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CHASE FUNDING, INC.
Company,
[ADVANTA MORTGAGE CORP, USA]
Servicer,
THE CHASE MANHATTAN BANK
Certificate Administrator
and
-------------------------------------
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of [DATE]
$________________ (Approximate)
Multi-Class Mortgage Pass-Through Certificates
Series [___]
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS.....................................................................
Section 1.01 Certain Defined Terms....................................
Section 1.02 Provisions of General Application........................
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; TRUST FUND........................................
Section 2.01 Conveyance of Mortgage Loans.............................
Section 2.02 Acceptance by Trustee of the Trust Fund; Certain
Substitutions; Certification by Trustee..................
Section 2.03. Trust Fund; Authentication of Certificates...............
Section 2.04. REMIC Election...........................................
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE MASTER SERVICER;
REPURCHASE OF MORTGAGE LOANS
Section 3.01 Representations and Warranties of the Company with
respect to the Mortgage Loans........................
Section 3.02 [Reserved]...............................................
Section 3.03 [Reserved]...............................................
Section 3.04 Representations of the Servicer..........................
Section 3.05 Purchase and Substitution................................
ARTICLE IV
THE CERTIFICATES................................................................
Section 4.01 The Certificates.........................................
Section 4.02 Registration of Transfer and Exchange of Certificates....
Section 4.03 Mutilated, Destroyed, Lost or Stolen Certificates........
Section 4.04 Persons Deemed Owners....................................
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Section 4.05 Establishment of Certificate Accounts;
Deposit in Certificate Accounts..........................
Section 4.06 Permitted Withdrawals from the Certificate Accounts......
Section 4.07 Appointment of Paying Agent; Paying Agent Account........
Section 4.08. Authenticating Agents....................................
ARTICLE V
ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS
Section 5.01 Appointment of the Servicer..............................
Section 5.02 Subservicing Agreements Between the Servicer and
Subservicers...........................
Section 5.03 Collection of Certain Mortgage Loan Payments; Collection
Account..................................................
Section 5.04 Permitted Withdrawals from the Collection Account........
Section 5.05 Payment of Taxes, Insurance and other Charges............
Section 5.06 The Maintenance of Casualty Insurance....................
Section 5.07 Maintenance of Mortgage Impairment Insurance Policy......
Section 5.08 Fidelity Bond; Errors and Omissions Policy...............
Section 5.09 Collection of Taxes, Assessments and Other Items;
Servicing Account .......................................
Section 5.10 Enforcement of Due-on-Sale Clauses, Assumption Agreements
Section 5.11 Realization upon Defaulted Mortgage Loans................
Section 5.12 Trustee to Cooperate; Release of Mortgage Files..........
Section 5.13 Servicing Fee; Servicing Compensation....................
Section 5.14 Reports to the Trustee and Certificate Administration;
Collection Account Statements............................
Section 5.15 Annual Statement as to Compliance........................
Section 5.16 Annual Independent Public Accountants' Servicing Report..
Section 5.17 Optional Purchase of Defaulted Mortgage Loans............
Section 5.18 Reports to be Provided by the Servicer...................
Section 5.19 Adjustment of Servicing Compensation in Respect of
Prepaid Mortgage Loans...................................
Section 5.20 Periodic Advances........................................
Section 5.21 [Reserved]...............................................
Section 5.22 Maintenance of Corporate Existence and Licenses; Merger
or Consolidation of the Servicer.........................
Section 5.23 Assignment of Agreement by Servicer, Servicer Not to
Resign...................................................
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Section 5.24 Information Reports to be Filed by the Servicer..........
Section 5.25. REMIC Related Covenants..................................
ARTICLE VI
DISTRIBUTIONS AND PAYMENTS......................................................
Section 6.01 Collection of Money......................................
Section 6.02 The Certificate Insurance Policy.........................
Section 6.03 Distributions............................................
Section 6.04 Reports by Certificate Administrator.....................
Section 6.05 Compensating Interest....................................
Section 6.06 Effect of Payments by the Certificate Insurer;
Subrogation..............................................
Section 6.07 Allocation of Liquidated Loan Losses.....................
ARTICLE VII
REPORTS TO BE PREPARED BY CERTIFICATE ADMINISTRATOR.............................
Section 7.01 Certificate Administrator Shall Provide
Information as Reasonably Required.......................
Section 7.02 Tax and Information Returns and Reports to
Certificateholders ......................................
ARTICLE VIII
THE COMPANY, THE SERVICER AND THE CERTIFICATE ADMINISTRATOR
Section 8.01 Liability of the Servicer................................
Section 8.02 Merger or Consolidation of the Servicer; Transfer of
Servicing ...............................................
Section 8.03 Limitation on Liability of the Servicer and Others.......
Section 8.04 Liability of the Company and the Certificate
Administrator ...........................................
Section 8.05 Merger or Consolidation of the Company or the Certificate
Administrator............................................
Section 8.06 Limitation on Liability of the Company, the Certificate
Administrator, the Trustee and Others....................
Section 8.07 Company and Certificate Administrator Not to Resign......
Section 8.08 Compensation to the Certificate Administrator............
Section 8.09 Successor to the Servicer. .............................
Section 8.10 Maintenance of Ratings...................................
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ARTICLE IX
DEFAULT.........................................................................
Section 9.01 Events of Default........................................
Section 9.02 Trustee to Act; Appointment of Successor.................
Section 9.03 Waiver of Defaults.......................................
Section 9.04 Mortgage Loans, Trust Fund and Accounts Held for Benefit
of the Certificate Insurer...............................
ARTICLE X
CONCERNING THE TRUSTEE..........................................................
Section 10.01 Duties of Trustee........................................
Section 10.02 Certain Matters Affecting the Trustee....................
Section 10.03 Trustee Not Liable for Certificates or Mortgage Loans....
Section 10.04 Trustee May Own Certificates.............................
Section 10.05 Fees and Expenses........................................
Section 10.06 Eligibility Requirements for Trustee.....................
Section 10.07 Resignation and Removal of the Trustee...................
Section 10.08 Successor Trustee........................................
Section 10.09 Merger or Consolidation of Trustee.......................
Section 10.10 Appointment of Co-Trustee or Separate Trustee............
Section 10.11 Appointment of Office or Agency..........................
ARTICLE XI
TERMINATION.....................................................................
Section 11.01 Termination..............................................
Section 11.02 Additional Termination Requirements......................
Section 11.03 Accounting Upon Termination of Servicer..................
ARTICLE XII
MISCELLANEOUS PROVISIONS........................................................
Section 12.01 Severability of Provisions...............................
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Section 12.02 Limitation on Rights of Certificateholders...............
Section 12.03 Amendment................................................
Section 12.04 Counterparts.............................................
Section 12.05 Duration of Agreement....................................
Section 12.06 Governing Law............................................
Section 12.07 Notices..................................................
Section 12.08 The Certificate Insurer Default..........................
Section 12.09 Third Party Beneficiary..................................
Section 12.10 Intent of the Parties....................................
EXHIBIT A FORM OF CERTIFICATES.....................................
EXHIBIT B [RESERVED]...............................................
EXHIBIT C [RESERVED]...............................................
EXHIBIT D FORM OF CLASS R CERTIFICATE..............................
EXHIBIT E [RESERVED]...............................................
EXHIBIT F MORTGAGE LOAN SCHEDULE...................................
EXHIBIT G [RESERVED]...............................................
EXHIBIT H FORM OF TRUSTEE CERTIFICATION............................
EXHIBIT I FORM OF TRANSFEREE'S LETTER AND AFFIDAVIT................
EXHIBIT J FORM OF TRANSFEROR CERTIFICATE...........................
EXHIBIT K FORM OF INVESTMENT LETTER................................
EXHIBIT L FORM OF RULE 144A LETTER.................................
EXHIBIT M REQUEST FOR RELEASE......................................
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This Pooling and Servicing Agreement, dated as of [DATE], is executed
among Chase Funding , Inc., as depositor, [Advanta Mortgage Corp. USA], as
servicer, The Chase Manhattan Bank, as certificate administrator and
_____________________________________________, as trustee.
In consideration of the mutual agreements herein contained, the
Company, the Servicer, the Certificate Administrator and the Trustee agree as
follows:
ARTICLE I
DEFINITIONS
Section 1.01 Certain Defined Terms. Whenever used herein, the
following words and phrases, unless the context otherwise requires, shall have
the following meanings.
"Accepted Servicing Practices": The Servicer's normal
servicing practices, which in general will conform to the mortgage servicing
practices of prudent mortgage lending institutions which service for their own
account mortgage loans of the same type as the Mortgage Loans in the
jurisdictions in which the related Mortgaged Properties are located.
"Account": Any Eligible Account established pursuant to
Sections 4.05, 4.07, 5.03 or 6.02 hereof.
"Accrual Period": With respect to (i) the Group I Certificates
and any Distribution Date other than the first Distribution Date, the period
commencing on the Distribution Date immediately preceding the month in which
such Distribution Date occurs and ending on the calendar day immediately
preceding such Distribution Date, and with respect to the first Distribution
Date, the period commencing on [DATE] and ending on [DATE] and (ii) the Group II
Certificates and any Distribution Date, the prior calendar month.
"Advanta": Advanta Mortgage Corp. USA, a Delaware corporation.
"Affiliate": With respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
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whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agreement": This Pooling and Servicing Agreement, including
the Exhibits hereto, and all amendments hereof and supplements hereto.
"Amortized Group I Subordinated Amount Requirement": As of
any Distribution Date, the product of (i) _____% and (ii) the aggregate
outstanding Group I Certificate Principal Balance immediately preceding such
Distribution Date.
"Amortized Group II Subordinated Amount Requirement": As of
any Distribution Date, the product of (i) _____% and (ii) the aggregate
outstanding Group II Certificate Principal Balance immediately preceding such
Distribution Date.
"Appraised Value": As to any Mortgaged Property, the lesser of
(i) the appraised value of such Mortgaged Property based upon the appraisal made
at the time of the origination of the related Mortgage Loan, and (ii) the sales
price of the Mortgaged Property at such time of origination, except in the case
of a Mortgaged Property securing a refinanced or modified Mortgage Loan as to
which it is the lesser of the appraised value determined above or the appraised
value determined in an appraisal at the time of refinancing or modification, as
the case may be.
"Assignment of Mortgage": With respect to each Mortgage Loan,
an assignment of the Mortgage, notice of transfer or equivalent instrument, in
recordable form, sufficient under the laws of the jurisdiction wherein the
related Mortgaged Property is located to reflect of record the sale of the
Mortgage to the Trustee for the benefit of the Certificateholders.
"Authorized Denominations": With respect to each class of
Class A Certificates, the minimum Percentage Interest corresponding to a minimum
denomination of $25,000 and integral multiples of $1 in excess thereof. With
respect to each class of Class S Certificates and Class R Certificates, a
minimum Percentage Interest of 10.00% and integral multiples of 0.01 % in excess
thereof.
"Available Funds Shortfall": With respect to the Group I Loans
and any Distribution Date, an amount equal to the sum of (a) the Group I Class A
Interest Distribution Amount minus the Group I Available Funds for such
Distribution Date and (b) the Group I
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Subordination Deficit. With respect to the Group II Loans and any Distribution
Date, an amount equal to the sum of (a) the Group II Class A Interest
Distribution Amount minus the Group II Available Funds for such Distribution
Date and (b) the Group II Subordination Deficit.
"Balloon Mortgage Loan": Any Mortgage Loan that provided on
the date of origination for an amortization schedule extending beyond its stated
maturity date.
"Balloon Payment": With respect to any Balloon Mortgage Loan,
as of any date of determination, the Monthly Payment payable on the stated
maturity date of such Mortgage Loan.
"Business Day": Any day other than (a) a Saturday or Sunday,
or (b) a day on which banking institutions in the State of California, the State
of New York or the state where the Trustee's corporate trust office is located
are authorized or obligated by law or executive order to be closed.
"Certificate": Any Class A Certificate, Class S Certificate or
Class R Certificate executed by the Trustee on behalf of the Trust Fund and
authenticated by the Trustee.
"Certificate Account": The Group I Certificate Account or the
Group II Certificate Account, as applicable.
"Certificate Administration Fee": As to any Mortgage Loan and
any Distribution Date, the fee payable to the Certificate Administrator in
respect of its services as Certificate Administrator that accrues monthly at a
rate equal to 1/12 of ____% of the Principal Balance of such Mortgage Loan as of
the immediately preceding Due Date.
"Certificate Administrator": The Chase Manhattan Bank, a New
York State banking corporation, or its successor in interest or permitted
assigns.
"Certificateholder or Holder": The Person in whose name a
Certificate is registered in the Certificate Register, except that, neither a
Disqualified Organization nor a Non-United States Person shall be a Holder of a
Class R Certificate for any purposes hereof and, solely for the purposes of
giving any consent (except any consent required to be obtained pursuant to
Section 12.03), waiver, request or demand pursuant to this Agreement, any
Certificate registered in the name of the Company, the Servicer or the
Certificate Administrator
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or any Affiliate thereof shall be deemed not to be outstanding and the rights to
which it is entitled shall not be taken into account in determining whether the
requisite percentage of rights necessary to effect any such consent has been
obtained, except as otherwise provided in Section 12.03. The Trustee shall be
entitled to rely upon a certification of the Company, the Servicer or the
Certificate Administrator in determining if any Certificates are registered in
the name of a respective Affiliate. Any Certificates on which payments are made
under the Certificate Insurance Policy shall be deemed to be outstanding and
held by the Certificate Insurer to the extent of such payment.
"Certificate Insurance Payments Account": The Certificate
Insurance Payments Account established in accordance with Section 6.02(c) hereof
and maintained by the Trustee.
"Certificate Insurance Policy": As the context requires,
either (i) the Group I Certificate Insurance Policy and the Group II Certificate
Insurance Policy together or (ii) the Group I Certificate Insurance Policy or
the Group II Certificate Insurance Policy, as applicable.
"Certificate Insurer": [Certificate Insurer], a [stock
insurance company organized and created under the laws of the State of New
York], and any successors thereto.
"Certificate Insurer Default": The failure by the Certificate
Insurer to make a payment required under either of the Group I or Group II
Certificate Insurance Policies in accordance with its terms.
"Certificate Owner": Any Person who is the beneficial owner of
a Class A Certificate registered in the name of the Depository or its nominee.
"Certificate Principal Balance": With respect to each class of
Class A Certificates, as determined separately, as of any time of determination,
the related Original Certificate Principal Balance less any amounts distributed
in reduction of the Certificate Principal Balance thereof pursuant to Section
6.03 on all prior Distribution Dates. With respect to each class of Class S
Certificates, as determined separately, as of any date of determination, the
related Original Certificate Principal Balance, plus the portion of the related
Class S Interest Distribution Amount added to the Certificate Principal Balance
thereof on each Distribution Date prior to such date pursuant to Section 6.03,
plus the related Subordination Increase Amount added to the Certificate
Principal Balance thereof on each Distribution Date prior to such date pursuant
to Section 6.03, less any amounts distributed in reduction of the Certificate
Principal
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Balance thereof pursuant to Section 6.03 on all prior Distribution Dates and
less any losses allocated thereto pursuant to Section 6.09. The Class R
Certificates do not have a "Certificate Principal Balance".
"Certificate Register": As described in Section 4.02(a).
"Civil Relief Act": The Soldiers' and Sailors' Civil Relief
Act of 1940, as amended.
"Civil Relief Act Interest Shortfall": With respect to any
Distribution Date, for any Mortgage Loan as to which there has been a reduction
in the amount of interest collectible thereon for the most recently ended Due
Period as a result of the application of the Civil Relief Act, the amount, if
any, by which (a) interest collectible on such Mortgage Loan during the most
recently ended calendar month is less than (b) interest accrued for the related
Accrual Period on the Principal Balance of such Mortgage Loan, calculated at a
rate equal to the sum of (A)(1) with respect to a Group I Loan, the Class IA
Pass-Through Rate on the Class IA Certificates or (2) with respect to a Group II
Loan, the weighted average of the Class IIA Pass-Through Rates on the Class IIA
Certificates, weighted on the basis of the Certificate Principal Balances of
such Certificates, in each case for such Distribution Date and (B) the per annum
rates at which the related Servicing Fee, the Certificate Administration Fee and
Trustee Fee accrue and the related Premium Percentage.
"Chase": The Chase Manhattan Bank, a New York banking
corporation.
"Class A Certificate": Any of the Class IA-1 Certificates,
Class IIA-1 Certificates, Class IIA-2 Certificates, Class IIA-3 Certificates,
Class IIA-4 Certificates or Class IIA-5 Certificates.
"Class A Certificateholder": A Holder of a Class A
Certificate.
"Class IA Available Funds Pass-Through Rate": As of any
Distribution Date, a per annum rate, expressed as a percentage, equal to the
weighted average of the Net Mortgage Interest Rates on the Group I Loans.
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"Class IIA Available Funds Pass-Through Rate": As of any
Distribution Date, a per annum rate, expressed as a percentage, equal to the
weighted average of the Net Mortgage Interest Rates on the Group II Loans.
"Class IA Carry-Forward Amount": As of any Distribution Date,
the sum of (a) the amount, if any, by which (1) the Group I Insured Distribution
Amount as of the immediately preceding Distribution Date exceeded (ii) the
amount actually distributed to the Holders of the Class IA Certificates on such
Distribution Date in respect thereof (including, without limitation, any Insured
Payments paid to the Holders of the Class IA Certificates by the Certificate
Insurer as described in Sections 6.02 and 6.03 hereof) and (b) interest accrued
for the related Accrual Period on the amount described in clause (a), calculated
at an interest rate equal to the Class IA Pass-Through Rate on the Class IA
Certificates applicable to such Distribution Date. Any Class IA Carry-Forward
Amount shall be deemed to be allocated first to any related Group I
Subordination Deficit and second to any related Class IA Interest Distribution
Amount.
"Class IIA Carry-Forward Amount": As of any Distribution Date,
the sum of (a) the amount, if any, by which (i) the Group II Insured
Distribution Amount as of the immediately preceding Distribution Date exceeded
(ii) the amount actually distributed to the Holders of the Class IIA
Certificates on such Distribution Date in respect thereof (including, without
limitation, any Insured Payments paid to the Holders of the Class IIA
Certificates by the Certificate Insurer as described in Sections 6.02 and 6.03
hereof) and (b) interest accrued for the related Accrual Period on the amount
described in clause (a), calculated at an interest rate equal to the weighted
average of the Class IIA Pass-Through Rate applicable to such Distribution Date,
weighted on the basis of the Certificate Principal Balances of such
Certificates. Any Class IIA Carry-Forward Amount shall be deemed to be allocated
first to any related Group II Subordination Deficit and second to any related
Class IIA Interest Distribution Amount.
"Class IA Certificates": The Class IA-1 Certificates.
"Class IIA Certificates": Collectively, the Class IIA-1
Certificates, the Class IIA-2 Certificates, the Class IIA-3 Certificates, the
Class IIA-4 Certificates and the Class IIA-5 Certificates.
"Class IA Interest Distribution Amount": With respect to the
Class IA Certificates for any Distribution Date the sum of (i) (a) the aggregate
amount of interest accrued for the related Accrual Period on the related
Certificate Principal Balance immediately prior to
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such Distribution Date at the related Class IA Pass-Through Rate (based on a
360-day year and the actual number of days in the prior calendar month if clause
(i) of the definition of Class IA Pass-Through Rate is used with respect to such
Distribution Date, or a 360-day year and a 30-day month if clause (ii) of the
definition of Class IA Pass-Through Rate is used with respect to such
Distribution Date) minus (b) the aggregate related Mortgage Loan Interest
Shortfall for such Distribution Date and (ii) the portion of any related Class
IA Carry-Forward Amount which relates to a shortfall (other than a related
Mortgage Loan Interest Shortfall) in a distribution of a Class IA Interest
Distribution Amount in respect of such Class IA Certificates, in each case as of
such Distribution Date.
"Class IIA Interest Distribution Amount": With respect to each
class of Group II Class A Certificates for any Distribution Date the sum of (i)
(a) the aggregate amount of interest accrued for the related Accrual Period on
the related Certificate Principal Balance immediately prior- to such
Distribution Date at the related Class A Pass-Through Rate (based on a 360-day
year and a 30-day month) minus (b) the aggregate related Mortgage Loan Interest
Shortfall for such Distribution Date with all such reductions allocated among
the Class IIA-1 Certificates, Class IIA-2 Certificates, Class IIA-3
Certificates, Class IIA-4 Certificates and Class IIA-5 Certificates in
proportion to their respective amount of Class IIA Interest Distribution Amount
which would have resulted absent such reductions and (ii) the portion of any
related Class IIA, Carry-Forward Amount which relates to a shortfall (other than
a related Mortgage Loan Interest Shortfall) in a distribution of a Class IIA
Interest Distribution Amount in respect of such Class IIA Certificates, in each
case as of such Distribution Date.
"Class IA Pass-Through Rate": With respect to any Distribution
Date and the Class IA-1 Certificates, the per annum rate equal to the lesser of:
(i) with respect to (a) any Distribution Date
which occurs on or prior to the date on
which the Pool Principal Balance is less
than 10% of the Original Pool Principal
Balance, [One-Month LIBOR] plus ____% and
(b) any Distribution Date thereafter
[One-Month LIBOR] plus ____%; and
(ii) the Class IA Available Funds Pass-Through
Rate for such Distribution Date.
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"Class IIA Pass-Through Rate": With respect to any
Distribution Date, [the lesser of] ____% per annum [and the Class IIA Available
Funds Pass-Through Rate.]
"Class IA Principal Distribution Amount": With respect to the
Class IA Certificates for any Distribution Date, the lesser of:
(a) excess of (i) the sum, as of such Distribution Date,
of (A) the Group I Available Funds and (B) any
related Insured Payment over (ii) the Class IA
Interest Distribution Amount; and
(b) the sum, without duplication, of:
(i) the portion of any Class IA Carry-Forward
Amount which relates to a shortfall in a
distribution of a Group I Subordination
Deficit,
(ii) all scheduled installments of principal in
respect of the Group I Loans received or
advanced during the related Due Period,
together with all unscheduled recoveries of
principal in respect of the Group I Loans
received by the Servicer during the prior
calendar month,
(iii) the Principal Balance of each Group I Loan
that was repurchased by the Seller during
the prior calendar month,
(iv) any Substitution Adjustments delivered by
the Seller on the related Servicer
Remittance Date in connection with a
substitution of a Group I Loan,
(v) the Net Liquidation Proceeds collected by
the Servicer of all Group I Loans during the
related Due Period (to the extent such Net
Liquidation Proceeds related to principal),
(vi) the amount of any Group I Subordination
Deficit for such Distribution Date,
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(vii) the proceeds received by the Trustee with
respect to the Group I Loans from any
termination of the Trust Fund (to the extent
such proceeds are related to principal), and
(viii) the amount of any Group I Subordination
Increase Amount for such Distribution Date;
minus
(ix) the amount of any Group I Subordination
Reduction Amount for such Distribution Date.
"Class IIA Principal Distribution Amount": With respect to the
Class IIA Certificates for any Distribution Date, the lesser of:
(a) the excess of (i) the sum, as of such Distribution Date, of
(A) the Group II Available Funds and (B) any related Insured
Payment over (ii) the Class IIA Interest Distribution Amount;
and
(b) the sum, without duplication, of:
(i) the portion of any Class IIA Carry-Forward Amount
which relates to a shortfall in a distribution of a
Group II Subordination Deficit,
(ii) all scheduled installments of principal in respect of
the Group II Loans received or advanced during the
related Due Period, together with all unscheduled
recoveries of principal in respect of the Group II
Loans received by the Servicer during the prior
calendar month,
(iii) the Principal Balance of each Group II Loan that
either was repurchased by the Seller during the prior
calendar month,
(iv) any Substitution Adjustments delivered by the Seller
on the related Servicer Remittance Date in connection
with a substitution of a Group II Loan,
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(v) the Net Liquidation Proceeds collected by the
Servicer of all Group II Loans during the related Due
Period (to the extent such Net Liquidation Proceeds
related to principal),
(vi) the amount of any Subordination Deficit for such
Distribution Date,
(vii) the proceeds received by the Trustee with respect to
the Group II Loans of any termination of the Trust
Fund (to the extent such proceeds are related to
principal), and
(viii) the amount of any Group II Subordination Increase
Amount for such Distribution Date;
minus
(ix) the amount of any Group II Subordination Reduction
Amount for such Distribution Date.
"Class IA-1 Certificate": Any Certificate designated as a
"Class IA-1 Certificate" on the face thereof, in the form of Exhibit B-1 hereto,
and authenticated by the Trustee in accordance with the procedures set forth
herein.
"Class IIA-1 Certificate": Any Certificate designated as a
"Class IIA-1 Certificate" on the face thereof, in the form of Exhibit B-1
hereto, and authenticated by the Trustee in accordance with the procedures set
forth herein.
"Class IIA-2 Certificate": Any Certificate designated as a
"Class IIA-2 Certificate" on the face thereof, in the form of Exhibit B-1
hereto, and authenticated by the Trustee in accordance with the procedures set
forth herein.
"Class IIA-3 Certificate": Any Certificate designated as a
"Class IIA-3 Certificate" on the face thereof, in the form of Exhibit B-1
hereto, and authenticated by the Trustee in accordance with the procedures set
forth herein.
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"Class IIA-4 Certificate": Any Certificate designated as a
"Class IIA-4 Certificate" on the face thereof, in the form of Exhibit B-1
hereto, and authenticated by the Trustee in accordance with the procedures set
forth herein.
"Class IIA-5 Certificate": Any Certificate designated as a
"Class IIA-5 Certificate" on the face thereof, in the form of Exhibit B-1
hereto, and authenticated by the Trustee in accordance with the procedures set
forth herein.
"Class I S Certificate": Any Certificate designated as a
"Class I S Certificate" on the face thereof, in the form of Exhibit B-1 hereto,
and authenticated by the Trustee in accordance with the procedures set forth
herein.
"Class II S Certificate": Any Certificate designated as a
"Class II S Certificate" on the face thereof, in the form of Exhibit B-1 hereto,
and authenticated by the Trustee in accordance with the procedures set forth
herein.
"Class R Certificate": Any one of the Class R Certificates
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form annexed hereto as Exhibit B-2, subordinate to the
Class A Certificates in right of payment to the extent set forth herein and
evidencing an interest designated as a "residual interest" in the REMIC for
purposes of the REMIC Provisions.
"Class R Certificateholder": A Holder of a Class R
Certificate.
"Class S Certificate": Any of the Class I S or Class II S
Certificates.
"Class S Certificateholder": A Holder of a Class S
Certificate.
"Class S Interest Distribution Amount": With respect to each
class of Class S Certificates for any Distribution Date, the aggregate amount of
interest accrued for the related Accrual Period on the related Notional Amount
immediately prior to such Distribution Date at the related Class S Pass-Through
Rate (based on a 360-day year and the actual number of days in the prior
calendar month in the case of the Class I S Certificates and a 360-day year and
a 30-day month in the case of the Class II S Certificates.
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"Class S Pass-Through Rate": With respect to the Class I S
Certificates and any Distribution Date, a rate equal to the weighted average,
expressed as a percentage, of the related Pool Strip Rates of all of the Group I
Loans in the Trust Fund as of the Due Date in the month immediately preceding
the month in which such Distribution Date occurs, weighted on the basis of the
respective Principal Balances of such Mortgage Loans at the beginning of the
related Due Period. With respect to the Class II S Certificates and any
Distribution Date, a rate equal to the weighted average, expressed as a
percentage, of the related Pool Strip Rates of all of the Group II Loans in the
Trust Fund as of the Due Date in the month immediately preceding the month in
which such Distribution Date occurs, weighted on the basis of the respective
Principal Balances of such Mortgage Loans at the beginning of the related Due
Period.
"Closing Date": [DATE].
"Code": The Internal Revenue Code of 1986, as amended.
"Collection Account": The Eligible Account established and
maintained by the Servicer pursuant to Section 5.03.
"Combined Loan-to-Value Ratio": With respect to any Mortgage
Loan secured by a second lien on the related Mortgaged Property, as of any date,
the fraction, expressed as a percentage, the numerator of which is the sum of
(i) the current principal balance of such Mortgage Loan and (ii) the current
aggregate principal balance of the related Senior Mortgage Loans (if any) at the
date of determination, and the denominator of which is the Appraised Value of
the related Mortgaged Property.
"Company": Chase Funding, Inc., a New York corporation, and
any successor thereto.
"Compensating Interest": As defined in Section 6.05 hereof.
"Corporate Trust Office": The principal office of the Trustee
at which at any particular time its corporate trust business shall be
administered, which office at the date of execution of this instrument is
located at _____________________________________________________________________
________________________________________________________________.
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"Curtailment": With respect to a Mortgage Loan, any payment of
principal received during a Due Period as part of a payment that is in excess of
the amount of the Monthly Payment due for such Due Period and which is not
intended to satisfy the Mortgage Loan in full, nor is intended to cure a
delinquency.
"Cut-off Date": [DATE].
"DCR": Duff & Xxxxxx Credit Rating Co., or its successor in
interest.
"Debt Service Reduction": With respect to any Mortgage Loan, a
reduction by a court of competent jurisdiction of the Monthly Payment due on
such Mortgage Loan in a proceeding under the United States Bankruptcy Code,
except such a reduction that constitutes a Deficient Valuation or a permanent
forgiveness of principal.
"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 such Mortgage
Loan, which valuation results from a proceeding initiated under the United
States Bankruptcy Code.
"Deleted Mortgage Loan": A Mortgage Loan replaced by or to be
replaced by a Qualified Substitute Mortgage Loan.
"Delinquent": A Mortgage Loan is "delinquent" if any payment
due thereon is not made by the close of business on the day such payment is
scheduled to be due. A Mortgage Loan is "30 days delinquent" if such payment has
not been received by the close of business on the corresponding day of the month
immediately succeeding the month in which such payment was due, or, if there is
no such corresponding day (e.g., as when a 30-day month follows a 31-day month
in which a payment was due on the 31st day of such month) then on the last day
of such immediately succeeding month. Similarly for "60 days delinquent," "90
days delinquent" and so on.
"Depository": The Depository Trust Company, 00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 and any successor Depository hereafter named. The
nominee of the initial Depository for purposes of registering those Certificates
that are to be Class A Certificates is Cede & Co. The Depository shall at all
times be a "clearing corporation" as defined in Section 8-102(3) of the Uniform
Commercial Code of the State of New York and a "clearing agency"
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registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934, as amended.
"Depository Participant": Any broker-dealer, bank or other
financial institution for which the Depository holds Class A Certificates from
time to time as a securities depositary.
"Disqualified Organization": Any of (i) the United States, any
State or political subdivision thereof, any possession of the United States, or
any agency or instrumentality of any of the foregoing (other than an
instrumentality which is a corporation if all of its activities are subject to
tax and, except for the FHLMC, a majority of its board of directors is not
selected by such governmental unit), (ii) any foreign government, any
international organization, or any agency or instrumentality of any of the
foregoing, (iii) any organization (other than certain farmers' cooperatives
described in Section 521 of the Code) which is exempt from the tax imposed by
Chapter 1 of the Code (unless such organization is subject to the tax imposed by
Section 511 of the Code on unrelated business taxable income). or rural electric
and telephone cooperatives described in Section 1381(a)(2)(C) of the Code and
(iv) any other Person so designated by the Trustee based upon an Opinion of
Counsel provided to the Trustee that the holding of an ownership interest in a
Class R Certificate by such Person may cause the REMIC or any Person having an
ownership interest in any Class of Certificates (other than such Person) to
incur liability for any federal tax imposed under the Code that would not
otherwise be imposed but for the transfer of an ownership interest in the Class
R Certificate to such Person. The terms "United States", "State" and
"international organization" shall have the meanings set forth in Section 7701
of the Code.
"Distribution Date": The 25th day of any month or if such 25th
day is not a Business Day, the first Business Day immediately following,
commencing on [DATE].
"Due Date": The first day of each calendar month.
"Due Period": With respect to each Distribution Date, the
period beginning on the opening of business on the second day of the calendar
month preceding the calendar month in which such Distribution Date occurs, and
ending at the close of business on the first day of the calendar month in which
such Distribution Date occurs.
"Eligible Account": Either (A) an account or accounts
maintained with an institution (which may include the Trustee, provided such
institution otherwise meets these
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requirements) whose deposits are insured by the FDIC, the unsecured and
uncollateralized debt obligations of which institution shall be rated AA or
better by S&P and DCR and Aa2 or better by Xxxxx'x and in the highest short term
rating by the Rating Agencies, and which is (i) a federal savings and loan
association duly organized, validly existing and in good standing under the
federal banking laws, (ii) an institution duly organized, validly existing and
in good standing under the applicable banking laws of any state, (iii) a
national banking association (including the Trustee) duly organized, validly
existing and in good standing under the federal banking laws, (iv) a principal
subsidiary of a bank holding company, or (v) approved in writing by the
Certificate Insurer and the Rating Agencies or (B) a trust account or accounts
maintained with the corporate trust department of a federal or state chartered
depository institution acceptable to each Rating Agency and the Certificate
Insurer (Chase shall be deemed acceptable, provided that Chase otherwise meets
these requirements), having capital and surplus of not less than $50,000,000,
acting in its fiduciary capacity.
"ERISA": The Employee Retirement Income Security Act of 1974,
as amended.
"Event Of Default": One or more of the events described in
Section 9.01 hereof.
"FDIC": The Federal Deposit Insurance Corporation and any
successor thereto.
"FHLMC": The Federal Home Loan Mortgage Corporation and any
successor
thereto.
"FNMA": The Federal National Mortgage Association and any
successor thereto.
"Foreclosure Profits": As to any Distribution Date, (i) Net
Liquidation Proceeds in respect of each Mortgage Loan that became a Liquidated
Mortgage Loan during the month immediately preceding the month of such
Distribution Date minus (ii) the sum of the unpaid principal balance of each
such Liquidated Mortgage Loan plus accrued and unpaid interest at the applicable
Mortgage Interest Rate on the unpaid principal balance thereof from the Due Date
to which interest was last paid by the Mortgagor (or, in the case of a
Liquidated Mortgagee Loan that had been an REO Mortgage Loan, from the Due Date
to which interest was last deemed to have been paid pursuant to Section 5.11) to
the first day of the month following the month in which such Mortgage Loan
became a Liquidated Mortgage Loan.
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"Fund": The VISTA U.S. Government Money Market Fund and the
VISTA Prime Money Market Fund, referred to collectively. The Servicer shall
instruct the Trustee regarding the voting of any proxies with respect to the
Fund.
"GAAP": Generally accepted accounting principles.
"Gross Margin": As to each Group I Loan, the fixed percentage
set forth in the related Mortgage Note and indicated in the related Mortgage
Loan Schedules as the 'Gross Margin, " which percentage is added to the related
Index on each Rate Adjustment Date to determine (subject to rounding, the
Periodic Cap, Lifetime Floor and the Lifetime Cap) the Mortgage Interest Rate on
such Mortgage Loan until the next Rate Adjustment Date.
"Group I Available Funds": As defined in Section 6.02(a).
"Group II Available Funds": As defined in Section 6.02(a).
"Group I Certificate Account": The Certificate Account
established with respect to the Group I Certificates in accordance with Section
4.05 hereof and maintained by the Trustee.
"Group II Certificate Account": The Certificate Account
established with respect to the Group II Certificates in accordance with Section
4.05 hereof and maintained by the Trustee.
"Group I Certificate Insurance Policy": The certificate
guaranty insurance policy No. _____, and all endorsements thereto dated the
Closing Date, issued by the Certificate Insurer for the benefit of the Group I
Certificateholders, a copy of which is attached hereto as Exhibit A-1.
"Group II Certificate Insurance Policy": The certificate
guaranty insurance policy No. _____, and all endorsements thereto dated the
Closing Date, issued by the Certificate Insurer for the benefit of the Group II
Certificateholders, a copy of which is attached hereto as Exhibit A-2.
"Group I Certificates": Collectively, the Class IA-1
Certificates, the Class I S Certificates and the Class R Certificates.
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"Group II Certificates": Collectively, the Class IIA
Certificates, the Class II S Certificates and the Class R Certificates.
"Group I Excess Subordinated Amount": With respect to any
Distribution Date, the difference, if any, between (a) the Group I Subordinated
Amount that would exist on such Distribution Date after taking into account all
distributions to be made on such Distribution Date (exclusive of any reductions
thereto attributable to Group I Subordination Reduction Amounts on such
Distribution Date) and (b) the Group I Required Subordinated Amount for such
Distribution Date.
"Group II Excess Subordinated Amount": With respect to any
Distribution Date, the difference, if any, between (a) the Group II Subordinated
Amount that would exist on such Distribution Date after taking into account all
distributions to be made on such Distribution Date (exclusive of any reductions
thereto attributable to Group II Subordination Reduction Amounts on such
Distribution Date) and (b) the Group II Required Subordinated Amount for such
Distribution Date.
"Group I Insured Distribution Amount": With respect to any
Distribution Date, the sum of (a) the Class IA Interest Distribution Amount with
respect to such Distribution Date and (b) the Group I Subordination Deficit, if
any, as of such Distribution Date.
"Group II Insured Distribution Amount": With respect to any
Distribution Date, the sum of (a) the Class IIA Interest Distribution Amount
with respect to such Distribution Date and (b) the Group II Subordination
Deficit, if any, as of such Distribution Date.
"Group I Loans" or "Loan Group I": The group of Mortgage Loans
identified on Exhibit D- I from time to time.
"Group II Loans"or "Loan Group II": The group of Mortgage
Loans identified on Exhibit D-2 from time to time.
"Group I Net Monthly Excess Cashflow": As of any Distribution
Date, an amount equal to (x) the Group I Available Funds minus (y) the sum of
(1) the sum of the Class IA Interest Distribution Amount and the amount
described in clause (b) of the definition of Class IA Principal Distribution
Amount (calculated for this purpose without regard to any Group IA
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Subordination Increase Amount or portion thereof included therein) and (ii) the
Group I Reimbursement Amount, if any, for such Distribution Date.
"Group II Net Monthly Excess Cashflow": As of any Distribution
Date, an amount equal to (x) the Group II Available Funds minus (y) the sum of
(i) sum of the Class IIA Interest Distribution Amount and the amount described
in clause (b) of the definition of Class IIA Principal Distribution Amount
(calculated for this purpose without regard to any Group II Subordination
Increase Amount or portion thereof included therein) and (ii) the Group II
Reimbursement Amount, if any, for such Distribution Date.
"Group I Pool Principal Balance": The aggregate Principal
Balances of the Group I Loans as of any date of determination.
"Group II Pool Principal Balance": The aggregate Principal
Balances of the Group II Loans as of any date of determination.
"Group I Principal Remittance Amount": As of any Distribution
Date, the sum, without duplication, of the amounts specified in clauses (b)(ii)
through (v), (vii) and (viii) of the definition of Class IA Principal
Distribution Amount.
"Group II Principal Remittance Amount": As of any Distribution
Date, the sum, without duplication, of the amounts specified in clauses (b)(1)
through (v), (vii) and (viii) of the definition of Class IIA Principal
Distribution Amount.
"Group I Reimbursement Amount": As of any Distribution Date,
the sum of (a)(i) all Group I Insured Payments (as defined in the Group I
Certificate Insurance Policy) previously paid by the Certificate Insurer and in
each case not previously repaid to the Certificate Insurer pursuant to Sections
6.03(b) or 6.03(c) hereof plus (ii) interest accrued on each such Group I
Insured Payment and Group I Preference Payments not previously repaid calculated
at the Class IA Pass-Through Rate from the date such Group I Insured Payment or
Group I Preference Amount was made and (b)(i) any amounts then due and owing to
the Certificate Insurer under the Insurance Agreement, as certified to the
Trustee by the Certificate Insurer plus (ii) interest on such amounts at the
Late Payment Rate (as defined in the Insurance Agreement), The Certificate
Insurer shall notify the Trustee, the Certificate Administrator and the Company
of the amount of any Group I Reimbursement Amount.
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"Group II Reimbursement Amount": As of any Distribution Date,
the sum of (a)(i) all Group II Insured Payments (as defined in the Group II
Certificate Insurance Policy) previously paid by the Certificate Insurer and in
each case not previously repaid to the Certificate Insurer pursuant to Sections
6.03(b) or 6.03(c) hereof plus (ii) interest accrued on each such Group II
Insured Payment and Group II Preference Payments not previously repaid
calculated at the Class IIA Pass-Through Rate from the date such Group II
Insured Payment or Group II Preference Amount was made and (b)(i) any amounts
then due and owing to the Certificate Insurer under the Insurance Agreement, as
certified to the Trustee by the Certificate Insurer plus (ii) interest on such
amounts at the Late Payment Rate (as defined in the Insurance Agreement). The
Certificate Insurer shall notify the Trustee, the Certificate Administrator and
the Company of the amount of any Group II Reimbursement Amount.
"Group I Required Subordinated Amount": For each Distribution
Date, the amount determined as follows:
(a) for any Distribution Date occurring during the period
commencing on the Closing Date and ending on the later of (x) the date
upon which principal payments on the Group I Loans equal to one-half of
the Original Group I Pool Principal Balance have been received and (y)
the thirtieth Distribution Date following the Closing Date, the greater
of the following:
(i) the Initial Group I Specified Subordinated
Amount; and
(ii) two times an amount equal to (x) one-half of the
aggregate Principal Balances of all Group I Loans which are 91
or more days Delinquent (including REO Properties) minus (y)
three times the Group I Net Monthly Excess Cashflow for such
Distribution Date; and
(b) for any Distribution Date occurring after the end
of the period in clause (a) above, the greatest of the
following:
(i) the lesser of (A) the Initial Group I
Specified Subordinated Amount and (B) two times the
Amortized Group I Subordinated Amount Requirement,
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(ii) two times the difference of (A)
one-half of the aggregate Principal Balances of all
Group I Loans which are 91 or more days Delinquent
(including REO Properties) and (B) three times the
Group I Net Monthly Excess Cashflow for such
Distribution Date,
(iii) an amount equal to 0.50% of the
Original Group I Pool Principal Balance and
(iv) the sum of the outstanding Principal
Balances of the Group I Loans with the four largest
outstanding Principal Balances.
Notwithstanding anything to the contrary set forth in clauses
(a) or (b) above, on or after any Distribution Date on which a Group I Insured
Payment is made, or any Distribution Date on which an Event of Default has
occurred and is continuing, the Group I Required Subordinated Amount shall be
equal to the Group I Required Subordinated Amount as of the Distribution Date
immediately prior to the Distribution Date on which either such event occurred.
"Group II Required Subordinated Amount": For each Distribution
Date, the amount determined as follows:
(a) for any Distribution Date occurring during the period
commencing on the Closing Date and ending on the later of (x) the date
upon which principal payments on the Group II Loans equal to one-half
of the Original Group II Pool Principal Balance have been received and
(y) the thirtieth Distribution Date following the Closing Date, the
greater of the following:
(i) the Initial Group II Specified Subordinated
Amount; and
(ii) two times an amount equal to (x) one-half of the
aggregate Principal Balances of all Group II Loans which are
91 or more days Delinquent (including REO Properties) minus
(y) three times the Group II Net Monthly Excess Cashflow for
such Distribution Date; and
(b) or any Distribution Date occurring after the end of the
period in clause (a) above, the greatest of the following:
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(i) the lesser of (A) the Initial Group II
Specified Subordinated Amount and (B) two times the Amortized
Group II Subordinated Amount Requirement,
(ii) two times the difference of (A)
one-half of the aggregate Principal Balances of all Group II
Loans which are 91 or more days Delinquent (including REO
Properties) and (B) three times the Group II Net Monthly
Excess Cashflow for such Distribution Date,
(iii) an amount equal to 0.50% of the
Original Group II Pool Principal Balance and
(iv) the sum of the then outstanding
Principal Balances of the Group II Loans with the four largest
outstanding Principal Balances.
Notwithstanding anything to the contrary set forth in clauses (a) or
(b) above, on or after any Distribution Date on which a Group II Insured Payment
is made, or any Distribution Date on which an Event of Default has occurred and
is continuing, the Group II Required Subordinated Amount shall be equal to the
Group II Required Subordinated Amount as of the Distribution Date immediately
prior to the Distribution Date on which either such event occurred.
"Group I Subordinated Amount": As of any Distribution Date,
the difference, if any, between (a) the Group I Pool Principal Balance as of the
close of business on the last day of the related Due Period and (b) the
aggregate Certificate Principal Balance of the Class IA Certificates as of such
Distribution Date (after taking into account the payment of the Group I
Principal Remittance Amount on such Distribution Date); provided, however, that
such amount shall not be less than zero.
"Group II Subordinated Amount": As of any Distribution Date,
the difference, if any, between (a) the Group II Pool Principal Balance as of
the close of business on the last day of the related Due Period and (b) the
aggregate Certificate Principal Balance of the Class IIA Certificates as of such
Distribution Date (after taking into account the payment of the Group II
Principal Remittance Amount on such Distribution Date); provided, however, that
such amount shall not be less than zero.
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"Group I Subordination Deficiency Amount": With respect to any
Distribution Date, the amount, if any, by which (a) the Group I Required
Subordinated Amount applicable to such Distribution Date exceeds (b) the Group I
Subordinated Amount applicable to such Distribution Date prior to taking into
account the payment of any related Group I Subordination Increase Amounts on
such Distribution Date.
"Group II Subordination Deficiency Amount": With respect to
any Distribution Date, the amount, if any, by which (a) the Group II Required
Subordinated Amount applicable to such Distribution Date exceeds (b) the Group
II Subordinated Amount applicable to such Distribution Date prior to taking into
account the payment of any related Group II Subordination Increase Amounts on
such Distribution Date.
"Group I Subordination Deficit": As of any Distribution Date,
the amount, if any, by which (a) the aggregate Certificate Principal Balance of
the Class IA Certificates (after taking into account the payment of the Class IA
Principal Distribution Amount (other than payments in respect thereof under the
Group I Certificate Insurance Policy)) on such date exceeds (b) the Group I Pool
Principal Balance determined as of the end of the immediately preceding Due
Period.
"Group II Subordination Deficit": As of any Distribution Date,
the amount, if any, by which (a) the aggregate Certificate Principal Balance of
the Class IIA Certificates (after taking into account the payment of the Class
IIA Principal Distribution Amount (other than payments in respect thereof under
the Group II Certificate Insurance Policy)) on such date exceeds (b) the Group
II Pool Principal Balance determined as of the end of the immediately preceding
Due Period.
"Group I Subordination Increase Amount": With respect to any
Distribution Date, the lesser of (a) the Group I Subordination Deficiency Amount
as of such Distribution Date (after taking into account the payment of the Class
IA Principal Distribution Amount on such Distribution Date (other than clause
(viii) thereof)) and (b) the amount of Group I Net Monthly Excess Cashflow on
such Distribution Date.
"Group II Subordination Increase Amount": With respect to any
Distribution Date, the lesser of (a) the Group II Subordination Deficiency
Amount as of such Distribution
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Date (after taking into account the payment of the Class IIA Principal
Distribution Amount on such Distribution Date (other than clause (viii)
thereof)) and (b) the amount of Group II Net Monthly Excess Cashflow on such
Distribution Date.
"Group I Subordination Reduction Amount": With respect to any
Distribution Date, an amount equal to the lesser of (a) the Group I Excess
Subordinated Amount for such Distribution Date and (b) the Group I Principal
Remittance Amount for the prior Due Period.
"Group II Subordination Reduction Amount": With respect to any
Distribution Date, an amount equal to the lesser of (a) the Group II Excess
Subordinated Amount for such Distribution Date and (b) the Group II Principal
Remittance Amount for the prior Due Period.
"Index": As to any Group I Loan, a rate per annum equal to the
average of the interbank offered rates for six month United States dollar
deposits in the London market as published in the Western Edition of The Wall
Street Journal, as most recently available as of the first business day
forty-five, thirty or five days prior to any Rate Adjustment Date, as specified
in the related Mortgage Note.
"Indirect Participant": Any financial institution for whom any
Depository Participant holds an interest in a Class A Certificate.
"Initial Group I Specified Subordinated Amount": An amount
equal to ____% of the Original Group I Pool Principal Balance.
"Initial Group II Specified Subordinated Amount": An amount
equal to ____% of the Original Group II Pool Principal Balance.
"Insurance Agreement": The Insurance Agreement dated as of
[DATE] among the Certificate Insurer, the Company, the Servicer, the Certificate
Administrator and the Trustee and attached hereto as Exhibit R, as such
agreement may be amended or supplemented in accordance with the provisions
thereof.
"Insurance Proceeds": Proceeds paid by any insurer pursuant to
any insurance policy covering a Mortgage Loan to the extent such proceeds are
not applied to the restoration of the related Mortgaged Property or released to
the related Mortgagor in accordance with Accepted Servicing Practices.
"Insurance Proceeds" do not include "Insured Payments."
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"Insured Payment": As determined separately for the Group I
and Group II Class A Certificates, the sum of (i) with respect to each
Distribution Date, the related Available Funds Shortfall and (ii) any related
unpaid Preference Amount.
"Interest Determination Date": With respect to any Accrual
Period, the second London Business Day preceding the commencement of such
Accrual Period.
"Lifetime Cap": As to any Mortgage Loan in Loan Group I, the
maximum Mortgage Interest Rate set forth in the related Mortgage Note and
indicated in the Mortgage Loan Schedule, which rate may be applicable to such
Mortgage Loan at any time during the life of such Mortgage Loan.
"Lifetime Floor": As to any Mortgage Loan in Loan Group I, the
minimum Mortgage Interest Rate set forth in the related Mortgage Note and
indicated in the Mortgage Loan Schedule, which rate may be applicable to such
Mortgage Loan at any time during the life of such Mortgage Loan.
"Liquidated Loan Loss": With respect to any Distribution Date,
the aggregate of the amount of losses with respect to each Mortgage Loan which
became a Liquidated Mortgage Loan during the Due Period preceding such
Distribution Date, equal to (i) the unpaid principal balance of each such
Liquidated Mortgage Loan, plus accrued interest thereon in accordance with the
amortization schedule at the time applicable thereto at the applicable Mortgage
Interest Rate from the Due Date as to which interest was last paid with respect
thereto through the last day of the month in which such Mortgage Loan became a
Liquidated Mortgage Loan, minus (ii) Net Liquidation Proceeds with respect to
such Liquidated Mortgage Loan.
"Liquidated Mortgage Loan": A Mortgage Loan with respect to
which the related Mortgaged Property has been acquired, liquidated or foreclosed
and with respect to which the Servicer determines that all Liquidation Proceeds
which it expects to recover have been recovered.
"Liquidation Expenses": Expenses incurred by the Servicer or
any Subservicer in connection with the liquidation of any defaulted Mortgage
Loan or property acquired in respect thereof (including, without limitation,
legal fees and expenses, committee or referee fees, and, if applicable,
brokerage commissions and conveyance taxes), any unreimbursed amount expended by
the Servicer pursuant to Sections 5.05, 5.06 and 5.11 respecting the related
Mortgage Loan
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and any unreimbursed expenditures for real property taxes or for property
restoration or preservation of the related Mortgaged Property. Liquidation
Expenses shall not include any previously incurred expenses in respect of an PEO
Mortgage Loan which have been netted against related REO Proceeds.
"Liquidation Proceeds": Amounts received by the Servicer
(including Insurance Proceeds) in connection with the liquidation of defaulted
Mortgage Loans or property acquired in respect thereof, whether through
foreclosure, sale or otherwise, including payments in connection with such
Mortgage loans received from the Mortgagor, other than amounts required to be
paid to the Mortgagor pursuant to the terms of the applicable Mortgage or to be
applied otherwise pursuant to law.
"Loan-to-Value Ratio or LTV": With respect to any Mortgage
Loan, the fraction, expressed as a percentage, the numerator of which is the
principal balance of such Mortgage Loan, as of the date of origination of the
Mortgage Loan, divided by the Appraised Value of the related Mortgaged Property.
"London Business Day": Any day in which banks in the City of
London, England are open and conducting transactions in United States dollars.
"Majority Certificateholders": With respect to each Loan
Group, the Holder or Holders of Class A Certificates evidencing Percentage
Interests in excess of 51 % in the aggregate.
"Monthly Payment": As to any Mortgage Loan (including any REO
Mortgage Loan) and any Due Date, the scheduled payment of principal and interest
due thereon for such Due Date (after adjustment for any Curtailments and
Deficient Valuations occurring prior to such Due Date but before any adjustment
to such amortization schedule by reason of any bankruptcy, other than Deficient
Valuations or similar proceeding or any moratorium or similar waiver or grace
period).
"Moody's": Xxxxx'x Investors Service, Inc., or any successor
thereto.
"Mortgage": The mortgage, deed of trust or other instrument
creating a first lien or second lien on the Mortgaged Property.
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"Mortgage File": The mortgage documents listed in Exhibit C
attached hereto pertaining to a particular Mortgage Loan and any additional
documents required to be added to the Mortgage File pursuant to this Agreement;
provided that whenever the term "Mortgage File" is used to refer to documents
actually received by the Trustee, such term shall not be deemed to include such
additional documents required to be added unless they are actually so added.
"Mortgage Impairment Insurance Policy": As defined in Section
5.07.
"Mortgage Interest Rate": As to any Group I Loan, the per
annum rate at which interest accrues on the unpaid principal balance thereof, as
adjusted from time to time in accordance with the provisions of the related
Mortgage Note, which rate is (a) prior to the first related Rate Adjustment Date
occurring after the Cut-off Date, the initial Mortgage Interest Rate for such
Mortgage Loan indicated on the Mortgage Loan Schedule and (b) from and after
such first Rate Adjustment Date, the sum of the related Index applicable to the
most recent Rate Adjustment Date, and the Gross Margin, rounded as set forth in
such Mortgage Note, subject to the Periodic Cap, the Lifetime Cap and Lifetime
Floor set forth in the related Mortgage Note that may be applicable to such
Mortgage Loan at any time during the life of such Mortgage Loan. As to any Group
II Loan, the fixed per annum rate at which interest accrued on the unpaid
principal balance thereof, which rate is the Mortgage Interest Rate for such
Group II Loan indicated on the related Mortgage Loan Schedule.
"Mortgage Loan": An individual mortgage loan which is assigned
and transferred to the Trustee pursuant to this Agreement, together with the
rights and obligations of a holder thereof and payments thereon and proceeds
therefrom (other than payments of interest that accrued on each Mortgage Loan up
to and including the Due Date therefor occurring, with respect to the Mortgage
Loans prior to the Cut-off Date), the Mortgage Loans originally subject to this
Agreement being identified on the Mortgage Loan Schedule. As applicable,
Mortgage Loan shall be deemed to refer to the related REO Property.
"Mortgage Loan Group": The Group I Loans or Group II Loans.
References herein to "Mortgage Loan Group" when used with respect to any
Certificate shall mean (i) Group I Loans, in the case of the Group I
Certificates, and (ii) Group II Loans, in the case of the Group II Certificates.
"Mortgage Loan Interest Shortfall": With respect to any
Distribution Date, as to the Mortgage Loans in either Loan Group, the sum of (a)
any Civil Relief Act Interest Shortfalls
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in respect of such Mortgage Loans for such Distribution Date and (b) any related
Servicer Default Prepayment Interest Shortfall. A "Servicer Default Prepayment
Interest Shortfall" will only exist on a Distribution Date with respect to which
the Servicer has defaulted on its obligations under Sections 5.19 and 6.05 with
respect to Prepayment Interest Shortfalls and on such a Distribution Date will
equal, for Loan Groups I and II in the aggregate, the excess of (i) the
aggregate maximum amount of Compensating Interest required pursuant to Sections
5.19 and 6.05 to have been paid by the Servicer or a Subservicer or netted
against the Servicer's aggregate Servicing Fee for such Distribution Date over
(ii) the amount of Compensating Interest actually paid by the Servicer or a
Subservicer or actually netted against the Servicer's aggregate Servicing Fee
for such Distribution Date.
"Mortgage Loan Schedule": The lists of the Mortgage Loans
transferred to the Trustee on or before the Closing Date as part of the Trust
Fund and attached hereto as Exhibits D-1 and D-2 and delivered in computer
readable format, which list shall set forth at a minimum the following
information as to each Mortgage Loan:
(i) the Mortgage loan identifying number,
(ii) the city, state and zip code of the Mortgaged
Property;
(iii) the type of property;
(iv) the current Monthly Payment as of the Cut-off Date;
(v) the original number of months to maturity;
(vi) the scheduled maturity date;
(vii) the Principal Balance as of the Cut-off Date;
(viii) the Loan-to-Value Ratio or Combined Loan-to-Value
Ratio at origination;
(ix) the Mortgage Interest Rate as of the Cut-off Date;
(x) the Mortgage Interest Rate at origination;
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(xi) the Gross Margin (with respect to Group I Loans) and
the frequency of the adjustment thereof;
(xii) the first Rate Adjustment Date (with respect to Group
I Loans) after the Cut-off Date;
(xiii) the first Rate Adjustment Date after origination and
the frequency of adjustment (with respect to Group I
Loans);
(xiv) the Lifetime Cap (with respect to Group I Loans);
(xv) the Lifetime Floor (with respect to Group I Loans);
(xvi) the Appraised Value;
(xvii) the stated purpose of the loan at origination;
(xviii) the type of occupancy at origination;
(xix) the documentation type (as described in the
Underwriting Guidelines),
(xx) the Periodic Cap (with respect to Group I Loans);
(xxi) the loan classification (as described in the
Underwriting Guidelines),
(xxii) the related Index (with respect to Group I Loans) and
the look-back period for such Mortgage Loan;
(xxiii) the Servicing Fee with respect to such Mortgage Loan,
expressed as a rate per annum; and
(xxiv) whether such Mortgage Loan is secured by a first lien
or second lien.
Such schedule may consist of multiple reports that collectively set forth all of
the information required.
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"Mortgage Note": The original, executed note or other evidence
of indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage
Loan.
"Mortgaged Property": The underlying property securing a
Mortgage Loan, consisting of a fee simple estate in a single parcel of land
improved by a Residential Dwelling.
"Mortgagor": The obligor on a Mortgage Note.
"Net Foreclosure Profits": As to any Distribution Date, an
amount equal to (i) the aggregate Foreclosure Profits with respect to such
Distribution Date minus (ii) Liquidated Loan Losses with respect to such
Distribution Date.
"Net Liquidation Proceeds": As to any Liquidated Mortgage
Loan, Liquidation Proceeds net of Liquidation Expenses and net of any
unreimbursed Periodic Advances and unreimbursed Servicing Advances made by the
Servicer. For all purposes of this Agreement, Net Liquidation Proceeds shall be
allocated first to accrued and unpaid interest on the related Mortgage Loan and
then to the unpaid principal balance thereof.
"Net Mortgage Interest Rate": With respect to each Mortgage
Loan at any time of determination, a rate equal to (i) the Mortgage Interest
Rate on such Mortgage Loan minus (ii) the sum of the per annum rates used to
determine the related Servicing Fee and Certificate Administration Fee and the
Premium Percentage. Any regular monthly computation of interest at such rate
shall be based upon annual interest at such rate on the applicable amount
divided by twelve.
"Net REO Proceeds": As to any REO Mortgage Loan, REO Proceeds
net of any related expenses of the Servicer.
"Nonrecoverable Advances": With respect to any Mortgage Loan,
(a) any Periodic Advance or Servicing Advance previously made and not reimbursed
from late collections pursuant to Section 5.04(b), or (b) a Periodic Advance or
Servicing Advance proposed to be made in respect of a Mortgage Loan or REO
Property either of which, in the good faith business judgment of the Servicer,
as evidenced by an Officer's Certificate delivered to the Certificate Insurer
and the Trustee would not be ultimately recoverable pursuant to Section 5.04.
"Non-United States Person": Any Person other than a United
States Person.
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"Notional Amount": As of any Distribution Date, with respect
to the Class I S Certificates, an amount equal to the aggregate Principal
Balance of the Group I Loans immediately prior to such date. As of any
Distribution Date, with respect to the Class II S Certificates, an amount equal
to the aggregate Principal Balance of the Group II Loans immediately prior to
such date.
"Officer's Certificate": A certificate signed by the Chairman
of the Board, the President or a Vice President and the Treasurer, the Secretary
or one of the Assistant Treasurers or Assistant Secretaries of the Seller and/or
the Servicer, or the Company, as required by this Agreement.
"One-Month LIBOR": With respect to any Accrual Period, the
rate determined by the Trustee on the related Interest Determination Date on the
basis of the offered rates of the Reference Banks for one-month United States
dollar deposits, as such rates appear on the Reuters Screen LIBO Page, as of
11:00 a.m. (London time) on such Interest Determination Date. On each Interest
Determination Date, One-Month LIBOR for the related Accrual Period will be
established by the Trustee as follows:
(i) If on such Interest Determination Date two or more
Reference Banks provide such offered quotations,
One-month LIBOR for the related Accrual Period shall
be the arithmetic mean of such offered quotations
(rounded upwards if necessary to the nearest whole
multiple of 1/16%).
(ii) If on such Interest Determination Date fewer than two
Reference Banks provide such offered quotations,
One-Month LIBOR for the related Accrual Period shall
be the higher of (1) One-Month LIBOR as determined on
the previous Interest Determination Date and (2) the
Reserve Interest Rate.
"Opinion of Counsel": A written opinion of counsel, who may,
without limitation, be counsel for the Seller, the Servicer, the Certificate
Administrator, the Trustee, a Certificateholder or a Certificateholder's
prospective transferee or the Certificate Insurer (including except as otherwise
provided herein, in-house counsel) reasonably acceptable to each addressee of
such opinion and experienced in matters relating to the subject of such opinion;
except that any opinion of counsel relating to (a) the qualification of the
Trust Fund as a REMIC or (b) compliance with the REMIC Provisions must be an
opinion of counsel who (i) is in fact
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independent of the Seller, the Servicer, the Certificate Administrator and the
Trustee, (ii) does not have any direct financial interest or any material
indirect financial interest in the Seller, the Servicer, the Certificate
Administrator or the Trustee or in an Affiliate thereof, (iii) is not connected
with the Seller, the Servicer, the Certificate Administrator or the Trustee as
an officer, employee, director or person performing similar functions and (iv)
is reasonably acceptable to the Certificate Insurer,
"Original Group I Pool Principal Balance": The Group I Pool
Principal Balance as of the Cut-off Date, which is $_____________.
"Original Group II Pool Principal Balance": The Group II Pool
Principal Balance as of the Cut-off Date, which is $_____________.
"Original Certificate Principal Balance": As of the Startup
Day and as to the Class IA-1 Certificates, $_____________, as to the Class IIA-1
Certificates, $_____________, as to the Class IIA-2 Certificates,
$_____________, as to the Class IIA-3 Certificates, $_____________, as to the
Class IIA-4 Certificates, $____________, as to the Class IIA-5 Certificates,
$____________, and as to the each class of Class S Certificates, $0.00. The
Class R Certificates do not have an Original Certificate Principal Balance.
"Original Pool Principal Balance": The Pool Principal Balance
as of the Cut-off Date, which is $______________.
"Outstanding Mortgage Loan": As to any Due Date, a Mortgage
Loan (including an REO Mortgage Loan) which was not the subject of a Principal
Prepayment in Full prior to such Due Date, which did not become a Liquidated
Mortgage Loan prior to such Due Date, which was not repurchased by the Seller
prior to such Due Date pursuant to Section 2.02 and which was not repurchased by
an Affiliate of the Seller pursuant to Section 5.17.
"Ownership Interest": As to any Certificate, any ownership or
security interest in such Certificate, including any interest in such
Certificate as the Holder thereof and any other interest therein, whether direct
or indirect, legal or beneficial, as owner or as pledgee.
"Owner-Occupied Mortgaged Property": A Residential Dwelling as
to which (a) the related Mortgagor represented an intent to occupy as such
Mortgagor's primary, secondary or
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vacation residence at the origination of the Mortgage Loan, and (b) the Seller
has no actual knowledge that such Residential Dwelling is not so occupied.
"Paying Agent": The Person appointed by the Trustee as Paying
Agent pursuant to Section 4.07.
"Paying Agent Account": The account created and maintained
pursuant to Section 4.07.
"Percentage Interest": With respect to a Class A Certificate
and any date of determination, the portion evidenced by such Certificate,
expressed as a percentage rounded to four decimal places, equal to a fraction
the numerator of which is the initial Authorized Denomination represented by
such Certificate and the denominator of which is the Original Certificate
Principal Balance of such Certificate. With respect to a Class S or Class R
Certificate and any date of determination, the portion evidenced thereby as
stated on the face of such Certificate.
"Periodic Advance": The aggregate of the advances with respect
to Mortgage Loans and REO Properties required to be made by the Servicer on any
Servicer Remittance Date pursuant to Section 5.20 hereof, the amount of any such
advances being equal to the sum of: (i) with respect to the Mortgage Loans
(other than Balloon Mortgage Loans with delinquent Balloon Payments as described
in clause (iii) below and other than REO Properties as described in clauses (ii)
and (iv) below), all Monthly Payments (net of the related Servicing Fee) on such
Mortgage loans that were delinquent as of the close of business on the Business
Day preceding the related Servicer Remittance Date, plus (ii) with respect to
each REO Property (other than any REO Property relating to a Balloon Mortgage
Loan with a delinquent Balloon Payment as described in clause (iv) below), which
REO Property was acquired during or prior to the related Due Period and as to
which an REO Disposition did not occur during the related Due Period, an amount
equal to the Monthly Payment (net of the related Servicing Fee) for the most
recently ended Due Period for the related Mortgage Loan minus the net income
from such REO Property transferred to the related Certificate Account for such
Distribution Date, plus (iii) with respect to each Balloon Mortgage Loan with a
delinquent Balloon Payment (other than any related REO Property as described in
clause (iv) below), an amount equal to the assumed monthly principal and
interest payment (net of the related Servicing Fee) that would have been due on
the related Due Date based on the original principal amortization schedule for
such Balloon Mortgage Loan, plus (iv) with respect to each REO Property relating
to a Balloon Mortgage Loan with a
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delinquent Balloon Payment, which REO Property was acquired during or prior to
the related Due Period and as to which an REO Disposition did not occur during
the related Due Period, an amount equal to the assumed monthly principal and
interest payment (net of the related Servicing Fee) that would have been due on
the related Due Date based on the original principal amortization schedule for
the related Balloon Mortgage Loan minus the net income from such REO Property
transferred to the related Certificate Account for such Distribution Date, minus
(v) the amount of any advance otherwise required for such Distribution Date
pursuant to clauses (i) through (iv) above which the Servicer has determined to
be a Nonrecoverable Advance.
"Periodic Cap": With respect to each Group I Loan, the
provision in the related Mortgage Note that provides for an absolute maximum
amount by which the Mortgage Interest Rate therein may increase or decrease on a
Rate Adjustment Date above or below the Mortgage Interest Rate previously in
effect.
"Permitted Investments:" One or more of the following:
(i) obligations of, or guaranteed as to principal and interest
by, the United States or obligations of any agency or instrumentality
thereof when such obligations are backed by the full faith and credit
of the United States; provided that any such obligation held as a "cash
flow investment" within the meaning of Section 860G(a)(6) of the Code
shall not have a remaining maturity of more than 45 days;
(ii) repurchase agreements on obligations specified in clause
(i) maturing not more than two months from the date of acquisition
thereof, provided that the long-term unsecured obligations of the party
agreeing to repurchase such obligations are at the time rated by each
Rating Agency in one of its two highest rating categories and the
short-term debt obligations of the party agreeing to repurchase are
rated A-1 by S&P and Prime-1 by Moody's;
(iii) federal funds, certificates of deposit, time deposits
and bankers' acceptances (which shall each have an original maturity of
not more than 60 days and, in the case of bankers' acceptances, shall
in no event have an original maturity of more than 365 days) of any
United States depository institution or trust company incorporated
under the laws of the United States or any state, provided that the
long-term unsecured debt obligations of such depository institution or
trust company at the date of acquisition thereof have been rated by
each Rating Agency in one of its two highest rating categories
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and the short-term obligations of such depository institution or trust
company are rated A-1 by S&P and Prime-1 by Moody's;
(iv) commercial paper (having original maturities of not more
than 365 days) of any corporation incorporated under the laws of the
United States or any state thereof which on the date of acquisition has
been rated by each Rating Agency in its highest short-term unsecured
commercial paper rating category; provided that such commercial paper
shall have a remaining maturity of not more than 45 days;
(v) the Fund unless S&P or Moody's notifies the Servicer in
writing that investment in the Fund would result in a reduction or
withdrawal of the rating of any of the Class A or Class M Certificates;
and
(vi) other obligations or securities that are "permitted
investments" within the meaning of Section 860G(a)(5) of the Code and
acceptable to each Rating Agency and S&P rating the Certificates as an
Eligible Investment hereunder and will not result in a reduction or
withdrawal in the then current rating of any Class of Certificates, as
evidenced by a letter to such effect from each Rating Agency;
provided that no such instrument shall be a Permitted Investment if such
instrument evidences either (a) a right to receive only interest payments with
respect to the obligations underlying such instrument, or (b) both principal and
interest payments derived from obligations underlying such instrument where the
interest and principal payments with respect to such instrument provide a yield
to maturity of greater than 120% of the yield to maturity at par of such
underlying obligations.
"Permitted Transferee": Any transferee of a Class R
Certificate other than a Non-United States Person or Disqualified Organization.
"Person": Any individual, corporation, partnership, Joint
venture, association, joint-stock company, trust, national banking association,
unincorporated organization or government or any agency or political subdivision
thereof.
"Plan": As defined in Section 4.02(d).
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"Policy Business Day": A Business Day as defined in the
Certificate Insurance Policy.
"Pool Principal Balance": The sum of the Group I Pool
Principal Balance and the Group II Pool Principal Balance as of any date of
determination.
"Pool Strip Rate": With respect to the Class I S Certificates
and the Group I Loans, a per annum rate equal to the weighted average of the
related Net Mortgage Interest Rates, weighted on the basis of the related
Principal Balances of such Mortgage Loans at the beginning of the related Due
Period, minus the Class IA Pass Through Rate. With respect to the Class II S
Certificates and the Group II Loans, a per annum rate equal to the related Net
Mortgage Interest Rate minus the Class IIA Pass-Through Rate. The Pool Strip
Rates are also designated on the related Mortgage Loan Schedule as the "Class I
S Strip" or the "Class II S Strip" as applicable for such Mortgage Loan and the
related Class S Certificates.
"Preference Amount": Any amount previously distributed to a
Class A Certificateholder that is recoverable and sought to be recovered as a
voidable preference by a trustee in bankruptcy pursuant to the United States
Bankruptcy Code as amended from time to time, in accordance with a final
nonappealable order of a court having competent jurisdiction.
"Preference Claim": As defined in Section 6.02(f).
"Premium Amount": The product of 1/12 of the Premium
Percentage and the Certificate Principal Balance for the related Distribution
Date.
"Premium Percentage": With respect to any Group I Loan or
Group II Loan, the fixed percentage per annum set forth in the Insurance
Agreement.
"Prepayment Interest Shortfall": With respect to any
Distribution Date, for each Mortgage Loan that was the subject during the
related Due Period of a Principal Prepayment in Full or Curtailment, an amount
equal to (a) 30 days' interest on the Principal Balance of such Mortgage Loan at
a per annum rate equal to the Mortgage Interest Rate (or at such lower rate as
may be in effect for such Mortgage Loan pursuant to application of the Civil
Relief Act, any Deficient Valuation and/or any Debt Service Reduction) minus the
rate at which the Servicing Fee is calculated minus (b) the amount of interest
actually remitted by the Mortgagor in
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connection with such Principal Prepayment in Full or Curtailment less the
Servicing Fee for such Mortgage Loan in such month.
"Principal Balance": As to any Mortgage Loan and Distribution
Date, the principal balance of such Mortgage Loan as of the Due Date preceding
such date of determination as specified for such Due Date in the amortization
schedule (before any adjustment to such amortization schedule by reason of any
bankruptcy (other than Deficient Valuations) or similar proceeding or any
moratorium or similar waiver or grace period) after giving effect to Principal
Prepayments in Full or Curtailments received prior to such Due Date, Deficient
Valuations incurred prior to such Due Date, to any Curtailments applied by the
Servicer in reduction of the unpaid principal balance of such Mortgage Loan as
of such Due Date and to the payment of principal due on such Due Date and
irrespective of any delinquency in payment by the related Mortgagor. The
Principal Balance of a Mortgage Loan which becomes a Liquidated Mortgage Loan
prior to such Due Date shall be zero.
"Principal Prepayment in Full": Any payment or other recovery
of principal on a Mortgage Loan equal to the outstanding principal balance
thereof, received in advance of the final scheduled Due Date which is not
intended as an advance payment of a scheduled Monthly Payment.
"Purchase Price": With respect to any Mortgage Loan required
to be purchased on any date pursuant to Section 2.02, 3.01, 5.17 or 11.01, an
amount equal to the sum of (a) 100% of the Principal Balance thereof, (b) unpaid
accrued interest at the Mortgage Rate thereon from the Due Date on which
interest was lade paid by the Mortgagor or Advanced by the Servicer to the Due
Date next following the date of repurchase and (c) the aggregate of any
unreimbursed Advances.
"Qualified Mortgage": "Qualified Mortgage" shall have the
meaning set forth from time to time in the definition thereof at Section
860(G)(a)(3) of the Code (or any successor statute thereto).
"Qualified Substitute Mortgage Loan": A mortgage loan or
mortgage loans substituted for a Deleted Mortgage Loan pursuant to Section 2.02
or 3.05 hereof, which (a)(i) with respect to a Group I Loan, has or have the
same interest rate index, a margin over such index and a maximum interest rate
at least equal to those applicable to the Deleted Mortgage Loan and (ii) with
respect to a Group II Loan, has the same or greater interest rate, (b) relates
or
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relate to a detached one-family residence or to the same type of Residential
Dwelling as the Deleted Mortgage Loan and in each case has or have the same or a
better lien priority as the Deleted Mortgage Loan and has the same occupancy
status or is an Owner Occupied Mortgaged Property, (c) matures or mature no
later than (and not more than one year earlier than) the Deleted Mortgage Loan
(except during the first 90 days after the Cut-Off Date), (d) has or have a
Loan-to-Value Ratio or Loan-to-Value Ratios (or Combined Loan-to-Value Ratio or
Combined Loan-to-Value Ratios, with respect to a Second Mortgage Loan) at the
time of such substitution no higher than the Loan-to-Value Ratio (or Combined
Loan-to-Value Ratio, with respect to a Second Mortgage Loan) of the Deleted
Mortgage Loan, (e) has or have a principal balance or principal balances (after
application of all payments received on or prior to the date of substitution)
not substantially less and not more than the Principal Balance of the Deleted
Mortgage Loan as of such date, (f) satisfies or satisfy the criteria set forth
from time to time in the definition of "qualified replacement mortgage" at
Section 860G(a)(4) of the Code (or any successor statute thereto) and (g)
complies or comply as of the date of substitution with each representation and
warranty set forth in Section 3.01(b).
"Rate Adjustment Date": The date on which the Mortgage
Interest Rate is adjusted with respect to each Group I Loan. The first Rate
Adjustment Date for each Group I Loan is set forth on the Mortgage Loan
Schedule.
"Rating Agency": S&P, DCR or Xxxxx'x.
"Record Date": With respect to any Distribution Date, the
close of business on the last Business Day of the month immediately preceding
the month of such Distribution Date.
"Reference Banks": ____________________, ____________________
and ___________________; provided that if any of the foregoing banks are not
suitable to serve as a Reference Bank, then any leading banks selected by the
Trustee which are engaged in transactions in Eurodollar deposits in the
international Eurocurrency market (i) with an established place of business in
London, (ii) not controlling, under the control of or under common control with
the Company or any affiliate thereof, (iii) whose quotations appear on the
Reuters Screen LIBO Page on the relevant Interest Determination Date and (iv)
which have been designated as such by the Certificate Administrator.
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"REMIC": A "real estate mortgage investment conduit" within
the meaning of Section 860D of the Code.
"REMIC Provisions": Provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear at Sections
860A through 86OG of Subchapter M of Chapter I of the Code, and related
provisions, and temporary and final regulations promulgated thereunder and
published rulings, notices and announcements, as the foregoing may be in effect
from time to time.
"Remittance Report": As defined in Section 6.04.
"REO Acquisition": The acquisition of any REO Property
pursuant to Section 5.11.
"REO Disposition": The final sale by the Servicer of a
Mortgaged Property acquired by the Servicer in foreclosure or by deed in lieu of
foreclosure.
"REO Mortgage Loan": Any Mortgage Loan which is not a
Liquidated Mortgage Loan and as to which the indebtedness evidenced by the
related Mortgage Note is discharged and the related Mortgaged Property is held
as part of the Trust Fund.
"REO Proceeds": Proceeds received in respect of any REO
Mortgage Loan ('including, without limitations, proceeds from the rental of the
related Mortgaged Property).
"REO Property": As described in Section 5.11.
"Representation Letter": Letters to, or agreements with, the
Depository to effectuate a book entry system with respect to the Class A
Certificates registered in the Certificate Register under the nominee name of
the Depository.
"Request for Release": A request for release in substantially
the form attached as Exhibit H hereto.
"Reserve Interest Rate": With respect to any Interest
Determination Date, the rate per annum that the Certificate Administrator
determines to be either (i) the arithmetic mean (rounded upwards if necessary to
the nearest whole multiple of 1/16%) of the three-month United
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States dollar lending rates which New York City banks selected by the
Certificate Administrator are quoting on the relevant Interest Determination
Date to the principal London offices of leading banks in the London interbank
market or (ii) in the event that the Certificate Administrator can determine no
such arithmetic mean, the lowest three-month United States dollar lending rate
which New York City banks selected by the Certificate Administrator are quoting
on such Interest Determination Date to leading European banks.
"Residential Dwelling": A one- to four-family dwelling, a unit
in a planned unit development, a unit in a condominium development, a townhouse
or a manufactured housing unit which is non-mobile.
"Residual Interest": The Interest of the Trust Fund
represented by: (i) the amounts, if any, remaining in the Certificate Account
following the termination of the Trust Fund after payments to the Class A and
Class S Certificateholders and (ii) all other amounts distributable to the Class
R Certificates pursuant to this Agreement. The Residual Interest is represented
by the Class R Certificates.
"Responsible Officer": When used with respect to the Trustee,
any officer assigned to the Corporate Trust Division (or any successor thereto),
including any Vice President, Senior Trust Officer, Trust Officer, Assistant
Trust Officer, any Assistant Secretary, any trust officer or any other officer
of the Trustee customarily performing functions similar to those performed by
any of the above designated officers and to whom, with respect to a particular
matter, such matter is referred because of such officer's knowledge of and
familiarity with the particular subject. When used with respect to the Seller,
the Certificate Administrator or the Servicer, the President or any Vice
President, Assistant Vice President, or any Secretary or Assistant Secretary.
"Sale Agreement": The Mortgage Loan Sale Agreement, dated as
of the date hereof, between the Seller and the Company relating to the sale of
the Mortgage Loans to the Company.
"S&P": Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc. or any successor thereto.
"Second Mortgage Loan": Any Mortgage Loan secured by a second
lien on the related Mortgaged Property.
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"Seller": Chase Manhattan Mortgage Corporation, or its
successor.
"Senior Mortgage Loan": With respect to any Second Mortgage
Loan, a mortgage loan on the related Mortgaged Property that is senior to the
lien provided by such Second Mortgage Loan.
"Servicer": [Advanta Mortgage Corp. USA,] a Delaware
corporation, or any successor appointed as herein provided.
"Servicer Remittance Amount": With respect to any Servicer
Remittance Date and each Loan Group, an amount equal to the sum of (i) all
unscheduled collections of principal and interest on the Mortgage Loans in the
related Loan Group (including Principal Prepayments in Full and Curtailments,
Net REO Proceeds and Net Liquidation Proceeds, if any) collected by the Servicer
during the prior calendar month and all scheduled Monthly Payments due on the
related Due Date and received on or prior to the Business Day preceding such
Servicer Remittance Date, (ii) all Periodic Advances made by the Servicer with
respect to payments due to be received on the Mortgage Loans in the related Loan
Group on the related Due Date and (iii) any other amounts required to be placed
in the Collection Account by the Servicer pursuant to this Agreement but
excluding the following:
(a) amounts received on particular Mortgage Loans as late
payments of principal or interest and respecting which the Servicer has
previously made an unreimbursed Periodic Advance;
(b) those portions of each payment of interest on a particular
Mortgage Loan which represent the Servicing Fee;
(c) that portion of Liquidation Proceeds and REO Proceeds
which represents any unpaid Servicing Fee;
(d) all income from Permitted Investments that is held in the
Collection Account for the account of the Servicer;
(e) all amounts in respect of late fees, assumption fees,
prepayment fees and similar fees;
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(f) certain other amounts which are reimbursable to the
Servicer, as provided in this Agreement; and
(g) Net Foreclosure Profits.
"Servicer Remittance Date": With respect to any Distribution
Date, the [18th] of the month in which such Distribution Date occurs, or if such
[18th] day is not a Business Day, the Business Day preceding such [18th] day.
"Servicing Account": The account created and maintained
pursuant to Section 5.09.
"Servicing Advances": All reasonable and customary
"out-of-pocket" costs and expenses relating to a borrower default or delinquency
or other unanticipated event incur-red by the Servicer in the performance of its
servicing obligations, including, but not limited to, the cost of (a) the
preservation, restoration and protection of the Mortgaged Property including,
without limitation, taxes and insurance costs, (b) any enforcement or judicial
proceedings, including foreclosures, (c) the management and liquidation of the
REO Property, including reasonable fees paid to any independent contractor in
connection therewith, (d) compliance with the obligations under Sections 5.02
(limited solely to the reasonable and customary out-of-pocket expenses of the
subservicer), 5.05, 5.07 or 5.09, all of which reasonable and customary
out-of-pocket costs and expenses are reimbursable to the Servicer to the extent
provided in Section 5.04(a).
"Servicing Compensation": The Servicing Fee and other amounts
to which the Servicer is entitled pursuant to Section 5.13.
"Servicing Fee": As to each Mortgage Loan, the annual fee
payable to the Servicer and the related Subservicer, if any, as indicated on the
related Mortgage Loan Schedule. Such fee shall not be in excess of ____% per
annum. Such fee shall be calculated and payable monthly only from the amounts
received in respect of interest on such Mortgage Loan and shall be computed on
the basis of the same principal amount and for the period respecting which any
related interest payment on a Mortgage Loan is computed. The Servicing Fee
includes any servicing fees owed or payable to any Subservicer.
"Servicing Officer": Any officer of the Servicer involved in,
or responsible for, the administration and servicing of the Mortgage Loans whose
name and specimen signature
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appear on a list of servicing officers furnished to the Trustee and the
Certificate Insurer by the Servicer, as such list may from time to time be
amended.
"Startup Day": The day designated as such pursuant to Section
2.04(a) hereof.
"Subservicer": Any Person with whom the Servicer has entered
into a Subservicing Agreement and who satisfies the requirements set forth in
Section 5.02(a) hereof in respect of the qualification of a Subservicer.
"Subservicing Agreement": Any agreement between the Servicer
and any Subservicer relating to subservicing and/or administration of certain
Mortgage Loans as provided in Section 5.02, a copy of which shall be delivered,
along with any modifications thereto, to the Trustee and the Certificate
Insurer.
"Substitution Adjustment": As to any date on which a
substitution occurs pursuant to Section 2.02 or 3.05, the amount (if any) by
which the aggregate principal balances (after application of principal payments
received on or before the date of substitution of any Qualified Substitute
Mortgage Loans as of the date of substitution), are less than the aggregate of
the Principal Balances of the related Deleted Mortgage Loans.
"Tax Return": The federal income tax return on Internal
Revenue Service Form 1066, "U.S. Real Estate Mortgage Investment Conduit Income
Tax Return," including Schedule Q thereto, Quarterly Notice to Residual Interest
Holders of REMIC Taxable Income or Net Loss Allocation, or any successor forms,
to be filed on behalf of the Trust Fund due to its classification as a REMIC
under the REMIC Provisions, together with any and all other information reports
or returns that may be required to be furnished to the Certificateholders or
filed with the Internal Revenue Service or any other governmental taxing
authority under any applicable provision of federal, state or local tax laws in
connection with the Trust Fund.
"Transfer": Any direct or indirect transfer, sale, pledge,
hypothecation or other form of assignment of any Ownership Interest in a
Certificate.
"Transferee": Any Person who is acquiring by Transfer any
Ownership Interest in a Certificate.
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"Transferor": Any Person who is disposing by Transfer any
Ownership Interest in a Certificate.
"Trustee": _____________________, or its successor in
interest, or any successor trustee appointed as herein provided.
"Trust Fund": The segregated pool of assets subject hereto,
constituting the trust created hereby and to be administered hereunder,
consisting of: (a) such Mortgage Loans as from time to time are subject to this
Agreement, together with the Mortgage Files relating thereto and all collections
thereon and proceeds thereof after the Cut-off Date, (b) such assets as from
time to time are identified as deposited in the Certificate Accounts, (c) such
assets as from time to time are identified as REO Property and collections
thereon and proceeds thereof, assets that are deposited in the Accounts,
including amounts on deposit in the Accounts and invested in Permitted
Investments, (d) the Trustee's rights with respect to the Mortgage Loans under
all insurance policies required to be maintained pursuant to this Agreement
(including the Certificate Insurance Policy) and any Insurance Proceeds (and any
proceeds of the Certificate Insurance Policy), (e) Liquidation Proceeds, (f)
Released Mortgaged Property Proceeds and (g) the representations and warranties
of the Seller pursuant to the Sale Agreement.
"12 Month Loss Amount": With respect to any Distribution Date,
an amount equal to the aggregate of all Liquidation Loan Losses on the Mortgage
Loans which became Liquidated Mortgage Loans during the 12 preceding Due
Periods.
"UCC": The Uniform Commercial Code in effect in the applicable
jurisdiction.
"UCC Financing Statement": A financing statement executed and
filed pursuant to the UCC.
"Underwriter": ______________________.
"Underwriting Guidelines": The underwriting guidelines of the
Seller.
"United States Person": A citizen or resident of the United
States, a corporation, partnership or other entity created or organized in, or
under the laws of, the United States or any political subdivision thereof, or an
estate or trust whose income from sources without the United
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States is includible in gross income for United States federal income tax
purposes regardless of its connection with the conduct of a trade or business
within the United States.
"Unpaid REO Amortization": As to any REO Mortgage Loan and any
month, the aggregate of the installments of principal and accrued interest
(adjusted to the related Net Mortgage Interest Rate) deemed to be due in such
month and in any prior months that remain unpaid, calculated in accordance with
Section 5.11.
Section 1.02 Provisions of General Application. (a) All
accounting terms not specifically defined herein shall be construed in
accordance with GAAP.
(b) The terms defined in this Article include the plural as well as the
singular.
(c) The words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole. All references to Articles
and Sections shall be deemed to refer to Articles and Sections of this
Agreement.
(d) Reference to statutes are to be construed as including all
statutory provisions consolidating, amending or replacing the statute to which
reference is made and all regulations promulgated pursuant to such statutes.
(e) All calculations of interest (other than with respect to the
Mortgage Loans, or as otherwise specifically set forth herein) provided for
herein shall be made on the basis of a 360-day year and the actual number of
days elapsed in the related period. All calculations of interest with respect to
any Mortgage Loan provided for herein shall be made in accordance with the terms
of the related Mortgage Note and Mortgage or, if such documents do not specify
the basis upon which interest accrues thereon, on the basis of a 360-day year
and the actual number of days elapsed in the related period, to the extent
permitted by applicable law.
(f) Any Mortgage Loan payment is deemed to be received on the date such
payment is actually received by the Servicer, provided, however, that for
purposes of calculating distributions on the Certificates, prepayments with
respect to any Mortgage Loan are deemed to be received on the date they are
applied in accordance with customary servicing practices consistent with the
terms of the related Mortgage Note and Mortgage to reduce the outstanding
principal balance of such Mortgage Loan on which interest accrues.
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ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; TRUST FUND
Section 2.01. Conveyance of Mortgage Loans. The Company,
concurrently with the execution and delivery hereof, does hereby sell, transfer,
assign, set over and convey to the Trustee without recourse all the right, title
and interest of the Company in and to the Mortgage Loans, including all interest
and principal received on or with respect to the Mortgage Loans on or after the
Cut-off Date (other than Monthly Payments due on the Mortgage Loans on or before
the Cut-off Date).
In connection with such assignment, the Company does hereby
deliver to, and deposit with, the Trustee the Certificate Insurance Policy and
each of the following documents or instruments with respect to each Mortgage
Loan so assigned:
(A)(I) Original Mortgage Note (or a lost note affidavit
(including a copy of the original Mortgage Note)) or (II) original
Consolidation, Extension and Modification Agreement (or a lost note
affidavit (including a copy of the original Consolidation, Extension
and Modification Agreement), in either case endorsed (by facsimile if
so authorized by the Company), "Pay to the order of
___________________, as trustee, under that certain Pooling and
Servicing Agreement dated as of [DATE] for Multi-Class Mortgage
Pass-Through Certificates, Series ______ (Chase Funding, Inc.) without
recourse" and signed in the name of the Seller by an authorized person
and showing a complete chain of endorsement from the originator to the
Seller.
(B) Original (or a court-certified copy of the original)
recorded Mortgage with evidence of recording thereon, or if such
original has been delivered to the appropriate public recording office,
a certified copy thereof certified true and complete by the Seller,
with the original thereof with evidence of recording thereon to be
delivered by the Company within 270 days of the Closing Date.
(C) Original Assignment of Mortgage (or copy thereof) by the
Seller or its agent in recordable form to "___________________, as
trustee." Subject to the foregoing, such assignments may, if permitted
by law, be by blanket assignments for Mortgage Loans covering Mortgaged
Properties situated within the same county. If the
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Assignment of Mortgage is in blanket form, a copy of the Assignment of
Mortgage shall be included in the related individual Mortgage File.
(D) Original (or a court-certified copy of the original)
recorded Assignments of Mortgage (or copies thereof) showing a complete
chain of assignment from the originator of the related Mortgage Loan to
the Seller, and, if copies are delivered, with the original thereof
with evidence of recording thereon to be delivered by the Company
within 270 days of the Closing Date.
(E) Originals (or lost note affidavit, including copies of the
originals) of all assumption, consolidation and modification
agreements, with evidence of recording thereon, to the extent required
by applicable law, relating to the Mortgage or the Mortgage Note, if
any, or, if such original has been delivered to the appropriate public
recording office, a certified copy thereof certified true and complete
by the applicable Seller, with the original thereof with evidence of
recording thereon to be delivered by the Company within 270 days of the
Closing Date.
(F) The original title policy or, in the event such original
title policy is unavailable, a certified true copy of the related
policy binder or commitment for title certified true and complete by
the title insurance policy company, with the original title policy to
be delivered by the Company within 270 days of the Closing Date.
(G) Copy of Primary Insurance Policy, if any.
If in connection with any Mortgage Loan the Company cannot
deliver the Mortgage, Assignments of Mortgage or assumption, consolidation or
modification, as the case may be, with evidence of recording thereon
concurrently with the execution and delivery of this Agreement, or within the
270 days permitted in (B), (D) and (E) above, solely because of a delay caused
by the public recording office where such Mortgage, Assignments of Mortgage or
assumption, consolidation or modification, as the case may be, has been
delivered for recordation, the Company shall deliver or cause to be delivered to
the Trustee written notice stating that such Mortgage, Assignments of Mortgage
or assumption, consolidation or modification, as the case may be, has been
delivered to the appropriate public recording office for recordation.
Thereafter, the Seller shall cause to be delivered to the Trustee such Mortgage,
Assignments of Mortgage or assumption, consolidation or modification, as the
case may be, with evidence of recording indicated thereon upon receipt thereof
from the public recording office. In
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any event, the Seller shall use all reasonable efforts to cause each original
Mortgage, Assignments of Mortgage or assumption, consolidation or modification,
as the case may be, with evidence of recording thereon to be delivered to the
Trustee within 300 days of the Closing Date.
The Seller shall cause to be recorded in the appropriate
public recording office for real property records each Assignment of Mortgage
referred to in this Section 2.01 as soon as practicable. While each Assignment
of Mortgage to be recorded is being recorded, the Seller shall deliver to the
Trustee a photocopy of such document. If any such Assignment of Mortgage is
returned unrecorded to the Seller because of any defect therein, the Seller
shall cause such defect to be cured and such document to be recorded in
accordance with this paragraph. The Seller shall deliver or cause to be
delivered each original recorded Assignment of Mortgage and intermediate
assignment to the Trustee within 270 days of the Closing Date or shall deliver
to the Trustee on or before such date an Officer's Certificate stating that such
document has been delivered to the appropriate public recording office for
recordation, but has not been returned solely because of a delay caused by such
recording office. In any event, the Seller shall use all reasonable efforts to
cause each such document with evidence of recording thereon to be delivered to
the Trustee within 300 days of the Closing Date.
The ownership of each Mortgage Note, the Mortgage and the
contents of the related Mortgage File is vested in the Trustee. Neither the
Company nor the Servicer shall take any action inconsistent with such ownership
and shall not claim any ownership interest therein. The Company and the Servicer
shall respond to any third party inquiries with respect to ownership of the
Mortgage Loans by stating that such ownership is held by the Trustee on behalf
of the Certificateholders. Mortgage documents relating to the Mortgage Loans not
delivered to the Trustee are and shall be held in trust by the Servicer or any
Sub-Servicer, for the benefit of the Trustee as the owner thereof, and the
Servicer's or such Sub-Servicer's possession of the contents of each Mortgage
File so retained is for the sole purpose of servicing the related Mortgage Loan,
and such retention and possession by the Servicer or such Sub-Servicer is in a
custodial capacity only. The Company agrees to take no action inconsistent with
the Trustee's ownership of the Mortgage Loans, to promptly indicate to all
inquiring parties that the Mortgage Loans have been sold and to claim no
ownership interest in the Mortgage Loans. Each Mortgage File and the mortgage
documents relating to the Mortgage Loans contain proprietary business
information of the Seller and its customers. The Trustee and the Servicer agree
that they will not use such information for business purposes without the
express written consent of the Seller and that all such information shall be
kept strictly confidential.
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It is the intention of this Agreement that the conveyance of
the Company's right, title and interest in and to the Trust Fund pursuant to
this Agreement shall constitute a purchase and sale and not a loan. If a
conveyance of Mortgage Loans from the Seller to the Company is characterized as
a pledge and not a sale, then the Company shall be deemed to have transferred to
the Trustee all of the Company's right, title and interest in, to and under the
obligations of the Seller deemed to be secured by said pledge; and it is the
intention of this Agreement that the Company shall also be deemed to have
granted to the Trustee a first priority security interest in all of the
Company's right, title, and interest in, to and under the obligations of the
Seller to the Company deemed to be secured by said pledge and that the Trustee
shall be deemed to be an independent custodian for purposes of perfection of the
security interest granted to the Company. If the conveyance of the Mortgage
Loans from the Company to the Trustee is characterized as a pledge, it is the
intention of this Agreement that this Agreement shall constitute a security
agreement under applicable law, and that the Company shall be deemed to have
granted to the Trustee a first priority security interest in all of the
Company's right, title and interest in, to and under the Mortgage Loans, all
payments of principal of or interest on such Mortgage Loans, all other rights
relating to and payments made in respect of the Trust Fund, and all proceeds of
any thereof. If the trust created by this Agreement terminates prior to the
satisfaction of the claims of any Person in any Certificates, the security
interest created hereby shall continue in full force and effect and the Trustee
shall be deemed to be the collateral agent for the benefit of such Person.
In addition to the conveyance made in the first paragraph of
this Section 2.01, the Company does hereby convey, assign and set over to the
Trustee all of its right, title and interest in that portion of the Trust Fund
described in items (b), (c), (d), (e), (f) and (g) of the definition thereof and
further assigns to the Trustee for the benefit of the Certificateholders those
representations and warranties of the Seller contained in the Sale Agreement and
described in Section 3.01 hereof and the benefit of the repurchase obligations
of the Seller described in Sections 2.02 and 3.01 hereof and the obligations of
the Seller contained in the Sale Agreement to take, at the request of the
Company or the Trustee, all action on its part which is reasonably necessary to
ensure the enforceability of a Mortgage Loan.
Section 2.02 Acceptance by Trustee of the Trust Fund; Certain
Substitutions; Certification by Trustee. (a) The Trustee agrees to execute and
deliver to the Company, the Certificate Insurer, the Servicer, the Certificate
Administrator and the Seller on or prior to the Closing Date an acknowledgment
of receipt of the Certificate Insurance Policy and, with respect to each
Mortgage Loan, on or prior to the Closing Date, an acknowledgment of receipt of
the original Mortgage Note (with any exceptions noted), in the form attached as
Exhibit E hereto and
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declares that it will hold such documents and any amendments, replacements or
supplements thereto, as well as any other assets included in the definition of
Trust Fund and delivered to the Trustee, as Trustee in trust upon and subject to
the conditions set forth herein for the benefit of the Certificateholders and
the Certificate Insurer. The Trustee agrees, for the benefit of the
Certificateholders and the Certificate Insurer, to review (or cause to be
reviewed) each Mortgage File within __ Business Days after the Closing Date
(with respect to the Mortgage Loans), and to deliver to the Seller, the
Servicer, the Company, the Certificate Administrator and the Certificate Insurer
a certification in the form attached hereto as Exhibit F to effect that, as to
each Mortgage Loan listed in the related Mortgage Loan Schedule (other than any
Mortgage Loan paid in full or any Mortgage Loan specifically identified in such
certification as not covered by such certification), (i) all documents required
to be delivered to it pursuant to Section 2.01 are in its possession, (ii) each
such document has been reviewed by it and has not been mutilated, damaged, torn
or otherwise physically altered (handwritten additions, changes or corrections
shall not constitute physical alteration if initialed by the Mortgagor), appears
regular on its face and relates to such Mortgage Loan, and (iii) based on its
examination and only as to the foregoing documents, the information set forth on
the Mortgage Loan Schedule as to the information set forth in (i), (ii), (v),
(vi), (x), (xi), (xiii), (xiv), (xv), (xx) and (xxii) of the definition of
"Mortgage Loan Schedule" set forth herein accurately reflects the information
set forth in the Mortgage File delivered on such date. The Trustee makes no
representations as to and shall not be responsible to verify (i) the validity,
legality, enforceability, sufficiency, due authorization, recordability or to
verify genuineness of any of the documents contained in each Mortgage File or of
any of the Mortgage Loans or (ii) the collectability, insurability,
effectiveness or suitability of any such Mortgage Loan.
By [DATE], the Trustee shall deliver (or cause to be delivered) to the
Servicer, the Seller, the Company and the Certificate Insurer a final
certification in the form attached hereto as Exhibit G to the effect that, as to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage
Loan paid in full or any Mortgage Loan specifically identified in such
certification as not covered by such certification), (1) all documents required
to be delivered to it pursuant to Section 2.01 are in its possession, (ii) each
such document has been reviewed by it and has not been mutilated, damaged, xxx
or otherwise physically altered (handwritten additions, changes or corrections
shall not constitute physical alteration if initialed by the Mortgagor), appears
regular on its face and relates to such Mortgage Loan, and (iii) based on its
examination and only as to the foregoing documents, the information set forth in
(i), (ii), (v), (vi), (x), (xi), (xiii), (xiv), (xv), (xx) and (xx) of the
definition of "Mortgage Loan Schedule" set forth herein accurately reflects the
information set forth in the Mortgage File delivered on such date.
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(b) If the Certificate Insurer or the Trustee during the process of
reviewing the Mortgage Files finds any document constituting a part of a
Mortgage File which is not executed, has not been received, Is unrelated to the
Mortgage Loan identified in the related Mortgage Loan Schedule, or does not
conform to the requirements of Section 2.01 or the description thereof as set
forth in the related Mortgage Loan Schedule, the Trustee or the Certificate
Insurer, as applicable, shall promptly so notify the Servicer, the Seller, the
Certificate Insurer, the Certificate Administrator and the Trustee. In
performing any such review, the Trustee may conclusively rely on the Seller as
to the purported genuineness of any such document and any signature thereon, It
is understood that the scope of the Trustee's review of the Mortgage Files is
limited solely to confirming that the documents listed in Section 2.01 have been
executed and received and relate to the Mortgage Files identified in the related
Mortgage Loan Schedule and such documents conform to the standard set forth in
clause (ii) of the paragraph directly above. The Trustee shall request that the
Seller cure any such defect within 60 days from the date on which the Seller was
notified of such defect, and if the Seller does not cure such defect in all
material respects during such period, request that the Seller (i) substitute in
lieu of such Mortgage Loan a Qualified Substitute Mortgage Loan in the manner
and subject to the conditions set forth in Section 3.05 or (ii) purchase such
Mortgage Loan on the next succeeding Servicer Remittance Date at a purchase
price equal to the Purchase Price, which purchase price shall be deposited in
the Collection Account on the same Business Day, after deducting therefrom any
amounts received in respect of such repurchased Mortgage Loan or Loans and being
held in the Collection Account for future distribution to the extent such
amounts have not yet been applied to principal or interest on such Mortgage
Loan. It is understood and agreed that the obligation of the Seller to so cure,
substitute for or purchase any Mortgage Loan as to which a material defect in or
omission of a constituent document exists shall constitute the sole remedy
respecting such defect or omission available to Certificateholders or the
Trustee on behalf of Certificateholders. In addition, it is understood and
agreed that the Company has assigned to the Trustee all of its rights under the
Sale Agreement and the right to enforce any remedy against the Seller as
provided in Section 2.01 of the Sale Agreement. For purposes of calculating the
amount the Servicer is required to remit on the Servicer Remittance Date
following such repurchase or substitution, any Purchase Price or Substitution
Adjustment that is paid and deposited in the related Collection Account as
provided above shall be deemed to have been deposited in the related Collection
Account in the Due Period preceding such Servicer Remittance Date.
(c) Upon receipt by the Trustee of a certification of a Servicing
Officer of such substitution or purchase and, in the case of a substitution,
upon receipt of the related Mortgage File, and the deposit of the amounts
described above in the Collection Account (which
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certification shall be in the form of Exhibit H hereto), the Trustee shall
release to the Servicer for release to the Seller the related Mortgage File and
shall execute, without recourse, and deliver such instruments of transfer
furnished by the Seller as may be necessary to transfer such Mortgage Loan to
the Seller. The Trustee shall notify the Certificate Insurer if the Seller fails
to repurchase or substitute for a Mortgage Loan in accordance with the
foregoing.
Section 2.03. Trust Fund; Authentication of Certificates. The
Trustee acknowledges and accepts the assignment to it of the Trust Fund created
pursuant to this Agreement in trust for the use and benefit of all present and
future Certificateholders. The Trustee acknowledges the assignment to it for the
benefit of the Trust Fund of the Mortgage Loans and has caused to be
authenticated and delivered to or upon the order of the Company, in exchange for
the Mortgage Loans, Certificates duly authenticated by the Authenticating Agent
in authorized denominations evidencing ownership of the entire Trust Fund.
Section 2.04. REMIC Election.
(a) The Company hereby instructs and authorizes the Trustee to
make an appropriate election to treat the Trust Fund as a REMIC. This Agreement
shall be construed so as to carry out the intention of the parties that the
Trust Fund be treated as a REMIC at all times prior to the date on which the
Trust Fund is terminated. The Closing Date is hereby designated as the "startup
day" of the REMIC within the meaning of Section 860G(a)(9) of the Code. The
"regular interests" (within the meaning of Section 860G(a)(1) of the Code) in
the REMIC shall consist of the Class A Certificates and the Class S Certificates
and the "residual interest" (within the meaning of Section 860G(a)(2) of the
Code) in the REMIC shall consist of the Residual Interest, and all such
interests shall be designated as such on the startup day.
(b) The principal amount of the regular interests in the REMIC
is equal to the sum of the aggregate Original Certificate Principal Balance of
the Class A and Class S Certificates.
(c) Solely for the purposes of Section 1.860G-1(a)(4)(iii) of
the Treasury regulations, the "latest possible maturity date" of any regular
interest in the REMIC is [DATE], which is the Remittance Date immediately
following the latest scheduled maturity of any Mortgage Loan.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND
THE MASTER SERVICER; REPURCHASE OF MORTGAGE LOANS
Section 3.01. Representations and Warranties of the Company
with respect to the Mortgage Loans. The Company hereby represents and warrants
to the Trustee and the Certificate Insurer that on the Closing Date it has
entered into the Purchase Agreement with respect to the Mortgage Loans with the
Seller, that the Seller has made the following representations and warranties in
such Purchase Agreement as of the Closing Date, which representations and
warranties run to and are for the benefit of the Company and the Trustee, and as
to which the Company has assigned to the Trustee, pursuant to Section 2.01
hereof, the right to cause the Seller to repurchase a Mortgage Loan as to which
there has occurred an uncured breach of representations and warranties in
accordance with the provisions of the Sale Agreement. References in this Section
to percentages of Mortgage Loans refer in each case to the percentage of the
aggregate principal balance of the Mortgage Loans as of the Cut-off Date, based
on the outstanding balances of the Mortgage Loans as of the Cut-off Date, and
giving effect to scheduled Monthly Payments due on or prior to the Cut-off Date,
whether or not received. References to percentages of Mortgaged Properties
refer, in each case, to the percentages of expected aggregate principal balances
of the related Mortgage Loans (determined as described in the preceding
sentence).
(a) With respect to the Seller:
(i) The Seller is a corporation validly existing and
in good standing under the laws of the State of New York;
(ii) The Seller has the full power and authority to
hold each Mortgage Loan, to sell each Mortgage Loan and to
execute, deliver and perform, and to enter into and consummate
all transactions contemplated by the Purchase Agreement and to
conduct its business as presently conducted, has duly
authorized the execution, delivery and performance of the
Purchase Agreement, has duly executed and delivered the
Purchase Agreement, and the Purchase Agreement and each
Assignment of Mortgage to the Company constitutes a legal,
valid and binding obligation of the Seller, enforceable
against it in accordance with its terms;
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(iii) None of the execution and delivery of the
Purchase Agreement, the acquisition of the Mortgage Loans by
the Seller, the sale of the Mortgage Loans to the Company, the
consummation of the transactions contemplated thereby or the
fulfillment of or compliance with the terms and conditions of
the Purchase Agreement will conflict with any of the terms,
conditions or provisions of the Seller's charter or by-laws or
materially conflict with or result in a material breach of any
of the terms, conditions or provisions of any legal
restriction or any agreement or instrument to which the Seller
is now a party or by which it is bound, or constitute a
default or result in an acceleration under any of the
foregoing, or result in the material violation of any law,
rule, regulation, order, judgment or decree to which the
Seller or its property is subject;
(iv) Each Mortgage Note, each Mortgage, each
Assignment of Mortgage and any other documents required
pursuant to the Purchase Agreement to be delivered to the
Company or its assignee for each Mortgage Loan have been, on
or before the Closing Date, delivered to the Company or its
assignee, except for such documents as are noted in the
Exception Report;
(v) There is no litigation pending or threatened with
respect to the Seller which is reasonably likely to have a
material adverse effect on the sale of the Mortgage Loans or
which is reasonably likely to have a material adverse effect
on the financial condition of the Seller;
(vi) No consent, approval, authorization or order of
any court or governmental agency or body is required for the
execution, delivery and performance by the Seller of or
compliance by the Seller with the Purchase Agreement, the sale
of the Mortgage Loans or the consummation of the transactions
contemplated by the Purchase Agreement except for consents,
approvals, authorizations and orders which have been obtained;
(vii) The consummation of the transactions
contemplated by the Purchase Agreement is in the ordinary
course of business of the Seller, and the transfer, assignment
and conveyance of the Mortgage Notes and the Mortgages by the
Seller pursuant to the Purchase Agreement are not subject to
bulk transfer or any similar statutory provisions in effect in
any applicable jurisdiction;
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(viii) The origination and collection practices used
by the Seller with respect to each Mortgage Note and Mortgage
have been in all material respects legal, proper and prudent
in the mortgage origination and servicing business. With
respect to escrow deposits and payments that the Seller
collects, all such payments are in the possession of, or under
the control of, the Seller, and there exist no deficiencies in
connection therewith for which customary arrangements for
repayment thereof have not been made. No escrow deposits or
other charges or payments due under the Mortgage Note have
been capitalized under any Mortgage or the related Mortgage
Note; and
(ix) The Seller will treat the sale of the Mortgage
Loans to the Company as a sale for reporting and accounting
purposes and, to the extent appropriate, for federal income
tax purposes.
(b) With respect to the Mortgage Loans:
(i) The information set forth in the Mortgage Loan
Schedule is complete, true and correct;
(ii) Unless otherwise specified on the Mortgage Loan
Schedule, no Monthly Payment required under the Mortgage Loan
has been delinquent for more than 30 days more than once in
the 12 months preceding the Closing Date; as of the Closing
Date, no more than approximately ____% and ____% of the Group
I and Group II Mortgage Loans, respectively will be 30-59 days
delinquent in payment of principal or interest; and as of the
Closing Date, [no] Mortgage Loan is sixty (60) or more days
delinquent in payment of principal or interest;
(iii) There are no defaults in complying with the
terms of the Mortgage, and all taxes, governmental
assessments, insurance premiums, water, sewer and municipal
charges, leasehold payments or ground rents 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, except that the Mortgage Loans may be
delinquent by 30 days or less. The Seller has not advanced
funds, or induced, solicited or knowingly received any advance
of funds by a party other than the Mortgagor, directly or
indirectly, for the payment of any amount required under
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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 earlier, to the day which precedes
by one month the Due Date of the first Monthly Payment;
(iv) 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 Trustee on behalf
of the Certificateholders and the Certificate Insurer and
which has been delivered to the Trustee. The substance of any
such waiver, alteration or modification has been approved by
the title insurer, to the extent required by the policy, and
its terms are reflected on the Mortgage Loan Schedule. No
Mortgagor has been released, in whole or in part, except in
connection with an assumption agreement approved by the title
insurer, to the extent required by the policy, and which
assumption agreement is part of the Mortgage File delivered to
the Trustee and the terms of which are reflected in the
Mortgage Loan Schedule;
(v) 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, recoupment, counterclaim or defense, including,
without limitation, the defense of usury, and no such right of
rescission, set-off, recoupment, counterclaim or defense has
been asserted with respect thereto, and no Mortgagor was a
debtor in any state or federal bankruptcy or insolvency
proceeding at the time the Mortgage Loan was originated;
(vi) Pursuant to the terms of the Mortgage, all
improvements upon the Mortgaged Property are insured by an
insurer acceptable to FNMA against loss by fire and such other
risks as are usually insured against in the broad form of
extended coverage hazard insurance available in the locale
where the Mortgaged Property is located, including flood
hazards if upon origination of the Mortgage Loan, the
Mortgaged Property was in an area identified in the Federal
Register by the Federal Emergency Management Agency as having
special flood hazards (and if flood insurance was required by
federal regulation and such flood
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insurance has been made available in the locate where the
Mortgaged Property is located). All such insurance policies
(collectively, the "hazard insurance policy") meet the
requirements of the current guidelines of the Federal
Insurance Administration, conform to the requirements of the
FNMA Sellers' Guide and the FNMA Servicers' Guide, and are a
standard policy of insurance for the locale where the
Mortgaged Property is located. The amount of the hazard
insurance is at least in the amount of the maximum amount
available under federal law in the locale where the Mortgaged
Property is located and the unpaid balance of the Mortgage
Loan, whichever is less. The hazard insurance policy names
(and will name) the Mortgagor as the insured and contains a
standard mortgagee loss payable clause in favor of the
original seller, and its successors and assigns. The Mortgage
obligates the Mortgagor thereunder to maintain the 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. Where required by state law or
regulation, the Mortgagor has been given an opportunity to
choose the carrier of the required hazard insurance, provided
the policy is not a "master" or "blanket" hazard insurance
policy covering a condominium or the common facilities of a
planned unit development. 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 upon the consummation of the
transactions contemplated by this Agreement. The Seller has
not engaged in, and has no knowledge of the Mortgagor's or any
subservicer's having engaged in, any act or omission which
would impair the coverage of any such policy, the benefits of
the endorsement provided for herein, or the validity and
binding effect of either. In connection with the issuance of
the hazard insurance policy, no unlawful fee, commission,
kickback or other unlawful compensation or value of any kind
has been or will be received, retained or realized by any
attorney, firm or other person or entity to the Seller's
knowledge, and no such unlawful items have been received,
retained or realized by the Seller;
(vii) 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 or disclosure laws
applicable to the Mortgage Loan have been complied with and
the
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consummation of the transactions contemplated hereby will not
involve the violation of any such laws;
(viii) The Mortgage has not 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. The Seller has not waived the
performance by the Mortgagor of any action, if the Mortgagor's
failure to perform such action would cause the Mortgage Loan
to be in default, nor has the Seller waived any default
resulting from any action or inaction by the Mortgagor;
(ix) The Mortgaged Property is located in the state
identified in the Mortgage Loan Schedule and consists of a
single 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 low-rise or high-rise
condominium project, or an individual unit in a planned unit
development or a manufactured dwelling (non-mobile); provided,
however, that no more than ____% and ____% of the Group I and
Group II Loans, respectively, are secured by condominiums,
townhouses or planned unit developments and, provided,
however, that any manufactured home meets the requirements of
Section 25(e)(10) of the Internal Revenue Code of 1986 by
having a minimum of 400 square feet of living space and a
minimum width in excess of 102 inches and is of a kind
customarily used in a fixed location. No more than _____% and
____% of the Group I and Group II Loans, respectively, are
secured by investor-owned properties. The Mortgaged Property
is either a fee simple estate or a long-term residential
lease. If the Mortgage Loan is secured by a long-term
residential lease, (1) the terms of such lease expressly
permit the mortgaging of the leasehold estate, the assignment
of the lease without the lessor's consent and the acquisition
by the holder of the Mortgage of the rights of the lessee upon
foreclosure or assignment in lieu of foreclosure or provide
the holder of the Mortgage with substantially similar
protections; (2) the terms of such lease do not (A) allow the
termination thereof upon the lessee's default without the
holder of the Mortgage being entitled to receive written
notice of, and opportunity to cure, such default, (B) allow
the termination of the lease in the event of damage or
destruction as long as the Mortgage is in existence or (C)
prohibit the holder of the Mortgage
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from being insured under the hazard insurance policy relating
to the Mortgaged Property; (3) the original term of such lease
is not less than 15 years; (4) the term of such lease
(including any term for which such lease may be renewed) does
not terminate earlier than five years after the maturity date
of the Mortgage Note; and (5) the Mortgaged Property is
located in a jurisdiction in which the use of leasehold
estates for residential properties is an accepted practice;
(x) The Mortgage is a valid, subsisting, enforceable and
perfected first lien or second lien on the Mortgaged Property,
including all buildings on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, hearing
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:
(1) The lien of current real property taxes and
assessments not yet due and payable;
(2) covenants, conditions and restrictions, rights of
way, easements and other matters of the public record
as of the date of recording acceptable to prudent
mortgage lending institutions generally and
specifically referred to in the lender's title
insurance policy delivered to the originator of the
Mortgage Loan and referred to or otherwise considered
in the appraisal made for the originator of the
Mortgage Loan; and
(3) 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 as
a residential 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 lien or second lien and first or second
priority security interest on the collateral described therein
and the Seller has full right to sell and assign the same to
the Company. The Mortgaged Property was not, as of the date of
origination of the Mortgage Loan, subject to a mortgage, deed
of trust,
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deed to secure debt or other security instrument creating a
lien subordinate to the lien of the Mortgage;
(xi) The Mortgage Note and the Mortgage and every other
agreement, if any, executed and delivered by the Mortgagor 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 and the Mortgage and any other related agreement
had legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note, the Mortgage and such
other related agreements, and the Mortgage Note and the
Mortgage and such other related agreements have been duly and
properly executed by such parties;
(xii) The Mortgage Loan has been closed and the proceeds
of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all
requirements as to completion of any on-site or off-site
improvement and as to disbursements of any escrow funds
therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgagee 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;
(xiii) Immediately prior to the sale of the Mortgage
Loan to the Company under this Agreement, (1) the Seller was
the sole owner an holder of the Mortgage Loan, (2) the
Mortgage Loan was not assigned or pledged, (3) the Seller had
good, indefeasible and marketable title thereto, (4) the
Seller had full right to transfer and sell the Mortgage Loan
to the Company free and clear of any encumbrance, equity
interest, participation interest, lien, pledge, charge, claim
or security interest, and (5) the Seller had full right and
authority subject to no interest or participation of, or
agreement with, any other party, to sell and assign each
Mortgage Loan to the Company under this Agreement, and
following the sale of each Mortgage Loan, the Company will own
such Mortgage Loan free and clear of any encumbrance, equity
interest, participation interest, lien, pledge, charge, claim
or security interest;
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(xiv) All parties which had any interest in the Mortgage
Loan, whether as mortgagee, assignee, pledgee or otherwise,
and including, without limitation, the Seller, to the best
knowledge of the Seller, 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)(a) organized under the laws of such state, or
(b) qualified to do business in such state, or (c) federal
savings and loan associations, savings banks, or national
banks having principal offices in such state, or (d) not doing
business in such state;
(xv) The Group I Loans have an original LTV equal to or
less than 90.00% and the Group II Loans have an original LTV
(or Combined Loan-to- Value Ratio in the case of Second
Mortgage Loans) equal to or less than 95.00%;
(xvi) The Mortgage Loan is covered by either (i) an
attorney's opinion of title and abstract of title the form and
stance of which is acceptable to FNMA or (ii) an ALTA lender's
title insurance policy or other generally acceptable form of
policy of insurance issued by a title insurer qualified to do
business in the jurisdiction where the Mortgaged Property is
located, or a commitment or binder to issue such a policy
insuring the Seller, its successors and assigns, as to the
first priority lien or second priority lien of the Mortgage in
the original principal amount of the Mortgage Loan, and
subject only to the exceptions contained in clauses (1), (2)
and (3) of paragraph (j) 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
in the Mortgage Interest Rate and Monthly Payment. Where
required by state law or regulation, the Mortgagor has been
given the opportunity to choose the carrier of the required
mortgage title insurance. Additionally, such lender's title
insurance policy affirmatively insured ingress and egress, and
against encroachments by or upon the Mortgaged Property or any
interest therein. Immediately prior to the sale of the
Mortgage Loan to the Company under the terms of this
Agreement, the Seller, its successors and assigns were the
sole insureds of such lender's title policy. 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 Seller, has done, by act or
omission, anything which
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would impair the coverage of such lender's title insurance
policy. In connection with the issuance of such lender's title
insurance policy, no unlawful fee, commission, kickback or
other unlawful compensation or value of any kind has been or
will be received, retained or realized by any attorney, firm
or other person or entity to the knowledge of the Seller, and
no such unlawful items have been received, retained or
realized by the Seller;
(xvii) There is no default, breach, violation or event
of acceleration existing under the Mortgage or the Mortgage
Note and no event which, with the passage of time or with
notice and the expiration of any grace or cure period, would
constitute a default, breach, violation or event of
acceleration, and neither the Seller nor its predecessors have
waived any default, breach, violation or event of
acceleration, except that the Mortgage Loans may be delinquent
by 30 days or less;
(xviii) To the Seller's knowledge, 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;
(xix) 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 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;
provided, that in no event shall a legal nonconforming use of
the Mortgaged Property be considered a violation of any such
zoning law or regulation;
(xx) The Mortgage Interest Rate and Monthly Payment are
adjusted in accordance with the terms of the Mortgage Note.
All required notices of interest rate and payment amount
adjustments have been sent to the Mortgagor on a timely basis
and the computations of such adjustments were properly
calculated. Installments of interest are subject to change due
to the adjustments to the Mortgage Interest Rate on each Rate
Adjustment Date, with interest calculated
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and payable in arrears and on each Rate Adjustment Date the
Monthly Payment will be adjusted to an amount, and pay
interest at the Mortgage Interest Rate as so adjusted,
sufficient to amortize the Mortgage Loan fully by the stated
maturity date (except with respect to __ Mortgage Loans,
representing approximately ____% of the Cut-Off Date Aggregate
Principal Balance of the Group II Loans, which are balloon
loans). All Mortgage Interest Rate adjustments have been made
in strict compliance with state and federal law and the terms
of the related Mortgage Note. Unless otherwise specified in
the Mortgage Loan Schedule, any interest required to be paid
by a Mortgagor pursuant to state and local law has been
properly paid and credited;
(xxi) The Mortgage contains 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, (A) in the case of a Mortgage designated
as a deed of trust, by trustee's sale, and (B) otherwise by
judicial foreclosure. There is no homestead or other exemption
available to the Mortgagor which would interfere with the
right to sell the Mortgaged Property at a trustee's sale or
the right to foreclose the Mortgage subject to applicable
federal and state laws and judicial precedent with respect to
bankruptcy and right of redemption;
(xxii) All inspections, licenses and certificates
required to be made are issued with respect to the use and
occupancy of 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;
(xxiii) The Mortgage Note is not and has not been
secured by any collateral except the lien of the corresponding
Mortgage and the security interest of any applicable security
agreement or chattel mortgage referred to in (x) above;
(xxiv) In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and 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 Trustee to
the trustee under the deed of trust, except in connection with
a trustee's sale after default by the
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Mortgagor, provided that this representation and warranty
shall in no way obligate the Trustee to pay any such amounts;
(xxv) The Mortgage Note, the Mortgage, the related
assignment of Mortgage and any other documents required to be
delivered by the Seller have been delivered to the Trustee as
and to the extent required to be delivered by this Agreement;
(xxvi) The Mortgage contains a provision 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, at the option of the Mortgagee. This
provision provides that the Mortgagee cannot exercise its
option if the exercise of such option is prohibited by federal
law;
(xxvii) Each of the Mortgage and the assignment of
Mortgage is in recordable form and is acceptable for recording
under the laws of the jurisdiction in which the Mortgaged
Property is located;
(xxviii) The Mortgage 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 Seller, the Mortgagor or anyone on behalf of the
Mortgagor, or paid by any source other than the Mortgagor, nor
does it contain any other similar provisions currently in
effect which may constitute a "buydown" provision. 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;
(xxix) 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. The lien of the Mortgage securing the
consolidated principal amount is expressly insured as having
first 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
FNMA and FHLMC.
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The consolidated principal amount does not exceed the original
principal amount of the Mortgage Loan;
(xxx) There is no proceeding pending or to the Seller's
knowledge threatened for the total or partial condemnation of
the Mortgaged Property. The Mortgaged Property is undamaged by
waste, fire, earthquake or earth movement, windstorm, flood,
tornado, other types of water damage or other casualty so as
to materially adversely affect the value of the Mortgaged
Property as security for the Mortgage Loan or the use for
which the premises were intended and each Mortgaged Property
is in good repair;
(xxxi) The origination and collection practices used
with respect to the Mortgage Loan have been in accordance with
Accepted Servicing Practices, and in all respects in
compliance with all applicable laws and regulations. With
respect to escrow deposits and any escrow payments, all such
payments collected are in the possession of the Servicer and
there exist no deficiencies in connection therewith for which
customary arrangements for repayment thereof have not bee
made. All escrow payments have been collected in full
compliance with state and federal law. Unless prohibited by
applicable law, an escrow of funds has been established, if
required, in an amount sufficient to pay for every item which
remains unpaid and which has been assessed by is not yet due
and payable. No escrow deposits or escrow payments or other
charges or payments due with respect to the Mortgage Loans,
other than origination points, fees and expenses, have been
capitalized under the Mortgage or Mortgage Note;
(xxxii) The Mortgage File contains an appraisal of the
related Mortgage Property signed prior to the approval of the
Mortgage Loan application by a Qualified Appraiser;
(xxxiii) The Mortgagor has not notified the Seller, and
the Seller has no knowledge, of any relief requested or
allowed to the Mortgagor under the Soldiers' and Sailors'
Civil Relief Act of 1940;
(xxxiv) To the Seller's knowledge, there exists no
violation of any local, state, or federal environmental law,
rule or regulation in respect of the Mortgaged Property which
violation has or could have a material adverse effect on the
market
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value of such Mortgaged Property. The Seller has no knowledge
of any pending action or proceeding directly involving the
related Mortgaged Property in which compliance with any
environmental law, rule or regulation is in issue; and, to the
best of the Seller'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 the use and
employment of such Mortgaged Property;
(xxxv) No Mortgage Loan was made in connection with (1)
the construction or rehabilitation of a Mortgaged Property or
(2) facilitating the trade-in or exchange of a Mortgaged
Property;
(xxxvi) 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 or disclosure
laws, applicable to the Mortgage Loan have been complied with,
and the Seller has and shall maintain in its possession,
available for the Trustee's inspection, and shall deliver to
the Trustee upon demand, evidence of compliance with all such
requirements;
(xxxvii) All information regarding the Mortgage Loans
which could reasonably be expected to adversely affect the
value or the marketability of any Mortgaged Property or
Mortgage Loan and of which the Seller is aware has been
provided by the Seller to the Company and the Certificate
Insurer;
(xxxviii) The Mortgage Note, the Mortgage and all other
documents contained in the Mortgage File are on FNMA or FHLMC
uniform instruments or are on forms acceptable to FNMA or
FHLMC. The documents, instruments and agreements submitted for
loan underwriting were not falsified by the Seller and contain
no untrue statement of material fact by the Seller and do not
omit to state a material fact required to be stated by the
Seller therein or necessary to make the statements therein not
misleading. The Seller has not made any representations to the
Mortgagor that are inconsistent with the mortgage instruments
used. The Mortgage Loans are representative of the Seller's
portfolio of fixed rate or adjustable rate mortgage loans, and
the Seller used no selection procedures that identified the
Mortgage Loans as being less desirable or valuable than other
comparable mortgage loans originated or acquired by the
Seller;
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(xxxix) All Monthly Payment amounts, with respect to the
Mortgage Loan, received after the Cut-Off Date and to which
the Seller is not entitled, have been deposited into the
Certificate Account;
(xl) To the Seller's knowledge there is no delinquent
tax or assessment lien on the Mortgaged Property;
(xli) The Seller has performed or directed the Servicer
to perform any and all acts required to be performed to
preserve the rights and remedies of the Trustee in any
insurance policies applicable to the Mortgage Loan, including,
without limitation, any necessary notification of insurers,
assignments of policies or interests therein, and
establishment of co-insurer, joint loan payer and mortgagee
rights in favor of the Trustee;
(xlii) The Mortgage Loan conforms, and all of the
Mortgage Loans in the aggregate conform, to the description
thereof set forth in the Prospectus Supplement, including
Appendix C;
(xliii) As of the Cut-Off Date, no more than
approximately 1.53% and 0.96% of the Group I and Group II
Loans, respectively, by aggregate principal balance as of the
Cut-Off Date, will be secured by Mortgaged Properties located
within any single zip code area;
(xliv) Each Mortgage Loan constitutes a qualified
mortgage under Section 860G(a)(3)(A) of the Internal Revenue
Code of 1986 and Treasury Regulations Section 1.860G-2(a)(1);
(xlv) With respect to each Mortgaged Property situated
in the 39 counties of California which were declared federal
disaster areas on March 21, 1995 due to flooding, none of the
Mortgagors residing in such Mortgaged Properties have
contacted the Seller with any reports of damage of any kind or
requests for forbearance of any payments as a result of such
flood damage;
(xlvi) Each Mortgage Loan contains a customary
due-on-sale clause;
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(xlvii) Except as previously disclosed in writing to the
Trustee and the Certificate Insurer, with respect to each
Mortgage Loan, there is only one originally executed Mortgage
Note not stamped as a duplicate;
(xlviii) The aggregate loan balance of all Group I and
Group II Loans, as of the Cut-Off Date is $_____________ and
$_____________, respectively;
(xlviv) Each Mortgage Loan is being serviced by the
Servicer or by an entity within the control of the Servicer
which is qualified to service mortgage loans;
(l)The Mortgage Note related to each fixed-rate Mortgage
Loan bears a fixed coupon rate of at least _____% per annum
and the Mortgage Note related to each adjustable rate Mortgage
Loan bears a current coupon rate of at least _____% as of the
Cut-Off Date;
(li) No funds provided to a borrower from a Second
Mortgage Loan were concurrently used as a down payment for a
First Mortgage Loan;
(lii) With respect to each Second Mortgage Loan, the
maturity date of the Mortgage Loan is prior to the maturity
date of the related prior lien if such prior lien provides for
a balloon payment;
(liii) With respect to each Second Mortgage Loan, the
Seller has not received, and is not aware of, a notice of
default of any senior mortgage loan which has not been cured;
(liv) The first date on which the applicable Mortgagor
must make a payment on each Mortgage Loan is due no later
than [DATE];
(lv) No property securing a Mortgage Loan is a
cooperative or mobile home or constitutes other than real
property under applicable state law;
(lvi) The Mortgage Loans are not being transferred
with any intent to hinder, delay or defraud any creditors;
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(lvii) With respect to each Second Mortgage Loan, the
related prior lien does not provide for negative amortization;
(lviii) The margin for the adjustable rate Mortgage
Loans (which margin, when added to the applicable current
index, establishes the interest rate paid applicable to the
Mortgage Loan) range from ____% to ____%;
(lix) No Mortgage Loan has a remaining term in excess
of 360 months; and
(lx) Each Mortgage Loan is secured by a property
having an appraised values of less than $____________.
The Purchase Agreement provides that the representations and
warranties described in this Section 3.01 shall survive the delivery of the
respective Mortgage Files to the Trustee and shall be continuing as long as any
Certificate shall be outstanding or this Agreement has not been terminated.
Upon discovery by any of the Company, the Servicer, the
Certificate Insurer or the Trustee of a breach of any of the foregoing
representations and warranties, irrespective of any limitation in such
representation or warranty regarding the knowledge of the Seller, which
materially and adversely affects the value of a Mortgage Loan or the interest of
the Certificateholders (or which materially and adversely affects the interests
of the Certificateholders in the related Mortgage Loan in the case of a
representation and warranty relating to a particular Mortgage Loan), the party
discovering such breach shall give prompt written notice to the other parties
and to the Seller, which notice shall specify the date of discovery. The
Servicer shall in any event notify the Seller of such breach, which notice shall
also specify the date of discovery. Pursuant to the Sale Agreement, the Seller
shall within 90 days from the earlier of (i) the date specified in the notice as
the date of discovery of such breach or (ii) the date the Seller otherwise
discovers such breach, cure such breach, substitute a Mortgage Loan pursuant to
the provisions of Section 3.05 or, if the breach relates to a particular
Mortgage Loan, purchase such Mortgage Loan from the Trustee at the Purchase
Price or, if the breach relates to a representation or warranty regarding the
Mortgage Loans as a whole, repurchase Mortgage Loans selected by the Company
such that the representations and warranties with respect to the Mortgage Loans
are materially correct (without using any selection procedures to identify
Mortgage Loans to remain in the Trust Fund as being less valuable than
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the Mortgage Loans to be repurchased, but, in the case of a repurchase of any
obligation pursuant to a breach of a representation or warranty relating to the
Mortgage Loans as a whole, using selection procedures to identify loans to be
repurchased that will not give rise to the tax imposed by Section 860F(a)(1) of
the Code either because no net income would be recognized or because, as set
forth in an Opinion of Counsel, which shall not be an expense of the Trust Fund,
delivered by the Seller to the Servicer, the transaction is not a "prohibited
transaction" within the meaning of Section 860F(a)(2) of the Code). The Purchase
Price for the purchased Mortgage Loan shall be paid to the Servicer and shall be
deposited by the Servicer in the Collection Account promptly upon receipt and,
upon receipt by the Trustee of written notification of such deposit signed by a
Servicing Officer, the Trustee shall promptly release to the Seller the related
Mortgage File and the Trustee shall execute and deliver such instruments of
transfer or assignment as may be provided to it by the Servicer, without
recourse, as shall be necessary to vest in the Seller or its designee, as the
case may be, any Mortgage Loan released pursuant hereto, and the Trustee shall
have no further responsibility with regard to such Mortgage Loan. It is
understood and agreed that the obligation of the Seller to cure, substitute or
purchase any Mortgage Loan as to which such a breach has occurred shall
constitute the sole remedy respecting such breach available to
Certificateholders, the Certificate Insurer or the Trustee on behalf of
Certificateholders. The Trustee shall notify each Rating Agency of any
repurchase or substitution of a Mortgage Loan pursuant to this Section 3.01.
Section 3.02. [Reserved]
Section 3.03. [Reserved]
Section 3.04 Representations of the Servicer. The Servicer
hereby represents and warrants to the Trustee, the Company, the Certificate
Insurer and the Certificateholders as of the Closing Date:
(a) The Servicer is a Delaware corporation duly organized,
validly existing and in good standing under the laws of the state of
its incorporation and is in compliance with the laws of each state in
which any Mortgaged Property is located to the extent necessary to
enable it to perform its obligations under the terms of this Agreement;
the Servicer has the full corporate power and authority to execute and
deliver this Agreement and to perform in accordance herewith; the
execution, delivery and performance of this Agreement by the Servicer
and the consummation of the transactions contemplated hereby have been
duly and validly authorized; this Agreement evidences the valid,
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binding and enforceable obligation of the Servicer; 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,
(b) Neither the execution and delivery of this Agreement, nor
the fulfillment of or compliance with the terms and conditions of this
Agreement, will conflict with or result in a breach of any of the
terms, conditions or provisions of the Servicer's charter or by-laws or
any legal restriction or any agreement or instrument to which the
Servicer is now a party or by which it is bound, or constitute a
default or result in an acceleration under any of the foregoing, or
result in the violation of any law, rule, regulation. order, judgment
or decree to which the Servicer or its property is subject, or impair
the ability of the Trustee (or the Servicer as the agent of the
Trustee) to realize on the Mortgage Loans, or impair the value of the
Mortgage Loans;
(c) The Servicer is an approved seller/servicer of
conventional residential mortgage loans for FNMA and FHLMC,
(d) There is no action, suit, proceeding or investigation
pending or, to the knowledge of the Servicer, threatened against the
Servicer which, either in any one instance 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 of any action taken or
to be taken in connection with the obligations of the Servicer
contemplated herein, or which would materially impair the ability of
the Servicer to perform under the terms of this Agreement;
(e) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery
and performance by the Servicer of or compliance by the Servicer with
this Agreement or the Mortgage Loans or the consummation of the
transactions contemplated by this Agreement, or if required, such
approval has been obtained prior to the Closing Date; and
(f) Neither this Agreement nor any statement, report or other
document furnished by the Servicer pursuant to this Agreement or in
connection with the transactions contemplated hereby contains any
untrue statement of material fact regarding
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the Servicer or omits to state a material fact necessary to make the
statements regarding the Servicer contained herein or therein not
misleading.
It is understood and agreed that the representations and warranties set forth in
this Section 3.04 shall survive the delivery of the respective Mortgage Files to
the Trustee or to a custodian, as the case may be, and inure to the benefit of
the Trustee, the Certificateholders and the Certificate Insurer.
Section 3.05 Purchase and Substitution. It is understood and
agreed that the representations and warranties set forth in Section 2.01 of the
Sale Agreement shall survive delivery of the Certificates to the
Certificateholders. Pursuant to the Sale Agreement, with respect to any
representation or warranty contained in Section 2.01 of the Sale Agreement that
is made to the best of the Seller's knowledge, if it is discovered by the
Servicer, any Subservicer, the Trustee, the Certificate Insurer or any
Certificateholder that the substance of such representation and warranty was
inaccurate as of the Closing Date and such inaccuracy materially and adversely
affects the value of the related Mortgage Loan, then notwithstanding the
Seller's lack of knowledge with respect to the inaccuracy at the time the
representation or warranty was made, such inaccuracy shall be deemed a breach of
the applicable representation or warranty. Upon discovery by the Seller, the
Servicer, any Subservicer, the Trustee or the Certificate Insurer of a breach of
any of such representations and warranties which materially and adversely
affects the value of the Mortgage Loans or the interest of the
Certificateholders or the Certificate Insurer, or which materially and adversely
affects the interests of the Certificate Insurer or the Certificateholders in
the related Mortgage Loan in the case of a representation and warranty relating
to a particular Mortgage Loan (notwithstanding that such representation and
warranty was made to the Seller's best knowledge), the party discovering such
breach shall give prompt written notice to the others. Subject to the last
paragraph of this Section 3.05, within 60 days of the earlier of its discovery
or its receipt of notice of any breach of a representation or warranty, pursuant
to the Sale Agreement, the Seller shall be required to (a) promptly cure such
breach in all material respects, or (b) purchase such Mortgage Loan on the next
succeeding Servicer Remittance Date, in the manner and at the price specified in
Section 2.02(b), or (c) remove such Mortgage Loan from the Trust Fund (in which
case it shall become a Deleted Mortgage Loan) and substitute one or more
Qualified Substitute Mortgage Loans; provided, that, such substitution is
effected not later than the date which is two years after the Startup Day or at
such later date, if the Trustee and the Certificate Insurer receive an Opinion
of Counsel to the effect set forth below in this Section. Pursuant to the Sale
Agreement, any such substitution shall
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be accompanied by payment by the Seller of the Substitution Adjustment, if any,
to be deposited in the Collection Account.
(b) As to any Deleted Mortgage Loan for which the Seller substitutes a
Qualified Substitute Mortgage Loan or Loans, the Seller shall be required to
effect such substitution by delivering to the Trustee a certification in the
form attached hereto as Exhibit H, executed by a Servicing Officer and the
documents described in Sections 2.01 for such Qualified Substitute Mortgage Loan
or Loans.
(c) The Servicer shall deposit in the Collection Account all payments
received in connection with such Qualified Substitute Mortgage Loan or Loans
after the date of such substitution. Monthly Payments received with respect to
Qualified Substitute Mortgage Loans on or before the date of substitution will
be retained by the Seller. The Trust Fund will own all payments received on the
Deleted Mortgage Loan on or before the date of substitution, and the Seller
shall thereafter be entitled to retain all amounts subsequently received in
respect of such Deleted Mortgage Loan. The Servicer shall give written notice to
the Trustee and the Certificate Insurer that such substitution has taken place
and shall amend the Mortgage Loan Schedule to reflect the removal of such
Deleted Mortgage Loan from the terms of this Agreement and the substitution of
the Qualified Substitute Mortgage Loan. Upon such substitution, such Qualified
Substitute Mortgage Loan or Loans shall be subject to the terms of this
Agreement in all respects.
(d) It is understood and agreed that the obligations of the Seller set
forth in Sections 2.02 and 2.03 of the Sale Agreement to cure, purchase or
substitute for a defective Mortgage Loan as provided in Sections 2.02 and 2.03
constitute the sole remedies of the Trustee, the Certificate Insurer and the
Certificateholders respecting a breach of the representations and warranties of
the Seller set forth in Section 2.01 of the Sale Agreement. In addition, it is
understood and agreed that the Company has assigned to the Trustee all of its
rights under the Sale Agreement and the right to enforce any remedy against the
Seller as provided in Section 2.01 of the Sale Agreement. The Trustee shall give
prompt written notice to the Certificate Insurer and the Rating Agencies of any
repurchase or substitution made pursuant to this Section 3.03 or Section
2.02(b).
(e) Upon discovery by the Servicer, the Trustee, the Certificate
Insurer or any Certificateholder that any Mortgage Loan does not constitute a
Qualified Mortgage, the party discovering such fact shall promptly (and in any
event within five days of the discovery) give
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written notice thereof to the other parties. In connection therewith, the Seller
shall be required to repurchase or substitute a Qualified Substitute Mortgage
Loan for the affected Mortgage Loan within 90 days of the earlier of such
discovery by an, of the foregoing parties, or the Trustee's or the Seller's
receipt of notice, in the same manner as it would a Mortgage Loan for a breach
of representation or warranty contained in Section 2.01 of the Sale Agreement.
The Trustee shall reconvey to the Seller 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
contained in Section 2.01 of the Sale Agreement.
ARTICLE IV
THE CERTIFICATES
Section 4.01. The Certificates. (a) The Class A, Class S and
Class R Certificates shall be substantially in the forms thereof included within
Exhibits C and D and shall, on original issue, be executed by the Company and
authenticated by the Trustee upon receipt by the Trustee of the documents
specified in Section 2.01, delivered to or upon the order of the Company.
(b) The Depository, the Company and the Trustee have entered
into a Depository Agreement dated as of [DATE] (the "Depository Agreement").
Except as provided in paragraph (c) below, the Class A Certificates shall at all
times remain registered in the name of the Depository or its nominee and at all
times: (i) registration of the Class A Certificates may not be transferred by
the Trustee except to a successor to the Depository; (ii) ownership and
transfers of registration of the Class A Certificates on the books of the
Depository shall be governed by applicable rules established by the Depository;
(iii) the Depository may collect its usual and customary fees, charges and
expenses from its Depository Participants; (iv) the Trustee shall deal with the
Depository, Depository Participants and Indirect Participants as representatives
of the Certificate Owners of the Class A Certificates for purposes of exercising
the rights of such Holders under this Agreement, and requests and directions for
and votes of such representatives shall not be deemed to be inconsistent if they
are made with respect to different Certificate Owners; and (v) 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 Participants and persons shown
on the books of such Indirect Participants as direct or indirect Certificate
Owners. The Depository Agreement provides that the Depository shall maintain
Class A records with respect to the Certificate Owners and with respect to
ownership and transfers of such Certificates.
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All transfers by Certificate Owners of Class A 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 Class A Certificates of Certificate
Owners it represents or of brokerage firms for which it acts as agent in
accordance with the Depository's normal procedures.
(c) If (i)(A) the Company advises the Trustee in writing that
the Depository is no longer willing or able to properly discharge its
responsibilities as Depository and (B) the Trustee or the Company are unable
after exercise of their reasonable best efforts to locate a qualified successor
or (ii) the Company at its option advises the Trustee in writing that it elects
to terminate the Class A system through the Depository, the Trustee shall notify
all Certificate Owners, through the Depository, of the occurrence of any such
event and of the availability of definitive, fully registered Certificates (the
"Definitive Certificates") to Certificate Owners requesting the same. Upon
surrender to the Trustee of the Class A Certificates by the Depository for
registration and receipt by the Trustee of an adequate supply of certificates
from the Company, the Trustee shall issue the Definitive Certificates. Neither
the Company, the Servicer, the Certificate Administrator nor the Trustee shall
be liable for any delay in delivery of such instructions and may conclusively
rely on, and shall be protected in relying on, such instructions.
(d) The Certificates shall be issuable in the minimum original
dollar denominations (and integral multiples of $1,000 in excess of such amount)
and aggregate original dollar denominations per Class as set forth in the
following table (except that one Certificate of each Class may be issued in a
different denomination).
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Aggregate Original Certificate
Minimum Principal Balance of all
Original Certificates of the CUSIP
Class Denomination Indicated Class Number
----- ------------ ------------------------------- ------
IA-1 $ $
IIA-2 $ $
IIA-3 $ $
IIA-4 $ $
IIA-5 $ $
I S $ $
II S $ $
R(1) (1) (1) N/A
---------------
(1) The Class R Certificate represents the Residual Interest and has no
Certificate Principal Balance.
The Certificates shall be signed by manual or facsimile
signature on behalf of the Company by its President or one of its Vice
Presidents. Certificates bearing the manual or facsimile signatures of
individuals who were at the time of signature proper officers of the Company
shall bind the Company, notwithstanding that such individuals or any of them
have ceased to hold such offices prior to the authentication and delivery of
such Certificate or did not hold such offices at the date of such Certificates.
No Certificate shall be entitled to any benefit under this Agreement, or be
valid for any purpose, unless there appears on such Certificate a manual
authentication by a Responsible Officer of the Trustee 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.
Section 4.02. Registration of Transfer and Exchange of
Certificates. (a) The Trustee shall cause to be kept at its Corporate Trust
Office, or at the office of its designated
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agent, a Certificate Register in which, subject to such reasonable regulations
as it may prescribe, the Trustee shall provide for the registration of
Certificates and of transfers and exchanges of Certificates as herein provided.
The Trustee will notify the Paying Agent within five Business Days after each
Record Date of any transfer of Certificates on or prior to such Record Date.
(b) Upon surrender for registration of transfer of any
Certificate at any office or agency of the Trustee maintained for such purpose,
the Company shall execute and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, a Certificate of a like Class
and aggregate Percentage Interest and dated the date of authentication by the
Trustee.
(c) No transfer of a Class S Certificate shall be made unless
such transfer is made pursuant to an effective registration statement or
otherwise in accordance with the requirements under the Securities Act of 1933,
as amended. If such a transfer is to be made in reliance upon an exemption from
said Act, (i) the Trustee or the Company shall require (except if the transferee
executes a certificate substantially in the form of Exhibit J-1 hereto) a
written opinion of independent counsel acceptable to and in form and substance
satisfactory to the Trustee and the Company that such transfer may be made
pursuant to an exemption, describing the applicable exemption and the basis
therefor, from said Act and laws or is being made pursuant to said Act and laws,
which opinion of counsel shall not be an expense of the Trust Fund, the Trustee,
the Company or the Servicer, and (ii) the Trustee shall require the transferee
to execute a certification substantially in the form of Exhibit J or Exhibit
J-1.
(d) No transfer of a Class S Certificate shall be made to any
employee benefit plan subject to Section 406 of ERISA (a "Plan"), nor a person
acting on behalf of such plan or using the assets of such plan. No transfer of a
Class S Certificate shall be made unless the Trustee shall have received either
(i) a representation letter from the transferee of such Certificate or interest,
acceptable to and in form and substance satisfactory to the Trustee and the
Company, to the effect that (A) such transferee is not an employee benefit plan
subject to Section 406 of ERISA, nor a person acting on behalf of any such plan
or using the assets of such plan, or, alternatively, in the case of an insurance
company, the assets of any separate accounts to effect such acquisition, or
alternatively, (B) the source of funds for the purchase of such Certificate is
an "insurance company general account" within the meaning of Prohibited
Transaction Class Exemption 95-60 ("PTCE 95-60"), 60 Fed. Reg. 35925 (July 12,
1995), and the conditions set forth in Section I and III of PTCE 95-60 are
satisfied with respect to the purchase and holding of such Certificate, which
representation letter shall not be an expense of the Trustee, the Company,
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the Certificate Administrator or the Servicer, or (ii) in the case of a Class S
Certificate presented for registration in the name of an employee benefit plan
subject to ERISA or Section 4975 of the Code (or comparable provisions of any
subsequent enactments) or a trustee of any such plan or any other Person who is
using the assets of any such plan to effect such acquisition, an Opinion of
Counsel satisfactory to the Trustee and the Company to the effect that the
purchase or holding of such Class S Certificate will not result in the assets of
the Trust Fund being deemed to be "plan assets" pursuant to the Department of
Labor Plan Asset Regulations set forth in 29 C.F.R. ss.2510.3-101 and subject to
the fiduciary responsibility provisions of ERISA or the prohibited transaction
provisions of the Code, will not constitute or result in a prohibited
transaction within the meaning of Section 406 or Section 407 of ERISA or Section
4975 of the Code, and will not subject the Trustee, the Company, the Certificate
Administrator or the Servicer to any obligation in addition to those undertaken
in this Agreement, which opinion of counsel shall not be an expense of the
Trustee, the Company, the Certificate Administrator or the Servicer.
(e) At the option of a Certificateholder, a Certificate may be
exchanged for another Certificate or Certificates of authorized denominations of
a like Class, upon surrender of the Certificate to be exchanged at any office or
agency of the Trustee maintained for such purpose. Whenever the Certificate is
so surrendered for exchange, the Company shall execute and the Trustee shall
authenticate and deliver, the Certificate which the Certificateholder making the
exchange is entitled to receive. Every Certificate presented or surrendered for
transfer or exchange shall (if so required by the Trustee) be duly endorsed by,
or be accompanied by a written instrument of transfer in the form satisfactory
to the Trustee duly executed by, the Holder thereof or his attorney duly
authorized in writing.
(f) No service charge shall be made to the Holder for any
transfer or exchange of a Certificate, but the Trustee may require payment by
the Certificateholders of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer or exchange of such
Certificate.
(g) All Certificates surrendered for transfer or exchange
shall be destroyed by the Trustee in accordance with the Trustee's standard
procedures.
(h) [Reserved]
(i) A Disqualified Organization is prohibited from acquiring
beneficial ownership of a Class R Certificate. Notwithstanding anything to the
contrary contained herein,
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unless and until the Certificate Administrator shall have received an Opinion of
Counsel, satisfactory in form and substance to the Certificate Administrator, to
the effect that the absence of the conditions contained in this Section 4.02(i)
would not result in the imposition of federal tax upon the REMIC or cause the
REMIC to fail to qualify as a REMIC, no transfer, sale or other disposition of
the Class R Certificate (including for purposes of this Section any beneficial
interest therein) may be made without the express written consent of the
Certificate Administrator, which consent is to be granted in the sole discretion
of the Certificate Administrator and a copy of which written consent shall be
supplied to the Trustee.
As a condition to the granting of the consent referred to in
this Section 4.02(i), prior to the transfer, sale, pledge, hypothecation or
other disposition of the Class R Certificate or any interest therein, the
Certificate Administrator shall require that the proposed transferee deliver to
the Certificate Administrator and the Trustee its taxpayer identification number
and state, under penalties of perjury that such number is the social security
number of the transferee or an affidavit under penalties of perjury stating that
as of the date of such transfer such transferee is not and has no intention of
becoming a Disqualified Organization, and, in either case, an affidavit stating
(i) that such transferee is not acquiring such Class R Certificate as an agent,
broker, nominee, or middleman for a Disqualified Organization, (ii) if the
Residual Interest is a "non-economic residual interest" within the meaning of
Treas. Reg. ss.1.860E-1(c)(2),(I) that no purpose of the acquisition of the
Class R Certificate is to avoid or impede the assessment or collection of tax,
(II) that such transferee has historically paid its debts as they came due and
will continue to pay its debts as they come due and (III) that such transferee
represents that it understands that, as the holder of the non-economic residual
interest, the transferee may incur tax liabilities in excess of any cash flows
generated by the interest and that the transferee intends to pay taxes
associated with holding the residual interest and (iii) unless the Certificate
Administrator consents to the transfer of the Class R Certificate to a Person
who is not a U.S. Person, that it is a U.S. Person. The Certificate
Administrator shall not grant the consent referred to in this Section 4.02(i) if
it has actual knowledge that any statement made in the affidavit issued pursuant
to the preceding sentence is not true. Notwithstanding any purported transfer,
sale or other disposition of the Class R Certificate to a Disqualified
Organization, such transfer, sale or other disposition shall be deemed to be of
no legal force or effect whatsoever and such Disqualified Organization shall not
be deemed to be a Class R Certificateholder for any purpose hereunder,
including, but not limited to, the receipt of distributions on such Class R
Certificate. If any purported transfer shall be in violation of the provisions
of this Section 4.02(i) then the prior holder of the Class R Certificate shall,
upon discovery that the transfer of such Class R Certificate was not in fact
permitted by this Section
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4.02(i), be restored to all rights as a Holder thereof retroactive to the date
of the purported transfer of such Class R Certificate. The Trustee and the
Certificate Administrator shall be under no liability to any Person for any
registration or transfer of a Class R Certificate that is not permitted by this
Section 4.02(i) or for making payments due on such Class R Certificate to the
purported Holder thereof or taking any other action with respect to such
purported Holder under the provisions of this Agreement so long as the transfer
was not registered under the written certification of the Certificate
Administrator as described in this Section 4.02(i). The prior Holder shall be
entitled to recover from any purported Holder of a Class R Certificate that was
in fact not a permitted purported transferee under this Section 4.02(i) at the
time it became a purported Holder all payments made to such purported Holder on
such Class R Certificate; provided that the Certificate Administrator shall not
be responsible for such recovery. Each Class R Certificateholder, by the
acceptance of the Class R Certificate, shall be deemed for all purposes to have
consented to the provisions of this Section 4.02(i) and to any amendment to this
Agreement deemed necessary by counsel of the Certificate Administrator to ensure
that the Class R Certificate is not transferred to a Disqualified Organization
and that any transfer of such Class R Certificate will not cause the imposition
of a tax upon the REMIC or cause the Trust Fund to fail to qualify as a REMIC.
The restrictions on transfer of the Class R Certificate will cease to apply and
be void upon receipt by the Trustee of a certificate of the Certificate
Administrator stating that the Certificate Administrator has received an Opinion
of Counsel to the effect that such restrictions on transfer are no longer
necessary to avoid the risk of material federal taxation to the REMIC or prevent
the Trust Fund from qualifying as a REMIC.
Section 4.03. Mutilated, Destroyed, Lost or Stolen
Certificates. If (a) any mutilated Certificate is surrendered to the Trustee or
the Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Certificate, and (b) there is delivered to the Trustee such
security or indemnity as may be required by it to save it harmless, then, in the
absence of notice to the Trustee that such Certificate has been acquired by a
bona fide purchaser, the Trustee 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 Class. Upon the issuance of any new Certificate
under this Section, the Trustee may require of the Certificateholder 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 connected therewith. Any
replacement Certificate of any Class issued pursuant to this Section shall
constitute complete and indefeasible evidence of ownership of the Percentage
Interest in the distributions to which the Certificateholders of such Class are
entitled, as if originally issued, whether or not the mutilated, destroyed, lost
or stolen
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Certificate shall be found at any time, and such mutilated, destroyed, lost or
stolen Certificate shall be of no force or effect under this Agreement, to the
extent permitted by law.
Section 4.04. Persons Deemed Owners. Prior to due presentation
of a Certificate of any Class for registration of transfer, the Company, the
Certificate Administrator and the Trustee may treat the person in whose name any
Certificate is registered on the Record Date as the owner of such Certificate
and the Percentage Interest in the distributions to which the Certificateholders
of such Class are entitled on the relevant date as the Holder of such
Certificate and the Percentage Interest represented by such Certificate for the
purpose of receiving remittances pursuant to Section 6.01 and for all other
purposes whatsoever, and neither the Company, the Certificate Administrator nor
the Trustee shall be affected by notice to the contrary.
Section 4.05. Establishment of Certificate Accounts; Deposit
in Certificate Accounts. (a) The Certificate Administrator shall establish and
maintain two separate Certificate Accounts for the benefit of the
Certificateholders (each, a "Certificate Account", and collectively, the
"Certificate Account") which are Eligible Accounts, in the form of a trust
account, in the name of "[Trustee], in trust for and for the benefit of the
Certificateholders of Multi-Class Mortgage Pass-Through Certificates, Chase
Funding, Inc. Series ____-__- [Group I] [Group II] Certificate Account." Each
Certificate Account shall be established with a commercial bank, a savings bank
or a savings and loan association.
(b) On each Servicer Remittance Date, the Servicer shall cause to be
deposited in the applicable Certificate Account, from funds on deposit in the
Collection Account, an amount equal to the related Servicer Remittance Amount
with respect to Loan Group I and Loan Group II, respectively. Upon becoming
aware of any failure of the Servicer to make any such required deposit, the
Certificate Administrator shall promptly give written notice of such failure to
the Servicer.
(c) The Certificate Administrator may invest, or cause the institution
maintaining the Certificate Accounts to invest, moneys in the Certificate
Account in Permitted Investments, which shall mature not later than the Business
Day next preceding the Distribution Date next following the date of such
investment (except that if such Permitted Investment is an obligation of the
institution that maintains the related Certificate Account, then, subject to
Section 4.07, such Permitted Investment shall mature not later than the related
Distribution Date) and shall not be sold or disposed of prior to its maturity.
All such Permitted Investments shall be made in the
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name of the Trustee and shall be held by the Trustee or its agent. All income
and gain realized from any such investment shall be for the benefit of the
Certificate Administrator as additional compensation and shall be subject to its
withdrawal or order from time to time. The amount of any losses incurred in
respect of any such investments (to the extent not offset by income from other
such investments) shall be deposited in the related Certificate Account by the
Certificate Administrator out of its own funds immediately as realized. The
creation of each Certificate Account shall be evidenced by a certification or
letter agreement in the form of Exhibit H or Exhibit I, respectively. A copy of
such certification or letter agreement shall be furnished to the Trustee.
Section 4.06. Permitted Withdrawals from the Certificate
Accounts. The Certificate Administrator may, from time to time, make withdrawals
from the Certificate Accounts for the following purposes:
(i) to reimburse itself for expenses incurred by it and
reimbursable pursuant to Section 8.06 and to reimburse the Company for
expenses incurred by it and reimbursable pursuant to Section 8.06;
(ii) to pay to the Seller with respect to each Mortgage Loan
or property acquired in respect thereof that has been repurchased or
replaced pursuant to Section 2.02 or 3.01 or to pay to the Servicer
with respect to each Mortgage Loan or property acquired in respect
thereof that has been purchased pursuant to Section 11.01 all amounts
received thereon and not required to be distributed as of the date on
which the related Repurchase Price was determined;
(iii) to reimburse the Servicer for unreimbursed Periodic
Advances and Servicing Advances made by it with respect to previous
Distribution Dates, to the extent such reimbursement is permitted to be
made from the Collection Account pursuant to Section 5.04(a) and only
if such reimbursement has not been made from the Collection Account;
(iv) to make deposits to the Paying Agent Account in the
amounts and in the manner provided for herein;
(v) to pay itself any interest earned on or investment income
earned with respect to funds in the Certificate Accounts;
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(vi) to return to the Collection Account any amount deposited
in either Certificate Account that was not required to be deposited
therein;
(vii) to pay itself the Certificate Administration Fee in
accordance with Section 8.08; and
(viii) to clear and terminate the Certificate Accounts
pursuant to Section 11.01.
The Certificate Administrator shall keep and maintain a
separate accounting for each Mortgage Loan for the purpose of accounting for
withdrawals from the Certificate Accounts pursuant to each of the subparagraphs
listed above.
Section 4.07. Appointment of Paying Agent; Paying Agent
Account. The Trustee may appoint a Paying Agent hereunder, which Paying Agent
shall not be the Company, the Seller, or an affiliate of the Company or the
Seller unless such Paying Agent is the Corporate Trust Department of Chase and
is rated at least Baa3 or P-3 by Xxxxx'x at the time of such appointment and at
all times thereafter. In the event of any such appointment, on the Business Day
prior to each Distribution Date, the Certificate Administrator shall deposit or
cause to be deposited with the Paying Agent from funds on deposit in the
Certificate Account a sum sufficient to make the payments to Certificateholders
and the Certificate Insurer in the amounts and in the manner provided for in
Section 6.03, such sum to be held in trust for the benefit of Certificateholders
in a segregated account (the "Paying Agent Account") which shall be an Permitted
Account in the name of "[Trustee], as Trustee, in trust for and for the benefit
of the Certificateholders of Multi-Class Mortgage Pass-Through Certificates,
Chase Funding, Inc. Series ____-__ - Paying Agent Account". The Certificate
Administrator shall cause the Paying Agent to perform each of the obligations of
the Paying Agent set forth herein and shall be liable to the Trustee and the
Certificateholders for failure of the Paying Agent to perform such obligations.
If the Paying Agent is a party other than the Trustee, the Trustee shall have no
liability in connection with the performance or failure of performance of the
Paying Agent. The Trustee designates the Corporate Trust Department of Chase as
the initial Paying Agent. The Trustee may withdraw funds from the Paying Agent
Account, although it is recognized and understood that for purposes of
administrative efficiency, in the ordinary course the Paying Agent and not the
Trustee will make all withdrawals from the Paying Agent Account necessary to
make payments to Certificateholders.
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If, on any Remittance Date, the Paying Agent fails to
distribute to Certificateholders the amounts then on deposit in the Paying Agent
Account for the purposes specified herein, the Trustee shall be obligated
promptly upon its knowledge thereof to distribute such amounts to
Certificateholders in the manner and in such amounts based upon information
provided by the Certificate Administrator; provided that in no event shall the
Trustee be obligated for purposes of this paragraph to distribute to
Certificateholders any amounts other than those on deposit in the Paying Agent
Account.
The Certificate Administrator shall cause each Paying Agent
other than the Trustee to execute and deliver to the Certificate Administrator
and the Trustee on the Closing Date or, if subsequently appointed, on the date
of appointment, a written instrument executed by an officer of the Paying Agent
in which such Paying Agent shall agree with the Certificate Administrator and
the Trustee that such Paying Agent will hold all sums held by it for the payment
to Certificateholders in trust for the benefit of the Certificateholders
entitled thereto until such sums shall be paid to such Certificateholders.
Section 4.08. Authenticating Agents. (a) The Trustee may
appoint one or more Authenticating Agents (each, an "Authenticating Agent")
which shall be authorized to act on behalf of the Trustee in authenticating the
Certificates. Wherever reference is made in this Agreement to the authentication
of Certificates by the Trustee or the Trustee's certificate of authentication,
such reference shall be deemed to include authentication on behalf of the
Trustee by an Authenticating Agent and a certificate of authentication executed
on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent
must be a corporation organized and doing business under the laws of the United
States of America or of any state, having a combined capital and surplus of at
least $15,000,000, authorized under such laws to do a trust business and subject
to supervision or examination by federal or state authorities. The Trustee
hereby appoints Chase as Authenticating Agent.
(b) Any Person into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which any Authenticating Agent shall be a
party, or any Person succeeding to the corporate agency business of any
Authenticating Agent, shall continue to be the Authenticating Agent without the
execution or filing of any paper or any further act on the part of the Trustee
or the Authenticating Agent.
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(c) Any Authenticating Agent may at any time resign by giving at least
30 days' advance written notice of resignation to the Trustee and the Company.
The Trustee may at any time terminate the agency of any Authenticating Agent by
giving written notice of termination to such Authenticating Agent and the
Company. Upon receiving a notice of resignation or upon such a termination, or
in case at any time any Authenticating Agent shall cease to be permitted in
accordance within the provisions of this Section 4.08, the Trustee may appoint a
successor Authenticating Agent, shall give written notice of such appointment to
the Company and shall mail notice of such appointment to all Holders of
Certificates. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers, duties
and responsibilities of its predecessor hereunder, with like effect as if
originally named as Authenticating Agent. No successor Authenticating Agent
shall be appointed unless eligible under the provisions of this Section 4.08. No
Authenticating Agent shall have responsibility or liability for any action taken
by it as such at the direction of the Trustee. Any Authenticating Agent shall be
entitled to reasonable compensation for its services and any such compensation
shall be payable solely by the Trustee, without any right of reimbursement from
the Company, the Servicer, the Certificate Administrator or the Trust Fund.
ARTICLE V
ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS
Section 5.01 Appointment of the Servicer. (a) [ Advanta Mortgage Corp. USA]
agrees to act as the Servicer and to perform all servicing duties
under this Agreement subject to the terms hereof.
(b) The Servicer shall service and administer the Mortgage
Loans on behalf of the Trustee and shall have full power and authority, acting
alone or through one or more Subservicers, to do any and all things in
connection with such servicing and administration which it may deem necessary or
desirable. Without limiting the generality of the foregoing, the Servicer, in
its own name or the name of a Subservicer, may, and is hereby authorized and
empowered by the Trustee to, execute and deliver, on behalf of itself, the
Certificateholders and the Trustee or any of them, any and all instruments of
satisfaction or cancellation, or of partial or full release or discharge and all
other comparable instruments, with respect to the Mortgage Loans, the insurance
policies and accounts related thereto and the properties subject to the
Mortgages. Upon the execution and delivery of this Agreement, and from time to
time as may be
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required thereafter, the Trustee shall execute for the Servicer or its
Subservicers any powers of attorney and such other documents as may be necessary
or appropriate to enable the Servicer to carry out its servicing and
administrative duties hereunder.
In servicing and administering the Mortgage Loans, the Servicer shall
employ procedures consistent with Accepted Servicing Practices and in a manner
consistent with recovery under any insurance policy required to be maintained by
the Servicer pursuant to this Agreement.
The Servicer shall make Mortgage Interest Rate and Monthly Payment
adjustments on each Rate Adjustment Date in compliance with applicable
regulatory adjustable mortgage loan requirements and the Mortgage Notes with
respect to each Group I Loan. The Servicer shall establish procedures to monitor
the Rate Adjustment Dates and the Index in order to assure that it uses the
correct Index in determining an interest rate change, and it will comply with
those procedures. In the event the Index is no longer available, the Servicer
shall choose a new comparable Index in accordance with the provisions hereof, of
the applicable Mortgage Note and of Accepted Servicing Practices, and shall
provide the Mortgagor and the Trustee with notice of the new Index sufficient
under law and the Mortgage Loan Documents. The Servicer shall execute and
deliver all appropriate notices required by the applicable adjustable mortgage
loan laws and regulations and the Mortgage Loan Documents regarding such
Mortgage Interest Rate adjustments and payment adjustments.
Each adjustment in the Mortgage Interest Rate shall result in an
adjustment to the related Monthly Payment. If the Servicer fails to make a
timely Mortgage Interest Rate or Monthly Payment adjustment, the Servicer shall
use its own funds to satisfy any shortage in the Mortgagor's remittance so long
as such shortage shall continue; any such amount paid by the Servicer shall be
reimbursable to it from any subsequent amounts collected on account of the
related Mortgage Loan with respect to such adjustments.
Costs incurred by the Servicer in effectuating the timely payment of
taxes and assessments on the property securing a Mortgage Note and foreclosure
costs may be added by the Servicer to the amount owing under such Mortgage Note
where the terms of such Mortgage Note so permit; provided, however, that the
addition of any such cost shall not be taken into account for purposes of
calculating the principal amount of the Mortgage Note and Mortgage Loan, the
Monthly Payments on the Mortgage Note and Mortgage Loan or distributions to be
made to Certificateholders. Such costs shall be recoverable by the Servicer
pursuant to Section 5.04.
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(c) Subject to Section 5.12, the Servicer is hereby authorized
and empowered to execute and deliver on behalf of the Trustee and each
Certificateholder, all instruments of satisfaction or cancellation, or of
partial or full release, discharge and all other comparable instruments, with
respect to the Mortgage Loans and with respect to the Mortgaged Properties. If
reasonably required by the Servicer, each Certificateholder and the Trustee
shall execute any powers of attorney furnished to the Trustee by the Servicer
and other documents necessary or appropriate to enable the Servicer to carry out
its servicing and administrative duties under this Agreement.
(d) On and after such time as the Trustee receives the
resignation of, or notice of the removal of, the Servicer from its rights and
obligations under this Agreement, and with respect to resignation pursuant to
Section 5.23, after receipt by the Trustee and the Certificate Insurer of the
Opinion of Counsel required pursuant to Section 5.23, the Trustee or its
designee approved by the Certificate Insurer (which approval shall not be
unreasonably withheld) shall assume all of the rights and obligations of the
Servicer, subject to Section 8.09 hereof. The Servicer shall, upon request of
the Trustee but at the expense of the Servicer, deliver to the Trustee all
documents and records relating to the Mortgage Loans and an accounting of
amounts collected and held by the Servicer and otherwise use its best efforts to
effect the orderly and efficient transfer of servicing rights and obligations to
the assuming party.
(e) If the Mortgage relating to a Mortgage Loan did not have a
lien senior on the related Mortgaged Property as of the Cut-Off Date, then the
Servicer, in such capacity, may not consent to the placing of a lien senior to
that of the Mortgage on the related Mortgaged Property. If the Mortgage relating
to a Mortgage Loan had a lien senior to the Mortgage Loan on the related
Mortgaged Property as of the Cut-Off Date, then the Servicer, in such capacity,
may consent to the refinancing of such senior lien; provided that (i) the
resulting Combined Loan-to-Value Ratio of such Mortgage Loan is no higher than
the Combined Loan-to-Value Ratio prior to such refinancing and (ii) the interest
rate for the loan evidencing the refinanced senior lien on the date of such
refinancing is no higher than the interest rate on the loan evidencing the
existing senior lien immediately prior to the date of such refinancing.
(f) The Servicer shall deliver a list of Servicing Officers to
the Certificate Administrator, the Trustee and the Certificate Insurer on or
before the Closing Date.
Section 5.02 Subservicing Agreements Between the Servicer and
Subservicers. (a) The Servicer may, subject to the prior written approval of the
Certificate insurer, enter into
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Subservicing Agreements with Subservicers for the servicing and administration
of the Mortgage Loans and for the performance of any and all other activities of
the Servicer hereunder. Each Subservicer shall be either (i) a depository
institution the accounts of which are insured by the FDIC or (ii) another entity
that engages in the business of originating, acquiring or servicing loans, and
in either case shall be authorized to transact business in the state or states
where the related Mortgaged Properties it is to service are situated and in
either case shall be a FNMA-approved mortgage servicer. In addition, each
Subservicer will obtain and preserve its qualifications to do business as a
foreign corporation in each jurisdiction in which such qualification is or shall
be necessary to protect the validity and enforceability of this Agreement, the
Certificates or any of the Mortgage Loans and to perform or cause to be
performed its duties under the related Subservicing Agreement. Each Subservicing
Agreement shall provide that the Subservicer's rights shall automatically
terminate at the option of the successor Servicer and without a termination fee
upon the termination, resignation or other removal of the Servicer under this
Agreement.
(b) Notwithstanding any Subservicing Agreement, any of the
provisions of this Agreement relating to agreements or arrangements between the
Servicer and a Subservicer or reference to actions taken through a Subservicer
or otherwise, the Servicer shall remain obligated and primarily liable to the
Trustee, Certificateholders and the Certificate Insurer for the servicing and
administering of the Mortgage Loans in accordance with the provisions of this
Agreement without diminution of such obligation or liability by virtue of such
Subservicing Agreements or arrangements or by virtue of indemnification from the
Subservicer and to the same extent and under the same terms and conditions as if
the Servicer alone were servicing and administering the Mortgage Loans. For
purposes of this Agreement, the Servicer shall be deemed to have received
payments on Mortgage Loans when the Subservicer has received such payments.
In the event the Servicer shall for any reason no longer be the
Servicer (including, by reason of an Event of Default), the Trustee or its
designee may, at its option, either (i) notwithstanding the last sentence of
Section 5.02(a), assume all of the rights and obligations of the Servicer under
each Subservicing Agreement that the Servicer may have entered into or (ii)
notwithstanding anything to the contrary contained in each such Subservicing
Agreement, terminate the related Subservicer without being required to pay any
fee in connection therewith.
Section 5.03 Collection of Certain Mortgage Loan Payments;
Collection Account. (a) The Servicer shall make reasonable efforts to collect
all payments called for under the terms and provisions of the Mortgage Loans,
and shall, to the extent such procedures shall be
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consistent with this Agreement and any applicable primary mortgage insurance
policy, follow such collection procedures as shall constitute Accepted Servicing
Practices. Consistent with the foregoing, the Servicer may in its discretion (i)
waive any prepayment charge, assumption fee, late payment charge or other charge
in connection with a Mortgage Loan, and (ii) arrange a schedule, running for no
more than 180 days after the Due Date for payment of any installment on any
Mortgage Note, for the liquidation of delinquent items. Any provision of this
agreement to the contrary notwithstanding, the Servicer shall not agree to the
modification or waiver of any provision of a Mortgage Loan at a time when such
Mortgage Loan is not in default or such default is not reasonably foreseeable,
if such modification or waiver would be treated as a taxable exchange under
Section 1001 of the Code, unless such exchange would not be considered a
"prohibited transaction" under the REMIC Provisions.
The Servicer shall establish and maintain in the name of the Trustee
the Collection Account, in trust for the benefit of the Certificateholders and
the Certificate Insurer. The Collection Account shall be established and
maintained as an Eligible Account.
The Servicer shall deposit in the Collection Account (i) any amounts
representing Monthly Payments on the Mortgage Loans due or to be applied as of a
date after the Cut-off Date, (ii) any amounts representing Monthly Payments due
or to be applied as of a date on or before the Cut-off Date (except for any
interest accrued prior to [DATE] and except for any principal received by the
Company prior to the Cut-off Date the receipt of which is reflected on the
Mortgage Loan Schedule) and (iii) thereafter, on a daily basis within two
Business Days of receipt (except as otherwise permitted herein), the following
payments and collections received or made by it (other than any amounts in
respect of principal of or interest on the Mortgage Loans which, under clauses
(i) and (ii) above, are not required to be deposited in the Collection Account):
(i) all payments received after the Cut-off Date on
account of principal on the Mortgage Loans and all Principal
Prepayments in Full, Curtailments and all Net REO Proceeds
collected after the Cut-off Date;
(ii) all payments received after the Cut-off Date on
account of interest on the Mortgage Loans (other than payments
of interest that accrued on each Mortgage Loan up to and
including the Cut-off Date;
(iii) all Net Liquidation Proceeds;
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(iv) all Insurance Proceeds;
(v) all Released Mortgaged Property Proceeds;
(vi) any amounts payable in connection with the
repurchase of any Mortgage Loan and the amount of any
Substitution Adjustment pursuant to Sections 2.02 and 3.05;
and
(vii) any amount expressly required to be deposited
in the Collection Account in accordance with certain
provisions of this Agreement, including, without limitation
Sections 2.02, 3.01, 5.06, 5.07 and 5.17 of this Agreement;
provided, however, that the Servicer shall be entitled, at its election, either
(a) to withhold and to pay to itself the applicable Servicing Fee from any
payment on account of interest or other recovery (including Net REO Proceeds) as
received and prior to deposit of such payments in the Collection Account or (b)
to withdraw the applicable Servicing Fee from the Collection Account after the
entire payment or recovery has been deposited therein; provided, further, that
with respect to any payment of interest received by the Servicer in respect of a
Mortgage Loan (whether paid by the Mortgagor or received as Liquidation
Proceeds, Insurance Proceeds or otherwise) which is less than the full amount of
interest then due with respect to such Mortgage Loan, only that portion of such
payment that bears the same relationship to the total amount of such payment of
interest as the rate used to determine the Servicing Fee bears to the Mortgage
Interest Rate borne by such Mortgage Loan shall be allocated to the Servicing
Fee with respect to such Mortgage Loan. All other amounts shall be deposited in
the Collection Account not later than the second Business Day following the day
of receipt and posting by the Servicer.
The Servicer may invest the funds in the Collection Account only in
Permitted Investments. No Permitted Investment shall be sold or disposed of at a
gain prior to maturity unless the Servicer has obtained an Opinion of Counsel
(at the Servicer's expense) that such sale or disposition will not cause the
Trust Fund to be subject to the tax on income from prohibited transactions
imposed by Section 860F(a)(i) of the Code, otherwise subject the Trust Fund to
tax or cause the Trust Fund to fail to qualify as a REMIC. All income (other
than any gain from a sale or disposition of the type referred to in the
preceding sentence) realized from any such Permitted Investment shall be for the
benefit of the Servicer as additional servicing compensation. The amount of any
losses incurred in respect of any such investments shall be deposited in the
Collection Account by the Servicer out of its own funds immediately as realized.
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The foregoing requirements for deposit in the Collection Account shall
be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of those described in the
last paragraph of Section 5.13 and payments in the nature of prepayment charges,
late payment charges or assumption fees need not be deposited by the Servicer in
the Collection Account. If the Servicer deposits in the Collection Account any
amount not required to be deposited therein, it may at any time withdraw such
amount from the Collection Account, any provision herein to the contrary
notwithstanding. All funds deposited by the Servicer in the Collection Account
shall be held in the Collection Account for the account of the Trustee in trust
for the Certificateholders until disbursed in accordance with Section 6.03 or
withdrawn in accordance with Section 5.04.
(b) Prior to the time of their required deposit in the
Collection Account, all amounts required to be deposited therein may be
deposited in an account in the name of Servicer, provided that such account is
an Eligible Account. All such funds shall be held by the Servicer in trust for
the benefit of the Certificateholders and the Certificate Insurer pursuant to
the terms hereof.
(c) The Collection Account may, upon written notice by the
Trustee to the Certificate Insurer, be transferred to a different depository so
long as such transfer is to an Eligible Account.
Section 5.04 Permitted Withdrawals from the Collection
Account. The Servicer may, from time to time, make withdrawals from the
Collection Account for the following purposes:
(a) to reimburse itself for any accrued unpaid Servicing Fees
and for unreimbursed Periodic Advances and Servicing Advances. The Servicer's
right to reimbursement for unpaid Servicing Fees and unreimbursed Servicing
Advances shall be limited to late collections on the related Mortgage Loan,
including Liquidation Proceeds, Released Mortgaged Property Proceeds, Insurance
Proceeds and such other amounts as may be collected by the Servicer from the
related Mortgagor or otherwise relating to the Mortgage Loan in respect of which
such unreimbursed amounts are owed. The Servicer's right to reimbursement for
unreimbursed Periodic Advances shall be limited to late collections of interest
on any Mortgage Loan and to Liquidation Proceeds and Insurance Proceeds on
related Mortgage Loans;
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(b) to reimburse itself for any Periodic Advances or Servicing
Advances determined in good faith to have become Nonrecoverable Advances, such
reimbursement to be made from any funds in the Collection Account;
(c) to withdraw any amount received from a Mortgagor that is
recoverable and sought to be recovered as a voidable preference by a trustee in
bankruptcy pursuant to the United States Bankruptcy Code in accordance with a
final, nonappealable order of a court having competent jurisdiction;
(d) to withdraw any funds deposited in the Collection Account
that were not required to be deposited therein;
(e) to pay itself Servicing Compensation pursuant to Section
5.13 hereof to the extent not retained or paid pursuant to Section 5.03, 5.04 or
5.13;
(f) to pay to the Seller with respect to each Mortgage Loan or
property acquired in respect thereof that has been repurchased or replaced
pursuant to Section 2.02 or 3.01 or to pay to itself with respect to each
Mortgage Loan or property acquired in respect thereof that has been purchased
pursuant to Section 11.01 all amounts received thereon and not required to be
distributed as of the date on which the related repurchase or purchase price or
Principal Balance, as the case may be, was determined;
(g) to pay to the Seller with respect to each Mortgage Loan
the amount of interest accrued and unpaid on such Mortgage Loan on the Cut-off
Date;
(h) to make deposits to the Certificate Accounts (which shall
include the Certificate Administration Fee and the Trustee Fee) in the amounts
and in the manner provided for herein;
(i) to pay itself any interest earned on or investment income
earned with respect to funds in the Collection Account;
(j) to reimburse itself for expenses incurred by it and
reimbursable pursuant to Section 8.03; and
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(k) to clear and terminate the Collection Account upon the
termination of this Agreement.
The Servicer shall keep and maintain a separate accounting for
each Mortgage Loan for the purpose of accounting for withdrawals from the
Collection Account pursuant to subclause (a).
Section 5.05 Payment of Taxes, Insurance and other Charges.
With respect to each Mortgage Loan, the Servicer shall maintain accurate records
reflecting casualty insurance coverage.
With respect to each Mortgage Loan as to which the Servicer maintains
escrow accounts, the Servicer shall maintain accurate records reflecting the
status of ground rents, taxes, assessments, water rates and other charges which
are or may become a lien upon the Mortgaged Property and the status of primary
mortgage guaranty insurance premiums, if any, and casualty insurance coverage
and shall obtain, from time to time, all bills for the payment of such charges
(including renewal premiums) and shall effect payment thereof prior to the
applicable penalty or termination date and at a time appropriate for securing
maximum discounts allowable, employing for such purpose deposits of the
Mortgagor in any escrow account which shall have been estimated and accumulated
by the Servicer in amounts sufficient for such purposes, as allowed under the
terms of the Mortgage. To the extent that a Mortgage does not provide for escrow
payments, the Servicer shall, if it has received notice of a default or
deficiency, monitor such payments to determine if they are made by the
Mortgagor.
Section 5.06 The Maintenance of Casualty Insurance. The
Servicer shall cause to be maintained for each Mortgage Loan a casualty
insurance policy with extended coverage issued by a generally acceptable insurer
in an amount which is not less than the full insurable value of the Mortgaged
Property securing such Mortgage Loan or the unpaid principal balance of such
Mortgage Loan, whichever is less; provided, however, that such insurance may not
be less than the minimum amount required to fully compensate for any loss or
damage on a replacement cost basis. If, upon origination of the Mortgage Loan,
the improvements on the Mortgaged Property were in an area identified in the
Federal Register by the Federal Emergency Management Agency as having special
flood hazards (and such 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
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acceptable insurance carrier, in an amount representing coverage not less than
the least of (i) the unpaid principal balance of the Mortgage Loan, (ii) the
full insurable value and (iii) the maximum amount of insurance which was
available under the Flood Disaster Protection Act of 1973. The Servicer shall
also maintain similar fire insurance coverage and, if applicable, flood
insurance on property acquired upon foreclosure, or by deed in lieu of
foreclosure, of any Mortgage Loan in an amount which is at least equal to the
lesser of (i) the full insurable value of the improvements which are a part of
such property and (ii) the principal balance owing on such Mortgage Loan at the
time of such foreclosure or grant of deed in lieu of foreclosure; provided,
however, that such insurance may not be less than the minimum amount required to
fully compensate for any loss or damage on a replacement cost basis. It is
understood and agreed that such insurance shall be with insurers approved by the
Servicer and that no earthquake or other additional insurance is to be required
of any Mortgagor, other than pursuant to such applicable laws and regulations as
shall at any time be in force and as shall require such additional insurance.
Pursuant to Section 5.03, any amounts collected by the Servicer under any
insurance policies maintained pursuant to this Section 5.06 (other than amounts
to be applied to the restoration or repair of the related Mortgaged Property or
released to the Mortgagor In accordance with Accepted Servicing Practices) shall
be deposited into the Collection Account, subject to withdrawal pursuant to
Section 5.04. Any cost incurred by the Servicer in maintaining any such
Insurance shall be added to the amount owing under the Mortgage Loan where the
terms of the Mortgage Loan so permit; provided, however, that the addition of
any such cost shall not be taken into account for purposes of calculating the
principal amount of the Mortgage Note or Mortgage Loan, the Monthly Payments on
the Mortgage Note or the distributions to be made to the Certificateholders.
Such costs shall be recoverable by the Servicer pursuant to Section 5.04. In the
event that the Servicer shall obtain and maintain a blanket policy issued by an
insurer that is acceptable to FNMA or FHLMC, insuring against hazard losses on
all of the Mortgage Loans, it shall conclusively be deemed to have satisfied its
obligation as set forth in the first sentence of this Section 5.06, it being
understood and agreed that such policy may contain a deductible clause, in which
case the Servicer shall, in the event that there shall not have been maintained
on the related mortgaged or acquired property an insurance policy complying with
the first sentence of this Section 5.06 and there shall have been a loss which
would have been covered by such a policy had it been maintained, be required to
deposit from its own funds into the Collection Account the amount not otherwise
payable under the blanket policy because of such deductible clause.
Section 5.07 Maintenance of Mortgage Impairment Insurance
Policy. In the event that the Servicer shall obtain and maintain a blanket
policy (the "Mortgage Impairment Insurance
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Policy") with an insurer either (i) having a General Policy rating of A:VIII or
better in Best's Key Rating Guide or (ii) approved in writing by the Certificate
Insurer, such approval not to be unreasonably withheld, insuring against fire
and hazards of extended coverage on all of the Mortgage Loans, then, to the
extent such policy names the Servicer as loss payee and provides coverage in an
amount equal to the aggregate unpaid principal balance on the Mortgage Loans
without co-insurance, and otherwise complies with the requirements of Section
5.06, the Servicer shall be deemed conclusively to have satisfied its
obligations with respect to fire and hazard insurance coverage under Section
5.06, it being understood and agreed that such blanket 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 a policy
complying with Section 5.06, and there shall have been a loss which would have
been covered by such policy, deposit in the Collection Account the difference,
if any, between the amount that would have been payable under a policy complying
with Section 5.06 and the amount paid under such blanket policy. Upon the
request of the Certificate Insurer, the Trustee or any Certificateholder, the
Servicer shall cause to be delivered to the Certificate Insurer, the Trustee or
such Certificateholder, as the case may be, a certified true copy of such
policy. The Servicer agrees to prepare and present, on behalf of itself, the
Trustee, the Certificate Insurer and Certificateholders, claims under any such
policy in a timely fashion in accordance with the terms of such policy.
Section 5.08 Fidelity Bond; Errors and Omissions Policy. (a)
The Servicer shall maintain with a responsible company, and at its own expense,
a blanket fidelity bond (a "Fidelity Bond") and an errors and omissions
insurance policy (an "Errors and Omissions Policy"), in a minimum amount
acceptable to FNMA or FHLMC or, if [Advanta] is the Servicer or if the Trustee
is the successor Servicer, in an amount generally maintained by prudent mortgage
loan servicers having servicing portfolios of a similar size.
(b) The Servicer shall be deemed to have complied with this
provision if one of its respective Affiliates has such a Fidelity Bond and
Errors and Omissions Policy and, by the terms of such fidelity bond and errors
and omission policy, the coverage afforded thereunder extends to the Servicer.
The Servicer shall cause each and every Subservicer for it to maintain a policy
of insurance covering errors and omissions and a fidelity bond which would meet
the requirements of Section 5.08(a). If [Advanta] is not the Servicer and the
Trustee is not the successor Servicer, any such Fidelity Bond and Errors and
Omissions Policy shall not be canceled or modified in a materially adverse
manner without 10 days prior written notice to the Certificate Insurer.
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Section 5.09 Collection of Taxes, Assessments and Other Items;
Servicing Account. In addition to the Collection Account, the Servicer shall
establish and maintain a Servicing Account, which shall be an Eligible Account,
and shall deposit therein all payments by Mortgagors for taxes, assessments,
primary mortgage or hazard insurance premiums or comparable items. Withdrawals
from the Servicing Account may be made to effect payment of taxes, assessments,
primary mortgage or hazard insurance premiums or comparable items, to reimburse
the Servicer out of related collections for any advances made in the nature of
any of the foregoing, to refund to any Mortgagors any sums determined to be
overages, or to pay any interest owed to Mortgagors on such account to the
extent required by law or to clear and terminate the Servicing Account at the
termination of this Agreement upon the termination of the Trust Fund. The
Servicer shall advance the payments referred to in the first sentence of this
Section 5.09 that are not timely paid by the Mortgagors on the date when the
tax, premium or other cost for which such payment is intended is due, but the
Servicer shall be required to so advance only to the extent that such advances,
in the good faith judgment of the Servicer, will be recoverable by the Servicer
pursuant to Section 5.04 out of Liquidation Proceeds, Insurance Proceeds or
otherwise.
Section 5.10 Enforcement of Due-on-Sale Clauses, Assumption
Agreements. In any case in which a Mortgaged Property is about to be conveyed by
the Mortgagor (whether by absolute conveyance or by contract of sale, and
whether or not the Mortgagor remains liable thereon) and the Servicer has
knowledge of such prospective conveyance, the Servicer shall effect assumptions
in accordance with the terms of any due-on-sale provision contained in the
related Mortgage Note or Mortgage. The Servicer shall enforce any due-on-sale
provision contained in such Mortgage Note or Mortgage to the extent the
requirements thereunder for an assumption of the Mortgage Loan have not been
satisfied to the extent permitted under the terms of the related Mortgage Note,
unless such provision is not exercisable under applicable law and governmental
regulations or in the Servicer's judgment, such exercise is reasonably likely to
result in legal action by the Mortgagor, or such conveyance is in connection
with a permitted assumption of the related Mortgage Loan. Subject to the
foregoing, the Servicer is authorized to take or enter into an assumption
agreement from or with the Person to whom such property is about to be conveyed,
pursuant to which such person becomes liable under the related Mortgage Note
and, unless prohibited by applicable state law, the Mortgagor remains liable
thereon, provided that the Mortgage Interest Rate with respect to such Mortgage
Loan shall remain unchanged. The Servicer is also authorized, to release the
original Mortgagor from liability upon the Mortgage Loan and substitute the new
Mortgagor as obligor thereon. In connection with such
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assumption or substitution, the Servicer shall apply such underwriting standards
and follow such practices and procedures as shall be normal and usual for
mortgage loans similar to the Mortgage Loans and as it applies to mortgage loans
owned solely by it. The Servicer shall notify the Trustee that any such
assumption or substitution agreement has been completed by forwarding to the
Trustee the original copy of such assumption or substitution agreement, which
copy shall be added by the Trustee to the related Mortgage File and shall, for
all purposes, be considered a part of such Mortgage File to the same extent as
all other documents and instruments constituting a part thereof. In connection
with any such assumption or substitution agreement, the Mortgage Interest Rate
of the related Mortgage Note and the payment terms shall not be changed. Any fee
collected by the Servicer for entering into an assumption or substitution of
liability agreement will be retained by the Servicer as servicing compensation.
Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Servicer shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any conveyance by the
Mortgagor of the property subject to the Mortgage or any assumption of a
Mortgage Loan by operation of law which the Servicer in good faith determines it
may be restricted by law from preventing, for any reason whatsoever, or if the
exercise of such right would impair or threaten to impair any recovery under any
applicable insurance policy or, in the Servicer's judgment, be reasonably likely
to result in legal action by the Mortgagor.
Section 5.11 Realization upon Defaulted Mortgage Loans.
(a) Except as provided in the last two paragraphs of this
Section 5.11(a), the Servicer shall foreclose upon or otherwise comparably
convert the ownership of properties securing such of the Mortgage Loans as come
into and continue in default and as to which no satisfactory arrangements can be
made for collection of delinquent payments pursuant to Section 5.03. In
connection with such foreclosure or other conversion, the Servicer shall follow
Accepted Servicing Practices. The foregoing is subject to the proviso that the
Servicer shall not be required to expend its own funds in connection with any
foreclosure or to restore any damaged property unless it shall determine that
(i) such foreclosure and/or restoration will increase the proceeds of
liquidation of the Mortgage Loan to Certificateholders after reimbursement to
itself for such expenses and (ii) such expenses will be recoverable to it
through Liquidation Proceeds (respecting which it shall have priority for
purposes of withdrawal from the Collection Account pursuant to Section 5.04) or
otherwise. The Servicer shall be entitled to reimbursement of the
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Servicing Fee and other amounts due it, if any, to the extent, but only to the
extent, that withdrawals from the Collection Account with respect thereto are
permitted under Section 5.04.
The Servicer may foreclose against the Mortgaged Property securing a
defaulted Mortgage Loan either by foreclosure, by sale or by strict foreclosure,
and in the event a deficiency judgment is available against the Mortgagor or any
other person, may proceed for the deficiency.
In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure (an "REO Property"), the deed or
certificate of sale shall be issued to the Servicer on behalf of the Trustee in
the name of the Trustee on behalf of the Certificateholders. Notwithstanding any
such acquisition of title and cancellation of the related Mortgage Loan, such
Mortgage Loan shall be considered to be a Mortgage Loan held in the Trust Fund
until such time as the related Mortgaged Property shall be sold and such
Mortgage Loan becomes a Liquidated Mortgage Loan. Consistent with the foregoing,
for purposes of all calculations hereunder, so long as such Mortgage Loan shall
be considered to be an Outstanding Mortgage Loan:
(i) It shall be assumed that, notwithstanding that
the indebtedness evidenced by the related Mortgage Note shall
have been discharged, such Mortgage Note and the related
amortization schedule in effect at the time of any such
acquisition of title (after giving effect to any previous
Curtailments and before any adjustment thereto by reason of
any bankruptcy or similar proceeding or any moratorium or
similar waiver or grace period) remain in effect, except that
such schedule shall be adjusted to reflect the application of
Net REO Proceeds received in any month pursuant to the
succeeding clause.
(ii) Net REO Proceeds received in any month shall be
deemed to have been received first in payment of the accrued
interest that remained unpaid on the date that such Mortgage
Loan became an REO Mortgage Loan, with the excess thereof, if
any, being deemed to have been received in respect of the
delinquent principal installments that remained unpaid on such
date. Thereafter, Net REO Proceeds received in any month shall
be applied to the payment of installments of principal and
accrued interest on such Mortgage Loan deemed to be due and
payable in accordance with the terms of such Mortgage Note and
such amortization schedule. If such Net REO Proceeds exceed
the then Unpaid REO
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Amortization, the excess shall be treated as a Curtailment
received in respect of such Mortgage Loan.
(iii) Only that portion of Net REO Proceeds allocable
to interest that bears the same relationship to the total
amount of Net REO Proceeds allocable to interest as the rate
of the Servicing Fee bears to the Mortgage Interest Rate borne
by such Mortgage Loan shall be allocated to the Servicing Fee
with respect thereto.
In the event that the Trust Fund acquires any Mortgaged Property as
aforesaid or otherwise in connection with a default or reasonably foreseeable
default on a Mortgage Loan, such Mortgaged Property shall be disposed of by or
on behalf of the Trust Fund within two years after its acquisition by the Trust
Fund unless (a) the Servicer shall have provided to the Trustee an Opinion of
Counsel (at the expense of the Trust Fund) to the effect that the holding by the
Trust Fund of such Mortgaged Property subsequent to two years after its
acquisition (and specifying the period beyond such two-year period for which the
Mortgaged Property may be held) will not cause the Trust Fund to be subject to
the tax on prohibited transactions imposed by Section 860F(a)(i) of the Code,
otherwise subject the Trust Fund to tax or cause the Trust Fund to fail to
qualify as a REMIC at any time that any Certificates are outstanding, or (b) the
Servicer (at the Trust Fund's expense) shall have applied for, at least 60 days
prior to the expiration of such two-year period, an extension of such two-year
period in the manner contemplated by Section 856(e)(3) of the Code, in which
case the two-year period shall be extended by the applicable period. The
Servicer shall further ensure that the Mortgaged Property is administered so
that it constitutes "foreclosure property" within the meaning of Section
860G(a)(8) of the Code at all times, that the sale of such property does not
result in the receipt by the Trust Fund of any income from non-permitted assets
as described in Section 860F(a)(2)(B) of the Code, and that the Trust Fund does
not derive any "net income from foreclosure property" within the meaning of
Section 860G(c)(2) of the Code with respect to such property.
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).
In lieu of foreclosing upon any defaulted Mortgage Loan, the
Servicer may, in its discretion, permit the assumption of such Mortgage Loan if,
in the Servicer's judgment, such default is unlikely to be cured and if the
assuming borrower satisfies the Servicer's underwriting guidelines with respect
to mortgage loans owned by the Servicer. In connection with any such
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assumption, the Mortgage Interest Rate of the related Mortgage Note and the
payment terms shall not be changed. Any fee collected by the Servicer for
entering into an assumption agreement will be retained by the Servicer as
servicing compensation. Alternatively, the Servicer may encourage the
refinancing of any defaulted Mortgage Loan by the Mortgagor.
Notwithstanding the foregoing, prior to instituting
foreclosure proceedings or accepting a deed-in-lieu of foreclosure with respect
to any Mortgaged Property, the Servicer shall make, or cause to be made,
inspection of the Mortgaged Property in accordance with the Accepted Servicing
Practices and, with respect to environmental hazards, such procedures are as
required by the provisions of the Federal National Mortgage Association's
selling and servicing guide applicable to single-family homes and in effect on
the date hereof. The Servicer shall be entitled to rely upon the results of any
such inspection made by others. In cases where the inspection reveals that such
Mortgaged Property is potentially contaminated with or affected by hazardous
wastes or hazardous substances, the Servicer shall promptly give written notice
of such fact to the Certificate Insurer, the Trustee and each Class A
Certificateholder. The Servicer shall not commence foreclosure proceedings or
accept a deed-in-lieu of foreclosure for Mortgaged Property with respect to this
paragraph without obtaining the written consent of the Certificate Insurer.
(b) Promptly after the Closing Date, the Servicer shall, with
respect to each Mortgage Loan for which the Mortgage provides a second lien on
the related Mortgaged Property, cause to be recorded in the appropriate public
office for real property records, where permitted by applicable law and where
applicable law does not require that a second mortgagee be named as a party
defendant in foreclosure or comparable proceedings in order to foreclose or
otherwise preempt such mortgagee's equity of redemption, a request for notice of
any action by or on behalf of any mortgagee under a Senior Mortgage Loan. The
Servicer also shall promptly provide written notice to each mortgagee under a
Senior Mortgage Loan of the existence of the related Mortgage Loan and request
notification of any action taken or to be taken against the related Mortgagor or
Mortgaged Property by or on behalf of such mortgagee in respect of such Senior
Mortgage Loan.
(c) Upon becoming aware that a Senior Mortgage Loan has come
into default or of any action that the related mortgagee has taken or may take
in respect thereof, the Servicer shall, consistent with the REMIC Provisions,
take such actions as it shall deem necessary or advisable, as shall be normal
and usual in its general mortgage servicing activities and as shall be required
or permitted by Accepted Servicing Practices. In taking such actions, the
Servicer may
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advance such funds as are necessary to cure such default, maintain such Senior
Mortgage Loan, acquire the related mortgagee's interest therein or redeem the
related Mortgaged Property. The Servicer, however, shall not be required to
expend its own funds in connection therewith unless it shall determine that such
expense will be recoverable to it. All such expenses shall be included as
Liquidation Expenses pursuant to the definition thereof, and shall be
reimbursable from the related Liquidation Proceeds in accordance with Section
5.04.
Section 5.12 Trustee to Cooperate; Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, 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 immediately notify the Trustee in the form of
a Request for Release in the form attached hereto as Exhibit H (which request
shall include a statement to the effect that all amounts received in connection
with such payment which are required to be deposited in the Collection Account
pursuant to Section 5.03 have been or shall be so deposited) of a Servicing
Officer and shall request delivery to it of the Mortgage File. Upon receipt of
such Request for Release, the Trustee, or the Custodian on its behalf, shall
promptly release the related Mortgage File to the Servicer. Upon any such
payment in full, the Servicer is authorized to give, as agent for the Trustee
and the mortgagee under the Mortgage which secured the Mortgage Loan, an
instrument of satisfaction (or assignment of mortgage without recourse)
regarding the property subject to such Mortgage, which instrument of
satisfaction or assignment, as the case may be, shall be delivered to the Person
or Persons entitled thereto against receipt therefor of such payment, it being
understood and agreed that no expenses incurred in connection with such
instrument of satisfaction or assignment, as the case may be, shall be
chargeable to the Collection Account. In connection therewith, the Trustee shall
execute and return to the Servicer any required power of attorney provided to
the Trustee by the Servicer and other required documentation in accordance with
Section 5.01(c). From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan and in accordance with Accepted Servicing
Practices, the Trustee shall, upon request of the Servicer and delivery to the
Trustee of a Request for Release signed by a Servicing Officer, release, or
cause the Custodian to release, the related Mortgage File to the Servicer and
shall execute such documents as shall be necessary to the prosecution of any
such proceedings. Such Request for Release shall obligate the Servicer to return
the Mortgage File to the Trustee when the need therefor by the Servicer no
longer exists unless the Mortgage Loan shall be liquidated, in which case, upon
receipt of a certificate of a Servicing Officer similar to the Request for
Release hereinabove specified, the Mortgage File shall be delivered by the
Trustee to the Servicer.
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Section 5.13 Servicing Fee; Servicing Compensation. The
Servicer shall be entitled, at its election, either (a) to pay itself the
Servicing Fee out of any Mortgagor payment on account of interest or Net REO
Proceeds prior to the deposit of such payment in the Collection Account or (b)
to withdraw from the Collection Account such Servicing Fee pursuant to Section
5.04. The Servicer shall also be entitled, at its election, either (a) to pay
itself the Servicing Fee in respect of each delinquent Mortgage Loan out of
Liquidation Proceeds in respect of such Mortgage Loan or other recoveries with
respect thereto to the extent permitted in Section 5.03(a) to withdraw from the
Collection Account the Servicing Fee in respect of each such Mortgage Loan to
the extent of such Liquidation Proceeds or other recoveries, to the extent
permitted by Section 5.04(a).
Servicing compensation in the form of Net Foreclosure Profits,
assumption fees, late payment charges, tax service fees, fees for statement of
account or payoff of the Mortgage Loan (to the extent permitted by applicable
law) or otherwise shall be retained by the Servicer and are not required to be
deposited in the Collection Account. The aggregate Servicing Fee is reserved for
the administration of the Trust Fund and, in the event of replacement of the
Servicer as servicer of the Mortgage Loans, for the payment of other expenses
related to such replacement. The aggregate Servicing Fee shall be offset as
provided in Section 5.19. The Servicer shall be required to pay all expenses
incurred by it in connection with its servicing activities hereunder (including
maintenance of the hazard insurance required by Section 5.05) and shall not be
entitled to reimbursement therefor except as specifically provided herein.
Section 5.14 Reports to the Trustee and the Certificate
Administrator; Collection Account Statements. Not later than 15 days after each
Distribution Date, the Servicer shall provide to the Trustee and the Certificate
Administrator a statement, certified by a Servicing Officer, setting forth the
status of the Collection Account as of the close of business on the last day of
the immediately preceding calendar month, stating that all distributions
required by this Agreement to be made by the Servicer on behalf of the Trustee
have been made (or if any required distribution has not been made by the
Servicer, specifying the nature and status thereof) and showing, for the period
covered by such statement, the aggregate of deposits into and withdrawals from
the Collection Account for each category of deposit specified in Section 5.03
and each category of withdrawal specified in Section 5.04 and the aggregate of
deposits into the Certificate Accounts as specified in Section 4.05(b). Such
statement shall also state the aggregate unpaid principal balance of all the
Mortgage Loans as of the close of business on the last day of the month
preceding the month in which such Distribution Date occurs. Copies of such
statement shall be provided by the Trustee to any Certificateholder upon
request. The Servicer shall
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provide to the Certificate Administrator such information as is required for the
Certificate Administrator to prepare the reports or additional information
specified in Section 6.04.
Section 5.15 Annual Statement as to Compliance. The Servicer
will deliver to the Trustee, the Certificate Administrator, the Certificate
Insurer and the Rating Agencies on or before June 30th of each year, beginning
with June 30, 1997, an Officers' Certificate stating as to each signer thereof,
that (i) a review of the activities of the Servicer during the preceding
calendar year and of its performance under this Agreement has been made under
such officer's supervision, and (ii) to the best of such officer's knowledge,
based on such review, the Servicer has fulfilled all its obligations under this
Agreement throughout such year, or if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof. Such Officers' Certificate shall be
accompanied by the statement described in Section 5.16 of this Agreement. Copies
of such statement shall, upon request, be provided to any Certificateholder by
the Servicer, or by the Trustee at the Servicer's expense if the Servicer shall
fail to provide such copies.
Section 5.16 Annual Independent Public Accountants' Servicing
Report. On or before March 30th of every year, beginning with March 30, 1997,
the Servicer, at its expense, shall cause a firm of nationally recognized
independent public accountants to furnish a statement to the Trustee, the
Certificate Administrator, the Certificate Insurer and the Rating Agencies to
the effect that, on the basis of an examination of certain documents and records
relating to the servicing of the mortgage loans being serviced by the Servicer
under pooling and servicing agreements similar to this Agreement, conducted
substantially in compliance with the Uniform Single Attestation Program for
Mortgage Bankers, such firm is of the opinion that such servicing has been
conducted in compliance with this Agreement. Copies of such statement shall,
upon request, be provided to Certificateholders by the Servicer, or by the
Trustee at the Servicer's expense if the Servicer shall fail to provide such
copies. For purposes of such statement, such firm may conclusively presume that
any pooling and servicing agreement which governs mortgage pass-through
certificates offered by the Company (or any predecessor or successor thereto) in
a registration statement under the Securities Act of 1933, as amended, is
similar to this Agreement, unless such other pooling and servicing agreement
expressly states otherwise.
Section 5.17 Optional Purchase of Defaulted Mortgage Loans.
Any Affiliate of the Seller, in its sole discretion, shall have the right to
elect (by written notice sent to the Servicer, the Trustee, the Certificate
Administrator and the Certificate Insurer), but shall not be obligated, to
purchase for its own account from the Trust Fund any Mortgage Loan which is 90
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days or more delinquent in the manner and at the price specified in Section
2.02. The purchase price for any Mortgage Loan purchased hereunder shall be
deposited in the Collection Account and the Trustee, upon receipt of such
deposit, shall release or cause to be released to the purchaser of such Mortgage
Loan the related Mortgage File and shall execute and deliver such instruments of
transfer or assignment prepared by the purchaser of such Mortgage Loan, in each
case without recourse, as shall be necessary to vest in the purchaser of such
Mortgage Loan any Mortgage Loan released pursuant hereto and the purchaser of
such Mortgage Loan shall succeed to all the Trustee's right, title and interest
in and to such Mortgage Loan and all security and documents related thereto.
Such assignment shall be an assignment outright and not for security. The
purchaser of such Mortgage Loan shall thereupon own such Mortgage Loan, and all
security and documents, free of any further obligation to the Trustee or the
Certificateholders with respect thereto.
Section 5.18 Reports to be Provided by the Servicer. The
Servicer agrees to make available on a reasonable basis to the Certificate
Insurer a knowledgeable financial or accounting officer for the purpose of
answering reasonable questions respecting recent developments affecting the
Servicer or the financial statements of the Servicer and to permit the
Certificate Insurer to inspect the Servicer's servicing facilities during normal
business hours for the purpose of satisfying the Certificate Insurer that the
Servicer has the ability to service the Mortgage Loans in accordance with this
Agreement.
Section 5.19 Adjustment of Servicing Compensation in Respect
of Prepaid Mortgage Loans. The aggregate amount of the Servicing Fees that the
Servicer and any Subservicer shall be entitled to receive with respect to all of
the Mortgage Loans and each Distribution Date shall be offset on such
Distribution Date by an amount equal to the aggregate Prepayment Interest
Shortfall with respect to all Mortgage Loans which were subjects of Principal
Prepayments in Full or Curtailments during the month preceding the month of such
Distribution Date. The amount of any offset against the aggregate Servicing Fee
with respect to any Distribution Date under this Section 5.19 shall be limited
to the aggregate amount of the Servicing Fees otherwise payable to the Servicer
and any Subservicer (without adjustment on account of Prepayment Interest
Shortfalls) with respect to (i) scheduled payments having the Due Date occurring
in the month of such Distribution Date received by the Servicer or any
Subservicer prior to the Servicer Remittance Date, and (ii) Principal
Prepayments in Full, Curtailments and Liquidation Proceeds received in the month
preceding the month in which such Distribution Date occurs, and the rights of
the Certificateholders to the offset of the aggregate Prepayment Interest
Shortfalls shall not be cumulative.
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Section 5.20 Periodic Advances. If, on any Servicer Remittance
Date, the Servicer determines that any Monthly Payments due on the Due Date
immediately preceding such Servicer Remittance Date have not been received as of
the close of business on the Business Day preceding such Servicer Remittance
Date, the Servicer shall determine the amount of any Periodic Advance required
to be made with respect to the related Distribution Date. The Servicer shall, on
the Servicer Remittance Date, deliver in a computer-readable form (including
electronic transmission) to the Certificate Administrator indicating the payment
status of each Mortgage Loan as of the Business Day prior to such Servicer
Remittance Date. The Servicer shall include in the amount to be deposited in the
related Certificate Account on such Servicer Remittance Date an amount equal to
the Periodic Advance, if any, which deposit may be made in whole or in part from
funds in the Collection Account being held for future distribution or withdrawal
on or in connection with Distribution Dates in subsequent months. Any funds
being held for future distribution to Certificateholders and so used shall be
replaced by the Servicer from its own funds by deposit in the related
Certificate Account on or before the Business Day preceding any such future
Servicer Remittance Date to the extent that funds in the related Certificate
Account on such Servicer Remittance Date shall be less than payments to
Certificateholders required to be made on such date.
The Servicer shall designate on its records the specific
Mortgage Loans and related installments (or portions thereof) as to which such
Periodic Advance shall be deemed to have been made, such determination being
conclusive for purposes of withdrawals from the Collection Account pursuant to
Section 5.04.
Section 5.21 [Reserved]
Section 5.22 Maintenance of Corporate Existence and Licenses;
Merger or Consolidation of the Servicer. (a) The Servicer will keep in full
effect its existence, rights and franchises as a corporation, will obtain and
preserve its qualification to do business as a foreign corporation in each
jurisdiction necessary to protect the validity and enforceability of this
Agreement or any of the Mortgage Loans and to perform its duties under this
Agreement and will otherwise operate its business so as to cause the
representations and warranties under Section 3.01 to be true and correct at all
times under this Agreement.
(b) Any Person into which the Servicer may be merged or
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Servicer shall be a party, or any Person succeeding
to the business of the Servicer, shall be an established
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mortgage loan servicing institution acceptable to the Certificate Insurer that
has a net worth of at least $15,000,000, and in all events shall be the
successor of the Servicer 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. The Servicer shall send notice of any such merger or
consolidation to the Trustee and the Certificate Insurer.
Section 5.23 Assignment of Agreement by Servicer, Servicer Not
to Resign. The Servicer shall not assign this Agreement or resign from the
obligations and duties hereby imposed on it except by mutual consent of the
Certificate Insurer, the Certificate Administrator and the Trustee or upon the
determination that the Servicer's duties hereunder are no longer permissible
under applicable law and that such incapacity cannot be cured by the Servicer
without incurring, in the reasonable judgment of the Certificate Insurer,
unreasonable expense. Any such determination that the Servicer's duties
hereunder are no longer permissible under applicable law permitting the
resignation of the Servicer shall be evidenced by a written Opinion of Counsel
(who may be counsel for the Servicer) to such effect delivered to the Trustee,
the Seller, the Company, the Certificate Administrator and the Certificate
Insurer. No such resignation shall become effective until the Trustee or a
successor appointed in accordance with the terms of this Agreement has assumed
the Servicer's responsibilities and obligations hereunder in accordance with
Section 8.09. The Servicer shall provide the Trustee, the Rating Agencies, the
Certificate Administrator and the Certificate Insurer with 30 days prior written
notice of its intention to resign pursuant to this Section 5.23.
In the case of any assignment and delegation of rights, duties
and obligations under this Agreement pursuant to this Section 5.23, the Servicer
shall be released from its duties and obligations under this Agreement, except
that the Servicer shall remain liable for all liabilities and obligations
incurred by it as Servicer hereunder prior to the satisfaction of the conditions
to such assignment and delegation set forth in the preceding paragraph.
Section 5.24 Information Reports to be Filed by the Servicer.
The Servicer shall file (or cause any Subservicers to file) information returns
with respect to the receipt of mortgage interest received in a trade or
business, reports of foreclosures and abandonments of any Mortgaged Property and
cancellation of indebtedness income with respect to any Mortgaged Property as
required by Sections 6050H, 6050J and 6050P of the Code, respectively.
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Section 5.25. REMIC-Related Covenants. For as long as the Trust Fund
shall exist, the Servicer, the Certificate Administrator and the Trustee shall
act in accordance herewith to assure continuing treatment of the Trust Fund as a
REMIC. In particular:
(a) Neither the Servicer nor the Certificate Administrator shall
create, or permit the creation of, any "interests" in the Trust Fund within the
meaning of Section 860G(a) of the Code other than the "regular interests" in the
REMIC designated as such in Section 2.04(a) and the Residual Interest;
(b) As of all times as may be required by the Code, the Servicer and
the Certificate Administrator will ensure that substantially all of the assets
of the Trust Fund will consist of Qualified Mortgages and "permitted
investments" as defined in Section 860G(a)(5) of the Code. The Certificate
Administrator and the Trustee, upon the direction of the Certificate
Administrator, also will maintain records that are sufficient to indicate the
Trust Fund's compliance with applicable requirements of the Code (and applicable
Proposed, Temporary or final Treasury Regulations) relating to the assets held
by the Trust Fund. Further, the Servicer shall not permit and the Trustee shall
not accept the transfer or substitution of any Mortgage Loan other than pursuant
to Section 3.05 of this Agreement and the Servicer shall, in any case, not
permit substitution later than two years from the Closing Date unless the
Servicer and the Trustee have received an Opinion of Counsel, which will not be
an expense of the Trust Fund, that such transfer or substitution would not
adversely affect the REMIC status of the Trust Fund or would not otherwise be
prohibited by this Agreement;
(c) The Servicer and the Certificate Administrator each shall ensure
that the Trust Fund does not receive a fee or other compensation for services
and that the Trust Fund does not receive any income from assets other than
Qualified Mortgages or "permitted investments" within the meaning of Section
860G(a)(5) of the Code, and shall take whatever action it deems necessary to
avoid any material tax imposed by the Code on the Trust Fund; provided, however,
that the Trust Fund shall not be prohibited from recognizing its "net income
from foreclosure property," as provided in Section 860G(c) of the Code with
respect to any Mortgage Loan foreclosed upon as provided in Section 5.10;
(d) The Trustee shall not sell or permit the sale of all or any portion
of the Mortgage Loans or of any Eligible Investment unless such sale is as a
result of a repurchase of the Mortgage Loans pursuant to this Agreement or the
Trustee has received an Opinion of Counsel, which will not be an expense of the
Trust Fund, to the effect that such sale (i) is pursuant to a
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"qualified liquidation" as defined in Section 860F(a)(4) of the Code and as
described in Section 11.01 hereof, or (ii) would not be treated as a "prohibited
transaction" within the meaning of Section 860F(a)(2) of the Code that results
in the realization of a material amount of gain or loss for federal income tax
purposes;
(e) The Trustee shall not accept any contribution to the Trust Fund
after the Startup Day without an Opinion of Counsel that such contribution is
included within the exceptions provided in Section 860G(d)(2) of the Code and,
therefore, will not be subject to the tax imposed by Section 860G(d)(1) of the
Code; and
(f) Notwithstanding anything to the contrary in this Agreement, the
Certificate Administrator and the Trustee, at the direction of the Certificate
Administrator, shall take any other action or refuse to take any action
otherwise required (including adjusting the Purchase Price for any Mortgage
Loan) where the Certificate Administrator deems such action or inaction
reasonably necessary to ensure the REMIC status of the Trust Fund under the Code
and applicable regulations or to avoid the imposition of any material tax
liability on the Trust Fund that will affect amounts distributable to the
Certificateholders.
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ARTICLE VI
DISTRIBUTIONS AND PAYMENTS
Section 6.01 Collection of Money. Except as otherwise
expressly provided herein, the Trustee may demand payment or delivery of all
money and other property payable to or receivable by the Trustee pursuant to
this Agreement, including (a) all payments due on the Mortgage Loans in
accordance with the respective terms and conditions of such Mortgage Loans and
required to be paid over to the Trustee by the Servicer or by any Subservicer
and (b) Insured Payments. The Trustee shall hold all such money and property
received by it, as part of the Trust Fund and shall apply it as provided in this
Agreement.
Section 6.02 The Certificate Insurance Policy. (a) Within two
Business Days after each Servicer Remittance Date the Certificate Administrator
shall determine with respect to the immediately following Distribution Date the
amount to be on deposit in the Certificate Accounts on such Distribution Date as
a result of the Servicer's remittance of the Servicer Remittance Amount on the
related Servicer Remittance Date, less the amounts described in clause (i) of
Section 6.03(b) or (c) for the related Distribution Date, and not including the
amount of any Insured Payment which is required to be deposited in the related
Certificate Account for such Distribution Date. The amounts described in the
preceding sentence, as determined separately with respect to the Group I Loans,
and Group II Loans, with respect to each Distribution Date are the "Group I
Available Funds" and "Group II Available Funds" for such Distribution Date.
(b) If on any Distribution Date there is an Available Funds
Shortfall, the Certificate Administrator shall complete a Notice in the form of
Exhibit A to the related Certificate Insurance Policy and submit such notice to
the Certificate Insurer no later than 12:00 noon New York City time on the
second Policy Business Day preceding such Distribution Date as a claim for an
Insured Payment in an amount equal to such Available Funds Shortfall.
(c) The Trustee shall establish a separate Eligible Account
for the benefit of Holders of the Certificates and the Certificate Insurer
referred to herein as the "Certificate Insurance Payments Account" over which
the Trustee shall have exclusive control and sole right of withdrawal. The
Trustee shall deposit upon receipt any amount paid under the Certificate
Insurance Policy in the Certificate Insurance Payments Account and distribute
such amount only for purposes of payment to Certificateholders of the Group I
Insured Distribution Amount or
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Group II Insured Distribution Amount for which a claim was made and such amount
may not be applied to satisfy any costs, expenses or liabilities of the
Servicer, the Certificate Administrator, the Trustee or the Trust Fund. Amounts
paid under the Certificate Insurance Policy, to the extent needed to pay the
Group I Insured Distribution Amount or Group II Insured Distribution Amount
shall be transferred by the Trustee from the Certificate Insurance Payments
Account to the related Certificate Account on the related Distribution Date and
disbursed by the Paying Agent to Certificateholders in accordance with Section
6.03. It shall not be necessary for payments made under the Certificate
Insurance Policy to be made by checks or wire transfers separate from other
amounts distributed pursuant to Section 6.03. However, the amount of any payment
of principal or of interest on the Certificates to be paid from funds
transferred from the Certificate Insurance Payments Account shall be noted as
provided in paragraph (d) below. Funds held in the Certificate Insurance
Payments Account shall not be invested. Any funds remaining in the Certificate
Insurance Payments Account on the first Policy Business Day following a
Distribution Date shall be returned to the Certificate Insurer pursuant to the
written instructions of the Certificate Insurer by the end of such Policy
Business Day.
(d) The Remittance Report shall indicate the amount of
interest and principal paid in respect of the Group I Class A Certificates and
the Group II Class A Certificates from moneys received under the Certificate
Insurance Policy.
(e) In the event that the Trustee has received a certified
copy of an order of the appropriate court that any Insured Payment has been
voided in whole or in part as a preference payment under applicable bankruptcy
law, the Trustee shall so notify the Certificate Insurer, shall comply with the
provisions of the Certificate Insurance Policy to obtain payment by the
Certificate Insurer of such voided Insured Payment, and shall, at the time it
provides notice to the Certificate Insurer, notify, by mail to
Certificateholders of the affected Certificates that, in the event any
Certificateholder's Insured Payment is so recovered, such Certificateholder will
be entitled to payment pursuant to the Certificate Insurance Policy, a copy of
which shall be made available through the Trustee, the Certificate Insurer or
the Certificate Insurer's fiscal agent if any, and the Trustee shall furnish to
the Certificate Insurer or its fiscal agent, if any, agent, its records
evidencing the payments which have been made by the Trustee and subsequently
recovered from Certificateholders, and dates on which such payments were made.
(f) The Trustee shall promptly notify the Certificate Insurer
of any proceeding or the institution of any action, of which a Responsible
Officer of the Trustee has actual knowledge, seeking the avoidance as a
preferential transfer under applicable bankruptcy,
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insolvency, receivership or similar law (a "Preference Claim") of any
distribution made with respect to the Certificates. Each Certificateholder, by
its purchase of Certificates, the Servicer, the Certificate Administrator and
the Trustee agree that, the Certificate Insurer (so long as no Certificate
Insurer Default exists) may at any time during the continuation of any
proceeding relating to a Preference Claim direct all matters relating to such
Preference Claim, including, without limitation, (i) the direction of any appeal
of any order relating to such Preference Claim and (ii) the posting of any
surety, supersedeas or performance bond pending any such appeal. In addition and
without limitation of the foregoing, the Certificate Insurer shall be subrogated
to, and each Certificateholder, the Servicer, the Certificate Administrator and
the Trustee hereby delegate and assign to the Certificate Insurer, to the
fullest extent permitted by law, the rights of the Servicer, the Certificate
Administrator, the Trustee and each Certificateholder in the conduct of any such
Preference Claim, including, without limitation, all rights of any party to any
adversary proceeding or action with respect to any court order issued in
connection with any such Preference Claim.
Section 6.03 Distributions. (a) No later than 12:00 noon
California time on each Servicer Remittance Date, the Servicer shall deliver to
the Certificate Administrator a report in computer-readable form (including
electronic transmission, provided that a portion of such report relating to
certain delinquency information may be delivered in hard copy form rather than
computer-readable form) containing such information as to each Mortgage Loan as
of such date and such other information as the Certificate Administrator shall
reasonably require.
(b) With respect to funds deposited in the Group I Certificate
Account, on each Distribution Date, the Paying Agent shall make the following
allocations, disbursements and transfers in the following order of priority, and
each such allocation, transfer and disbursement shall be treated as having
occurred only after all preceding allocations, transfers and disbursements have
occurred:
(i) to the Certificate Insurer, the Premium Amount
with respect to the Group I Loans;
(ii) to the Certificate Insurer the lesser of (x) an
amount equal to (A) the amount then on deposit in the Group I
Certificate Account remaining after the distributions in (i)
minus (B) the Group I Insured Distribution Amount for such
Distribution Date and (y) the outstanding Group I
Reimbursement Amounts, if any, as of such Distribution Date;
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(iii) from amounts then on deposit in the Group I
Certificate Account (including any Group I Insured Payments),
to the Class IA Certificateholders an amount equal to the
Class IA Interest Distribution Amount;
(iv) from amounts then on deposit in the Group I
Certificate Account (including any Group I Insured Payments),
to the Class IA Certificateholders an amount equal to the
lesser of (a) the Class IA Principal Distribution Amount (to
the extent not covered by payments to be made pursuant to
Section 6.03(c)(v) below) and (b) the amount remaining in the
Group I Certificate Account after distributions pursuant to
clauses (i) through (iii) above, in the manner described
below;
(v) from amounts then on deposit in the Group I
Certificate Account, to the Class IIA Certificateholders, on
any Distribution Date where a Group II Subordination Deficit
exists, an amount equal to such Group II Subordination
Deficit;
(vi) from amounts then on deposit in the Group I
Certificate Account, to the Class IIA Certificateholders, on
any Distribution Date when, following distributions to be made
on such date, the Group II Subordinated Amount would be less
than the Group II Required Subordinated Amount, an amount
equal to such difference;
(vii) from amounts then on deposit in the Group I
Certificate Account, to the Certificate Insurer, an amount
equal to the outstanding Group II Reimbursement Amount
remaining unpaid following any distributions made on such
Distribution Date pursuant to Section 6.03(c)(ii);
(viii) from amounts then on deposit in the Group I
Certificate Account, to the Class I S Certificateholders an
amount equal to the related Class S Interest Distribution
Amount to the extent not added to the Certificate Principal
Balance thereof as described below;
(ix) from amounts then on deposit in the Group I
Certificate Account, to the Class I S Certificateholders the
amount remaining on such Distribution Date, if any, until the
Certificate Principal Balance thereof is reduced to zero; and
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(x) from amounts then on deposit in the Group I
Certificate Account, to the Holders of the Class R
Certificates, the amount remaining on such Distribution Date,
if any.
Notwithstanding clause (iv) above, the aggregate amounts distributed on all
Distribution Dates to the Holders of the Class IA Certificates on account of the
Class IA Principal Distribution Amount shall not exceed the Original Certificate
Principal Balance of the Class IA Certificates.
Distributions of the Class IA Principal Distribution Amount
and amounts allocated pursuant to Section 6.03(c)(v) and (vi) will be allocated
to the Class IA Certificates in reduction of the Certificate Principal Balance
thereof, until the Certificate Principal Balance thereof has been reduced to
zero.
On each Distribution Date, an amount equal to the Group I
Subordination Increase Amount for such Distribution Date will be added to the
Certificate Principal Balance of the Class I S Certificates.
(c) With respect to funds deposited in the Group II
Certificate Account, on each Distribution Date, the Paying Agent shall make the
following allocations, disbursements and transfers in the following order of
priority, and each such allocation, transfer and disbursement shall be treated
as having occurred only after all preceding allocations, transfers and
disbursements have occurred:
(i) to the Certificate Insurer, the Premium Amount
with respect to the Group II Loans;
(ii) to the Certificate Insurer the lesser of (x) an
amount equal to (A) the amount then on deposit in the Group II
Certificate Account remaining after the distributions in (i)
above minus (B) the Group II Insured Distribution Amount for
such Distribution Date and (y) the outstanding Group II
Reimbursement Amounts, if any, as of such Distribution Date;
(iii) from amounts then on deposit in the Group II
Certificate Account (including any Group II Insured Payments),
to the Class IIA-1 Certificateholders, Class IIA-2
Certificateholders, Class IIA-3 Certificateholders, and Class
IIA-4 Certificateholders, on a pro rata basis in proportion to
the related Class IIA
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Interest Distribution Amount payable thereon, an amount equal
to the Class IIA Interest Distribution Amount;
(iv) from amounts then on deposit in the Group II
Certificate Account (including any Group II Insured Payments),
to the Class IIA Certificateholders an amount equal to the
lesser of (a) the Class IIA Principal Distribution Amount (to
the extent not covered by payments to be made pursuant to
Section 6.03(b)(v) above) and (b) the amount remaining in the
Group II Certificate Account after distributions pursuant to
clauses (i) through (iii) above, in the manner described
below;
(v) from amounts then on deposit in the Group II
Certificate Account, to the Class IA Certificateholders, on
any Distribution Date where a Group I Subordination Deficit
exists, an amount equal to such Group I Subordination Deficit;
(vi) from amounts then on deposit in the Group II
Certificate Account, to the Class IA Certificateholders, on
any Distribution Date when, following distributions to be made
on such date, the Group I Subordinated Amount would be less
than the Group I Required Subordinated Amount, an amount equal
to such difference;
(vii) from amounts then on deposit in the Group II
Certificate Account, to the Certificate Insurer, an amount
equal to the outstanding Group I Reimbursement Amount
remaining unpaid following any distributions made on such
Distribution Date pursuant to Section 6.03(b)(ii);
(viii) from amounts then on deposit in the Group II
Certificate Account, to the Class II S Certificateholders, an
amount equal to the related Class S Interest Distribution
Amount to the extent not added to the Certificate Principal
Balance thereof as described below;
(ix) from amounts then on deposit in the Group II
Certificate Account, to the Class II S Certificateholders, the
amount remaining on such Distribution Date, if any, until the
Certificate Principal Balance thereof is reduced to zero; and
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(x) from amounts then on deposit in the Group II
Certificate Account, to the Holders of the Class R
Certificates, the amount remaining on such Distribution Date,
if any.
Notwithstanding clause (iv) above, the aggregate amounts distributed on all
Distribution Dates to the Holders of the Class IIA Certificates on account of
the Class IIA Principal Distribution Amount shall not exceed the Original
Certificate Principal Balance of the Class IIA Certificates.
Distributions of the Class IIA Principal Distribution Amount
and amounts allocated pursuant to Section 6.03(b)(v) and (vi) will be allocated
first to the Class IIA-1 Certificates, second to the Class IIA-2 Certificates,
third to the Class IIA-3 Certificateholders, and fourth, to the Class IIA-4
Certificates, in each case until the Certificate Principal Balance thereof has
been reduced to zero.
On each Distribution Date, an amount equal to the Group II
Subordination Increase Amount for such Distribution Date will be added to the
Certificate Principal Balance of the Class II S Certificates.
Section 6.04 Reports by Certificate Administrator. (a) On each
Distribution Date the Certificate Administrator shall provide to each Holder, to
the Trustee, to the Servicer, to the Certificate Insurer, to the Underwriter, to
the Company and to each Rating Agency a written report (the "Remittance
Report"), setting forth information including, without limitation, the following
information:
(i) the amount of the distribution with respect to
each class of the Class A Certificates, Class S Certificates
and Class R Certificates;
(ii) the amount of such distributions allocable to
principal, separately identifying the aggregate amount of any
Prepayments in Full and Curtailments or other unscheduled
recoveries of principal included therein and separately
identifying any Subordination Increase Amounts;
(iii) the amount of such distributions allocable to
interest and the calculation thereof;
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(iv) the Certificate Principal Balance of each class
of the Class A Certificates and Class S Certificates as of
such Distribution Date, together with the principal amount of
each class of the Class A Certificates and Class S
Certificates (based on a Certificate in an original principal
amount of $1,000) then outstanding, in each case after giving
effect to any payment of principal on such Distribution Date;
(v) the amount of any Insured Payment included in the
amounts distributed to the Class A Certificateholders on such
Distribution Date;
(vi) the Group I Required Subordinated Amount, the
Group II Required Subordinated Amount, the Group I
Subordinated Amount and the Group II Subordinated Amount as of
such Distribution Date;
(vii) the amounts, if any, of any Liquidation Loan
Losses for the related Due Period and the cumulative amount of
Liquidated Loan Losses from the Closing Date; and
(viii) the applicable Pass-Through Rate for each
class of Class A Certificates and Class S Certificates for
such distribution.
Items (i), (ii) and (iii) above shall, with respect to the Class A Certificates,
be presented on the basis of a Certificate having a $1,000 denomination. In
addition, by January 31 of each calendar year following any year during which
the Certificates are outstanding, the Certificate Administrator shall furnish a
report to each Holder of record if so requested in writing at any time during
each calendar year as to the aggregate of amounts reported pursuant to (i), (ii)
and (iii) with respect to the Certificates for such calendar year.
(b) All distributions made to the Class A Certificateholders,
Class S Certificateholders and the Class R Certificateholders as a Class on each
Distribution Date will be made on a pro rata basis among the Certificateholders
of such Class on the next preceding Record Date based on the Percentage Interest
represented by their respective Certificates, and shall be made by wire transfer
of immediately available funds to the account of such Certificateholder at a
bank or other entity having appropriate facilities therefor, if, in the case of
a Class A Certificateholder, such Certificateholder shall own of record
Certificates of the same Class which have denominations aggregating at least
$10,000,000 appearing in the Certificate
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Register and shall have provided complete wiring instructions by the Record
Date, and otherwise by check mailed to the address of such Certificateholder
appearing in the Certificate Register.
(c) In addition, on each Distribution Date the Certificate
Administrator will distribute to each Holder, to the Trustee, to the Certificate
Insurer, to the Underwriter, to the Servicer, to the Company and to each Rating
Agency, together with the information described in subsection (a) preceding, the
following information with respect to the Group I Loans and the Group II Loans
as of the close of business on the last Business Day of the prior calendar
month, which is hereby required to be prepared by the Servicer and furnished to
the Certificate Administrator for such purpose on or prior to the related
Servicer Remittance Date (such information to be provided for the Group I Loans
and the Group II Loans separately):
(i) the total number of Mortgage Loans and the
aggregate Principal Balances thereof, together with the number
and aggregate principal balances of such Mortgage Loans and
the percentage (based on the aggregate Principal Balances of
the Mortgage Loans) of the aggregate Principal Balances of
such Mortgage Loans to the aggregate Principal Balance of all
Mortgage Loans (A) 30-59 days Delinquent, (B) 60-89 days
Delinquent and (C) 90 or more days Delinquent;
(ii) the number and aggregate Principal Balances of
all Mortgage Loans and percentage (based on the aggregate
Principal Balances of the Mortgage Loans) of the aggregate
Principal Balances of such Mortgage Loans to the aggregate
Principal Balance of all Mortgage Loans in foreclosure
proceedings and the number and aggregate Principal Balances of
all Mortgage Loans and percentage (based on the aggregate
Principal Balances of the Mortgage Loans) of any such Mortgage
Loans which are also included in any of the statistics
described in the foregoing clauses (i)(A), (i)(B) and (i)(C);
(iii) the number and aggregate Principal Balances of
all Mortgage Loans and percentage (based on the aggregate
Principal Balances of the Mortgage Loans) of the aggregate
Principal Balances of such Mortgage Loans to the aggregate
Principal Balance of all Mortgage Loans relating to Mortgagors
in bankruptcy proceedings and the number and aggregate
Principal Balances of all Mortgage Loans and percentage (based
on the aggregate Principal Balances of the
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Mortgage loans) of any such Mortgage Loans which are also
included in any of the statistics described in the foregoing
clauses (i)(A), (i)(B) and (i)(C);
(iv) the number and aggregate Principal Balances of
all Mortgage Loans and percentage (based on the aggregate
Principal Balances of the Mortgage Loans) of the aggregate
Principal Balances of such Mortgage Loans to the aggregate
Principal Balance of all Mortgage Loans relating to REO
Properties and the number and aggregate Principal Balances of
all Mortgage Loans and percentage (based on the aggregate
Principal Balances of the Mortgage Loans) of any such Mortgage
Loans which are also included in any of the statistics
described in the foregoing clause (i)(A), (i)(B) and (i)(C);
(v) the weighted average Mortgage Interest Rate as of
the Due Date occurring in the Due Period related to such
Distribution Date;
(vi) weighted average remaining term to stated
maturity of all Mortgage Loans; and
(vii) book value of any REO Property.
Section 6.05 Compensating Interest. Not later than the close
of business on the third Business Day prior to the Distribution Date, the
Servicer or any Subservicer shall deposit into the related Certificate Account
an amount equal to the lesser of (a) the aggregate of the Prepayment Interest
Shortfalls for the related Distribution Date resulting from Principal
Prepayments in Full and Curtailments during the related Due Period and (b) its
aggregate Servicing Fees payable in the related Due Period and shall not have
the right to reimbursement therefor ("Compensating Interest").
Section 6.06 Effect of Payments by the Certificate Insurer;
Subrogation. Anything herein to the contrary notwithstanding, any payment with
respect to principal of or interest on the Class A Certificates which is made
with moneys received pursuant to the terms of the Certificate Insurance Policy
shall not be considered payment of the Certificates from the Trust Fund. The
Company, the Servicer, the Certificate Administrator and the Trustee
acknowledge, and each Holder by its acceptance of a Certificate agrees, that
without the need for any further action on the part of the Certificate Insurer,
the Company, the Servicer, the Certificate Administrator, the Trustee or the
Certificate Registrar (a) to the extent the Certificate
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Insurer makes payments, directly or indirectly, on account of principal of or
interest on the Class A Certificates to the Holders of such Certificates, the
Certificate Insurer will be fully subrogated to, and each Certificateholder, the
Servicer, the Certificate Administrator and the Trustee hereby delegate and
assign to the Certificate Insurer, to the fullest extent permitted by law, the
rights of such Holders to receive such principal and interest from the Trust
Fund, including, without limitation, any amounts due to the Certificateholders
in respect of securities law violations arising from the offer and sale of the
Class A Certificates, and (b) the Certificate Insurer shall be paid such amounts
but only from the sources and in the manner provided herein for the payment of
such amounts. The Trustee, the Certificate Administrator and the Servicer shall
cooperate in all respects with any reasonable request by the Certificate Insurer
for action to preserve or enforce the Certificate Insurer's rights or interests
under this Agreement without limiting the rights or affecting the interests of
the Holders as otherwise set forth herein.
Section 6.07 Allocation of Liquidated Loan Losses. Prior to
each Distribution Date the Servicer shall determine the total amount of related
Liquidated Loan Losses, if any, that occurred during the related Due Period with
respect to the Group I Loans and the Group II Loans. The amount of such
Liquidated Loan Losses shall be evidenced by an Officer's Certificate to be
delivered to the Certificate Administrator not later than the Servicer
Remittance Date. On each Distribution Date, the principal portion of all
Liquidated Loan Losses on the Mortgage Loans in Loan Group I shall be allocated
in reduction of the Certificate Principal Balance of the Class I S Certificates,
until the Certificate Principal Balance thereof has been reduced to zero, and
then in reduction of the Certificate Principal Balance of the Class II S
Certificates, until the Certificate Principal Balance thereof has been reduced
to zero. On each Distribution Date, the principal portion of all Liquidated Loan
Losses on the Mortgage Loans in Loan Group II shall be allocated in reduction of
the Certificate Principal Balance of the Class II S Certificates, until the
Certificate Principal Balance thereof has been reduced to zero, and then in
reduction of the Certificate Principal Balance of the Class IS Certificates,
until the Certificate Principal Balance thereof has been reduced to zero. In
each case above, Liquidated Loan Losses after the Certificate Principal Balances
of the Certificates described above have been reduced to zero shall not be
allocated to any specific class of related Certificates, but shall increase the
Group I Subordination Deficit or Group II Subordination Deficit, as applicable,
in the manner described in this Agreement.
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ARTICLE VII
REPORTS TO BE PREPARED BY CERTIFICATE ADMINISTRATOR
Section 7.01. Certificate Administrator Shall Provide
Information as Reasonably Required. The Certificate Administrator shall furnish
to the Trustee, during the term of this Agreement, such periodic, special, or
other reports or information, whether or not provided for herein, as shall be
necessary, reasonable, or appropriate in respect to the Trustee, or otherwise in
respect to the purposes of this Agreement, all such reports or information to be
as provided by and in accordance with such applicable instructions and
directions as the Trustee may reasonably require.
Section 7.02. Tax and Information Returns and Reports to
Certificateholders.
(a) For Federal income tax purposes, the taxable year of the
Trust Fund shall be a calendar year and the Certificate Administrator shall
maintain or cause the maintenance of the books of the Trust Fund on the accrual
method of accounting.
(b) The Certificate Administrator shall prepare and file or
cause to be filed with the Internal Revenue Service and applicable state or
local tax authorities, federal and state or local tax or information returns,
respectively, with respect to the Trust Fund and the Certificates containing
such information and at the times and in the manner as may be required by the
Code or applicable Treasury regulations or corresponding provisions of state or
local law, and shall furnish to each Holder of Certificates at any time during
the calendar year for which such returns or reports are made such statements or
information at the times and in the manner as may be required thereby. Without
limitation on any other requirement of this Section 7.02, the Certificate
Administrator shall make available the information necessary for the application
of Section 860E(e) of the Code within 60 days of such request. With respect to
the Class R Certificate, the Certificate Administrator shall provide such
information or cause such information to be provided to (i) the Internal Revenue
Service, (ii) the transferor of a Class R Certificate to a Disqualified
Organization and (iii) a Pass-Thru Entity that holds a Class R Certificate with
one or more record holders that are Disqualified Organizations. The Certificate
Administrator also shall provide or cause to be provided promptly the above
described computation and information relating to the tax on transfers to
Disqualified Organizations or holdings by Pass-Thru Entities within 60 days
after becoming aware of the transfer to a Disqualified Organization or Pass-Thru
Entity with one or more Disqualified Organization
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owners, as the case may be. In addition, except as may be provided in Treasury
Regulations, any person holding an interest in a Pass-Thru Entity as a nominee
for another will, with respect to such interest, be treated as a Pass-Thru
Entity. In connection with the foregoing, the Certificate Administrator shall
provide the name, address and telephone number of the person who can be
contacted to obtain information required to be reported to the holders of
regular interests in the REMIC (the "REMIC Reporting Agent") as required by IRS
Form 8811. The Trustee hereby designates [NAME] to serve as the REMIC Reporting
Agent. The Certificate Administrator shall indicate the election to treat the
Trust Fund as a REMIC (which election shall apply to the taxable period ending
December 31, 1996 and each calendar year thereafter) in such manner as the Code
or applicable Treasury regulations may prescribe. The Trustee shall sign all tax
and information returns filed pursuant to this Section 7.02 and any other
returns as may be required by the Code or any state or local law, and in doing
so shall rely entirely upon, and shall have no liability for information
provided by, or calculations provided by, the Certificate Administrator. The
Certificate Administrator is hereby designated as the "tax matters person"
(within the meaning of Treas. Reg. ss.1.860F-4(d)) for the Trust Fund. Any
Holder of a Class R Certificate will by acceptance thereof so appoint the
Certificate Administrator as agent and attorney-in-fact for the purpose of
acting as tax matters person. In the event that the Code or applicable Treasury
Regulations prohibit the Trustee from signing tax or information returns or
other statements, or the Certificate Administrator from acting as tax matters
person (as an agent or otherwise), the Trustee or the Certificate Administrator,
as the case may be, shall take whatever action that in its sole good faith
judgment is necessary for the proper filing of such information returns or for
the provision of a tax matters person, including designation of the Holder of a
Class R Certificate to sign such returns or act as tax matters person. Each
Holder of a Class R Certificate shall be bound by this Section 7.02 by virtue of
its acceptance of a Class R Certificate.
[End of Article VII]
ARTICLE VIII
THE COMPANY, THE SERVICER AND THE CERTIFICATE ADMINISTRATOR
Section 8.01. Liability of the Servicer. The Servicer shall be
liable in accordance herewith only to the extent of the obligations specifically
imposed upon and undertaken by the Servicer herein. If the Servicer delegates
any of its duties hereunder to one or more Sub-Servicers, the Servicer shall
not be relieved thereby of its liability with respect thereto.
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Section 8.02 Merger or Consolidation of the Servicer. Any
person into which the Servicer may be merged or consolidated, or any Person
resulting from any merger, conversion or consolidation to which the Servicer
shall be a party, or any Person succeeding to the business of the Servicer,
shall be the successor of the Servicer hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding; provided, however, that any
such successor or resulting person shall be qualified to service mortgage loans
for FNMA and FHLMC and shall have a net worth of not less than $15,000,000.
Section 8.03. Limitation on Liability of the Servicer and
Others. Neither the Servicer nor any of its directors, officers, employees or
agents, 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 Servicer or any such person against
breach of warranties or representations made herein, or for failure to perform
its obligations in strict compliance with this Agreement or any liability which
would otherwise be imposed by reason of willful misfeasance, bad faith or
negligence in the performance of his or its duties or by reason of reckless
disregard of his or its obligations and duties hereunder. The Servicer and any
of its directors, officers, employees or agents, 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 each of its
directors, officers, employees or agents, shall be indemnified and held harmless
by the Trust Fund against any loss, liability or expense incurred in connection
with any legal action relating to this Agreement or the Certificates, other than
any loss, liability or expense related to the Servicer's servicing obligations
with respect to any specific Mortgage Loan or Mortgage Loans (except as any such
loss, liability or expense shall be otherwise reimbursable pursuant to this
Agreement) or related to the Servicer's obligations under this Agreement or any
loss, liability or expense incurred by reason of willful misfeasance, bad faith
or negligence in the performance of his or its duties hereunder or by reason of
reckless disregard of his or its obligations and duties hereunder. Neither the
Servicer nor any subservicer shall be under any obligation to appear in,
prosecute or defend any legal action which is not incidental to its duties under
this Agreement and that in its opinion may involve any expense or liability;
provided, however, that the Servicer may in its discretion undertake any such
action which it may deem necessary or desirable in respect of this Agreement and
the rights and duties of the parties hereto and the interest of the
Certificateholders hereunder. In such event, the legal expenses and costs of
such action, if previously approved in writing by the Certificate Insurer, which
approval shall not be unreasonably withheld, and any liability resulting
therefrom shall be
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expenses, costs and liabilities of the Trust Fund, and the Servicer shall be
entitled to be reimbursed therefor out of the Collection Account as provided by
Section 5.04, and such amounts shall, on the following Distribution Date or
Distribution Dates, be allocated in reduction of distributions on the
Certificates in the same manner as Liquidated Loan Losses are allocated
hereunder.
Section 8.04. Liability of the Company and the Certificate
Administrator. The Company and the Certificate Administrator shall each be
liable in accordance herewith only to the extent of the obligations specifically
imposed by this Agreement and undertaken hereunder by the Company and the
Certificate Administrator herein.
Section 8.05 Merger or Consolidation of the Company or the
Certificate Administrator. The Company and the Certificate Administrator will
each keep in full effect its existence, rights and franchises as a corporation,
and will obtain and preserve its qualification to do business as a foreign
corporation in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Agreement, the
Certificates or any of the Mortgage Loans and to perform its duties under this
Agreement.
Any person into which the Company or the Certificate
Administrator may be merged or consolidated, or to whom the Company or the
Certificate Administrator has sold substantially all of its assets, or any
corporation resulting from any merger, conversion or consolidation to which the
Company or the Certificate Administrator shall be a party, or any Person
succeeding to the business of the Company or the Certificate Administrator,
shall be the successor of the Company or the Certificate Administrator
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.
Notwithstanding anything else in this Section 8.05 and Section
8.07 to the contrary, the Certificate Administrator may assign its rights and
delegate its duties and obligations under this Agreement; provided that the
Person accepting such assignment or delegation shall execute and deliver to the
Company and the Trustee an agreement, in form and substance reasonably
satisfactory to the Company and the Trustee, which contains an assumption by
such Person of the due and punctual performance and observance of each covenant
and condition to be performed or observed by the Certificate Administrator under
this Agreement; provided further that each Rating Agency's rating of any of the
Classes of Certificates that have been rated in effect immediately prior to such
assignment and delegation will not be qualified or
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reduced or withdrawn as a result of such assignment and delegation. In the case
of any such assignment and delegation, the Certificate Administrator shall be
released from its obligations as Certificate Administrator under this Agreement,
except that the Certificate Administrator shall remain liable for all
liabilities and obligations incurred by it as Certificate Administrator
hereunder prior to the satisfaction of the conditions to such assignment and
delegation set forth in the next preceding sentence.
Section 8.06 Limitation on Liability of the Company, the
Certificate Administrator, the Trustee and Others. Neither the Company, the
Certificate Administrator nor any of the directors, officers, employees or
agents of the Company or the Certificate Administrator shall be under any
liability to 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, or for errors in judgment; provided, however, that this provision
shall not protect the Company or the Certificate Administrator against any
breach of warranties or representations made herein, or failure to perform its
obligations in strict compliance with this Agreement, or any liability which
would otherwise be imposed by reason of any breach of the terms and conditions
of this Agreement. The Company, the Certificate Administrator, the Trustee, and
any director, officer, employee or agent of the Company, the Certificate
Administrator or the Trustee 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. Neither the Company, the Trustee nor the Certificate
Administrator shall be under any obligation to appear in, prosecute or defend
any legal action which is not incidental to its respective duties to service the
Mortgage Loans in accordance with this Agreement and which in its opinion may
cause it to incur any expenses or liability; provided, however, that the
Company, the Trustee or the Certificate Administrator may in its discretion
undertake any such action which it may deem necessary or desirable with respect
to this Agreement and the rights and duties of the parties hereto and the
interest of the Certificateholders hereunder. In such event, the legal expenses
and costs of such action and any liability resulting therefrom shall be
expenses, costs and liabilities payable from the Certificate Account and the
Company or the Certificate Administrator shall be entitled to be reimbursed
therefor out of the Certificate Account as provided by Section 4.06 and such
amounts shall, on the following Distribution Date or Distribution Dates, be
allocated in the same manner as Liquidated Loan Losses are allocated hereunder.
Section 8.07 Company and Certificate Administrator Not to
Resign. Except as described in Section 8.05, neither the Company nor the
Certificate Administrator shall assign this Agreement or resign from the
obligations and duties hereby imposed on it except by mutual
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consent of the Company, the Certificate Administrator and all of the
Certificateholders unless the determination is made that its duties hereunder
are no longer permissible under applicable law and such incapacity cannot be
cured by the Company or the Certificate Administrator. Any such determination
permitting the resignation of the Company or the Certificate Administrator shall
be evidenced by an opinion of independent counsel to such effect delivered to
the Trustee which opinion of counsel shall be in form and substance acceptable
to the Trustee. Upon any such assignment or resignation, the Company or the
Certificate Administrator, as appropriate, shall send notice to the Certificate
Insurer and all Certificateholders of the effect of such assignment or
resignation upon the then current rating of the Class of Certificates by each
Rating Agency whose rating on such Class is then in effect. No such resignation
shall become effective until a successor shall have assumed the Company's or the
Certificate Administrator's responsibilities and obligations hereunder in the
manner provided in Section 8.05. Any purported assignment or resignation which
does not comply with the requirements of this Section shall be of no effect.
Section 8.08 Compensation to the Certificate Administrator.
The Certificate Administrator shall be entitled to receive the Certificate
Administration Fee as compensation for services rendered by the Certificate
Administrator under this Agreement. The Certificate Administrator shall pay
itself such Certificate Administration Fee monthly from amounts on deposit in
the Certificate Account.
Section 8.09 Successor to the Servicer. In connection with the
termination of the Servicer's responsibilities and duties under this Agreement
pursuant to Section 5.23 or 9.01, the Trustee shall (i) succeed to and assume
all of the Servicer's responsibilities, rights, duties and obligations as
Servicer (but not in any other capacity) under this Agreement (except that the
Trustee shall not be obligated to make Periodic Advances if prohibited by
applicable law nor to effectuate repurchases or substitutions of Mortgage Loans
pursuant to Section 2.02 and except that the Trustee makes no representations
and warranties pursuant to Section 3.04). Prior to the termination of the
Servicer's responsibilities, duties and liabilities under this Agreement, the
Trustee may appoint a successor having a net worth of not less than $15,000,000
and which is a FNMA or FHLMC approved seller/servicer in good standing and which
shall succeed to all rights and assume all of the responsibilities, duties and
liabilities of the Servicer under this Agreement, except as aforesaid, if the
Trustee receives a letter from each Rating Agency that such appointment would
not result in a reduction or withdrawal of the current rating of any Class of
Certificates that is rated by a Rating Agency. If the Trustee has become the
successor to the Servicer in accordance with this Section or Section 9.02, then
notwithstanding the above, the Trustee may, if it shall be unwilling to so act,
or shall, if it is unable to so act, appoint, or petition
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a court of competent jurisdiction to appoint, any established housing and home
finance institution having a net worth of not less than $15,000,000 and which is
a FNMA or FHLMC approved seller/servicer in good standing as the successor to
the Servicer hereunder in the assumption of all of the responsibilities, duties
or liabilities of the Servicer hereunder. In connection with any such
appointment and assumption, the Trustee may make such arrangements for the
compensation of such successor out of payments on Mortgage Loans as it and such
successor shall agree or such court shall determine; provided, however, that no
such compensation shall be in excess of that permitted under this Agreement
without the consent of all of the Certificateholders. If the Servicer's duties,
responsibilities and liabilities under this Agreement should be terminated
pursuant to Section 5.23, 8.02 or 9.01, the Servicer shall discharge such duties
and responsibilities during the period from the date it acquires knowledge of
such termination until the effective date thereof with the same degree of
diligence and prudence which it is obligated to exercise under this Agreement,
and shall take no action whatsoever that might impair or prejudice the rights or
financial condition of its successor or the Trust Fund. The resignation or
removal of the Servicer pursuant to Section 5.23, 8.02 or 9.01 shall not become
effective until a successor shall be appointed pursuant to this Section and
shall in no event relieve the Servicer of liability for breach of the
representations and warranties made pursuant to Section 3.04.
Any successor appointed as provided herein shall execute,
acknowledge and deliver to the Servicer and to the Trustee an instrument
accepting such appointment, whereupon such successor shall become fully vested
with all the rights, powers, duties, responsibilities, obligations and
liabilities of the Servicer, with like effect as if originally named as a party
to this Agreement and the Certificates. Any termination or resignation of the
Servicer or this Agreement pursuant to Section 5.23, 8.02, 9.01 or 11.01 shall
not affect any claims that the Trustee may have against the Servicer for events
or actions taken or not taken by the Servicer arising prior to any such
termination or resignation.
The Servicer shall timely deliver to the successor the funds
that were, or were required to be, in the Collection Account and the Servicing
Account, if any, and all Mortgage Files and related documents, statements and
recordkeeping held by it hereunder and the Servicer shall account for all funds
and shall execute and deliver such instruments and do such other things as may
reasonably be required to more fully and definitely vest and confirm in the
successor all such rights, powers, duties, responsibilities, obligations and
liabilities of the Servicer.
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Upon a successor's acceptance of appointment as such, the
Servicer shall notify in writing the Trustee, the Certificate Insurer, the
Certificateholders, the Certificate Administrator and each Rating Agency of such
appointment.
Section 8.10 Maintenance of Ratings. The Servicer shall
cooperate with the Company and the Certificate Administrator and take any action
that may be reasonably necessary to maintain the current rating or ratings on
the Certificates.
[End of Article VIII]
ARTICLE IX
DEFAULT
Section 9.01 Events of Default. (a) "Event of Default",
wherever used herein, means any one of the following events:
(i) any failure by the Servicer to make any deposit
into the Certificate Account required by Section 4.05 which
continues unremedied for one Business Day after the date upon
which such deposit was required to be made;
(ii) the failure by the Servicer to make any required
Servicing Advance which failure continues unremedied for a
period of 30 days after the date on which written notice of
such failure, requiring the same to be remedied, shall have
been given to the Servicer by the Trustee or to the Servicer
and the Trustee by any Certificateholder or the Certificate
Insurer,
(iii) any failure on the part of the Servicer duly to
observe or perform in any material respect any other of the
covenants or agreements on the part of the Servicer contained
in this Agreement, or the failure of any representation and
warranty made pursuant to Section 3.01 to be true and correct
which continues unremedied for a period of 30 days (or 15 days
in the case of a failure to pay the premium for any insurance
policy which is required to be maintained under this
Agreement) after the date on which written notice of such
failure, requiring the same to be remedied, shall have been
given to the Servicer, as the case may be, by
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the Company or the Trustee or to the Servicer and the Trustee
by any Certificateholder or the Certificate Insurer;
(iv) a decree or order of a court or agency or
supervisory authority having jurisdiction in an involuntary
case under any present or future federal or state bankruptcy,
insolvency or similar law or for the appointment of a
conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshaling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of
its affairs, shall have been entered against the Servicer and
such decree or order shall have remained in force,
undischarged or unstayed for a period of 60 days;
(v) the Servicer shall consent to the appointment of
a conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshaling of assets and liabilities or
similar proceedings of or relating to the Servicer or of or
relating to all or substantially all of the Servicer's
property,
(vi) the Servicer shall admit in writing its
inability to pay its debts as they become due, file a petition
to take advantage of any applicable insolvency or
reorganization statute, make an assignment for the benefit of
its creditors, or voluntarily suspend payment of its
obligations"
(vii) on any Distribution Date the average Sixty-Day
Delinquency Ratio, for each of the three (or one or two, in
the case of the first and second Distribution Dates)
immediately preceding Due Periods, exceeds 13%. The Sixty-Day
Delinquency Ratio with respect to any Distribution Date means
a fraction, expressed as a percentage, (a) the numerator of
which is the aggregate Principal Balances of all Mortgage
Loans that are 60 or more days Delinquent, in foreclosure or
converted to REO Property as of the last day of the related
Due Period and (b) the denominator of which is the Pool
Principal Balance as of the last day of the related Due
Period;
(viii) if on any Distribution Date occurring in
[MONTH] of any year, commencing in [MONTH/YEAR], the 12 Month
Loss Amount exceeds 1.05% of the average Pool Principal
Balance as of the close of business on the last day of each of
the twelve preceding Due Periods; or
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(ix) if (a) on any Distribution Date occurring
before_____ 1, [YEAR], the aggregate Liquidated Loan Losses
since the Cut-off Date exceed ____% of the Original Pool
Principal Balance, (b) on any Distribution Date on or after
____ 1,[YEAR] and before ____ 1,[YEAR], the aggregate
Liquidated Loan Losses since the Cut-off Date exceed ____% of
the Original Pool Principal Balance, (c) on any Distribution
Date on or after ____ 1,[YEAR] and before ____ 1,[YEAR], the
aggregate Liquidated Loan Losses since the Cut-off Date exceed
____% of the Original Pool Principal Balance, (d) on any
Distribution Date on or after ____ 1,[YEAR] and before ____
1,[YEAR], the aggregate Liquidated Loan Losses since the
Cut-off Date exceed ____% of the Original Pool Principal
Balance, or (e) on any Distribution Date on or after ____
1,[YEAR], the aggregate Liquidated Loan Losses since the
Cut-off Date exceed ____% of the Original Pool Principal
Balance.
(b) If an Event of Default described in this Section shall
occur, then, and in each and every such case, so long as such Event of Default
shall not have been remedied: with respect to clauses (i), (ii), (iii), (iv),
(v) and (vi) above, the Trustee shall, but only at the direction of the
Certificate Insurer or the Majority Certificateholders and with the prior
written consent of the Certificate Insurer, by notice in writing to the Servicer
and a Responsible Officer of the Trustee, and in addition to whatever rights
such Certificateholders may have at law or equity to damages, including
injunctive relief and specific performance, terminate all the rights and
obligations of the Servicer under this Agreement and in and to the Mortgage
Loans and the proceeds thereof, as servicer; and with respect to clauses
(vii)-(ix) above, the Trustee shall, but only at the direction of the
Certificate Insurer, after notice in writing to the Servicer and a Responsible
Officer of the Trustee, terminate all the rights and obligations of the Servicer
under this Agreement and in and to the Mortgage Loans and the proceeds thereof,
as servicer. Upon receipt by the Servicer of such written notice, all authority
and power of the Servicer under this Agreement, whether with respect to the
Mortgage Loans or otherwise, shall, subject to Section 9.02, pass to and be
vested in the Trustee or its designee approved by the Certificate Insurer and
the Trustee is hereby authorized and empowered to execute and deliver, on behalf
of the Servicer, as attorney-in-fact or otherwise, at the expense of the
Servicer, any and all documents and other instruments and do or cause to be done
all other acts or things necessary or appropriate to effect the purposes of such
notice of termination, including, but not limited to, the transfer and
endorsement or assignment of the Mortgage Loans and related documents. The
Servicer agrees to cooperate (and pay any related costs and expenses) with the
Trustee in effecting the termination of the Servicer's responsibilities and
rights hereunder, including, without limitation, the transfer
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to the Trustee or its designee for administration by it of all amounts which
shall at the time be credited by the Servicer to the Collection Account or
thereafter received with respect to the Mortgage Loans. The Trustee shall
promptly notify the Certificate Insurer and the Rating Agencies of the
occurrence of an Event of Default.
Section 9.02 Trustee to Act; Appointment of Successor. On and
after the time the Servicer receives a notice of termination pursuant to Section
9.01, the Trustee or its appointed agent shall be the successor in all respects
to the Servicer to the extent provided in Section 8.09.
Section 9.03 Waiver of Defaults. The Majority
Certificateholders may, on behalf of all Certificateholders, and subject to the
consent of the Certificate Insurer, waive any events permitting removal of the
Servicer as servicer pursuant to this Article IX; provided, however, that the
Majority Certificateholders may not waive a default in making a required
distribution on a Certificate without the consent of the holder of such
Certificate. Upon any waiver of a past default, such default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have been
remedied for every purpose of this Agreement. No such waiver shall extend to any
subsequent or other default or impair any right consequent thereto except to the
extent expressly so waived. Notice of any such waiver shall be given by the
Trustee to the Rating Agencies.
Section 9.04 Mortgage Loans, Trust Fund and Accounts Held for
Benefit of the Certificate Insurer. (a) The Trustee shall hold the Trust Fund
and the Mortgage Files for the benefit of the Certificateholders and the
Certificate Insurer and all references in this Agreement and in the Certificates
to the benefit of Holders of the Certificates shall be deemed to include the
Certificate Insurer. The Trustee shall cooperate in all reasonable respects with
any reasonable request by the Certificate Insurer for action to preserve or
enforce the Certificate Insurer's rights or interests under this Agreement and
the Certificates unless, as stated in an Opinion of Counsel addressed to the
Trustee and the Certificate Insurer, such action is adverse to the interests of
the Certificateholders or diminishes the rights of the Certificateholders or
imposes additional burdens or restrictions on the Certificateholders.
(b) The Servicer hereby acknowledges and agrees that it shall
service the Mortgage Loans for the benefit of the Certificateholders and for the
benefit of the Certificate Insurer, and all references in this Agreement to the
benefit of or actions on behalf of the Certificateholders shall be deemed to
include the Certificate Insurer.
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ARTICLE X
CONCERNING THE TRUSTEE
Section 10.01 Duties of Trustee. The Trustee, prior to the
occurrence of an Event of Default and after the curing or waiver of all Events
of Default which may have occurred, undertakes to, and is empowered to, perform
such duties and only such duties as are specifically set forth in this
Agreement. Any permissive right of the Trustee as enumerated in this Agreement
shall not be construed as a duty; provided that in case an Event of Default has
occurred (which has not been cured or waived), 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 man would exercise or use under
the circumstances in the conduct of such man's own affairs unless the Trustee is
acting as Servicer pursuant to Section 9.03, in which case it shall use the same
degree of skill in case (when acting as Servicer) as the Servicer hereunder.
No provision of this Agreement shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act or its own misconduct, and, if the Trustee is acting as the
successor Servicer pursuant to Section 8.09 or 9.02, its own willful misconduct
with respect to its servicing obligations; provided, however, that:
(i) Prior to the occurrence of an Event of Default, and after
the curing or waiver of all such Events of Default which may have
occurred, the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Agreement, the Trustee shall
not be liable except for the performance of such duties and obligations
as are specifically set forth in this Agreement, no implied covenants
or obligations shall be read into this Agreement against the Trustee
and, in the absence of bad faith on the part of the Trustee, the
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Agreement;
(ii) The Trustee shall not be liable for an error of judgment
made in good faith by a Responsible Officer or Responsible Officers of
the Trustee, unless it shall be proved that the Trustee was negligent
in ascertaining the pertinent facts; and
(iii) The Trustee shall not be liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of Certificateholders of
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any Class holding Certificates which evidence, as to such Class,
Percentage Interests aggregating not less than 25% as to the time,
method and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred upon the
Trustee, under this Agreement.
Section 10.02 Certain Matters Affecting the Trustee. Except
as otherwise provided in Section 10.01:
(a) The Trustee may rely upon and shall be protected in acting
or refraining from acting upon any resolution, Officers' Certificate,
certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order,
appraisal, bond or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(b) The Trustee may consult with counsel and any 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;
(c) The Trustee shall be under no obligation to exercise any
of the trusts or powers vested in it by this Agreement or to institute,
conduct or defend any litigation hereunder or in relation hereto at the
request, order or direction of any of the Certificateholders, pursuant
to the provisions of this Agreement, unless such Certificateholders
shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which may be incurred
therein or thereby; nothing contained herein shall, however, relieve
the Trustee of the obligation, upon the occurrence of an Event of
Default (which has not been cured or waived), to exercise such of the
rights and powers vested in it by this Agreement, and to use the same
degree of care and skill in their exercise as a prudent man would
exercise or use under the circumstances in the conduct of such man's
own affairs;
(d) Neither the Trustee nor any of its directors, officers,
employees or agents shall be personally liable for any action taken,
suffered or omitted by it in good faith and believed by it or any of
them to be authorized or within the discretion or rights or powers
conferred upon the Trustee by this Agreement;
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(e) Prior to the occurrence of an Event of Default hereunder
and after the curing of all Events of Default which may have occurred,
the Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or document, unless requested in writing to do so
by Holders of Certificates of any Class evidencing, as to such Class,
Percentage Interests aggregating not less than 25% (in the case of
conflicting requests by two or more 25% or greater Percentage
Interests, the Trustee shall act in accordance with the first such
request); provided, however, that if the payment within a reasonable
time to the Trustee of the costs, expenses or liabilities likely to be
incurred by it in the making of such investigation is, in the opinion
of the Trustee, not reasonably assured to the Trustee by the security
afforded to it by the terms of this Agreement, the Trustee may require
reasonable indemnity against such expense or liability as a condition
to such proceeding. The reasonable expense of every such examination
shall be paid by the Servicer, if an Event of Default shall have
occurred and is continuing, and otherwise by the Certificateholder
requesting the investigation;
(f) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys; and
(g) Nothing in this Agreement shall be construed to require
the Trustee (acting in its capacity as Trustee) to expend its own
funds.
Section 10.03 Trustee Not Liable for Certificates or Mortgage
Loans. The recitals contained herein and in the Certificates (other than the
authentication of the Certificates by an authorized signatory of the Trustee)
shall be taken as the statements of the Company, the Certificate Administrator
or the Servicer, as the case may be, and the Trustee assumes no responsibility
for their correctness. The Trustee makes no representations or warranties as to
the validity or sufficiency of this Agreement or of the Certificates (except
that the Certificates shall be duly and validly authenticated by it) or of any
Mortgage Loan or related document. The Trustee shall not be accountable for the
use or application by the Company, the Certificate Administrator or the Servicer
of any of the Certificates or of the proceeds of such Certificates, or for the
use or application of any funds paid to the Company, the Certificate
Administrator or the Servicer in respect of the Mortgage Loans or deposited in
or withdrawn from the Collection Account or the Certificate Account by the
Company, the Certificate Administrator or the
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Servicer. The Trustee, in its capacity as trustee hereunder, shall have no
responsibility for the timeliness or the amount of payments made by the Paying
Agent to the Certificateholders.
Section 10.04 Trustee May Own Certificates. The Trustee in its
individual or any other capacity may become the owner or pledgee of Certificates
with the same rights it would have if it were not Trustee.
Section 10.05 Fees and Expenses. The Certificate Administrator
covenants and agrees to pay to the Trustee from time to time, and the Trustee
shall be entitled to, reasonable compensation (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an express trust)
for all services rendered by it in the execution of the trust hereby created and
in the exercise and performance of any of the powers and duties hereunder of the
Trustee, and the Certificate Administrator will pay or reimburse the Trustee
upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any of the provisions of this
Agreement (including the reasonable compensation and the expenses and
disbursements of its counsel and of all persons not regularly in its employ)
except any such expense, disbursement or advance as may arise from its
negligence or bad faith. Notwithstanding anything to the contrary in this
Agreement, this Section shall survive the termination of this Agreement.
Section 10.06 Eligibility Requirements for Trustee. The
Trustee hereunder shall at all times be a corporation having its principal
office in a state and city acceptable to the Company and organized and doing
business under the laws of such state or the United States of America,
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus of at least $50,000,000 and subject to supervision or
examination by federal or state authority. The Trustee shall not be an affiliate
of the Seller, the Certificate Administrator or the Company. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. In case at any time the Trustee shall
cease to be eligible in accordance with the provisions of this Section, the
Trustee shall resign immediately in the manner and with the effect specified in
Section 10.07.
Section 10.07 Resignation and Removal of the Trustee. The
Trustee, and any co-trustee may at any time resign and be discharged from the
trusts hereby created by giving written
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notice thereof to the Company, the Servicer, the Certificate Administrator and
each Rating Agency. Upon receiving such notice of resignation, the Company shall
promptly appoint a successor trustee or co-trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the resigning
Trustee and one copy to the successor trustee; provided that such appointment
does not result in a reduction or withdrawal of the rating of any of the Classes
of Certificates that have been rated. If no successor trustee shall have been so
appointed and have accepted appointment within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.
If at any time, the Trustee shall cease to be eligible in
accordance with the provisions of Section 10.06 and shall fail to resign after
written request therefor by the Company, or if at any time the Trustee shall
become incapable of acting, or shall be adjudged bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Company may remove the Trustee and appoint a successor trustee by written
instrument, in duplicate, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee.
The Holders of Certificates evidencing in the aggregate more
than 50% of Percentage Interest may at any time remove the Trustee and appoint a
successor trustee by written instrument or instruments, in triplicate, signed by
such Holders or their attorneys-in-fact duly authorized, one complete set of
which instruments shall be delivered to the Company, one complete set to the
Trustee so removed and one complete set to the successor so appointed.
Any resignation or removal of the Trustee or any resignation
of any co-trustee and appointment of a successor trustee or co-trustee pursuant
to any of the provisions of this Section shall become effective upon acceptance
of appointment by the successor trustee as provided in Section 10.08, or upon
acceptance of appointment by a co-trustee, as applicable, unless with respect to
a co-trustee, the Trustee receives written notice from each Rating Agency that
the failure to appoint a successor co-trustee would not result in a withdrawal
or reduction of the rating of any of the Classes of Certificates that have been
rated, in which case the resignation of any co-trustee shall be effective upon
receipt of such written notice. Any co-trustee may not be removed unless the
Company and the Trustee each receive written notice from each Rating Agency that
such removal would not result in a withdrawal or reduction of the rating of any
of
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the Classes of Certificates that have been rated, in which case the removal of
any co-trustee shall be effective upon receipt of such written notice.
Section 10.08 Successor Trustee. Any successor trustee
appointed as provided in Section 10.07 shall execute, acknowledge and deliver to
the Company and to its predecessor trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee shall
become effective and such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as trustee herein. The predecessor trustee shall deliver to the successor
trustee all Mortgage Files and related documents and statements held by it
hereunder, and the Company, the Servicer, the Certificate Administrator and the
predecessor trustee shall execute and deliver such instruments and do such other
things as may reasonably be required for more fully and certainly vesting and
confirming in the successor trustee all such rights, powers, duties and
obligations.
No successor trustee shall accept appointment as provided in
this Section unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 10.06. Prior to the appointment of
any successor trustee becoming effective, the Company shall have received from
each Rating Agency written confirmation that such appointment would not result
in a reduction or withdrawal of the rating of the Certificates.
Upon acceptance of appointment by a successor trustee as
provided in this Section, the Certificate Administrator shall mail notice of the
succession of such trustee hereunder to all Holders of Certificates at their
addresses as shown in the Certificate Register, to the Servicer, any
Sub-Servicer and to each Rating Agency. If the Certificate Administrator fails
to mail such notice within 10 days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to be mailed at
the expense of the Certificate Administrator.
Section 10.09 Merger or Consolidation of Trustee. Any
corporation into which the Trustee may be merged or converted or with which it
may be consolidated or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to the business of the Trustee, shall be the successor of the Trustee
hereunder, provided such corporation shall be eligible under the provisions of
Section 10.06,
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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 10.10 Appointment of Co-Trustee or Separate Trustee.
At any time, for the purpose of meeting any legal requirements of any
jurisdiction in which any part of the Trust Fund or property securing the same
may at the time be located, the Company 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, of any part of the Trust Fund, and to vest in such
Person or Persons, in such capacity, such title to the Trust Fund, or any part
thereof, and, subject to the other provisions of this Section 10.10, such
powers, duties, obligations, rights and trusts as the Company and the Trustee
may consider necessary or desirable. If the Company shall not have joined in
such appointment within 15 days after the receipt by it of a request so to do,
or in case an Event of Default shall have occurred and be continuing, the
Trustee alone shall have the power to make such appointment. No co-trustee or
separate trustee hereunder shall be required to meet the terms of eligibility as
a successor trustee under Section 10.06 hereunder and no notice to Holders of
Certificates of the appointment of co-trustee(s) or separate trustee(s) shall be
required under Section 10.08 hereof.
In the case of any appointment of a co-trustee or separate
trustee pursuant to this Section 10.10 all rights, powers, duties and
obligations conferred or imposed upon the Trustee shall be conferred or imposed
upon and exercised or performed by the Trustee and such separate trustee or
co-trustee jointly and severally, except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed (whether as
Trustee hereunder or as successor to the Servicer hereunder), the Trustee shall
be incompetent or unqualified to perform such act or acts, in which event such
rights, powers, duties and obligations (including the holding of title to the
Trust Fund or any portion thereof in any such jurisdiction) shall be exercised
and performed by such separate trustee or co-trustee at the direction of the
Trustee.
Every instrument appointing any separate trustee or co-trustee
shall refer to this Agreement and the conditions of this Article X. 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.
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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.
Section 10.11 Appointment of Office or Agency. The Trustee may
appoint an office or agency in The City of New York where Certificates may be
surrendered for registration of transfer or exchange. The Trustee will maintain
an office at the address stated in Section 12.07 hereof where notices and
demands to or upon the Trustee in respect of the Certificates may be served.
[End of Article X]
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ARTICLE XI
TERMINATION
Section 11.01 Termination. (a) Subject to Section 11.02, this
Agreement shall terminate upon notice to the Trustee of either: (i) the
disposition of all funds with respect to the last Mortgage Loan and the
remittance of all funds due hereunder and the payment of all amounts due and
payable to the Certificate Insurer and the Trustee or (it) mutual consent of the
Servicer, the Certificate Insurer and all Certificateholders in writing;
provided, however, that in no event shall the Trust established by this
Agreement terminate later than twenty-one years after the death of the last
surviving lineal descendant of Xxxxxx X. Xxxxxxx, late Ambassador of the United
States to the Court of St. James's, alive as of the date hereof.
(b) In addition, subject to Section 11.02, the Holder of a
50.01% Percentage Interest or greater of the Class R Certificates or the
Servicer (or the Certificate Insurer, if [Advanta Mortgage Corp. USA] is removed
as Servicer) may, at its option and at its sole cost and expense, terminate this
Agreement on any date on which the related Pool Principal Balance is less than
10%, if the holder of the Class R Certificates exercises this option, or is less
than 5%, if the Servicer or the Certificate Insurer exercises this option, of
the aggregate of the Principal Balances of the Mortgage Loans on the Cut-off
Date, by purchasing, on the next succeeding Distribution Date, all of the
outstanding Mortgage Loans and REO Properties at a price (the "Termination
Price") equal to the sum of (i) 100% of the Principal Balance of each such
outstanding Mortgage Loan and each REO Property, (ii) the aggregate amount of
accrued and unpaid interest on such Mortgage Loans through the related due
period and 30 days' interest on such Mortgage Loans at a rate equal to the
related Mortgage Interest Rate (net of the Servicing Fee if the Servicer
exercises this option) with respect to such Mortgage Loan, (iii) any
unreimbursed amounts due to the Certificate Insurer under this Agreement or the
Insurance Agreement and (iv) any excess of the actual stated principal balance
of each such Mortgage Loan and REO Property over the Principal Balance thereof,
the aggregate amount of accrued and unpaid interest on such excess through the
related due period and 30 days' interest on such excess at a rate equal to the
related Mortgage Interest Rate with respect to each related Mortgage Loan. Any
such purchase shall be accomplished by deposit into the related Certificate
Account of the Termination Price. From the Termination Price so deposited, the
Trustee shall reimburse the Servicer for the amount of any unpaid Servicing
Fees, unreimbursed Periodic Advances and unreimbursed Servicing Advances made by
the Servicer with respect to the related Mortgage Loans. No such termination is
permitted without the prior written consent of the Certificate
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Insurer (i) if it would result in a draw on the Certificate Insurance Policy or
(ii) unless the Servicer shall have delivered to the Certificate Insurer an
opinion of counsel reasonably satisfactory to the Certificate Insurer stating
that no amounts paid hereunder are subject to recapture as preferential
transfers under the United States Bankruptcy Code, 11 U.S.C. xx.xx. 101 et seq.,
as amended.
(c) If on any Distribution Date, the Servicer determines that
there are no outstanding Mortgage Loans and no other funds or assets in the
Trust Fund other than funds in the related Certificate Account, the Servicer
shall send a final distribution notice promptly to the related
Certificateholders in accordance with paragraph (d) below.
(d) Notice of any termination, specifying the Distribution
Date upon which the Trust Fund will terminate and that the Certificateholders
shall surrender their Certificates to the Trustee for payment of the final
distribution and cancellation, shall be given promptly by the Servicer by letter
to the Certificateholders mailed during the month of such final distribution
before the Servicer Remittance Date in such month, specifying (i) the
Distribution Date upon which final payment of the Certificates will be made upon
presentation and surrender of the Certificates at the office of the Trustee
therein designated, (ii) the amount of any such final payment and (iii) that the
Record Date otherwise applicable to such Distribution Date is not applicable,
payments being made only upon presentation and surrender of the Certificates at
the office of the Trustee therein specified. The Servicer shall give such notice
to the Trustee therein specified. The Servicer shall give such notice to the
Trustee at the time such notice is given to the Certificateholders. The
obligations of the Certificate Insurer hereunder shall terminate upon the
deposit by the Servicer with the Trustee of a sum sufficient to purchase all of
the Mortgage Loans and REO Properties in the Trust Fund as set forth above and
when the aggregate Certificate Principal Balance of the Certificates has been
reduced to zero.
(e) In the event that all Certificateholders do not surrender
their Certificates for cancellation within six months after the time specified
in the above-mentioned written notice, 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
six months after the second notice, all of the Certificates shall not have been
surrendered for cancellation, the Trustee may take appropriate steps, or may
appoint an agent to take appropriate steps, to contact the remaining
Certificateholders concerning surrender of their Certificates and the cost
thereof shall be paid out of the funds and other assets which remain subject
hereto. If within nine months after the second notice all the Certificates shall
not have been surrendered for
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cancellation, the Class R Certificateholders shall be entitled to all unclaimed
funds and other assets which remain subject hereto and the Trustee upon transfer
of such funds shall be discharged of any responsibility for such funds and the
Certificateholders shall look only to such Class R Certificateholders for
payment. Such funds shall remain uninvested.
Section 11.02 Additional Termination Requirements. (a) In the
event that the Holder of a 50.01% Percentage Interest or greater of the Class R
Certificates, Servicer or Certificate Insurer (any of which, an "Exercising
Party") exercises its purchase option with respect to the Trust Fund as provided
in Section 11.01, the Trust Fund shall be terminated in accordance with the
following additional requirements, unless the Trustee has been furnished with an
Opinion of Counsel to the effect that the failure of the Trust Fund to comply
with the requirements of this Section 11.02 will not (i) result in the
imposition of taxes on "prohibited transactions" of the Trust Fund as defined in
Section 860F of the Code or (ii) cause the Trust Fund to fall to qualify as a
REMIC at any time that any Class A Certificates or Class S Certificates are
outstanding:
(i) The Trustee shall establish a 90-day liquidation
period for the Trust Fund and specify the first day of such
period in a statement attached to the Trust Fund's final Tax
Return pursuant to Treasury Regulation Section 1.860F-1. The
Trustee shall satisfy all the requirements of a qualified
liquidation under Section 860F of the Code and any regulations
thereunder, as evidenced by an Opinion of Counsel obtained at
the expense of the Exercising Party;
(ii) During such 90-day liquidation period, and at or
prior to the time of making of the final payment on the
Certificates, the Trustee shall sell all of the assets of the
Trust Fund for cash; and
(iii) At the time of the making of the final payment
on the Certificates, the Trustee shall distribute or credit,
or cause to be distributed or credited, to the Holders of the
Class R Certificates all cash on hand in the Trust Fund (other
than cash retained to meet claims), and the REMIC shall
terminate at that time.
(b) By their acceptance of the Class R Certificates, the
Holders thereof hereby agree to authorize the Trustee to specify the 90-day
liquidation period for the Trust Fund, which authorization shall be binding upon
all successor Class R Certificateholders.
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Section 11.03 Accounting Upon Termination of Servicer. Upon
termination of the Servicer, the Servicer shall, at its expense:
(a) deliver to its successor or, if none shall yet have been
appointed, to the Trustee, the funds in any Account;
(b) deliver to its successor or, if none shall yet have been
appointed, to the Trustee all of the Mortgage Files and related documents and
statements held by it hereunder and a Mortgage Loan portfolio computer tape;
(c) deliver to its successor or, if none shall yet have been
appointed, to the Trustee and, upon request, to the Certificateholders a full
accounting of all funds, including a statement showing the Monthly Payments
collected by it and a statement of monies held in trust by it for the payments
or charges with respect to the Mortgage Loans; and
(d) execute and deliver such instruments and perform all acts
reasonably requested in order to effect the orderly and efficient transfer of
servicing of the Mortgage Loans to its successor and to more fully and
definitively vest in such successor all rights, powers, duties,
responsibilities, obligations and liabilities of the "Servicer" under this
Agreement.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Severability of Provisions. If any one or more
of the covenants, agreements, provisions or terms of this Agreement shall be for
any reason whatsoever held invalid, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement.
Section 12.02 Limitation on Rights of Certificateholders. The
death or incapacity of any Certificateholder shall not operate to terminate this
Agreement or the Trust Fund, nor entitle such Certificateholder's legal
representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding-up of the Trust Fund, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
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No Certificateholder shall have any right to vote (except as
expressly provided herein) or in any manner otherwise control the operation and
management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth, or contained in the terms of the Certificates,
be construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be under
any liability to any third person by reason of any action taken by the parties
to this Agreement pursuant to any provision hereof.
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 hereinbefore provided, and the Holders of
Certificates of any Class evidencing in the aggregate not less than 25% of the
Percentage Interests of such Class shall have made written request upon the
Trustee to institute such action, suit or proceeding in its own name as Trustee
hereunder (in the case of conflicting requests by two or more 25% or greater
Percentage Interests, the Trustee shall act in accordance with the first such
request) and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses and liabilities to be incurred therein
or thereby, and the Trustee, for 60 days after its receipt of such notice,
request and offer of indemnity, shall have neglected or refused to institute any
such action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
of any Class 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 of such Class or any other Class, or
to obtain or seek to obtain priority over or preference to any other such
Holder, or to enforce any right under this Agreement, except in the manner
herein provided and for the common benefit of Certificateholders of such Class
or all Classes, as the case may be. For the protection and enforcement of the
provisions of this Section, each and every Certificateholder and the Trustee
shall be entitled to such relief as can be given either at law or in equity.
Section 12.03 Amendment. This Agreement may be amended from
time to time by the Company, the Servicer, the Certificate Administrator and the
Trustee, without the consent of any of the Certificateholders, to cure any
ambiguity, to correct or supplement any provisions herein which may be
inconsistent with any other provisions herein, to ensure continuing treatment of
the Trust Fund as a REMIC, or to make any other provisions with respect to
matters
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or questions arising under this Agreement which shall not be materially
inconsistent with the provisions of this Agreement, provided that such actions
shall not, as evidenced by an Opinion of Counsel, adversely affect in any
material respect the interests of any Certificateholder of a Class having an
outstanding Certificate Principal Balance of greater than zero.
This Agreement may also be amended from time to time by the
Company, the Servicer, the Certificate Administrator and the Trustee with the
consent of the Holders of Certificates evidencing in the aggregate not less than
66% of the Percentage Interest of each Class of Certificates having an
Outstanding Certificate Principal Balance greater than zero and affected thereby
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 of such Class; provided,
however, that no such amendment shall (i) reduce in any manner the amount of, or
delay the timing of, payments received on Mortgage Loans which are required to
be distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) reduce the aforesaid percentage of Certificates of any class
the Holders of which are required to consent to any such amendment or (iii)
change the percentage specified in clause (ii) of the first paragraph of Section
11.01, without the consent of the Holders of all Certificates of such Class then
outstanding.
Promptly after the execution of any such amendment the Trustee
shall furnish written notification of the substance of such amendment to each
Certificateholder and each Rating Agency.
It shall not be necessary for the consent of
Certificateholders under this Section 12.03 to approve the particular form of
any proposed amendment but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable regulations as the Trustee may prescribe.
Section 12.04 Counterparts. This Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 12.05 Duration of Agreement. This Agreement shall
continue in existence and effect until terminated as herein provided.
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Section 12.06 Governing Law. This Agreement shall be construed
in accordance with the laws of the State of New York and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws.
Section 12.07 Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered at or mailed by first class or registered mail, postage
prepaid, to (i) in the case of the Company, Chase Funding, Inc., 000 Xxxxxxxx
Xxxxxx, Xxxxxx, Xxx Xxxxxx 00000, Attention: President, (ii) in the case of
Chase, The Chase Manhattan Bank, 000 Xxxx 00xx Xxxxxx, Xxx Xxxx Xxx Xxxx 00000,
Attention: _______________, (iv) in the case of the Trustee,
____________________________________________________________________, (v) in the
case of Moody's, Xxxxx'x Investors Service, Inc., 00 Xxxxxx Xxxxxx, Xxxxxx
Xxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention: Residential Pass-Through
Surveillance, (vi) in the case of S&P, Standard & Poor's Corporation, 00
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, (vii) in the case of the Certificate
Insurer, ________________________________________, and (viii) in the case of any
of the foregoing persons, such other addresses as may hereafter be furnished by
any such persons to the other parties to this Agreement.
Section 12.08 The Certificate Insurer Default. Any right
conferred to the Certificate Insurer shall be suspended during any period in
which a Certificate Insurer Default exists. At such time as the Certificates are
no longer outstanding hereunder, and no amounts owed to the Certificate Insurer
hereunder remain unpaid, the Certificate Insurer's rights hereunder shall
terminate.
Section 12.09 Third Party Beneficiary. The parties agree that
each of the Seller and the Certificate Insurer are intended and shall have all
rights of a third-party beneficiary of this Agreement.
Section 12.10 Intent of the Parties. It is the intent of the
Company and Certificateholders that, for federal income taxes, state and local
income or franchise taxes and other taxes imposed on or measured by income, the
Certificates will be treated as evidencing beneficial ownership interests in a
REMIC. The parties to this Agreement and the holder of each Certificate, by
acceptance of its Certificate, and each beneficial owner thereof, agree to
treat, and to take no action inconsistent with the treatment of, the
Certificates in accordance with the preceding sentence for purposes of federal
income taxes, state and local income and franchise taxes and other taxes imposed
on or measured by income.
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IN WITNESS WHEREOF, the Company, the Servicer, the Certificate
Administrator and the Trustee have caused their officers thereunto duly
authorized as of the day and year first above written.
CHASE FUNDING, INC., as Company
By:___________________________________
Name:
Title:
[ADVANTA MORTGAGE CORP. USA], as
Servicer
By:___________________________________
Name:
Title:
THE CHASE MANHATTAN BANK, as
Certificate Administrator
By:___________________________________
Name:
Title:
___________________________,
as Trustee
By:___________________________________
Name:
Title:
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EXHIBIT A
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR INTEREST"
IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED,
RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN CHASE
FUNDING, INC. ("CHASE FUNDING"), THE MASTER SERVICER, THE SUBSERVICER OR THE
TRUSTEE REFERRED TO BELOW OR ANY OF THEIR AFFILIATES. NEITHER THIS CERTIFICATE,
THE REMIC REGULAR INTEREST REPRESENTED HEREBY NOR THE UNDERLYING MORTGAGE LOANS
ARE GUARANTEED OR INSURED BY CHASE FUNDING, CHASE MANHATTAN MORTGAGE
CORPORATION, ADVANTA MORTGAGE CORP., USA THE TRUSTEE OR BY ANY OF THEIR
AFFILIATES OR BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE PRINCIPAL BALANCE OF
THIS CERTIFICATE WILL BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN BELOW.
ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL BALANCE BY
INQUIRY OF THE MASTER SERVICER.
CLASS IA-1 CERTIFICATE
Number 99- -1 Original Denomination
$
Cut-off Date: [DATE] Final Scheduled
Distribution Date:
First Distribution Date: Aggregate Initial Certificate
[Date] Balance of all Class IA-1
Certificates: $
Pass-Through Rate: CUSIP:
MORTGAGE LOAN ASSET-BACKED CERTIFICATE
Series [______]
evidencing an ownership interest in distributions allocable to the Class IA-1-1
Certificates with respect to a pool of conventional, sub-prime mortgage loans
formed and sold by
CHASE FUNDING, INC.
Unless this Certificate is presented by an authorized
representative of the Depository Trust Company, a New York corporation ("DTC"),
to the Trustee 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 certifies that CEDE & CO. is the registered owner of the
ownership interest (the "Ownership Interest") evidenced by this Certificate
(obtained by dividing the Original Denomination of this Certificate by the
aggregate Original Denomination of all Class IA-1 Certificates) in certain
distributions with respect to a pool of conventional, sub-prime mortgage loans
(the "Mortgage Loans") formed and sold by Chase Funding, Inc. (hereinafter
called the "Depositor"), and certain other property held in trust for the
benefit of Certificateholders (collectively, the "Trust Fund"). The Mortgage
Loans are serviced by Advanta Mortgage Corp., USA (the "Subservicer") and are
secured by first mortgages on Mortgaged Properties. The Trust Fund was created
pursuant to a Pooling and Servicing Agreement (the "Agreement"), dated as of
[Date] among the Depositor, the Subservicer, Chase Manhattan Mortgage
Corporation (the "Master Servicer") and Citibank, N.A., as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement.
This Certificate is one of a duly authorized issue of
Certificates, designated as Mortgage Loan Asset-Backed Certificates, Series
______, Class IA-1 (the "Class IA-1 Certificates") and 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 Agreement such Holder is bound. Also issued under the
Agreement are Certificates designated as Mortgage Loan Asset-Backed
Certificates, Series ______, Class IA-2, Class IA-3, Class IA-4, Class IA-5 and
Class IA-6 Certificates (collectively, with the Class IA-1 Certificates, the
"Group I Class A Certificates"), Class IIA-1 Certificates (the "Group II Class A
Certificates"), Class IM-1 and Class IM-2 Certificates (the "Mezzanine Group I
Certificates"), Class IIM-1 and Class IIM-2 Certificates (together the
"Mezzanine Group II Certificates"), Class IB Certificates (the "Class IB
Certificates") and Class IIB Certificates (the "Class IIB Certificates").
The Group I Class A Certificates, the Group II Class A
Certificates, the Mezzanine Group I Certificates, the Mezzanine Group II
Certificates, the Class IB Certificates and the Class IIB Certificates are
collectively referred to herein as the "Certificates".
Pursuant to the terms of the Agreement, the Master Servicer
will distribute from funds in the Distribution Account the amount as described
on the reverse hereof on the 25th day of each month or, if such 25th day is not
a Business Day, the Business Day immediately following (the "Distribution
Date"), commencing on [Date] Such distributions will be made to the Person in
whose name this Certificate is registered at the close of business on the last
Business Day of the month preceding the month in which such payment is made, or
if such last day is not a Business Day, the Business Day immediately preceding
such last day.
Distributions on this Certificate will be made either by check
mailed to the address of the Person entitled thereto, as such name and address
shall appear on the Certificate Register, or by wire transfer in immediately
available funds to the account of such Holder at a bank or other financial or
depository institution having appropriate facilities therefor, if such Holder
has so notified the Master Servicer in writing at least 5 Business Days prior to
the first Distribution Date for which distribution by wire transfer is to be
made, and such Holder's Certificates evidence an aggregate original principal
balance of not less than $1,000,000 or such Holder holds a 100% Percentage
Interest of such Class. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Master Servicer, of the
pendency of such distribution and only upon presentation and surrender of this
Certificate at the office of the Master Servicer or at such other office as may
be designated by such notice of final distribution.
The Master Servicer will maintain or cause to be maintained a
Certificate Register in which, subject to such reasonable regulations as it may
prescribe, the Master Servicer will provide for the registration of Certificates
and of transfers and exchanges of Certificates. Upon surrender for registration
of transfer of any Certificate at any office or agency of the Master Servicer,
or, if an Authenticating Agent has been appointed under the Agreement, the
Authenticating Agent, maintained for such purpose, the Master Servicer, or, if
an Authenticating Agent has been appointed under the Agreement, the
Authenticating Agent, will, subject to the limitations set forth in the
Agreement, authenticate and deliver, in the name of the designated transferee or
transferees, a Certificate of a like class and dated the date of authentication
by the Authenticating Agent. Notwithstanding the above, the final distribution
on this Certificate will be made after due notice by the Master Servicer, of the
pendency of such distribution and only upon presentation and surrender of this
Certificate at the office or agency appointed by the Master Servicer, for that
purpose and specified in such notice of final distribution.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication has been executed by
the Authenticating Agent, 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 Depositor has caused this Certificate to be duly
executed.
Dated: [Date] CHASE FUNDING, INC.
By:
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class IA-1
Certificates referred to
in the within-mentioned
Agreement.
THE CHASE MANHATTAN BANK
as Authenticating Agent
By:
Authorized Signatory
REVERSE OF CERTIFICATE
MORTGAGE LOAN ASSET-BACKED CERTIFICATE
SERIES ________
This Certificate is one of a duly authorized issue of
Certificates, designated as Chase Funding Mortgage Loan Asset-Backed
Certificates, Series _________, issued in [six] Classes of Group I Class A
Certificates, [one] Class of Group II Class A Certificates, [two] Classes of
Mezzanine Group I Certificates, [two] Classes of Mezzanine Group II
Certificates, [one] Class of Class IB Certificates and [one] Class of Class IIB
Certificates, each evidencing an interest in certain distributions with respect
to a pool of conventional, sub-prime Mortgage Loans formed and sold by the
Depositor and certain other property conveyed by the Depositor to the Trustee.
Following the initial issuance of the Certificates, the
Principal Balance of this Certificate will be different from the Original
Denomination shown above. Anyone acquiring this Certificate may ascertain its
current Principal Balance by inquiry of the Master Servicer.
The Holder, by its acceptance of this Certificate, agrees that
it will look solely to the Trust Fund and certain amounts resulting from credit
enhancements for payment hereunder and that the Trustee is not liable to the
Holders for any amount payable under this Certificate or the Agreement or,
except as expressly provided in the Agreement, subject to any liability under
the Agreement.
This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Master Servicer will maintain or cause to be maintained a
Certificate Register in which, subject to such reasonable regulations as it may
prescribe, the Master Servicer will provide for the registration of Certificates
and of transfers and exchanges of Certificates. Upon surrender for registration
of transfer of any Certificate at any office or agency of the Master Servicer,
or, if an Authenticating Agent has been appointed under the Agreement, the
Authenticating Agent, maintained for such purpose, the Master Servicer, or, if
an Authenticating Agent has been appointed under Section 5.10, the
Authenticating Agent, will, subject to the limitations set forth in the
Agreement, authenticate and deliver, in the name of the designated transferee or
transferees, a Certificate of a like class and dated the date of authentication
by the Authenticating Agent. Notwithstanding the above, the final distribution
on this Certificate will be made after due notice by the Master Servicer of the
pendency of such distribution and only upon presentation and surrender of this
Certificate at the office of the Master Servicer or at such other office as may
be designated by such notice of final distribution.
No service charge will be made to the Holder for any transfer
or exchange of the Certificate, but the Master Servicer 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 the Certificate. Prior to due presentation of a Certificate for
registration of transfer, the Depositor, the Subservicer, the Master Servicer
and the Trustee may treat the person in whose name any Certificate is registered
as the owner of such Certificate and the Percentage Interest in the Trust Fund
evidenced thereby for the purpose of receiving distributions pursuant to the
Agreement and for all other purposes whatsoever, and neither the Depositor, the
Subservicer, the Master Servicer nor the Trustee will be affected by notice to
the contrary.
The Agreement may be amended from time to time by the
Depositor, the Subservicer, the Master Servicer and the Trustee, without the
consent of any of the Certificateholders, to cure any ambiguity, to correct or
supplement any provisions therein which may be inconsistent with the other
provisions therein, to ensure continuing treatment of the Trust Fund as a REMIC,
or to make any other provisions with respect to matters or questions arising
under the Agreement which are not materially inconsistent with the provisions of
the Agreement, provided that such action does not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any
Certificateholder.
The Agreement may also be amended from time to time by the
Depositor, the Subservicer, the Master Servicer and the Trustee with the consent
of the Holders of Certificates evidencing in the aggregate not less than 66 2/3%
of the Percentage Interests of each Class of Certificates affected thereby for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of the Agreement or of modifying in any manner the rights
of the Holders of Certificates of such Class; provided, however, that no such
amendment may (i) reduce in any manner the amount of, or delay the timing of,
payments received on Mortgage Loans which are required to be distributed on any
Certificate without the consent of the Holder of such Certificate, (ii)
adversely affect in any material respect the interests of the Holders of any
Class of Certificates in a manner other than as described in (i), without the
consent of the Holders of Certificates of such Class evidencing 66 2/3% or more
of the Voting Rights of such Class or (iii) change the percentage specified in
clause (ii) of the third paragraph of Section 10.01 of the Agreement, without
the consent of the Holders of all Certificates of such Class then outstanding.
For federal income tax purposes, the Trust Fund includes two
segregated asset pools. The Depositor intends to make an election to treat each
as a "real estate mortgage investment conduit" (a "REMIC"). As described more
fully herein and in the Prospectus, the Certificates, other than the Residual
Certificates, will constitute "regular interests" in the Master REMIC. The
Residual Certificates will represent the sole class of "residual interests" in
both the Master REMIC and the Subsidiary REMIC.
The respective obligations and responsibilities of the
Depositor, the Subservicer, the Master Servicer and the Trustee under the
Agreement will terminate upon (i) the later of the final payment or other
liquidation (or any Advance with respect thereto) of the last Mortgage Loan or
the disposition of all property acquired upon the foreclosure or deed in lieu of
foreclosure of any Mortgage Loan and the remittance of all funds due thereunder;
or (ii) at the option of the Master Servicer, on any Distribution Date on which
the aggregate Stated Principal Balances of the Mortgage Loans in such Loan Group
is equal to
or less than 10% of the aggregate Initial Certificate Principal Balance of the
Certificates in such Mortgage Loan Group, so long as the Master Servicer
deposits or causes to be deposited in the Distribution Account during the
Principal Prepayment Period related to such Distribution Date an amount equal to
the sum of (i) 100% of the Stated Principal Balance of each Mortgage Loan in
such Loan Group (other than in respect of REO Property), (ii) accrued interest
thereon at the applicable Mortgage Rate, (iii) the appraised value of any REO
Property in such Loan Group (up to the Stated Principal Balance of the related
Mortgage Loan), such appraisal to be conducted by an appraiser mutually agreed
upon by the Depositor and the Trustee and (iv) any unreimbursed Servicing Fees,
Advances and Servicing Advances, and the principal portion of any unreimbursed
Advances, made on the Mortgage Loans in such Loan Group prior to such
Distribution Date; provided, however, that in no event shall the trust created
hereby continue beyond the earlier of (i) the expiration of 21 years from the
death of the last survivor of the descendants of Xxxxxx X. Xxxxxxx, the late
ambassador of the United States to the Court of St. James's, living on the date
hereof or (ii) the Latest Possible Maturity Date.
[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF
ASSIGNEE)
------------------------------------------
-------------------------------------------------------------
(Please Print or Type Name and Address of Assignee)
_____________________________________________________________ the within
Certificate, and all rights thereunder, and hereby does irrevocably constitute
and appoint
__________________________________________________ Attorney to transfer the
within Certificate on the books kept for the registration thereof, with full
power of substitution in the premises.
Dated:
(Signature guaranty) _______________________________
NOTICE: The signature to this assignment
must correspond with the name as it appears
upon the face of the within Certificate in
every particular, without alteration or
enlargement or any change whatever.
(*This information, which is voluntary, is being requested to ensure that the
assignee will not be subject to backup withholding under Section 3406 of the
Code.)
EXHIBIT B
[RESERVED]
EXHIBIT C
[RESERVED]
EXHIBIT D
FORM OF CLASS R CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN EACH OF TWO "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.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN CHASE
FUNDING, INC. ("CHASE FUNDING"), THE SUBSERVICER OR THE TRUSTEE REFERRED TO
BELOW OR ANY OF THEIR AFFILIATES. NEITHER THIS CERTIFICATE, THE REMIC REGULAR
INTEREST REPRESENTED HEREBY NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR
INSURED BY CHASE FUNDING, CHASE MANHATTAN MORTGAGE CORPORATION, ADVANTA MORTGAGE
CORP.,USA, THE TRUSTEE OR BY ANY OF THEIR AFFILIATES OR BY ANY GOVERNMENTAL
AGENCY OR INSTRUMENTALITY.
THIS CLASS R CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS SOLD OR TRANSFERRED IN TRANSACTIONS
WHICH ARE EXEMPT FROM REGISTRATION UNDER SUCH ACT OR UNDER APPLICABLE STATE LAW
AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE TRUSTEE SHALL HAVE
RECEIVED EITHER (i) A REPRESENTATION LETTER FROM THE TRANSFEREE OF THIS
CERTIFICATE TO THE EFFECT THAT SUCH TRANSFEREE EITHER (A) IS NOT AN EMPLOYEE
BENEFIT PLAN (A "PLAN") WITHIN THE MEANING OF SECTION 406 OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), AND IS NOT
DIRECTLY OR INDIRECTLY PURCHASING ANY CERTIFICATE ON BEHALF OF, AS INVESTMENT
MANAGER OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF OR WITH ASSETS OF A PLAN OR, IN
THE CASE OF AN INSURANCE COMPANY, THE ASSETS OF ANY SEPARATE ACCOUNTS TO EFFECT
SUCH ACQUISITION OR (B) THE SOURCE OF FUNDS FOR THE PURCHASE OF THE CERTIFICATES
IS AN "INSURANCE COMPANY GENERAL ACCOUNT" WITHIN THE MEANING OF PROHIBITED
TRANSACTION CLASS EXEMPTION 95-60 ("PTCE 95-60"), 60 FED. REG. 35925 (JULY 12,
1995), AND THE CONDITIONS SET FORTH IN SECTION I
AND SECTION III OF PTCE 95-60 ARE SATISFIED WITH RESPECT TO THE PURCHASE AND
HOLDING OF THE CERTIFICATES, OR (ii) IF THIS CERTIFICATE IS PRESENTED FOR
REGISTRATION IN THE NAME OF A PLAN SUBJECT TO TITLE I OF ERISA, OR SECTION 4975
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (OR COMPARABLE
PROVISIONS OF ANY SUBSEQUENT ENACTMENTS), OR A TRUSTEE OF ANY SUCH PLAN, OR ANY
OTHER PERSON WHO IS USING THE ASSETS OF ANY SUCH PLAN TO EFFECT SUCH
ACQUISITION, AN OPINION OF COUNSEL TO THE EFFECT THAT THE PURCHASE OR HOLDING OF
THIS CERTIFICATE WILL NOT RESULT IN THE ASSETS OF THE TRUST FUND BEING DEEMED TO
BE "PLAN ASSETS" PURSUANT TO THE DEPARTMENT OF LABOR PLAN ASSET REGULATIONS SET
FORTH IN 29 C.F.R. ss.2510.3-101 AND TO BE SUBJECT TO THE FIDUCIARY
RESPONSIBILITY PROVISIONS OF ERISA OR THE PROHIBITED TRANSACTION PROVISIONS OF
THE CODE, WILL NOT CONSTITUTE OR RESULT IN A PROHIBITED TRANSACTION WITHIN THE
MEANING OF SECTION 406 OR SECTION 407 OF ERISA OR SECTION 4975 OF THE CODE, AND
WILL NOT SUBJECT THE TRUSTEE, THE SUBSERVICER, THE COMPANY OR ANY OF THEIR
AFFILIATES TO ANY OBLIGATION OR LIABILITY (INCLUDING OBLIGATIONS OR LIABILITIES
UNDER ERISA OR SECTION 4975 OF THE CODE) RELATING TO THE CERTIFICATES.
CLASS R CERTIFICATE
Number 00- -0 Xxxxxxxxxx Xxxxxxxx: 100%
Cut-off Date: [Date] Pass-Through Rate: Variable
First Distribution Date:
[Date]
MORTGAGE LOAN ASSET-BACKED CERTIFICATE
Series _________
evidencing an ownership interest in distributions allocable to the Class R
certificates with respect to a pool of conventional one- to four-family mortgage
loans formed and sold by
CHASE FUNDING, INC.
This certifies that CHASE HOME MORTGAGE CORPORATION OF THE
SOUTHEAST is the registered owner of the ownership interest (the "Ownership
Interest") evidenced by this Certificate (obtained by dividing the Original
Denomination of this Certificate by the aggregate Original Denomination of all
Class R Certificates) in certain distributions with respect to a pool of
conventional, sub-prime mortgage loans (the "Mortgage Loans") formed and sold by
Chase Funding, Inc. (hereinafter called the "Depositor"), and certain other
property held in trust for the benefit of Certificateholders (collectively, the
"Trust Fund"). The Mortgage Loans are serviced by Chase Manhattan Mortgage
Corporation (the "Master Servicer") and are secured by first mortgages on
Mortgaged Properties. The Trust Fund was created pursuant to a Pooling and
Servicing Agreement (the "Agreement"), dated as of September 1, 1999 among the
Depositor, Advanta Mortgage Corp., USA, as Subservicer (the "Subservicer"), the
Master Servicer and Citibank, N.A., as trustee (the "Trustee"), a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement.
This Certificate is one of a duly authorized issue of
Certificates, designated as Chase Funding Mortgage Loan Asset-Backed
Certificates, Series _________, Class R (the "Class R Certificates") and 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 Agreement such Holder is bound. Also
issued under the Agreement are Certificates designated as Mortgage Loan
Asset-Backed Certificates, Series _________, Class IA-1, Class IA-2, Class IA-3,
Class IA-4, Class IA-5 and Class IA-6 Certificates (collectively, the "Group I
Class A Certificates"), Class IIA-1 Certificates (the Group II Class A
Certificates"), Class IM-1 and Class IM-2 Certificates (together, the "Mezzanine
Group I Certificates"), Class IIM-1 and Class IIM-2 Certificates (together, the
"Mezzanine Group II Certificates"), Class IB Certificates (the "Class IB
Certificates") and Class IIB Certificates (the "Class IIB Certificates"). The
Group I Class A Certificates, Group II Class A Certificates, Mezzanine Group I
Certificates, Mezzanine Group II Certificates, Class IB Certificates and Class
IIB Certificates are collectively referred to herein as the "Certificates")
Pursuant to the terms of the Agreement, the Master Servicer
will distribute from funds in the Distribution Account the amount as described
on the reverse hereof on the 25th day of each month or, if such 25th day is not
a Business Day, the Business Day immediately following (the "Distribution
Date"), commencing on [Date]. Such distributions will be made to
the Person in whose name this Certificate is registered at the close of business
on the last Business Day of the month preceding the month in which such payment
is made, or if such last day is not a Business Day, the Business Day immediately
preceding such last day.
Distributions on this Certificate will be made either by check mailed
to the address of the Person entitled thereto, as such name and address shall
appear on the Certificate Register, or by wire transfer in immediately available
funds to the account of such Holder at a bank or other financial or depository
institution having appropriate facilities therefor, if such Holder has so
notified the Paying Agent in writing at least 5 Business Days prior to the first
Distribution Date for which distribution by wire transfer is to be made, and
such Holder's Certificates evidence an aggregate original principal balance of
not less than $1,000,000 or such Holder holds a 100% Percentage Interest of such
Class. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Master Servicer of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office of the Master Servicer or at such other office as may be designated by
such notice of final distribution.
The Master Servicer will maintain or cause to be maintained a
Certificate Register in which, subject to such reasonable regulations as it may
prescribe, the Master Servicer will provide for the registration of Certificates
and of transfers and exchanges of Certificates. Upon surrender for registration
of transfer of any Certificate at any office or agency of the Master Servicer,
or, if an Authenticating has been appointed under the Agreement, the
Authenticating Agent, maintained for such purpose, the Master Servicer, or, if
an Authenticating Agent has been appointed under the Agreement, the
Authenticating Agent, will, subject to the limitations set forth in the
Agreement, authenticate and deliver, in the name of the designated transferee or
transferees, a Certificate of a like class and dated the date of authentication
by the Authenticating Agent. Notwithstanding the above, the final distribution
on this Certificate will be made after due notice by the Master Servicer of the
pendency of such distribution and only upon presentation and surrender of this
Certificate at the office or agency appointed by the Master Servicer, for that
purpose and specified in such notice of final distribution.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication has been executed by
the Authenticating Agent, 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 Depositor has caused this Certificate to be duly
executed.
Dated: [Date] CHASE FUNDING, INC.
By:
Name: Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class R
Certificates referred to
in the within-mentioned
Agreement.
THE CHASE MANHATTAN BANK
as Authenticating Agent
By:
Authorized Signatory
REVERSE OF CERTIFICATE
MORTGAGE LOAN ASSET-BACKED CERTIFICATE
SERIES _________
This Certificate is one of a duly authorized issue of
Certificates, designated as Chase Funding Mortgage Loan Asset-Backed
Certificates, Series ________, issued in [six] Classes of Group I Class A
Certificates, [one] Class of Group II Class A Certificates, [two] Classes of
Mezzanine Group I Certificates, [two] Classes of Mezzanine Group II
Certificates, [one] Class of Class IB Certificates and [one] Class of Class IIB
Certificates, each evidencing an interest in certain Distributions with respect
to a pool of conventional, sub-prime Mortgage Loans formed and sold by the
Depositor and certain other property conveyed by the Depositor to the Trustee.
The Holder, by its acceptance of this Certificate, agrees that
it will look solely to the Trust Fund and certain amounts resulting from credit
enhancements for payment hereunder and that the Trustee is not liable to the
Holders for any amount payable under this Certificate or the Agreement or,
except as expressly provided in the Agreement, subject to any liability under
the Agreement.
This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Master Servicer will maintain or cause to be maintained a
Certificate Register in which, subject to such reasonable regulations as it may
prescribe, the Master Servicer will provide for the registration of Certificates
and of transfers and exchanges of Certificates. Upon surrender for registration
of transfer of any Certificate at any office or agency of the Master Servicer,
or, if an Authenticating Agent has been appointed under the Agreement, the
Authenticating Agent, maintained for such purpose, the Master Servicer, or, if
an Authenticating Agent has been appointed under the Agreement, the
Authenticating Agent, will, subject to the limitations set forth in the
Agreement, authenticate and deliver, in the name of the designated transferee or
transferees, a Certificate of a like class and dated the date of authentication
by the Authenticating Agent. Notwithstanding the above, the final Distribution
on this Certificate will be made after due notice by the Master Servicer of the
pendency of such Distribution and only upon presentation and surrender of this
Certificate at the office of the Master Servicer or at such other office as may
be designated by such notice of final Distribution.
No service charge will be made to the Holder for any transfer
or exchange of the Certificate, but the Trustee, or, or, if an Authenticating
Agent has been appointed under the Agreement, the Authenticating Agent, 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 the Certificate.
Prior to due presentation of a Certificate for registration of transfer, the
Depositor, the Subservicer, the Master Servicer and the Trustee may treat the
person in whose name any Certificate is registered as the owner of such
Certificate and the Percentage Interest in the Trust Fund evidenced thereby for
the purpose of receiving distributions pursuant to the Agreement and for all
other purposes whatsoever, and neither the Depositor, the Master Servicer, the
Subservicer, the Authenticating Agent nor the Trustee will be affected by notice
to the contrary.
The Agreement may be amended from time to time by the
Depositor, the Master Servicer, the Subservicer and the Trustee, without the
consent of any of the Certificateholders, to cure any ambiguity, to correct or
supplement any provisions therein which may be inconsistent with the other
provisions therein, to ensure continuing treatment of the Trust Fund as a REMIC,
or to make any other provisions with respect to matters or questions arising
under the Agreement which are not materially inconsistent with the provisions of
the Agreement, provided that such action does not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any
Certificateholder.
The Agreement may also be amended from time to time by the
Depositor, the Subservicer, the Master Servicer and the Trustee with the consent
of the Holders of Certificates evidencing in the aggregate not less than 66 2/3%
of the Percentage Interests of each Class of Certificates affected thereby for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of the Agreement or of modifying in any manner the rights
of the Holders of Certificates of such Class; provided, however, that no such
amendment may (i) reduce in any manner the amount of, or delay the timing of,
payments received on Mortgage Loans which are required to be distributed on any
Certificate without the consent of the Holder of such Certificate, (ii)
adversely affect in any material respect the interests of the Holders of any
Class of Certificates in a manner other than as described in (i), without the
consent of the Holders of Certificates of such Class evidencing 66 2/3% or more
of the Voting Rights of such Class or (iii) change the percentage specified in
clause (ii) of the third paragraph of Section 10.01 of the Agreement, without
the consent of the Holders of all Certificates of such Class then outstanding.
For federal income tax purposes, the Trust Fund includes two
segregated asset pools. The Depositor intends to make an election to treat each
as a "real estate mortgage investment conduit" (a "REMIC"). The Certificates,
other than the Residual Certificates, will constitute "regular interests" in the
Master REMIC. The Residual Certificates will represent the sole class of
"residual interests" in both the Master REMIC and the Subsidiary REMIC.
The respective obligations and responsibilities of the
Depositor, the Subservicer, the Master Servicer and the Trustee under the
Agreement will terminate upon (i) the later of the final payment or other
liquidation (or any Advance with respect thereto) of the last Mortgage Loan or
the disposition of all property acquired upon the foreclosure or deed in lieu of
foreclosure of any Mortgage Loan and the remittance of all funds due thereunder;
or (ii) at the option of the Master Servicer, on any Distribution Date on which
the aggregate Stated Principal Balances of the Mortgage Loans in such Loan Group
is equal to or less than 10% of the initial Certificate Principal Balance of the
Certificates in such Mortgage Loan Group, so long as the Master Servicer
deposits or causes to be deposited in the Distribution Account during the
Principal Prepayment Period related to such Distribution Date an amount equal to
the sum of (i) 100% of the Stated Principal Balance of each Mortgage Loan in
such Loan Group (other than in respect of REO Property), (ii) accrued interest
thereon at the applicable Mortgage Rate, (iii) the appraised value of any REO
Property in such Loan Group (up to the Stated Principal Balance of the related
Mortgage Loan), such appraisal to be conducted by an appraiser mutually agreed
upon by the Depositor and the Trustee and (iv) any unreimbursed Servicing Fees,
Advances and Servicing Advances, and the principal portion of any unreimbursed
Advances, made on the Mortgage Loans in such Loan Group prior to such
termination; provided, however, that in no event shall the trust created hereby
continue beyond the earlier of (i) the expiration of 21 years from the death of
the last survivor of the descendants of Xxxxxx X. Xxxxxxx, the late ambassador
of the United States to the Court of St. James's, living on the date hereof or
(ii) 32 years after the Closing Date.
[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION
NUMBER OF ASSIGNEE)
------------------------------------------
-------------------------------------------------------------
(Please Print or Type Name and Address of Assignee)
_____________________________________________________________ the within
Certificate, and all rights thereunder, and hereby does irrevocably constitute
and appoint
__________________________________________________ Attorney to transfer the
within Certificate on the books kept for the registration thereof, with full
power of substitution in the premises.
Dated:
(Signature guaranty) _______________________________
NOTICE: The signature to this assignment
must correspond with the name as it appears
upon the face of the within Certificate in
every particular, without alteration or
enlargement or any change whatever.
(*This information, which is voluntary, is being requested to ensure that the
assignee will not be subject to backup withholding under Section 3406 of the
Code.)
EXHIBIT E
[RESERVED]
EXHIBIT F
SCHEDULE OF MORTGAGE LOANS
EXHIBIT H
FORM OF TRUSTEE CERTIFICATION
[DATE]
Chase Funding, Inc.
300 Xxxx Boulevard, 0xx Xxxxx Xxxxx
Xxxxxxxxx Xxxx, Xxx Xxxxxx 00000
Re: Pooling and Servicing Agreement dated as of [Date] among Chase
Funding, Inc. as depositor, Advanta Mortgage Corp. USA, as
subservicer, Chase Manhattan Mortgage Corporation, as master
servicer and Citibank, N.A., as trustee, Chase Funding, Inc.,
Chase Funding Mortgage Loan Asset-Backed Certificates, Series
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling
and Servicing Agreement, the undersigned, as Trustee, hereby certifies that [,
except as set forth in Schedule A hereto,] as to each Mortgage Loan listed in
the Mortgage Loan Schedule attached hereto (other than any Mortgage Loan paid in
full or listed on the attachment hereto) it has reviewed the Mortgage File and
the Mortgage Loan Schedule and has determined that:
(i) All documents in the Mortgage File required to be
delivered to the Trustee pursuant to Section 2.01 of the Pooling and Servicing
Agreement are in its possession;
(ii) In connection with each Mortgage Loan or Assignment
thereof as to which documentary evidence of recording was not received on the
Closing Date, it has received evidence of such recording; and
(iii) Such documents have been reviewed by it and such
documents do not contain any material omissions or defects within the meaning of
Section 2.01 or 2.02.
The Trustee further certifies that as to each Mortgage Loan,
the Trustee holds the Mortgage Note without any Responsible Officer of the
Trustee having received written notice (a) of any adverse claims, liens or
encumbrances, (b) that any Mortgage Note was overdue or has been dishonored, (c)
of evidence on the face of any Mortgage Note or Mortgage of any security
interest therein, or (d) of any defense against or claim to the Mortgage Note by
any other party.
The Trustee has made no independent examination of any
documents contained in each Mortgage File beyond confirming (i) that the
Mortgage Loan number and the name of the Mortgagor in each Mortgage File conform
to the respective Mortgage Loan number and name listed on the Mortgage Loan
Schedule and (ii) the existence in each Mortgage File of each of the documents
listed in subparagraphs (i)(A) through (G), inclusive, of Section 2.01 in the
Agreement. The Trustee makes no representations or warranties as to the
validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in each Mortgage Loan or the collectibility, insurability,
effectiveness or suitability of any such Mortgage Loan.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Pooling and
Servicing Agreement.
CITIBANK, N.A.,
as Trustee
By: _____________________________
Name: _______________________
Title: ______________________
EXHIBIT I
FORM OF TRANSFEREE'S LETTER
CHASE FUNDING, INC., CHASE FUNDING MORTGAGE LOAN
ASSET-BACKED CERTIFICATES, SERIES ________
[DATE]
Chase Funding, Inc.
000 Xxxx Xxxxxxxxx, 0xx Xxxxx Xxxxx
Xxxxxxxxx Lake, New Jersey 07675
Ladies and Gentlemen:
We propose to purchase Chase Funding, Inc., Chase Funding Mortgage
Loan Asset-Backed Certificates, Series ________, Class R, described in the
Prospectus Supplement, dated [Date], and Prospectus, dated [Date].
1. We certify that (a) we are not a disqualified organization and
(b) we are not purchasing such Class R Certificates on behalf of a disqualified
organization; for this purpose the term "disqualified organization" means the
United States, any state or political subdivision thereof, any foreign
government, any international organization, any agency or instrumentality of any
of the foregoing (except any entity treated as other than an instrumentality of
the foregoing for purposes of Section 168(h)(2)(D) of the Internal Revenue Code
of 1986, as amended (the "Code")), any organization (other than a cooperative
described in Section 521 of the Code) that is exempt from taxation under the
Code (unless such organization is subject to tax on excess inclusions) and any
organization that is described in Section 1381(a)(2)(C) of the Code. We
understand that any breach by us of this certification may cause us to be liable
for an excise tax imposed upon transfers to disqualified organizations.
2. We certify that (a) we have historically paid our debts as they
became due, (b) we intend, and believe that we will be able, to continue to pay
our debts as they become due in the future, (c) we understand that, as
beneficial owner of the Class R Certificates, we may incur tax liabilities in
excess of any cash flows generated by the Class R Certificates, and (d) we
intend to pay any taxes associated with holding the Class R Certificates as they
become due.
3. We acknowledge that we will be the beneficial owner of the
Class R Certificates and:1/
______ The Class R Certificates will be registered in our name.
______ The Class R Certificates will be held in the
name of our nominee,
_________________, which is not a disqualified
organization.
4. Unless Chase Funding, Inc. ("Chase Funding") has consented
to the transfer to us by executing the form of Consent affixed hereto as
Appendix B, we certify that we are a U.S. person; for this purpose the term
"U.S. person" means a citizen or resident of the United States, a corporation,
or partnership (unless, in the case of a partnership, Treasury regulations are
adopted that provide otherwise) created or organized in or under the laws of the
United States, any State thereof or the District of Columbia, including an
entity treated as a corporation or partnership for federal income tax purposes,
an estate whose income is subject to United States federal income tax regardless
of the source of its income, or a trust if a court within the United States is
able to exercise primary supervision over the administration of the trust and
one or more such U.S. persons have the authority to control all substantial
decisions of the trust (or, to the extent provided in applicable Treasury
regulations, certain trusts in existence on August 20, 1996 which are eligible
to elect to be treated as U.S. Persons. We agree that any breach by us of this
certification shall render the transfer of any interest in the Class R
Certificates to us absolutely null and void and shall cause no rights in the
Class R Certificates to vest in us.
5. We agree that in the event that at some future time we wish
to transfer any interest in the Class R Certificates, we will transfer such
interest in the Class R Certificates only (a) to a transferee that (i) is not a
disqualified organization and is not purchasing such interest in the Class R
Certificates on behalf of a disqualified organization, (ii) is a U.S. person and
(iii) has delivered to Chase Funding a letter in the form of this letter
(including the affidavit appended hereto) and, if requested by Chase Funding, an
opinion of counsel (in a form acceptable to Chase Funding) that the proposed
transfer will not cause the interest in the Class R Certificates to be held by a
disqualified organization or a person who is not a U.S. person or (b) with the
written consent of Chase Funding.
--------------------
1/ Check appropriate box and if necessary fill in the name of the Transferee's
nominee.
6. We hereby designate Chase Manhattan Mortgage Corporation as
our fiduciary to act as the tax matters person for the Chase Funding, Inc.,
Chase Funding Mortgage Loan Asset-Backed Certificates, Series ________ REMIC.
Very truly yours,
[PURCHASER]
By:
Name:
Title:
Accepted as of __________ __, 199_
CHASE FUNDING, INC.
By:
Name:
Title:
APPENDIX A
Affidavit pursuant to (i)
Section 860E(e)(4) of the
Internal Revenue Code of
1986, as amended, and (ii)
certain provisions of the
Pooling and Servicing
Agreement
Under penalties of perjury, the undersigned declares that the following is true:
(1) He or she is an officer of _________________________ (the "Transferee"),
(2) the Transferee's Employee Identification number is __________,
(3) the Transferee is not a "disqualified organization" (as defined below),
has no plan or intention of becoming a disqualified organization, and
is not acquiring any of its interest in the Chase Funding, Inc., Chase
Funding Mortgage Loan Asset-Backed Certificates, Series 1999-3, Class R
on behalf of a disqualified organization or any other entity,
(4) unless Chase Funding, Inc. ("Chase Funding") has consented to the
transfer to the Transferee by executing the form of Consent affixed as
Appendix B to the Transferee's Letter to which this Certificate is
affixed as Appendix A, the Transferee is a "U.S. person" (as defined
below),
(5) that no purpose of the transfer is to avoid or impede the assessment or
collection of tax,
(6) the Transferee has historically paid its debts as they became due,
(7) the Transferee intends, and believes that it will be able, to continue
to pay its debts as they become due in the future,
(8) the Transferee understands that, as beneficial owner of the Class R
Certificates, it may incur tax liabilities in excess of any cash flows
generated by the Class R Certificates,
(9) the Transferee intends to pay any taxes associated with holding the
Class R Certificates as they become due, and
(10) the Transferee consents to any amendment of the Pooling and Servicing
Agreement that shall be deemed necessary by Chase Funding (upon advice
of counsel) to constitute a reasonable arrangement to ensure that the
Class R Certificates will not be owned directly or indirectly by a
disqualified organization;
For purpose of this affidavit, the term "disqualified organization" means the
United States, any state or political subdivision thereof, any foreign
government, any international organization, any agency or instrumentality of any
of the foregoing (except any entity treated as other than an instrumentality of
the foregoing for purposes of Section 168(h)(2)(D) of the Internal Revenue Code
of 1986, as amended (the "Code")), any organization (other than a cooperative
described in Section 521 of the Code) that is exempt from taxation under the
Code (unless such organization is subject to tax on excess inclusions) and any
organization that is described in Section 1381(a)(2)(C) of the Code and the term
"U.S. Person" means a citizen or resident of the United States, a corporation or
partnership (unless, in the case of a partnership, Treasury regulations are
adopted that provide otherwise) created or organized in or under the laws of the
United States, any state thereof or the District of Columbia, including an
entity treated as a corporation or partnership for federal income tax purposes,
an estate whose income is subject to Unites States federal income tax regardless
of its source, or a trust if a court within the United States is able to
exercise primary supervision over the administration of such trust, and one or
more such U.S. Persons have the authority to control all substantial decisions
of such trust, (or, to the extent provided in applicable Treasury regulations,
certain trusts in existence on August 20, 1996 which are eligible to elect to be
treated as U.S. Persons).
---------------------------------
By:
----------------------------------
---------------------------------
Address of Investor for receipt of distribution:
Address of Investor for receipt of tax information:
(Corporate Seal)
Attest:
----------------------------------
________________________, 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 Investor, and acknowledged to
me that he executed the same as his free act and deed and the free act
and deed of the Investor.
Subscribed and sworn before me this day of , 19 .
Notary Public
County of ______
State of _______
My commission expires the _____day of________
By: __________________________
Name: ___________________
Title: ___________________
Dated: _____________
APPENDIX B
CONSENT
_________________________ (Transferee)
_________________________
_________________________
Ladies and Gentlemen:
Chase Funding, Inc. ("Chase Funding") hereby consents to the
transfer to, and registration in the name of, the Transferee (or, if applicable,
registration in the name of such Transferee's nominee of the Chase Funding Inc.,
Chase Funding Mortgage Loan Asset-Backed Certificates, Series _______, Class R
described in the Transferee's Letter to which this Consent is appended,
notwithstanding Chase Funding's knowledge that the Transferee is not a U.S.
person (as defined in such Transferee's Letter).
CHASE FUNDING, INC.
Dated: By:
EXHIBIT J
FORM OF TRANSFEROR CERTIFICATE FOR
CLASS R CERTIFICATES
Chase Funding, Inc.
000 Xxxx Xxxxxxxxx
Xxxxxxxxx Xxxx, XX 00000
Citibank, N.A., as Trustee
000 Xxxx Xxxxxx
0xx Xxxxx, Xxxx 0
Xxx Xxxx, XX 00000
RE: Chase Funding, Inc., Chase Funding Mortgage Loan Asset-Backed
Certificates, Series _________
Ladies and Gentlemen:
In connection with our disposition of the Class R 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 that would result in, a violation of Section 5 of the Act and
(c) if we are disposing of a Class R Certificate, we have no knowledge the
Transferee is not a Permitted Transferee. All capitalized terms used herein but
not defined herein shall have the meanings assigned to them in the Pooling and
Servicing Agreement dated as of September 1, 1999, among Chase Funding, Inc., as
Depositor, Advanta Mortgage Corp. USA as Subservicer, Chase Manhattan Mortgage
Corporation as Master Servicer and Citibank, N.A., as Trustee.
Very truly yours,
Name of Transferor
By:
Name:
Title
EXHIBIT K
FORM OF INVESTMENT LETTER
(Accredited Investor)
[DATE]
Chase Funding, Inc.
300 Xxxx Boulevard, 0xx Xxxxx Xxxxx
Xxxxxxxxx Xxxx, Xxx Xxxxxx 00000
Re: Pooling and Servicing Agreement dated as of [Date] among Chase Funding,
Inc. as depositor, Advanta Mortgage Corp. USA, as subservicer, Chase
Manhattan Mortgage Corporation, as master servicer and Citibank, N.A., as
trustee, Chase Funding, Inc., Chase Funding Mortgage Loan Asset-Backed
Certificates, Series [Class B-]
Ladies and Gentlemen:
______________ (the "Purchaser") intends to purchase from
________________ (the "Transferor") $_______ by original principal balance (the
"Transferred Certificates") of Mortgage Loan Asset-Backed Certificates, Series
________, [Class B-] (the "Certificates"), issued pursuant to a pooling and
servicing agreement, dated as of [Date] (the "Pooling and Servicing Agreement"),
among Chase Funding, Inc. as depositor (the "Depositor"), Advanta Mortgage Corp.
USA as subservicer (the "Subservicer"), Chase Manhattan Mortgage Corporation, as
master servicer (the "Master Servicer") and Citibank, N.A., as trustee (the
"Trustee"). [The Purchaser intends to register the Transferred Certificate in
the name of ____________________, as nominee for _________________.] All terms
used and not otherwise defined herein shall have the meanings set forth in the
Pooling and Servicing Agreement.
For good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Purchaser certifies, represents
and warrants to, and covenants with, the Depositor and the Trustee that:
1. The Purchaser understands that (a) the Certificates have
not been registered or qualified under the Securities Act of 1933, as amended
(the "Securities Act"), or the securities laws of any state, (b) neither the
Depositor nor the Trustee is required, and neither of them intends, to so
register or qualify the Certificates, (c) the Certificates cannot be resold
unless (i) they are registered and qualified under the Securities Act and the
applicable state securities laws or (ii) an exemption from registration and
qualification is available and (d) the Pooling and Servicing Agreement contains
restrictions regarding the transfer of the Certificates.
2. The Certificates will bear a legend to the following effect:
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), THE INVESTMENT COMPANY
ACT OF 1940, AS AMENDED (THE "1940 ACT") OR ANY STATE
SECURITIES OR "BLUE SKY" LAWS, AND MAY NOT, DIRECTLY OR
INDIRECTLY, BE SOLD OR OTHERWISE TRANSFERRED, OR OFFERED FOR
SALE, UNLESS SUCH TRANSFER IS NOT SUBJECT TO REGISTRATION
UNDER THE ACT, THE 1940 ACT AND ANY APPLICABLE STATE
SECURITIES LAWS AND SUCH TRANSFER ALSO COMPLIES WITH THE OTHER
PROVISIONS OF SECTION 5.02 OF THE POOLING AND SERVICING
AGREEMENT. NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE
UNLESS THE MASTER SERVICER SHALL HAVE RECEIVED, IN FORM AND
SUBSTANCE SATISFACTORY TO THE MASTER SERVICER (A) AN
INVESTMENT LETTER FROM THE PROSPECTIVE INVESTOR; AND (B)
REPRESENTATIONS FROM THE TRANSFEROR REGARDING THE OFFERING AND
SALE OF THE CERTIFICATES.
NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE
DEPOSITOR SHALL HAVE RECEIVED EITHER (i) A REPRESENTATION
LETTER FROM THE TRANSFEREE OF THIS CERTIFICATE TO THE EFFECT
THAT SUCH TRANSFEREE EITHER (A) IS NOT AN EMPLOYEE BENEFIT
PLAN (A "PLAN") WITHIN THE MEANING OF SECTION 406 OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), AND IS NOT DIRECTLY OR INDIRECTLY PURCHASING ANY
CERTIFICATE ON BEHALF OF, AS INVESTMENT MANAGER OF, AS NAMED
FIDUCIARY OF, AS TRUSTEE OF OR WITH ASSETS OF A PLAN OR, IN
THE CASE OF AN INSURANCE COMPANY, THE ASSETS OF ANY SEPARATE
ACCOUNTS TO EFFECT SUCH ACQUISITION OR (B) THE SOURCE OF FUNDS
FOR THE PURCHASE OF THE CERTIFICATES IS AN "INSURANCE COMPANY
GENERAL ACCOUNT" WITHIN THE MEANING OF PROHIBITED TRANSACTION
CLASS EXEMPTION 95-60 ("PTCE 95-60"), 60 FED. REG. 35925 (JULY
12, 1995), AND THE CONDITIONS SET FORTH IN SECTION I AND
SECTION III OF PTCE 95-60 ARE SATISFIED WITH RESPECT TO THE
PURCHASE AND HOLDING OF THE CERTIFICATES, OR (ii) IF THIS
CERTIFICATE IS PRESENTED FOR REGISTRATION IN THE NAME OF A
PLAN SUBJECT TO TITLE I OF ERISA, OR SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (OR
COMPARABLE
PROVISIONS OF ANY SUBSEQUENT ENACTMENTS), OR A TRUSTEE OF ANY
SUCH PLAN, OR ANY OTHER PERSON WHO IS USING THE ASSETS OF ANY
SUCH PLAN TO EFFECT SUCH ACQUISITION, AN OPINION OF COUNSEL TO
THE EFFECT THAT THE PURCHASE OR HOLDING OF THIS CERTIFICATE
WILL NOT RESULT IN THE ASSETS OF THE TRUST FUND BEING DEEMED
TO BE "PLAN ASSETS" PURSUANT TO THE DEPARTMENT OF LABOR PLAN
ASSET REGULATIONS SET FORTH IN 29 CFR ss.2510.3-101 AND TO BE
SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF ERISA OR
THE PROHIBITED TRANSACTION PROVISIONS OF THE CODE, WILL NOT
CONSTITUTE OR RESULT IN A PROHIBITED TRANSACTION WITHIN THE
MEANING OF SECTION 406 OR SECTION 407 OF ERISA OR SECTION 4975
OF THE CODE, AND WILL NOT SUBJECT THE TRUSTEE, THE
SUBSERVICER, THE MASTER SERVICER, THE DEPOSITOR OR ANY OF
THEIR AFFILIATES TO ANY OBLIGATION OR LIABILITY (INCLUDING
OBLIGATIONS OR LIABILITIES UNDER ERISA OR SECTION 4975 OF THE
CODE) RELATING TO THE CERTIFICATES.
3. The Purchaser is acquiring the Transferred Certificates for
its own account [for investment only]**/ and not with a view to or for sale or
other transfer in connection with any distribution of the Transferred
Certificates in any manner that would violate the Securities Act or any
applicable state securities laws, subject, nevertheless, to the understanding
that disposition of the Purchaser's property shall at all times be and remain
within its control.
4. The Purchaser (a) is a substantial, sophisticated
institutional investor having such knowledge and experience in financial and
business matters, and in particular in such matters related to securities
similar to the Certificates, such that it is capable of evaluating the merits
and risks of investment in the Certificates, (b) is able to bear the economic
risks of such an investment and (c) is an "accredited investor" within the
meaning of Rule 501(a) promulgated pursuant to the Securities Act.
5. The Purchaser will not nor has it authorized nor will it
authorize any person to (a) offer, pledge, sell, dispose of or otherwise
transfer any Certificate, any interest in any Certificate or any other similar
security to any person in any manner, (b) solicit any offer to buy or to accept
a pledge, disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c)
otherwise approach or negotiate with respect to any Certificate, any interest in
any Certificate or any other similar security with any person in any manner, (d)
make any general solicitation by means of general advertising or in any other
manner, or (e) take any other action, that would constitute a distribution of
any Certificate under the Securities Act or the Investment Company Act of 1940,
as amended (the "1940 Act"), that would render the disposition of any
Certificate a violation of Section 5 of the Securities Act or any state
securities law, or that would require registration or qualification pursuant
thereto. Neither the Purchaser nor anyone acting on its behalf has offered the
Certificates for sale or made any general solicitation by means of general
advertising or in any other manner with respect to the Certificates. The
Purchaser will not sell or otherwise transfer any of the Certificates, except in
compliance with the provisions of the Pooling and Servicing Agreement.
--------------------
**/ Not required of a broker/dealer purchaser.
6. [This paragraph may be deleted if the Purchaser provides
the Opinion of Counsel referred to in clause (ii) of Section 5.02(b) of the
Pooling and Servicing Agreement.] The Purchaser either (A) is not an employee
benefit plan within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), or a plan within the meaning
of Section 4975 of the Internal Revenue Code of 1986, as amended (the "Code")
(each, a "Plan"), and is not directly or indirectly purchasing any Certificate
on behalf of, as investment manager of, as named fiduciary of, as trustee of or
with assets of a Plan or directly or indirectly purchasing any certificates with
the assets of any insurance company separate account or of any Plan or (B) is an
insurance company and the source of funds for the purchase of the certificates
is an "insurance company general account" within the meaning of Prohibited
Transaction Class Exemption 95-60 ("PTCE 95-60"), 60 Fed. Reg. 35925 (July 12,
1995), and the conditions set forth in Section I and III of PTCE 95-60 are
satisfied with respect to the purchase and holding of the Certificates.
7. Prior to the sale or transfer by the Purchaser of any of
the Certificates, the Purchaser will obtain from any subsequent purchaser
substantially the same certifications, representations, warranties and covenants
contained in the foregoing paragraphs and in this letter or a letter
substantially in the form of Exhibit L to the Pooling and Servicing Agreement.
8. The Purchaser agrees to indemnify the Trustee, the Master
Servicer, the Subservicer and the Depositor against any liability that may
result from any misrepresentation made herein.
Very truly yours,
[PURCHASER]
By:
Name:
Title:
EXHIBIT L
FORM OF RULE 144A INVESTMENT LETTER
(Qualified Institutional Buyer)
[DATE]
Chase Funding, Inc.
000 Xxxx Xxxxxxxxx, 0xx Xxxxx Xxxxx
Xxxxxxxxx Lake, New Jersey 07675
Chase Manhattan Mortgage Corporation
c/o The Chase Manhattan Bank
Global Trust Services
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Pooling and Servicing Agreement dated as of [Date] among Chase Funding,
Inc. as depositor, Advanta Mortgage Corp., USA, as subservicer, Chase
Manhattan Mortgage Corporation, as master servicer and Citibank, N.A., as
trustee, Chase Funding, Inc., Chase Funding Mortgage Loan Asset-Backed
Certificates, Series [Class B-]
Ladies and Gentlemen:
______________ (the "Purchaser") intends to purchase from
________________ (the "Transferor") $_______ by original principal balance (the
"Transferred Certificates") of Asset-Backed Certificates, Series ______, [Class
B-] (the "Certificates"), issued pursuant to a pooling and servicing agreement,
dated as of [Date] (the "Pooling and Servicing Agreement"), among Chase Funding,
Inc. as depositor (the "Depositor"), Advanta Mortgage Corp., USA, as subservicer
(the "Subservicer"), Chase Manhattan Mortgage Corporation, as master servicer
(AMaster Servicer@), and Citibank, N.A., as trustee (the "Trustee"). [The
Purchaser intends to register the Transferred Certificate in the name of
____________________, as nominee for __________________.] All terms used and not
otherwise defined herein shall have the meanings set forth in the Trust
Agreement.
For good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Purchaser certifies, represents
and warrants to, and covenants with, the Depositor and the Trustee that:
In connection with our acquisition of the above Transferred
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 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 Transferred Certificates and all matters relating thereto or any additional
information deemed necessary to our decision to purchase the Transferred
Certificates, (d) we are not an employee benefit plan within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended,
or a plan within the meaning of Section 4975 of the Internal Revenue Code of
1986, as amended (each, a "Plan"), nor are we directly or indirectly purchasing
any Certificate on behalf of, as investment manager of, as named fiduciary of,
as trustee of or with assets of a Plan or directly or indirectly purchasing any
certificates with the assets of any insurance company separate account or of any
Plan [or alternatively, in the case of an insurance company, is an insurance
company and the source of funds for the purchase of the certificates] is an
"insurance company general account" within the meaning of Prohibited Transaction
Class Exemption 95-60 ("PTCE 95-60"), 50 Fed. Reg. 35925 (July 12, 1995), and
the conditions set forth in Section I and Section III of PTCE 95-60 are
satisfied with respect to the purchase and holding of the Certificates, (e) 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, (f) we are a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act and have completed one of the forms of certification to that effect attached
hereto as Annex 1 or Annex 2. We are aware that the sale of the Transferred
Certificates to us is being made in reliance on Rule 144A. We are acquiring the
Transferred 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 by us, based upon
certifications of such purchaser or information we have in our possession, 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.
We agree to indemnify the Trustee, the Master Servicer, the Subservicer
and the Depositor against any liability that may result from any
misrepresentation made herein.
Very truly yours,
[PURCHASER]
By:
Name:
Title:
ANNEX 1
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:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with the 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 $____________*/ in securities (except
for the excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with Rule 144A)
and (ii) the Buyer satisfies the criteria in the category marked below.
____ Corporation, etc. The Buyer is a
corporation (other than a bank,
savings and loan association or
similar institution), Massachusetts
or similar business trust,
partnership, or charitable
organization described in Section
501(c)(3) of the Internal Revenue
Code 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 Federal, 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.
--------------------
* Buyer must own and/or invest on a discretionary basis at least $100,000,000
in securities unless Buyer is a dealer, and, in that case, Buyer must own
and/or invest on a discretionary basis at least $10,000,000 in securities.
____ 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 such institution 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,
as amended.
____ 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 the 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, as
amended.
____ Investment Advisor. The Buyer is an
investment advisor registered under
the Investment Advisors Act of 1940,
as amended.
____ 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, as
amended.
____ Business Development Company. Buyer
is a business development company as
defined in Section 202(a)(22) of the
Investment Advisors Act of 1940, as
amended.
3. The term "securities" as used for purposes of the
calculation of the dollar amount in paragraph 2 excludes: (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.
4. For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the Buyer, the
Buyer used the cost of such securities to the Buyer and did not include any of
the securities referred to in the preceding paragraph, 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.
5. The Buyer acknowledges that it is familiar with Rule 144A
and understands that the seller to it and other parties related to the
Certificates are relying and will continue to rely on the statements made herein
because one or more sales to the Buyer may be in reliance on Rule 144A.
6. 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 as provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
By:
Name:
Title:
Date:
ANNEX 2
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 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.
By:
Name:
Title:
IF AN ADVISER:
Print Name of Buyer
Date:
EXHIBIT M
REQUEST FOR RELEASE OF DOCUMENTS
To: Citibank, N.A.
000 Xxxx Xxxxxx
5th Floor, Zone 1
Xxx Xxxx, XX 00000 Citibank, N.A.
[and/or its designee]
Re:
In connection with the administration of the Mortgage Loans held by
you, as Trustee, pursuant to the above-captioned Pooling and Servicing
Agreement, we request the release, and hereby acknowledge receipt, of the
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 Loan Paid in Full (Subservicer hereby certifies that
all amounts received in connection therewith have been credited
to the Collection Account)
_______ 2. Mortgage Loan Liquidated (Subservicer hereby certifies that all
proceeds of foreclosure, insurance or other liquidation have
been received and credited to the Collection Account
_______ 3. Mortgage Loan Repurchased pursuant to Section 2.03(c) of the
Pooling and Servicing Agreement
_______ 4. Mortgage Loan in Foreclosure
_______ 5. Mortgage Loan Repurchased or Substituted pursuant to the terms
of the Pooling and Servicing Agreement (Subservicer hereby
certifies that the Purchase Price or Substitution Adjustment
Amount has credited to the Collection Account)
_______ 6. Other
Reason:
By:
(authorized signer)
Address:
Date:
If box 1 or 2 above is checked, and if all or part of the Mortgage File was
previously released to us, please release to us our previous receipt on file
with you, as well as any additional documents in your possession relating to the
above specified Mortgage Loan.
If box 3, 4, 5 or 6 above is checked, upon our return of all of the above
documents to you as Trustee [or Trustee's designee], please acknowledge your
receipt by signing in the space indicated below, and returning this form.
Trustee
Citibank, N.A.
Please acknowledge the execution of the above request by your signature and date
below:
Signature Date
Documents returned to Trustee:
Trustee Date