualified Organization; (ii) such tax will be imposed on the transferor, or,
if such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is a Disqualified Organization, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability for
the tax if the subsequent Transferee furnished to such Person an affidavit that
such subsequent Transferee is not a Disqualified Organization and, at the time
of Transfer, such Person does not have actual knowledge that the affidavit is
false.
4. The Transferee has been advised of, and understands that a tax
will be imposed on a "pass-through entity" holding the Certificate if at any
time during the taxable year of the pass-through entity a Person that is a
Disqualified Organization is the record holder of an interest in such entity.
The Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is not a Disqualified Organization and the
pass-through entity does not have actual knowledge that such affidavit is false.
(For this purpose, a "pass-through entity" includes a regulated investment
company, a real estate investment trust or common trust fund, a partnership,
trust or estate, and certain cooperatives and, except as may be provided in
Treasury Regulations, persons holding interests in pass-through entities as a
nominee for another Person.)
5. The Transferee has reviewed the provisions of Section 5.02(d) of
the Agreement and understands the legal consequences of the acquisition of an
Ownership Interest in the Certificate including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding the
Transfer and mandatory sales. The Transferee expressly agrees to be bound by and
to abide by the provisions of Section 5.02(d) of the Agreement and the
restrictions noted on the face of the Certificate. The Transferee understands
and agrees that any breach of any of the representations included herein shall
render the Transfer to the Transferee contemplated hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit from any
Person to whom the Transferee attempts to Transfer its Ownership Interest in the
Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth in this Exhibit L to the Agreement (a "Transferor Certificate")
to the effect that such Transferee has no actual knowledge that the Person to
which the Transfer is to be made is not a Permitted Transferee.
7. The Transferee does not have the intention to impede the
assessment or collection of any tax legally required to be paid with respect to
the Certificate.
8. The Transferee's taxpayer identification number is _____________.
9. The Transferee is a U.S. Person as defined in Code Section
7701(a)(30).
10. The Transferee is aware that the Certificate may be a
"noneconomic residual interest" within the meaning of Treasury regulations
promulgated pursuant to the Code and that the transferor of a noneconomic
residual interest will remain liable for any taxes due with respect to the
income on such residual interest, unless no significant purpose of the transfer
was to impede the assessment or collection of tax.
11. That the Transferee will not cause income from the Class R
Certificate to be attributable to a foreign permanent establishment or fixed
base, within the meaning of an applicable income tax treaty, of the Transferee
or any other person.
12. That, if the Transferee is purchasing the Class R Certificate in
a transfer intended to meet the safe harbor provisions of Treasury Regulations
Sections 1.860E-1(c), the Transferee has executed and attached Attachment A
hereto.
13. The Transferee is not an employee benefit plan that is subject
to ERISA or a plan that is subject to Section 4975 of the Code or a plan or
arrangement subject to any materially similar provisions of applicable federal,
state or local law, nor are we acting on behalf of such a plan.
IN WITNESS WHEREOF, the Transferee has caused this instrument to
be executed on its behalf, pursuant to authority of its Board of Directors,
by its duly authorized officer, duly attested, this ____ day of ______________,
20__.
[NAME OF TRANSFEREE]
By:______________________________________
Name:
Title:
[Corporate Seal]
ATTEST:
[Assistant] Secretary
Personally appeared before me the above-named ____________ , known
or proved to me to be the same person who executed the foregoing instrument and
to be the ____________________ of the Transferee, and acknowledged that he
executed the same as his free act and deed and the free act and deed of the
Transferee.
Subscribed and sworn before me this ____ day of ________ , 20__.
________________________________________
NOTARY PUBLIC
My Commission expires the ____ day
of ________________, 20__.
ATTACHMENT A
to
AFFIDAVIT PURSUANT TO SECTION 860E(e)(4) OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
Check the appropriate box:
|_| The consideration paid to the Transferee to acquire the Class R Certificate
equals or exceeds the excess of (a) the present value of the anticipated tax
liabilities over (b) the present value of the anticipated savings associated
with holding such Certificate, in each case calculated in accordance with U.S.
Treasury Regulations Sections 1.860E-1(c)(7) and (8), computing present values
using a discount rate equal to the short-term Federal rate prescribed by Section
1274(d) of the Code and the compounding period used by the Transferee.
OR
|_| The transfer of the Class R Certificate complies with U.S. Treasury
Regulations Sections 1.860E-1(c)(5) and (6) and, accordingly:
(i) the Transferee is an "eligible corporation," as defined in U.S.
Treasury Regulations Section 1.860E-1(c)(6)(i), as to which income from
Class R Certificate will only be taxed in the United States;
(ii) at the time of the transfer, and at the close of the
Transferee's two fiscal years preceding the year of the transfer, the
Transferee had gross assets for financial reporting purposes (excluding
any obligation of a person related to the Transferee within the meaning of
U.S. Treasury Regulations Section 1.860E-1(c)(6)(ii)) in excess of $100
million and net assets in excess of $10 million;
(iii) the Transferee will transfer the Class R Certificate only to
another "eligible corporation," as defined in U.S. Treasury Regulations
Section 1.860E-1(c)(6)(i), in a transaction that satisfies the
requirements of Sections 1.860E-1(c)(4)(i), (ii) and (iii) and Section
1.860E-1(c)(5) of the U.S. Treasury Regulations;
(iv) the Transferee has determined the consideration paid to it to
acquire the Class R Certificate based on reasonable market assumptions
(including, but not limited to, borrowing and investment rates, prepayment
and loss assumptions, expense and reinvestment assumptions, tax rates and
other factors specific to the Transferee) that it has determined in good
faith; and
(v) in the event of any transfer of the Class R Certificate by the
Transferee, the Transferee will require its transferee to complete a
representation in the form of this Attachment A as a condition of the
transferee's purchase of the Class R Certificate.
EXHIBIT L
FORM OF TRANSFEROR CERTIFICATE
[DATE]
[_______________________________]
▇▇▇▇▇ Fargo Asset Securities Corporation
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: ▇▇▇▇▇ Fargo Asset Securities Corporation,
Home Equity Asset Backed Certificates, Series 20 -
---------------------------------------------------
Ladies and Gentlemen:
In connection with our disposition of the ▇▇▇▇▇ Fargo Asset
Securities Corporation, Home Equity Asset Backed Certificates, Series 20 - (the
"Certificates"), we certify that (a) we understand that the Certificates have
not been registered under the Securities Act of 1933, as amended (the "Act"),
and are being disposed by us in a transaction that is exempt from the
registration requirements of the Act, (b) we have not offered or sold any
Certificates to, or solicited offers to buy any Certificates from, any person,
or otherwise approached or negotiated with any person with respect thereto, in a
manner that would be deemed, or taken any other action which would result in, a
violation of Section 5 of the Act, (c) to the extent we are disposing of the
Class R Certificate, we have no knowledge the Transferee is not a Permitted
Transferee and (d) no purpose of the proposed disposition of the Class R
Certificate is to impede the assessment or collection of tax.
Very truly yours,
[_____________________]
By: ______________________________
EXHIBIT M
MONTHLY INFORMATION DELIVERED BY SERVICER
1. With respect to the Mortgage Pool, the Group 1 Mortgage Loans and the
Group 2 Mortgage Loans, the number and Principal Balances of all Mortgage
Loans which were the subject of Principal Prepayments during the related
Prepayment Period.
2. With respect to the Mortgage Pool, the Group 1 Mortgage Loans and the
Group 2 Mortgage Loans, the amount of all curtailments which were received
during the related Prepayment Period.
3. With respect to the Mortgage Pool, the Group 1 Mortgage Loans and the
Group 2 Mortgage Loans, the aggregate amount of the principal portion of
all Monthly Payments received during the related Collection Period.
4. With respect to the Mortgage Pool, the Group 1 Mortgage Loans and the
Group 2 Mortgage Loans, the amount of interest received on the Mortgage
Loans during the related Collection Period.
5. With respect to the Mortgage Pool, the Group 1 Mortgage Loans and the
Group 2 Mortgage Loans, the aggregate amount of the Advances made and
recovered with respect to such Distribution Date.
6. With respect to the Mortgage Pool, the Group 1 Mortgage Loans and the
Group 2 Mortgage Loans, the aggregate amount of the Servicing Advances
made and recovered with respect to such Distribution Date.
7. With respect to the Mortgage Pool, the Group 1 Mortgage Loans and the
Group 2 Mortgage Loans, the delinquency and foreclosure information and
the amount of Mortgage Loan Losses during the related Collection Period.
8. The information contained in the Liquidation Report for the related
Collection Period.
9. With respect to the Mortgage Pool, the Group 1 Mortgage Loans and the
Group 2 Mortgage Loans, the weighted average maturity, the weighted
average Mortgage Interest Rate and the weighted average Net Mortgage
Interest Rate as of the last day of the Collection Period preceding of the
related Interest Accrual Period.
10. The Servicing Fees paid and Servicing Fees accrued during the related
Collection Period.
11. The Securities Administrator Fees paid and Securities Administrator Fees
accrued during the related Collection Period.
12. The Credit Risk Manager Fees paid and Credit Risk Manager Fees accrued
during the related Collection Period.
13. The amount of all payments or reimbursements to the Servicer paid or to be
paid since the prior Distribution Date (or in the case of the first
Distribution Date, since the Closing Date).
14. The Pool Balance, the aggregate Principal Balance of the Group 1
Mortgage Loan and the aggregate Principal Balance of the Group 2
Mortgage Loans.
15. With respect to the Mortgage Pool, the Group 1 Mortgage Loans and the
Group 2 Mortgage Loans, the number of Mortgage Loans outstanding at the
beginning and at the end of the related Collection Period.
16. The aggregate interest accrued on the Mortgage Loans, the Group 1 Mortgage
Loans and the Group 2 Mortgage Loans, at their respective Mortgage
Interest Rates for the related Collection Period.
17. The amount deposited in the Collection Account which may not be withdrawn
therefrom pursuant to an Order of a United States Bankruptcy Court of
competent jurisdiction imposing a stay pursuant to Section 362 of U.S.
Bankruptcy Code.
18. The aggregate Realized Losses in the Mortgage Pool, in the Group 1
Mortgage Loans and in the Group 2 Mortgage Loans since the Cut-off Date as
of the end of the related Collection Period.
19. The amount of Prepayment Charges received and the reason for any
Prepayment Charges waived during the related Collection Period.
20. The amount of Yield Maintenance Agreement Payments received with respect
to such Distribution Date.
EXHIBIT N
Form of Yield Maintenance Agreement
EXHIBIT O
Form of Certification
▇▇▇▇▇ FARGO ASSET SECURITIES CORPORATION,
HOME EQUITY ASSET BACKED CERTIFICATES, SERIES 20 -
I, [identify the certifying individual] certify that:
1. I have reviewed the annual report on Form 10-K, and all Monthly Form 8-K's
containing Distribution Date Statements filed in respect of periods
included in the year covered by this annual report, of the ▇▇▇▇▇ Fargo
Home Equity Asset-Backed Securities 20 - Trust;
2. Based on my knowledge, the information in these reports, taken as a whole,
does not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading as of
the last day of the period covered by this annual report;
3. Based on my knowledge, the distribution or servicing information
required to be provided to the Trustee and the Securities Administrator
by the Servicer under the Pooling and Servicing Agreement, dated as of
[________], 20 (the "Agreement"), among ▇▇▇▇▇ Fargo Asset Securities
Corporation, as depositor, ▇▇▇▇▇ Fargo Home Mortgage, Inc., as servicer
(the "Servicer"), ▇▇▇▇▇ Fargo Bank, National Association, as securities
administrator (the "Securities Administrator") and [_______________],
as trustee (the "Trustee") for inclusion in these reports is included
in these reports;
4. I am responsible for reviewing the activities performed by the Servicer
under the Agreement and based on my knowledge and upon the annual
compliance statement required to be delivered to the Securities
Administrator in accordance with the terms of the Agreement, and except as
disclosed in the reports, the Servicer has fulfilled its obligations under
the Agreement; and
5. The reports disclose all significant deficiencies relating to the
Servicer's compliance with the minimum servicing standards based upon the
report provided by an independent public accountant, after conducting a
review in compliance with the Uniform Single Attestation Program for
Mortgage Bankers or similar procedure, as set forth in the Agreement, that
is included in these reports.
By:______________________________________
Name:
Title:
EXHIBIT P
Form of Certification to be Provided by the Securities Administrator to the
Servicer
▇▇▇▇▇ FARGO ASSET SECURITIES CORPORATION,
HOME EQUITY ASSET BACKED CERTIFICATES, SERIES 20 -
I, [identify the certifying individual], certify to ▇▇▇▇▇ Fargo Home
Mortgage, Inc. and its officers, directors and affiliates, and with the
knowledge and intent that they will rely upon this certification, that:
1. I have reviewed the annual report on Form 10-K for the calendar year [___]
and all Monthly Form 8-K's containing Distribution Date Statements filed
in respect of periods included in the year covered by that annual report,
of the ▇▇▇▇▇ Fargo Home Equity Asset-Backed
Securities 20 - Trust;
2. Based on my knowledge, the distribution information in the Distribution
Date Statements contained in all Monthly Form 8-K's included in the
year covered by the annual report on Form 10-K for the calendar year
[___], taken as a whole, does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such
statements were made, not misleading as of the last day of the period
covered by that annual report; and
3. Based on my knowledge, the distribution or servicing information
required to be provided to the Trustee and the Securities Administrator
by the Servicer under the Pooling and Servicing Agreement, dated as of
[________], 20 (the "Agreement"), among ▇▇▇▇▇ Fargo Asset Securities
Corporation, as depositor, ▇▇▇▇▇ Fargo Home Mortgage, Inc., as servicer
(the "Servicer"), ▇▇▇▇▇ Fargo Bank, National Association, as securities
administrator (the "Securities Administrator") and [_______________],
as trustee (the "Trustee"), for inclusion in these reports is included
in these reports.
By:______________________________________
Name:
Title:
EXHIBIT Q
List of Recordation States
Maryland
Florida
Schedule I