EXHIBIT 10.5
CERTIFICATE GUARANTY INSURANCE POLICY
OBLIGATIONS: $_______ POLICY NUMBER _____
Remodelers Home Improvement Loan
Asset-Backed Certificates
Series 199__-__
Class A-1, Class A-2, Class A-3 and Class A-4
___________ (the "Insurer"), in consideration of the payment of the
premium and subject to the terms of this Certificate Guaranty Insurance
Policy (this "Policy"), hereby unconditionally and irrevocably guarantees to
any Owner that an amount equal to each full and complete Guaranteed Payment
will be received by _____________ or its successor, as trustee for the Owners
(the "Trustee"), on behalf of the Owners from the Insurer, for distribution
by the Trustee to each Owner of each Owner's proportionate share of the
Guaranteed Payment. The Insurer's obligations hereunder with respect to a
particular Guaranteed Payment shall be discharged to the extent funds equal
to the applicable Guaranteed Payment are received by the Trustee, whether or
not such funds are properly applied by the Trustee. Guaranteed Payments
shall be made only at the time set forth in this Policy and no accelerated
Guaranteed Payments shall be made regardless of any acceleration of the
Obligations, unless such acceleration is at the sole option of the Insurer.
Notwithstanding the foregoing paragraph, this Policy does not cover
shortfalls, if any, attributable to the liability of the Trust Fund, the
REMIC or the Trustee for withholding taxes, if any (including interest and
penalties in respect of any such liability).
The Insurer will pay any Guaranteed Payment that is a Preference Amount
on the Business Day following receipt on a Business Day by the Fiscal Agent
of (i) a certified copy of the order requiring the return of such Preference
Amount, (ii) an opinion of counsel satisfactory to the Insurer that such
order is final and not subject to appeal, (iii) an assignment in such form as
is reasonably required by the Insurer, irrevocably assigning to the Insurer
all rights and claims of the Owner relating to or arising under the
Obligations against the debtor which made such preference payment or
otherwise with respect to such preference payment and (iv) appropriate
instruments to effect the appointment of the Insurer as agent for such Owner
in any legal proceeding related to such preference payment, such instruments
being in a form satisfactory to the Insurer, provided that if such documents
are received after 12:00 noon New York City time on such Business Day, they
will be deemed to be received on the following Business Day. Such payments
shall be disbursed to the receiver or trustee in bankruptcy named in the
final order of the court exercising jurisdiction on behalf of the Owner and
not to any Owner directly unless such Owner has returned principal or
interest paid on the Obligations to such receiver or trustee in bankruptcy,
in which case such payment shall be disbursed to such Owner.
The Insurer will pay any other amount payable hereunder no later than
12:00 noon New
York City time on the later of the Remittance Date on which the related
Remittance Amount is due or the Business Day following receipt in New York,
New York on a Business Day by__________________, as Fiscal Agent for the
Insurer or any successor fiscal agent appointed by the Insurer (the "Fiscal
Agent"), of a Notice (as described below); provided that if such Notice is
received after 12:00 noon New York City time on such Business Day, it will be
deemed to be received on the following Business Day. If any such Notice
received by the Fiscal Agent is not in proper form or is otherwise
insufficient for the purpose of making a claim hereunder, it shall be deemed
not to have been received by the Fiscal Agent for purposes of this paragraph,
and the Insurer or the Fiscal Agent, as the case may be, shall promptly so
advise the Trustee and the Trustee may submit an amended Notice.
Guaranteed Payments due hereunder unless otherwise stated herein will be
disbursed by the Fiscal Agent to the Trustee on behalf of the Owners by wire
transfer of immediately available funds in the amount of the Guaranteed
Payment less, in respect of Guaranteed Payments related to Preference
Amounts, any amount held by the Trustee for the payment of such Guaranteed
Payment and legally available therefor.
The Fiscal Agent is the agent of the Insurer only and the Fiscal Agent
shall in no event be liable to Owners for any acts of the Fiscal Agent or any
failure of the Insurer to deposit, or cause to be deposited, sufficient funds
to make payments due under this Policy.
As used herein, the following terms shall have the following meanings:
"Business Day" means any day other than a Saturday, a Sunday or a day on
which banking institutions in New York City or in the city in which the
corporate trust office of the Trustee under the Pooling and Servicing
Agreement is located are authorized or obligated by law or executive order to
close.
"Deficiency Amount" means, as of any Remittance Date, the amount by
which the sum of the Interest Remittance Amount and the Principal Remittance
Amount for the Class A Certificates exceeds the Amount Available for
distribution on such Class A Certificates for such Remittance Date.
"Guaranteed Payment" means (i) as of any Remittance Date, any Deficiency
Amount and (ii) any unpaid Preference Amount.
"Notice" means the telephonic or telegraphic notice, promptly confirmed
in writing by telecopy substantially in the form of Exhibit A attached
hereto, the original of which is subsequently delivered by registered or
certified mail, from the Trustee or the Standby Servicer on behalf of the
Trustee specifying the Guaranteed Payment which shall be due and owing on the
applicable Remittance Date.
"Owner" means each registered holder of a Class A Certificate (other
than the Trust Fund,
the Depositor, the Servicer, the Standby Servicer or any Subservicer) who, on
the applicable Remittance Date, is entitled under the terms of the Class A
Certificate to payment thereunder.
"Pooling and Servicing Agreement" means the Pooling and Servicing
Agreement dated as of ________, 199__ among Remodelers National Funding
Corp., a Texas corporation, as transferor and servicer (the "Transferor" or
"Servicer"), __________, a _______ corporation, as standby servicer (the
"Standby Servicer"), Remodelers Investment Corporation, a Nevada corporation,
as depositor (the "Depositor"), and _______________, a national banking
association, as trustee (the "Trustee"), without regard to any amendment or
supplement thereto.
"Preference Amount" means any amount previously distributed to an Owner
on the Class A Certificates that is recoverable and sought to be recovered as
a voidable preference by a trustee in bankruptcy pursuant to the United
States Bankruptcy Code (11 U.S.C.), as amended from time to time, in
accordance with a final nonappealable order of a court having competent
jurisdiction.
Capitalized terms used herein and not otherwise defined herein shall
have the respective meanings set forth in the Pooling and Servicing Agreement
as of the date of execution of this Policy, without giving effect to any
subsequent amendment or modification to the Pooling and Servicing Agreement
unless such amendment or modification has been approved in writing by the
Insurer.
Any notice hereunder or service of process on the Fiscal Agent may be
made at the address listed below for the Fiscal Agent or such other address
as the Insurer shall specify in writing to the Trustee.
The notice address of the Fiscal Agent is ______________________________,
or such other address as the Fiscal Agent shall specify to the Trustee in
writing.
This Policy is being issued under and pursuant to, and shall be
construed under, the laws of the State of New York, without giving effect to
the conflict of laws principles thereof.
The insurance provided by this Policy is not covered by the
Property/Casualty Insurance Security Fund specified in Article 76 of the New
York Insurance Law.
This Policy is not cancelable for any reason. The premium on this
Policy is not refundable for any reason including payment, or provision being
made for payment, prior to maturity of the Obligations.
IN WITNESS WHEREOF, the Insurer has caused this Policy to be executed
and attested this ____ day of __________, 199__.
____________________________________
By _________________________________
Name: ___________________________
Title:___________________________
EXHIBIT A
TO CERTIFICATE GUARANTY INSURANCE POLICY
NUMBER: _____
NOTICE UNDER CERTIFICATE GUARANTY
INSURANCE POLICY NUMBER: _____
__________, as Fiscal Agent for
___________________
_____________________
_____________________
_____________________
Attention:________________
_____________________
_____________________
_____________________
The undersigned, a duly authorized officer of [Trustee], as trustee (the
"Trustee"), hereby certifies to ________________________ (the "Fiscal Agent")
and __________________ (the "Insurer"), with reference to Certificate
Guaranty Insurance Policy Number: _____ (the "Policy") issued by the Insurer
in respect of the $________ Remodelers Home Improvement Loan Asset-Backed
Certificates, Series 199__-__, Class A-1, Class A-2, Class A-3 and Class A-4
(the "Obligations"), that:
(i) the Trustee is the trustee under the Pooling and Servicing
Agreement dated as of _____________, 199__ among Remodelers National
Funding Corp. as Transferor and Servicer, Remodelers Investment
Corporation, as Depositor, _________________, as Standby Servicer, and
the Trustee, as trustee for the Owners;
(ii) the Interest Remittance Amount with respect to the Class A
Certificates for the Remittance Date occurring on [ ] (the
"Applicable Remittance Date") is $[ ];
(iii) the Principal Remittance Amount with respect to the
Class A Certificates for the Applicable Remittance Date is $[ ];
(iv) the Amount Available respecting the Applicable Remittance
Date is $[ ];
(v) the amount of any previously distributed Amount Available
that is recoverable and sought to be recovered as a voidable
preference by a trustee in bankruptcy pursuant to the Bankruptcy Code
in accordance with a final nonappealable order of a court
having competent jurisdiction (the "Preference Amount") is $[ ];
(vi) the amount by which the sum of the Interest Remittance
Amount with respect to the Class A Certificates and the Principal
Remittance Amount with respect to the Class A Certificates exceeds the
Amount Available (the "Deficiency Amount") is $[ ];
(vii) the sum of the Deficiency Amount and the Preference
Amount (the "Guaranteed Payment", is $[ ];
(viii) the Trustee is making a claim under and pursuant to the
terms of the Policy for the dollar amount of the Guaranteed Payment
set forth in (vii) above to be applied to the payment of the
Remittance Amount for the Applicable Remittance Date in accordance
with the Pooling and Servicing Agreement;
(viii) the Trustee directs that payment of the Guaranteed
Payment be made to the following account by bank wire transfer of
federal or other immediately available funds in accordance with the
terms of the Policy: [TRUSTEE'S ACCOUNT].
Any capitalized term used in this Notice and not otherwise defined
herein shall have the meaning assigned thereto in the Policy.
ANY PERSON WHO KNOWINGLY AND WITH INTENT TO DEFRAUD ANY INSURANCE COMPANY OR
OTHER PERSON FILES AN APPLICATION FOR INSURANCE OR STATEMENT OF CLAIM CONTAINING
ANY MATERIALLY FALSE INFORMATION, OR CONCEALS FOR THE PURPOSE OF MISLEADING,
INFORMATION CONCERNING ANY FACT MATERIAL THERETO, COMMITS A FRAUDULENT INSURANCE
ACT, WHICH IS A CRIME, AND SHALL ALSO BE SUBJECT TO A CIVIL PENALTY NOT TO
EXCEED FIVE THOUSAND DOLLARS AND THE STATED VALUE OF THE CLAIM FOR EACH SUCH
VIOLATION.
IN WITNESS WHEREOF, the Trustee has executed and delivered this Notice
under the Policy as of the _____ day of ____________, 19__.
[TRUSTEE]
By _________________________________
Title ______________________________