EXHIBIT 4.2
POOLING AND SERVICING AGREEMENT
Relating to
ACCESS FINANCIAL MORTGAGE LOAN TRUST 1997-1
Among
ACCESS FINANCIAL LENDING CORP.,
as Seller and Master Servicer,
ACCESS FINANCIAL RECEIVABLES CORP.,
as the Transferor,
and
THE CHASE MANHATTAN BANK
as Trustee
Dated as of February 1, 1997
TABLE OF CONTENTS
(Not a Part of this Agreement)
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Parties......................................................... 1
Recitals........................................................ 1
ARTICLE I DEFINITIONS; RULES OF CONSTRUCTION............. 1
1.1. Definitions.................................... 1
1.2. Use of Words and Phrases....................... 40
1.3. Captions; Table of Contents.................... 40
1.4. Opinions....................................... 40
1.5. Calculations................................... 41
ARTICLE II THE TRUST...................................... 41
2.1. Establishment of the Trust..................... 41
2.2. Office......................................... 41
2.3. Purpose and Powers............................. 41
2.4. Appointment of the Trustee; Declaration
of Trust....................................... 41
2.5. Expenses of the Trust.......................... 42
2.6. Ownership of the Trust......................... 42
2.7. Receipt of Trust Estate........................ 42
2.8. Miscellaneous REMIC Provisions................. 42
ARTICLE III REPRESENTATIONS, WARRANTIES AND
COVENANTS OF THE SELLER, THE MASTER
SERVICER AND THE TRANSFEROR; CONVEYANCE
OF MORTGAGE LOANS.............................. 45
3.1. Representations and Warranties of the
Seller, the Master Servicer and the
Transferor..................................... 45
3.2. Covenants of the Seller to Take Certain
Actions with Respect to the Mortgage
Loans in Certain Situations.................... 53
3.3. Conveyance of the Mortgage Loans and
Qualified Replacement Mortgages................ 65
3.4. Acceptance by Trustee; Certain
Substitutions of Mortgage Loans;
Certification by Trustee....................... 69
3.5. Cooperation Procedures......................... 71
ARTICLE IV ISSUANCE AND SALE OF CERTIFICATES.............. 72
4.1. Issuance of Certificates....................... 72
4.2. Sale of Certificates........................... 72
ARTICLE V CERTIFICATES AND TRANSFER OF INTERESTS......... 72
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5.1. Terms.......................................... 72
5.2. Forms.......................................... 73
5.3. Execution, Authentication and Delivery......... 73
5.4. Registration and Transfer of
Certificates................................... 73
5.5. Mutilated, Destroyed, Lost or Stolen
Certificates................................... 76
5.6. Persons Deemed Owners.......................... 77
5.7. Cancellation................................... 77
5.8. Limitation on Transfer of Ownership
Rights......................................... 77
5.9. Assignment of Rights........................... 78
ARTICLE VI COVENANTS...................................... 78
6.1. Distributions.................................. 78
6.2. Money for Distributions to be Held in
Trust; Withholding............................. 79
6.3. Protection of Trust Estate..................... 79
6.4. Performance of Obligations..................... 80
6.5. Negative Covenants............................. 80
6.6. No Other Powers................................ 81
6.7. Limitation of Suits............................ 81
6.8. Unconditional Rights of Owners to
Receive Distributions.......................... 82
6.9. Rights and Remedies Cumulative................. 82
6.10. Delay or Omission Not Waiver................... 82
6.11. Control by Owners.............................. 83
ARTICLE VII ACCOUNTS, FLOW OF FUNDS, DISTRIBUTIONS
AND REPORTS.................................... 83
7.1. Collection of Money............................ 83
7.2. Establishment of Accounts...................... 83
7.3. Flow of Funds.................................. 84
7.4. Investment of Accounts......................... 88
7.5. Eligible Investments........................... 88
7.6. Reports by Trustee............................. 90
7.7. Drawings under the Certificate Insurance
Policy and Reports by Trustee.................. 94
7.8. Allocation of Realized Losses.................. 96
7.9. Supplemental Interest Payments................. 96
ARTICLE VIII TERMINATION OF TRUST........................... 97
8.1. Termination of Trust........................... 97
8.2. Termination Upon Option of the Seller.......... 98
8.3. Auction Sale................................... 99
8.4. Disposition of Proceeds........................ 100
ARTICLE IX THE TRUSTEE.................................... 100
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9.1. Certain Duties and Responsibilities............ 100
9.2. Removal of Trustee for Cause................... 103
9.3. Certain Rights of the Trustee.................. 104
9.4. Not Responsible for Recitals or Issuance
of Certificates................................ 105
9.5. May Hold Certificates.......................... 105
9.6. Money Held in Trust............................ 105
9.7. Compensation and Reimbursement................. 106
9.8. Corporate Trustee Required; Eligibility........ 106
9.9. Resignation and Removal; Appointment of
Successor...................................... 106
9.10. Acceptance of Appointment by Successor
Trustee........................................ 108
9.11. Merger, Conversion, Consolidation or
Succession to Business of the Trustee.......... 108
9.12. Reporting; Withholding......................... 109
9.13. Liability of the Trustee....................... 109
9.14. Appointment of Co-Trustee or Separate
Trustee........................................ 110
ARTICLE X SERVICING AND ADMINISTRATION OF MORTGAGE
LOANS.......................................... 111
10.1. General Servicing Procedures................... 111
10.2. Collection of Certain Mortgage Loan
Payments....................................... 114
10.3. Sub-Servicing Agreements Between Master
Servicer and Sub-Servicers..................... 115
10.4. Successor Sub-Servicers........................ 115
10.5. Liability of Master Servicer................... 115
10.6. No Contractual Relationship Between
Sub-Servicer and Trustee or the Owners......... 116
10.7. Assumption or Termination of
Sub-Servicing Agreement by Trustee............. 116
10.8. Principal and Interest Account................. 116
10.9. Delinquency Advances and Servicing
Advances....................................... 120
10.10. Compensating Interest.......................... 121
10.11. Maintenance of Insurance....................... 121
10.12. Due-on-Sale Clauses; Assumption and
Substitution Agreements........................ 122
10.13. Realization Upon Defaulted Mortgage
Loans.......................................... 123
10.14. Trustee to Cooperate; Release of Files......... 125
10.15. Master Servicing Compensation.................. 126
10.16. Annual Statement as to Compliance.............. 127
10.17. Annual Independent Certified Public
Accountants' Reports........................... 127
10.18. Access to Certain Documentation and
Information Regarding the Mortgage
Loans; Confidentiality......................... 127
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10.19. Assignment of Agreement........................ 128
10.20. Inspections by Certificate Insurer and
Account Parties; Errors and Omissions
Insurance...................................... 128
10.21. Financial Statements........................... 129
10.22. REMIC.......................................... 129
10.23. The Designated Depository Institution.......... 129
10.24. Appointment of Custodian....................... 129
ARTICLE XI EVENTS OF DEFAULT; REMOVAL OF MASTER
SERVICER; MERGER............................... 130
11.1. Removal of Master Servicer; Resignation
of Master Servicer............................. 130
11.2. Trigger Events; Removal of Master
Servicer....................................... 135
11.3. Merger, Conversion, Consolidation or
Succession to Business of Master
Servicer....................................... 136
ARTICLE XII MISCELLANEOUS.................................. 137
12.1. Compliance Certificates and Opinions........... 137
12.2. Form of Documents Delivered to the
Trustee........................................ 137
12.3. Acts of Owners................................. 138
12.4. Notices, etc. to Trustee....................... 139
12.5. Notices and Reports to Owners; Waiver of
Notices........................................ 139
12.6. Rules by Trustee and Seller.................... 140
12.7. Successors and Assigns......................... 140
12.8. Severability................................... 140
12.9. Benefits of Agreement.......................... 140
12.10. Legal Holidays................................. 140
12.11. Governing Law.................................. 140
12.12. Counterparts................................... 140
12.13. Usury.......................................... 140
12.14. Amendment...................................... 141
12.15. REMIC Status; Taxes............................ 142
12.16. Additional Limitation on Action and
Imposition of Tax.............................. 144
12.17. Appointment of Tax Matters Person.............. 144
12.18. Reports to the Securities and Exchange
Commission..................................... 145
12.19. Notices........................................ 145
12.20. Grant of Security Interest..................... 146
12.21. Indemnification................................ 147
ARTICLE XIII CERTAIN MATTERS REGARDING THE
CERTIFICATE INSURER............................ 151
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13.1. Rights of the Certificate Insurer to
Exercise Rights of the Owners of the
Class A Certificates........................... 151
13.2. Trustee to Act Solely with Consent of
the Certificate Insurer........................ 151
13.3. Trust Fund and Accounts Held for Benefit
of the Certificate Insurer..................... 151
13.4. Claims Upon the Policy; Policy Payments
Account........................................ 152
13.5. Effects of Payments by the Certificate
Insurer........................................ 153
13.6. Notices to the Certificate Insurer............. 153
13.7. Third-Party Beneficiary........................ 153
EXHIBIT A-1 -- Form of Class A-1 Group I Certificate
EXHIBIT A-2 -- Form of Class A-2 Group I Certificate
EXHIBIT A-3 -- Form of Class A-3 Group I Certificate
EXHIBIT A-4 -- Form of Class A-4 Group I Certificate
EXHIBIT A-5 -- Form of Class A-5 Group II Certificate
EXHIBIT B-1 -- Form of Class B Certificate
EXHIBIT B-2 -- Form of Class B-S Certificate
EXHIBIT C-1 -- Form of Class RL Certificate
EXHIBIT C-2 -- Form of Class RU Certificate
EXHIBIT D -- Form of Transfer Certificate
EXHIBIT E -- Form of Residual Certificate Tax Matters
Transfer Certificate
EXHIBIT F -- Form of Master Servicer's Trust Receipt
EXHIBIT G -- Form of Liquidation Report
EXHIBIT H -- Form of Delivery Order
EXHIBIT I -- Officer's Certificate
EXHIBIT J -- Form of Certificate Regarding Prepaid Loans
EXHIBIT K -- Form of Initial Trustee Certification
EXHIBIT L -- Form of Interim Trustee Certification
EXHIBIT M -- Form of Final Trustee Certification
EXHIBIT N -- Auction Procedures
EXHIBIT O -- Form of Trustee Request for Class A-5
Formula Interest Shortfall
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POOLING AND SERVICING AGREEMENT, relating to ACCESS FINANCIAL MORTGAGE LOAN
TRUST 1997-1, dated as of February 1, 1997, among ACCESS FINANCIAL LENDING
CORP., a Delaware corporation, as the seller (in such capacity, the "Seller")
and as the master servicer (in such capacity, the "Master Servicer"), ACCESS
FINANCIAL RECEIVABLES CORP., a Delaware corporation, as the transferor (the
"Transferor") and THE CHASE MANHATTAN BANK, a New York banking corporation, in
its capacity as trustee (the "Trustee").
WHEREAS, the Seller wishes to establish a trust and two sub-trusts and
provide for the allocation and sale of the beneficial interests therein and the
maintenance and distribution of the trust estate;
WHEREAS, the Seller has conveyed the Mortgage Loans to the Transferor
pursuant to the Sale Agreement;
WHEREAS, the Transferor wishes to convey the Mortgage Loans to the Trust;
WHEREAS, the Master Servicer has agreed to service the Mortgage Loans,
which constitute the principal assets of the trust estate;
WHEREAS, all things necessary to make the Certificates, when executed and
authenticated by the Trustee, valid instruments, and to make this Agreement a
valid agreement, in accordance with their and its terms, have been done; and
WHEREAS, The Chase Manhattan Bank, a New York banking corporation, is
willing to serve in the capacity of Trustee hereunder.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the Seller, the Master Servicer, the Transferor and the
Trustee hereby agree as follows:
ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION
Section 1.1. Definitions. For all purposes of this Agreement, the following
terms shall have the meanings set forth below, unless the context clearly
indicates otherwise:
"Account": The Certificate Account, each Principal and Interest Account and
each Distribution Account including any sub-Accounts created pursuant to Section
7.2.
"Accrual Period": With respect to the Class A-2 Group I, A-3 Group I and
A-4 Group I Certificates and any Payment Date, the period from and including the
second day of the calendar month immediately preceding such Payment Date to and
including the first day of the calendar month in which such Payment Date occurs;
with respect to the Class A-1 Group I and A-5 Group II Certificates and any
Payment Date, the period from and including the prior Payment Date (or, in the
case of the first Payment Date, from and including the Startup Day) to and
including the day immediately preceding such Payment Date.
"Affiliate": With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agreement": This Pooling and Servicing Agreement, as it may be amended
from time to time, and including the Exhibits hereto.
"Appraised Value": The appraised value of any Property based upon the
appraisal made at the time of the origination of the related Mortgage Loan, or,
in the case of a Mortgage Loan which is a purchase money mortgage, the sales
price of the Property at such time of origination, if such sales price is less
than such appraised value.
"Auction Sale": The Trustee's solicitation of bids for the purchase of all
Mortgage Loans in the Trust pursuant to Section 8.3 hereof.
"Authorized Officer": With respect to any Person, any person who is
authorized to act for such Person in matters relating to this Agreement, and
whose action is binding upon such Person and, with respect to the Seller, the
Master Servicer, the Transferor and the Trustee, initially including those
individuals whose names appear on the lists of Authorized Officers delivered on
the Startup Day.
"Available Funds": With respect to Group I, the Group I Available Funds,
and with respect to Group II, the Group II Available Funds.
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"Base Group I Principal Distribution Amount": As to any Payment Date, an
amount equal to (x) the sum, without duplication, of (i) the principal portion
of all scheduled and unscheduled payments received by the Master Servicer on the
Group I Mortgage Loans during the related Remittance Period, including any
Prepayments and any Net Proceeds, (ii) the principal portion of all Substitution
Amounts and the principal portion of all Loan Purchase Prices deposited into the
Principal and Interest Accounts with respect to the Group I Mortgage Loans on
the related Remittance Date, and (iii) the proceeds received by the Trustee with
respect to the Group I Mortgage Loans in connection with any termination of the
Trust pursuant to Article VIII hereof, to the extent such proceeds relate to
principal, minus (y) the amount of any Group I ----- Subordination Reduction
Amount for such Payment Date.
"Base Group II Principal Distribution Amount": As to any Payment Date, an
amount equal to (x) the sum, without duplication, of (i) the principal portion
of all scheduled and unscheduled payments received by the Master Servicer on the
Group II Mortgage Loans during the related Remittance Period, including any
Prepayments and any Net Proceeds, (ii) the principal portion of all Substitution
Amounts and the principal portion of all Loan Purchase Prices deposited into the
Principal and Interest Accounts with respect to the Group II Mortgage Loans on
the related Remittance Date, and (iii) the proceeds received by the Trustee with
respect to the Group II Mortgage Loans in connection with any termination of the
Trust pursuant to Article VIII hereof, to the extent such proceeds relate to
principal, minus (y) the amount of any ----- Group II Subordination Reduction
Amount for such Payment Date.
"Business Day": Any day that is not a Saturday, Sunday or other day on
which commercial banking institutions in the State of New York, the state in
which the principal corporate office or bank of the Master Servicer is located
or in the state in which the principal corporate trust office of the Trustee is
located, which initially is New York, New York are authorized or obligated by
law or executive order to be closed.
"Certificate": Any one of the Class A-1 Group I Certificates, Class A-2
Group I Certificates, Class A-3 Group I Certificates, Class A-4 Group I
Certificates, Class A-5 Group II Certificates, Class B Certificates, Class B-S
Certificates or the Residual Certificates.
"Certificate Account": The account designated as the Certificate Account
pursuant to Section 7.2 hereof.
"Certificate Insurance Policy": The financial guaranty insurance policy
number 50565-N issued by the
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Certificate Insurer to the Trustee for the benefit of the Owners of the Class A
Certificates.
"Certificate Insurer": Financial Security Assurance Inc., a New York
monoline insurance company.
"Certificate Insurer Default": The existence and continuance of any of the
following:
(a) the Certificate Insurer shall have failed to make a required payment
when due under the Certificate Insurance Policy;
(b) the Certificate Insurer shall have (i) filed a petition or commenced
any case or proceeding under any provision or chapter of the United States
Bankruptcy Code, the New York State Insurance Law or any other similar federal
or state law relating to insolvency, bankruptcy, rehabilitation, liquidation, or
reorganization, (ii) made a general assignment for the benefit of its creditors
or (iii) had an order for relief entered against it under the United States
Bankruptcy Code, the New York State Insurance Law or any other similar federal
or state law relating to insolvency, bankruptcy, rehabilitation, liquidation, or
reorganization that is final and nonappealable; or
(c) a court of competent jurisdiction, the New York Department of Insurance
or any other competent regulatory authority shall have entered a final and
nonappealable order, judgment or decree (i) appointing a custodian, trustee,
agent, or receiver for the Certificate Insurer or for all or any material
portion of its property or (ii) authorizing the taking of possession by a
custodian, trustee, agent, or receiver of the Security Insurer or of all or any
material portion of its property.
"Certificate Insurer Premium Rate": 0.23% per annum.
"Certificate Principal Balance": The Class A-1 Principal Balance, the Class
A-2 Principal Balance, the Class A-3 Principal Balance, the Class A-4 Principal
Balance, the Class A-5 Principal Balance, or the Class B Principal Balance, as
the case may be.
"Certificateholder": As of any date and with respect to any Certificate,
the Person in whose name such Certificate is registered on the Register on such
date.
"Class": All of the Class A-1 Group I Certificates, the Class A-2 Group I
Certificates, the Class A-3 Group I Certificates, the Class A-4 Group I
Certificates, the Class A-5 Group II Certificates, the Class
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B Certificates, or all of the Residual Certificates, as applicable.
"Class A Certificate Principal Balance": The sum of the Class A-1 Principal
Balance, the Class A-2 Principal Balance, the Class A-3 Principal Balance, the
Class A-4 Principal Balance, and the Class A-5 Principal Balance.
"Class A Certificates": Collectively, the Class A-1 Group I Certificates,
the Class A-2 Group I Certificates, the Class A-3 Group I Certificates, the
Class A-4 Group I Certificates, and the Class A-5 Group II Certificates.
"Class A Distribution Account": The Class A Group I Distribution Account or
the Class A Group II Distribution Account, as the case may be.
"Class A Group I Certificates": All of the Class ▇- ▇ Group I Certificates,
the Class A-2 Group I Certificates, the Class A-3 Group I Certificates, and the
Class A-4 Group I Certificates.
"Class A Group I Distribution Account": The Class A Group I Distribution
Account created pursuant to Section 7.2 hereof.
"Class A Group II Distribution Account": The Class A Group II Distribution
Account created pursuant to Section 7.2 hereof.
"Class A-1 Distribution Amount": As of any Payment Date, the sum of (i) the
Class A-1 Principal Distribution Amount for such Payment Date, (ii) the Class
A-1 Interest Distribution Amount for such Payment Date and (iii) the Class A-1
Interest Carry-Forward Amount for such Payment Date.
"Class A-1 Group I Certificates": Those certificates in substantially the
form set forth in Exhibit A-1 hereto.
"Class A-1 Interest Carry-Forward Amount": As of any Payment Date, the sum
of (i) the amount, if any, by which (x) the Class A-1 Interest Distribution
Amount as of the immediately preceding Payment Date exceeded (y) the amount of
the actual distribution, made to the Owners of the Class A-1 Group I
Certificates pursuant to Section 7.3(c)(i)(A) hereof on such immediately
preceding Payment Date and allocable to the Class A-1 Interest Distribution
Amount on such immediately preceding Payment Date and (ii) interest on the
amount, if any, described in clause (i) at one-twelfth of the Class A-1
Pass-Through Rate from such immediately preceding Payment Date.
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"Class A-1 Interest Distribution Amount": As of any Payment Date, interest
accrued during the related Accrual Period at the Class A-1 Pass-Through Rate on
the Class A-1 Principal Balance immediately prior to such Payment Date.
"Class A-1 Pass-Through Rate": The lesser of (i) LIBOR as of the second to
last Business Day prior to the immediately preceding Payment Date (or prior to
the Startup Day, in the case of the initial Payment Date) plus 0.085% per annum
or (ii) the Net Weighted Average Coupon Rate for the Group I Mortgage Loans for
such Payment Date.
"Class A-1 Principal Balance": The original Class A-1 Principal Balance of
$63,500,000 reduced by the sum of all amounts previously distributed to the
Owners of the Class A-1 Group I Certificates in respect of principal on all
previous Payment Dates, but shall not be reduced below zero.
"Class A-1 Principal Distribution Amount": With respect to any Payment Date
on or prior to the Class A-1 Termination Date, an amount equal to the lesser of
(x) the Group I Principal Distribution Amount for such Payment Date and (y) the
amount necessary to reduce the Class A-1 Principal Balance (as it was
immediately prior to such Payment Date) to zero. On the Class A-1 Termination
Date any portion of the Group I Principal Distribution Amount for such Payment
Date remaining on such Payment Date following the reduction to zero of the Class
A-1 Principal Balance shall be distributed as the initial principal distribution
on the Class A-2 Group I Certificates.
"Class A-1 Termination Date": The Payment Date on which the Class A-1
Principal Balance is reduced to zero.
"Class A-2 Distribution Amount": As of any Payment Date, the sum of (i) the
Class A-2 Principal Distribution Amount for such Payment Date, (ii) the Class
A-2 Interest Distribution Amount for such Payment Date and (iii) the Class A-2
Interest Carry-Forward Amount for such Payment Date.
"Class A-2 Group I Certificates": Those certificates in substantially the
form set forth in Exhibit A-2 hereto.
"Class A-2 Interest Carry-Forward Amount": As of any Payment Date, the sum
of (i) the amount, if any, by which (x) the Class A-2 Interest Distribution
Amount as of the immediately preceding Payment Date exceeded (y) the amount of
the actual distribution, made to the Owners of the Class A-2 Group I
Certificates pursuant to Section 7.3(c)(i)(B) hereof on such immediately
preceding Payment Date and allocable to the Class A-2 Interest Distribution
Amount on such immediately preceding Payment Date and (ii) interest on the
amount, if
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any, described in clause (i) at one-twelfth of the Class A-2 Pass-Through Rate
from such immediately preceding Payment Date.
"Class A-2 Interest Distribution Amount": As of any Payment Date, interest
accrued during the related Accrual Period at the Class A-2 Pass-Through Rate on
the Class A-2 Principal Balance immediately prior to such Payment Date.
"Class A-2 Pass-Through Rate": 6.600% per annum.
"Class A-2 Principal Balance": The original Class A-2 Principal Balance of
$30,200,000 reduced by the sum of all amounts previously distributed to the
Owners of the Class A-2 Group I Certificates in respect of principal on all
previous Payment Dates, but shall not be reduced below zero.
"Class A-2 Principal Distribution Amount": With respect to any Payment Date
following the Class A-1 Termination Date, an amount equal to the lesser of (x)
the Group I Principal Distribution Amount for such Payment Date and (y) the
amount necessary to reduce the Class A-2 Principal Balance (as it was
immediately prior to such Payment Date) to zero. On the Class A-1 Termination
Date any portion of the Group I Principal Distribution Amount for such Payment
Date remaining on such Payment Date following the reduction to zero of the Class
A-1 Principal Balance shall be distributed as the initial principal distribution
on the Class A-2 Group I Certificates. On the Class A-2 Termination Date any
portion of the Group I Principal Distribution Amount remaining on such Payment
Date following the reduction to zero of the Class A-2 Principal Balance shall be
distributed as the initial principal distribution on the Class A-3 Group I
Certificates.
"Class A-2 Termination Date": The Payment Date on which the Class A-2
Principal Balance is reduced to zero.
"Class A-3 Distribution Amount": As of any Payment Date, the sum of (i) the
Class A-3 Principal Distribution Amount for such Payment Date, (ii) the Class
A-3 Interest Distribution Amount for such Payment Date and (iii) the Class A-3
Interest Carry-Forward Amount for such Payment Date.
"Class A-3 Group I Certificates": Those certificates in substantially the
form set forth in Exhibit A-3 hereto.
"Class A-3 Interest Carry-Forward Amount": As of any Payment Date, the sum
of (i) the amount, if any, by which (x) the Class A-3 Interest Distribution
Amount as of the immediately preceding Payment Date exceeded (y) the amount of
the actual distribution made to the Owners of the Class A-3 Group I Certificates
pursuant to Section 7.3(c)(i)(C) hereof
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on such immediately preceding Payment Date and allocable to the Class A-3
Interest Distribution Amount on such immediately preceding Payment Date and (ii)
interest on the amount, if any, described in clause (i) at one-twelfth of the
Class A-3 Pass-Through Rate from such immediately preceding Payment Date.
"Class A-3 Interest Distribution Amount": As of any Payment Date, interest
accrued during the related Accrual Period at the Class A-3 Pass-Through Rate on
the Class A-3 Principal Balance immediately prior to such Payment Date.
"Class A-3 Pass-Through Rate": 6.925% per annum.
"Class A-3 Principal Balance": The original Class A-3 Principal Balance of
$21,300,000 reduced by the sum of all amounts previously distributed to the
Owners of the Class A-3 Group I Certificates in respect of principal on all
previous Payment Dates, but shall not be reduced below zero.
"Class A-3 Principal Distribution Amount": With respect to any Payment Date
following the Class A-2 Termination Date, an amount equal to the lesser of (x)
the Group I Principal Distribution Amount for such Payment Date and (y) the
amount necessary to reduce the Class A-3 Principal Balance (as it was
immediately prior to such Payment Date) to zero. On the Class A-2 Termination
Date any portion of the Group I Principal Distribution Amount for such Payment
Date remaining on such Payment Date following the reduction to zero of the Class
A-2 Principal Balance shall be distributed as the initial principal distribution
on the Class A-3 Group I Certificates. On the Class A-3 Termination Date any
portion of the Group I Principal Distribution Amount remaining on such Payment
Date following the reduction to zero of the Class A-3 Principal Balance shall be
distributed as the initial principal distribution on the Class A-4 Group I
Certificates.
"Class A-3 Termination Date": The Payment Date on which the Class A-3
Principal Balance is reduced to zero.
"Class A-4 Distribution Amount": As of any Payment Date, the sum of (i) the
Class A-4 Principal Distribution Amount for such Payment Date, (ii) the Class
A-4 Interest Distribution Amount for such Payment Date and (iii) the Class A-4
Interest Carry-Forward Amount for such Payment Date.
"Class A-4 Group I Certificates": Those certificates in substantially the
form set forth in Exhibit A-4 hereto.
"Class A-4 Interest Carry-Forward Amount": As of any Payment Date, the sum
of (i) the amount, if any, by which (x) the Class A-4 Interest Distribution
Amount as of the
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immediately preceding Payment Date exceeded (y) the amount of the actual
distribution, made to the Owners of the Class A-4 Group I Certificates pursuant
to Section 7.3(c)(i)(D) hereof on such immediately preceding Payment Date and
allocable to the Class A-4 Interest Distribution Amount on such immediately
preceding Payment Date and (ii) interest on the amount, if any, described in
clause (i) at one-twelfth of the Class A-4 Pass-Through Rate from such
immediately preceding Payment Date.
"Class A-4 Interest Distribution Amount": As of any Payment Date, interest
accrued during the related Accrual Period at the Class A-4 Pass-Through Rate on
the Class A-4 Principal Balance immediately prior to such Payment Date.
"Class A-4 Pass-Through Rate": 7.275% per annum.
"Class A-4 Principal Balance": The original Class A-4 Principal Balance of
$19,733,000 reduced by the sum of all amounts previously distributed to the
Owners of the Class A-4 Group I Certificates in respect of principal on all
previous Payment Dates, but shall not be reduced below zero.
"Class A-4 Principal Distribution Amount": With respect to any Payment Date
following the Class A-3 Termination Date, an amount equal to the lesser of (x)
the Group I Principal Distribution Amount for such Payment Date and (y) the
amount necessary to reduce the Class A-4 Principal Balance (as it was
immediately prior to such Payment Date) to zero. On the Class A-3 Termination
Date any portion of the Group I Principal Distribution Amount for such Payment
Date remaining on such Payment Date following the reduction to zero of the Class
A-3 Principal Balance shall be distributed as the initial principal distribution
on the Class A-4 Group I Certificates.
"Class A-5 Distribution Amount": As of any Payment Date, the sum of (i) the
Class A-5 Principal Distribution Amount for such Payment Date, (ii) the Class
A-5 Interest Distribution Amount for such Payment Date and (iii) the Class A-5
Interest Carry-Forward Amount for such Payment Date.
"Class A-5 Formula Interest Shortfall": As defined in Section 7.9(a)
hereof.
"Class A-5 Formula Pass-Through Rate": As of any Payment Date, the rate
described in clause (i) of the definition of "Class A-5 Pass-Through Rate".
"Class A-5 Full Distribution Amount": With respect to any Payment Date, the
sum of (x) the Class A-5 Full Interest Distribution Amount for such Payment Date
and (y) the Class A-5 Principal Distribution Amount for such Payment Date.
9
"Class A-5 Full Interest Distribution Amount": With respect to any Payment
Date, the Class A-5 Interest Distribution Amount for such Payment Date
calculated using the Class A-5 Formula Pass-Through Rate for such Payment Date
rather than the Class A-5 Pass-Through Rate for such Payment Date plus, if the
full amount of the Class A-5 Formula Interest Shortfall, if any, was not funded
on any prior Payment Date and remains unpaid on such Payment Date, such amount,
together with interest thereon (from the Payment Date on which such Class A-5
Formula Interest Shortfall was calculated) at the Class A-5 Formula Pass-Through
Rate for such Payment Date.
"Class A-5 Interest Carry-Forward Amount": As of any Payment Date, the sum
of (i) the amount, if any, by which (x) the Class A-5 Interest Distribution
Amount as of the immediately preceding Payment Date exceeded (y) the amount of
the actual distribution, made to the Owners of the Class A-5 Group II
Certificates pursuant to Section 7.3(c)(ii) hereof on such immediately preceding
Payment Date and allocable to the Class A-5 Interest Distribution Amount on such
immediately preceding Payment Date and (ii) interest on the amount, if any,
described in clause (i) at one-twelfth of the Class A-5 Pass-Through Rate from
such immediately preceding Payment Date.
"Class A-5 Interest Distribution Amount": As of any Payment Date, interest
accrued during the related Accrual Period at the Class A-5 Pass-Through Rate on
the Class A-5 Principal Balance immediately prior to such Payment Date.
"Class A-5 Pass-Through Rate": With respect to any Payment Date and Accrual
Period, the lesser of (i) LIBOR as of the second to last Business Day prior to
the immediately preceding Payment Date (or prior to the Startup Day, in the case
of the initial Payment Date) plus 0.20% per annum, or (ii) the Net Weighted
Average Coupon Rate for the Group II Mortgage Loans for such Payment Date and
less 0.50% on the 13th Payment Date and thereafter.
"Class A-5 Principal Balance": The original Class A-5 Principal Balance of
$138,866,000 reduced by the sum of all amounts previously distributed to the
Owners of the Class A-5 Group II Certificates in respect of principal on all
previous Payment Dates, but shall not be reduced below zero.
"Class A-5 Principal Distribution Amount": With respect to any Payment
Date, an amount equal to the lesser of (x) the Group II Principal Distribution
Amount for such Payment Date and (y) the amount necessary to reduce the Class
A-5 Principal Balance (as it was immediately prior to such Payment Date) to
zero.
10
"Class A-5 Group II Certificates": Those certificates in substantially the
form set forth in Exhibit A-5 hereto.
"Class B Certificates": Those certificates in substantially the form set
forth in Exhibit B-1 hereto.
"Class B Carry-Forward Amount": As of any Payment Date, the amount, if any,
by which (x) the Class B Distribution Amount as of the immediately preceding
Payment Date exceeded (y) the amount of the actual distribution to the Owners of
the Class B Certificates made pursuant to Section 7.3(c)(iv) hereof on such
immediately preceding Payment Date.
"Class B Distribution Account": The Class B Distribution Account created
pursuant to Section 7.2 hereof.
"Class B Distribution Amount": As of any Payment Date, the sum of (i) the
Class B Interest Distribution Amount for such Payment Date, (ii) the Group I
Subordination Reduction Amount for such Payment Date and the Group II
Subordination Reduction Amount, if any, described in Section 7.3(b)(iii)(E)
hereof and (iv) the Class B Carry-Forward Amount, if any, as of such Payment
Date.
"Class B Interest": As of any Payment Date, the product of (x) the Class B
Pass-Through Rate, times the actual number of days in the related Remittance
Period divided by 365 (or 366, as appropriate), and (y) the Net Pool Balance as
of the opening of business on the first day of such Remittance Period.
"Class B Interest Distribution Amount": As of any Payment Date, the Class B
Interest for such Payment Date minus the sum of (i) the amount of any Group I
Subordination Increase Amount actually paid to the Owners of the Class A Group I
Certificates on such Payment Date as all or a portion of (x) the Group I Insured
Distribution Amount on such Payment Date, pursuant to Section 7.3(b)(iii)(B)
hereof or (y) the Group I Subordination Increase Amount on such Payment Date
pursuant to Section 7.3(b)(iii)(E) hereof and (ii) the amount of any Class B
Interest actually paid to the Owners of the Class A-5 Group II Certificates as
all or a portion of (x) the Group II Insured Distribution Amount on such Payment
Date, pursuant to Section 7.3(b)(iii)(B) hereof or (y) the portion of any Group
II Subordination Increase Amount allocated to the Class A Group II Distribution
Account with respect to a Group II Subordination Deficiency on such Payment
Date, pursuant to Section 7.3(b)(iii)(E) hereof.
"Class B Pass-Through Rate": With respect to any Payment Date, the weighted
average of the interest rates borne
11
by the LT-1, LT-2, ▇▇-▇, ▇▇-▇, and LT-6 Lower Tier Interests for the immediately
preceding Remittance Period minus two times the weighted average of the interest
rates borne by the LT-5 LT-7, and LT-8 Lower Tier Interests for such Remittance
Period, with the rate on the LT-8 Lower Tier Interest deemed to be zero for
purposes of this calculation.
"Class B Principal Balance": As of the Startup Day, zero. The Class B
Principal Balance shall be (x) increased on each Payment Date by the amounts, if
any, of the Class B Interest (i) actually paid to the Owners of the Class A
Group I Certificates on such Payment Date as all or a portion of the Group I
Principal Distribution Amount or as all or a portion of the Group I
Subordination Increase Amount on such Payment Date pursuant to Sections
7.3(b)(iii)(A) and 7.3(b)(iii)(E) hereof, and (ii) actually paid to the Owners
of the Class A-6 Group II Certificates on such Payment Date as all or a portion
of the Group II Principal Distribution Amount or as all or a portion of the
Group II Subordination Deficiency Amount on such Payment Date, pursuant to
Sections 7.3(b)(iii)(A) and 7.3(b)(iii)(E) hereof and (y) decreased on each
Payment Date by the amounts of (i) any Group I Subordination Reduction Amount or
any Group II Subordination Reduction Amount paid to the Owners of the Class B
Certificates on such Payment Date pursuant to Section 7.3(b)(iii)(G) hereof and
(ii) the amount of any Group I Allocable Losses and Group II Allocable Losses
allocated as a reduction of the Class B Principal Balance on such Payment Date
pursuant to Section 7.8(a) hereof. The Class B Principal Balance shall in no
event be less than zero.
"Class B-S Certificate": Any of those Certificates representing the right
to receive excess amounts in the Supplemental Interest Payment Account, and
designated as a "Class B-S Certificate" on the face thereof, in the form of
Exhibit B-2 hereto.
"Class LT-1 Certificates" or "LT-1": The uncertificated class of interests
in the Lower-Tier REMIC, as described in and designated in Section 2.8 hereof.
"Class LT-2 Certificates" or "LT-2": The uncertificated class of interests
in the Lower-Tier REMIC, as described in and designated in Section 2.8 hereof.
"Class LT-3 Certificates" or "LT-3": The uncertificated class of interests
in the Lower-Tier REMIC, as described in and designated in Section 2.8 hereof.
"Class LT-4 Certificates" or "LT-4": The uncertificated class of interests
in the Lower-Tier REMIC, as described in and designated in Section 2.8 hereof.
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"Class LT-5 Certificates" or "LT-5": The uncertificated class of interests
in the Lower-Tier REMIC, as described in and designated in Section 2.8 hereof.
"Class LT-6 Certificates" or "LT-6": The uncertificated class of interests
in the Lower-Tier REMIC, as described in and designated in Section 2.8 hereof.
"Class LT-7 Certificates" or "LT-7": The uncertificated class of interests
in the Lower-Tier REMIC, as described in and designated in Section 2.8 hereof.
"Class LT-8 Certificates" or "LT-8": The uncertificated class of interests
in the Lower-Tier REMIC, as described in and designated in Section 2.8 hereof.
"Class RL Certificates": Those certificates representing certain residual
rights to distributions from the Lower-Tier REMIC in substantially the form set
forth as Exhibit C-1 hereto.
"Class RU Certificates": Those certificates representing certain residual
rights to distributions from the Upper-Tier REMIC in substantially the form set
forth as Exhibit C-2 hereto.
"Code": The Internal Revenue Code of 1986, as amended.
"Compensating Interest": As defined in Section 10.10 of this Agreement.
"Coupon Rate": With respect to any Note and Remittance Period, the rate of
interest borne by such Note at the opening of business on the first day of such
Remittance Period.
"Cumulative Loss Percentage": As to any Payment Date and the Mortgage
Loans, the percentage equivalent of the fraction obtained by dividing (i) the
Cumulative Net Realized Losses by (ii) the Original Pool Principal Balance.
"Cumulative Net Realized Losses": As of any Payment Date, the sum of all
Net Realized Losses with respect to the Mortgage Loans experienced on all prior
Payment Dates.
"Cut-Off Date": The close of business on February 1, 1997.
"Delinquency Advance": As defined in Section 10.9(a) of this Agreement.
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"Delinquency Percentage": As of the last day of any Remittance Period and
with respect to the Mortgage Loans, the percentage equivalent of a fraction, the
numerator of which is equal to the aggregate Principal Balances of all Mortgage
Loans that are 60 or more days delinquent, in foreclosure or converted to REO
Properties as of such last day of such Remittance Period, and the denominator of
which is the Pool Principal Balance as of the last day of such Remittance
Period.
"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.
"Delivery Order": The Delivery Order from the Seller to the Trustee
directing the Trustee to issue the Certificates on the Startup Day, in
substantially the form of Exhibit H hereto.
"Depository": The Depository Trust Company, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, and any successor depository hereafter named.
"Designated Depository Institution": With respect to any Account, an
institution whose deposits are insured by the Bank Insurance Fund or the Savings
Association Insurance Fund of the FDIC, the long-term deposits of which shall be
rated A or better by S&P and A1 or better by ▇▇▇▇▇'▇ and in one of the two
highest short-term rating categories by S&P and the highest short-term rating
category by ▇▇▇▇▇'▇, unless otherwise approved in writing by the Certificate
Insurer, and which is any of the following: (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 duly organized, validly existing and in good
standing under the federal banking laws, (iv) a principal subsidiary of a bank
holding company meeting the standards of (i)-(iii) above, or (v) approved in
writing by the Certificate Insurer and the Rating Agencies and, in each case
acting or designated by the Master Servicer or the Trustee as the depository
institution for such Account; provided, however, that any such institution,
association or subsidiary shall have combined capital, surplus and individual
profits of at
14
least $100,000,000. Notwithstanding the foregoing, an Account may be held by an
institution otherwise meeting the preceding requirements except that the only
applicable rating requirement shall be that the unsecured and uncollateralized
debt obligations thereof shall be rated Baa2 or better by ▇▇▇▇▇'▇ and BBB or
better by S&P if such institution has capital and surplus of not less than
$50,000,000 and has trust powers and the Account is held by such institution in
its trust capacity and not in its commercial capacity.
"Designated Residual Holder": Access Financial Receivables Corp.
"Determination Date": The second Business Day preceding each Payment Date.
"Disqualified Organization": "Disqualified Organization" shall have the
meaning set forth from time to time in the definition thereof at Section
860E(e)(5) of the Code (or any successor statute thereto) and applicable to the
Trust.
"Distribution Accounts": The Class A Group I Distribution Account, the
Class A Group II Distribution Account and the Class B Distribution Account.
"Eligible Investments": Those investments so designated pursuant to Section
7.5 hereof.
"ERISA": As defined in Section 5.8(a) hereof.
"Event of Default": As defined in Section 11.1 of this Agreement.
"Excess Spread Rate": With respect to any Group II Mortgage Loan and for
any Payment Date, the Coupon Rate thereof as of the beginning of the related
Remittance Period minus the sum of (i) the rate at which the Master Servicing
Fee is calculated, (ii) the rate at which the Trustee's Fees are calculated,
(iii) the Class A-5 Pass-Through Rate applicable to such Payment Date and (iv)
the product of (A) the related Certificate Insurer Premium Rate and (B) a
fraction, the numerator of which is the Class A-5 Principal Balance and the
denominator of which is the Group II Pool Principal Balance.
"Excess Spread Trigger": As such term is defined in the Insurance and
Indemnity Agreement.
"FDIC": The Federal Deposit Insurance Corporation, or any successor
thereto.
"FHLMC": The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States
15
created pursuant to the Emergency Home Finance Act of 1970, as amended, or any
successor thereof.
"File": The documents pertaining to a particular Mortgage Loan pursuant to
Section 3.3(b) hereof and any additional documents required to be added to the
File pursuant to this Agreement.
"First Mortgage Loan": A Mortgage Loan which constitutes a first priority
mortgage lien with respect to any Property as indicated on the Mortgage Loan
Schedules.
"Fiscal Agent": As defined in the Insurance Agreement.
"FNMA": The Federal National Mortgage Association, a federally-chartered
and privately-owned corporation existing under the Federal National Mortgage
Association Charter Act, as amended, or any successor thereof.
"Group": Group I or Group II, as the case may be.
"Group I": The group of Mortgage Loans that are the Group I Mortgage Loans.
"Group I Allocable Losses": As defined in Section 7.8(a) hereof.
"Group I Available Funds": As of any Payment Date, the amount on deposit in
the Certificate Account with respect to the Group I Mortgage Loans on such
Payment Date after making the deposits to the Certificate Account pursuant to
Sections 7.3(a)(i) hereof on such Payment Date. The term "Group I Available
Funds" does not include Insured Payments and does not include any amounts that
cannot be distributed to the Owners of the Certificates by the Trustee as a
result of proceedings under the United States Bankruptcy Code.
"Group I Certificates": Any of the Class A-1 Group I Certificates, the
Class A-2 Group I Certificates, the Class A-3 Group I Certificates, and the
Class A-4 Group I Certificates.
"Group I Cumulative Net Realized Losses": As of any Payment Date, the sum
of all Net Realized Losses with respect to the Group I Mortgage Loans
experienced on all prior Payment Dates.
"Group I Excess Subordinated Amount": With respect to any Payment Date, the
excess, if any, of (x) the Group I Subordinated Amount that would apply on such
Payment Date after taking into account the payment of the Group I Principal
Distribution Amount on such Payment Date (except for any
16
distributions of related Group I Subordination Reduction Amounts on such Payment
Date) over (y) the Group I Specified Subordinated Amount for such Payment Date.
"Group I Insured Distribution Amount": With respect to any Payment Date,
the sum of (i) Group I Insured Interest Distribution Amount for such Payment
Date and (ii) the Group I Insured Principal Distribution Amount for such Payment
Date.
"Group I Insured Interest Distribution Amount": With respect to any Payment
Date, the sum of (i) the Class A-1 Interest Distribution Amount, (ii) the Class
A-2 Interest Distribution Amount, (iii) the Class A-3 Interest Distribution
Amount, (iv) the Class A-4 Interest Distribution Amount, (v) the Class A-1
Interest Carry-Forward Amount, (vi) the Class A-2 Interest Carry-Forward Amount,
(vii) the Class A-3 Interest Carry-Forward Amount and (viii) the Class A-4
Interest Carry-Forward Amount, in each case for such Payment Date, less any
Prepayment Interest Shortfalls or Relief Act Shortfalls and less any interest on
any such Prepayment Interest Shortfalls or Relief Act Shortfalls.
"Group I Insured Payment": As of any Payment Date, the sum of (x) the Group
I Shortfall Amount for such Payment Date and (y) any Preference Amounts with
respect to the Group I Certificates with respect to which the affected Owners
have complied with the provisions of Section 7.3(g) hereof during the related
Remittance Period.
"Group I Insured Principal Distribution Amount": With respect to any
Payment Date, the Group I Subordination Deficit for such Payment Date.
"Group I Interest Distribution Amount": As of any Payment Date, the sum of
the Class A-1 Interest Distribution Amount, the Class A-2 Interest Distribution
Amount, the Class A-3 Interest Distribution Amount and the Class A-4 Interest
Distribution Amount.
"Group I Interest Remittance Amount": For any Remittance Date, the amount
equal to (x) the sum, without duplication, of (i) the aggregate interest
portions of the payments (whether or not collected) becoming due on the Group I
Mortgage Loans during the immediately preceding Remittance Period and (ii)
Compensating Interest with respect to the Group I Mortgage Loans minus (y) the
aggregate Master Servicing Fee due to the Master Servicer with respect to Group
I Mortgage Loans for such Remittance Period to the extent not previously paid
to, or withheld by, the Master Servicer.
"Group I Monthly Remittance": The sum of (i) the Group I Interest
Remittance Amount and the Group I Principal Remittance Amount required to be
remitted to the Trustee on
17
each Remittance Date and (ii) the amount of any Substitution Amounts and Loan
Purchase Prices on deposit in the Principal and Interest Account with respect to
the Group I Mortgage Loans on such Remittance Date.
"Group I Mortgage Loans": The Mortgage Loans held by the Trust and assigned
to Group I, as indicated on the related Mortgage Loan Schedule, as supplemented
and amended from time to time.
"Group I Pool Principal Balance": As of any date of determination, the
aggregate Principal Balances of all of the Group I Mortgage Loans as of the
close of business on such date.
"Group I Premium Amount": With respect to each Payment Date, an amount
equal to the product of (x) one twelfth of the Certificate Insurer Premium Rate
and (y) the sum of the Certificate Principal Balances of the Class A Group I
Certificates as of the close of business on the last day of the preceding
Remittance Period.
"Group I Principal Distribution Amount": As of any Payment Date, the lesser
of (A) the Group I Available Funds less the Group I Interest Distribution
Amount, the Group I Trustee's Fee and the Group I Premium Amount and (B) the sum
of (i) the Base Group I Principal Distribution Amount, (ii) the Group I
Subordination Deficit, and (iii) the Group I Subordination Increase Amount.
"Group I Principal Remittance Amount": For any Remittance Date, without
duplication, the amount equal to the sum of (i) the aggregate principal portions
of the payments received by the Master Servicer with respect to the Group I
Mortgage Loans during the immediately preceding Remittance Period and (ii) any
Prepayments, Net Proceeds (but only to the extent that such Net Proceeds do not
exceed the Principal Balance of the related Mortgage Loan), in each case
described in clauses (i) and (ii) only to the extent collected on the Group I
Mortgage Loans during the preceding Remittance Period.
"Group I Shortfall Amount": As of any Payment Date, the excess, if any, of
(x) the Group I Insured Distribution Amount, as of such Payment Date on such
Payment Date on account of its subrogation rights over (y) the Group I Total
Available Funds on deposit in the Class A Group I Distribution Account on such
Payment Date.
"Group I Specified Subordinated Amount": As such term is defined in the
Insurance and Indemnity Agreement.
18
"Group I Stepped Down Required Subordinated Percentage": As such term is
defined in the Insurance and Indemnity Agreement.
"Group I Subordinated Amount": With respect to any Payment Date, the
excess, if any, of (x) the Group I Pool Principal Balance as of the close of
business on the last day of the preceding Remittance Period over (y) the sum of
the Class A-1 Principal Balance, the Class A-2 Principal Balance, the Class A-3
Principal Balance and the Class A-4 Principal Balance as of such Payment Date
(after taking into account the payment on such Payment Date of the amount set
forth in clause (x) of the definition of "Base Group I Principal Distribution
Amount", and the Group I Subordination Deficit except for any portions thereof
related to payment of Group I Insured Payments applied as payments of the Group
I Principal Distribution Amount on such Payment Date or on any prior Payment
Date and not previously reimbursed to the Certificate Insurer pursuant to
Section 7.3 hereof).
"Group I Subordination Deficiency Amount": As of any Payment Date, the
excess, if any, of (i) the Group I Specified Subordinated Amount applicable to
such Payment Date over (ii) the Group I Subordinated Amount applicable to such
Payment Date prior to taking into account the payment of any related Group I
Subordination Increase Amounts on such Payment Date.
"Group I Subordination Deficit": As of any Payment Date, the excess, if
any, of (x) the sum of the Class A-1 Principal Balance, the Class A-2 Principal
Balance, the Class A-3 Principal Balance and the Class A-4 Principal Balance
after taking into account the amount otherwise payable as the Group I Principal
Distribution Amount on such Payment Date (i.e., the sum of (i) the Base Group I
Principal Distribution Amount and (ii) the Group I Subordination Increase
Amount), over (y) the Group I Pool Principal Balance as of the close of business
on the last day of the preceding Remittance Period.
"Group I Subordination Increase Amount": With respect to any Payment Date,
the lesser of (x) the Group I Subordination Deficiency Amount as of such Payment
Date and (y) the portion of the Class B Interest allocable to Group I pursuant
to Section 7.3(b)(iii)(E) as of such Payment Date.
"Group I Subordination Reduction Amount": With respect to any Payment Date,
an amount equal to the lesser of (x) the Group I Excess Subordinated Amount and
(y) the amount described in clause (x) of the definition of Base Group I
Principal Distribution Amount, in each case as of such Payment Date.
19
"Group I Total Available Funds": As of any Payment Date, the amount on
deposit in the Class A Group I Distribution Account on such Payment Date after
making the allocations, transfers and disbursements from the Certificate Account
pursuant to Section 7.3(b) hereof on such Payment Date. The term "Group I Total
Available Funds" does not include Insured Payments and does not include any
amounts that cannot be distributed to the Owners of the Certificates by the
Trustee as a result of proceedings under the United States Bankruptcy Code.
"Group I Trustee's Fee": With respect to any Payment Date, the product of
(i) one-twelfth of 0.0075% and (ii) the Group I Pool Principal Balance as of the
last day of the preceding Remittance Period.
"Group II": The group of Mortgage Loans that are the Group II Mortgage
Loans.
"Group II Allocable Losses": As defined in Section 7.8(b) hereof.
"Group II Available Funds": As of any Payment Date, the amount on deposit
in the Certificate Account with respect to the Group II Mortgage Loans on such
Payment Date after making the deposit to the Certificate Account pursuant to
Section 7.3(a)(ii) hereof on such Payment Date. The term "Group II Available
Funds" does not include Insured Payments and does not include any amounts that
cannot be distributed to the Owners of the Certificates by the Trustee as a
result of proceedings under the United States Bankruptcy Code.
"Group II Certificates": Any of the Class A-5 Group II Certificates.
"Group II Cumulative Net Realized Losses": As of any Payment Date, the sum
of all Net Realized Losses with respect to the Group II Mortgage Loans
experienced on all prior Payment Dates.
"Group II Excess Subordinated Amount": With respect to any Payment Date,
the excess, if any, of (x) the Group II Subordinated Amount that would apply on
such Payment Date after taking into account the payment of the Group II
Principal Distribution Amount on such Payment Date (except for any distributions
of related Group II Subordination Reduction Amounts on such Payment Date) over
(y) the Group II Specified Subordinated Amount for such Payment Date.
"Group II Insured Distribution Amount": With respect to any Payment Date,
the sum of (i) Group II Insured Interest Distribution Amount for such Payment
Date and (ii)
20
the Group II Insured Principal Distribution Amount for such Payment Date.
"Group II Insured Interest Distribution Amount": With respect to any
Payment Date, the sum of (i) the Class A-5 Interest Distribution Amount and (ii)
the Class A-5 Interest Carry-Forward Amount, less any Prepayment Interest
Shortfalls or Relief Act Shortfalls and less any interest on any such Prepayment
Interest Shortfalls or Relief Act Shortfalls.
"Group II Insured Payment": As of any Payment Date, the sum of (x) the
Group II Shortfall Amount for such Payment Date and (y) any Preference Amounts
with respect to the Class A-5 Group II Certificates with respect to which the
affected Owners have complied with the provisions of Section 7.3(g) hereof
during the related Remittance Period.
"Group II Insured Principal Distribution Amount": With respect to any
Payment Date, the Group II Subordination Deficit for such Payment Date.
"Group II Interest Distribution Amount": As of any Payment Date, interest
accrued during the related Accrual Period at the Class A-5 Pass-Through Rate on
the Class A-5 Principal Balance immediately prior to such Payment Date.
"Group II Interest Remittance Amount": For any Remittance Date, the amount
equal to (x) the sum, without duplication, of (i) the aggregate interest
portions of the payments (whether or not collected) becoming due on the Group II
Mortgage Loans during the immediately preceding Remittance Period and (ii)
Compensating Interest with respect to the Group II Mortgage Loans minus (y) the
aggregate Master Servicing Fee due to the Master Servicer with respect to the
Group II Mortgage Loans for such Remittance Period to the extent not previously
paid to, or withheld by, the Master Servicer.
"Group II Monthly Remittance": The sum of (i) the Group II Interest
Remittance Amount and the Group II Principal Remittance Amount required to be
remitted to the Trustee on each Remittance Date and (ii) the amount of any
Substitution Amounts and Loan Purchase Prices on deposit in the Principal and
Interest Account with respect to the Group II Mortgage Loans on such Remittance
Date.
"Group II Mortgage Loans": The Mortgage Loans held by the Trust and
assigned to Group II, as indicated on the related Mortgage Loan Schedule, as
supplemented and amended from time to time.
"Group II Pool Principal Balance": As of any date of determination, the
aggregate Principal Balances of all of
21
the Group II Mortgage Loans as of the close of business on such date.
"Group II Premium Amount": With respect to each Payment Date, an amount
equal to the product of (x) one twelfth of the Certificate Insurer Premium Rate
and (y) the Certificate Principal Balance of the Class A-5 Group II Certificates
as of the close of business on the last day of the preceding Remittance Period.
"Group II Principal Distribution Amount": As of any Payment Date, the
lesser of (A) the Group II Available Funds less the Group II Interest
Distribution Amount, the Group II Trustee's Fee and the Group II Premium Amount
and (B) the sum of (i) the Base Group II Principal Distribution Amount, (ii) the
Group II Subordination Deficit, and (iii) the Group II Subordination Increase
Amount in each case for such Payment Date.
"Group II Principal Remittance Amount": For any Remittance Date, without
duplication, the amount equal to the sum of (i) the aggregate principal portions
of the payments received by the Master Servicer with respect to the Group II
Mortgage Loans during the immediately preceding Remittance Period and (ii) any
Prepayments, Net Proceeds (but only to the extent that such Net Proceeds do not
exceed the Principal Balance of the related Mortgage Loan), in each case
described in clauses (i) and (ii) only to the extent collected on the Group II
Mortgage Loans during the preceding Remittance Period.
"Group II Shortfall Amount": As of any Payment Date, the excess, if any, of
(x) the Group II Insured Distribution Amount, as of such Payment Date, owed to
the Certificate Insurer on such Payment Date on account of its subrogation
rights over (y) the Group II Total Available Funds on deposit in the Class A-5
Group II Distribution Account on such Payment Date.
"Group II Specified Subordinated Amount": As such term is defined in the
Insurance and Indemnity Agreements.
"Group II Stepped Down Required Subordinated Percentage": As such term is
defined in the Insurance and Indemnity Agreements.
"Group II Subordinated Amount": With respect to any Payment Date, the
excess, if any, of (x) the Group II Pool Principal Balance as of the close of
business on the last day of the preceding Remittance Period over (y) the Class
A-5 Group II Principal Balance as of such Payment Date (after taking into
account the payment on such Payment Date of the amount set forth in clause (x)
of the definition of "Base
22
Group II Principal Distribution Amount", and the Group II Subordination Deficit
except for any portion thereof related to payment of Group II Insured Payments
applied as payments of the Group II Principal Distribution Amount on such
Payment Date or on any prior Payment Date and not previously reimbursed to the
Certificate Insurer pursuant to Section 7.3 hereof).
"Group II Subordination Deficiency Amount": As of any Payment Date, the
excess, if any, of (i) the Group II Specified Subordinated Amount applicable to
such Payment Date over (ii) the Group II Subordinated Amount applicable to such
Payment Date prior to taking into account the payment of any related Group II
Subordination Increase Amounts on such Payment Date.
"Group II Subordination Deficit": As of any Payment Date, the excess, if
any, of (x) the Class A-6 Group II Principal Balance after taking into account
the amount otherwise payable as the Group II Principal Distribution Amount on
such Payment Date (i.e., the sum of (i) the Base Group II Principal Distribution
Amount and (ii) the Group II Subordination Increase Amount), over (y) the Group
II Pool Principal Balance as of the close of business on the last day of the
preceding Remittance Period.
"Group II Subordination Increase Amount": With respect to any Payment Date,
the lesser of (x) the Group II Subordination Deficiency Amount as of such
Payment Date and (y) the portion of the Class B Interest allocable to Group II
pursuant to Section 7.3(b)(iii)(E) as of such Payment Date.
"Group II Subordination Reduction Amount": With respect to any Payment
Date, an amount equal to the lesser of (x) the Group II Excess Subordinated
Amount for such Payment Date and (y) the amount described in clause (x) of the
definition of Base Group II Principal Distribution Amount for such Payment Date.
"Group II Total Available Funds": As of any Payment Date, the amount on
deposit in the Class A Group II Distribution Account on such Payment Date after
making the allocations, transfers and disbursements from the Certificate Account
pursuant to Section 7.3(b) hereof on such Payment Date. The term "Group II Total
Available Funds" does not include Insured Payments and does not include any
amounts that cannot be distributed to the Owners of the Certificates by the
Trustee as a result of proceedings under the United States Bankruptcy Code.
"Group II Trustee's Fee": With respect to any Payment Date, the product of
(i) one-twelfth of 0.0075% and
23
(ii) the Group II Pool Principal Balance as of the last day of the preceding
Remittance Period.
"Highest Lawful Rate": As defined in Section 12.13.
"Insurance and Indemnity Agreement": The Insurance and Indemnity Agreement
dated as of February 1, 1997 among the Certificate Insurer, the Seller and the
Transferor.
"Indemnification Agreement": The Indemnification Agreement dated as of
February 25, 1997 among the Seller, the Master Servicer, the Transferor, the
Underwriters and the Certificate Insurer.
"Insurance Policy": Any hazard or title insurance policy relating to a
Mortgage Loan.
"Insurance Proceeds": The proceeds of any Insurance Policy relating to a
Mortgage Loan, a Property or an REO Property, net of proceeds to be applied to
the repair of the Property or released to the Mortgagor and net of expenses
reimbursable therefrom, but excluding any Insured Payment.
"Insured Distribution Amount": The Group I Insured Distribution Amount or
the Group II Insured Distribution Amount, as the case may be.
"Insured Payment": The Group I Insured Payment or the Group II Insured
Payment, as the case may be.
"Interest Advance": As defined in Section 7.9(a) hereof.
"Interest Advance Reimbursement Amount": As defined in Section 7.9(b)
hereof.
"Interest Determination Date": With respect to any Accrual Period for the
Class A-1 Group I Certificates and the Class A-5 Group II Certificates, the
second London Business Day preceding the first day of such Accrual Period.
"Late Payment Rate": As defined in the Insurance and Indemnity Agreement.
"LIBOR": With respect to any Accrual Period for the Class A-1 Group I
Certificates or the Class A-5 Group II Certificates, 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 U.S. 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,
24
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, 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, LIBOR for the related Accrual Period
shall be the higher of (i) LIBOR as determined on the previous
Interest Determination Date and (ii) the Reserve Interest Rate.
"Liquidated Loan": As to any Payment Date, (i) any Mortgage Loan as to
which the Master Servicer has determined, in accordance with the servicing
procedures specified herein, during the related Remittance Period that all
Liquidation Proceeds which it expects to recover from or on account of such
Mortgage Loan have been recovered or (ii) any Mortgage Loan as to which the
related REO Property has been held by the Trust for 270 days. Any such
determination shall be evidenced by an Officer's Certificate in the form of
Exhibit I to this Agreement.
"Liquidation Expenses": Expenses which are incurred by the Master Servicer
in connection with the liquidation of any defaulted Mortgage Loan, such
expenses, including, without limitation, legal fees and expenses, and any
unreimbursed Servicing Advances expended by the Master Servicer pursuant to
Sections 10.9(b) and 10.13 of this Agreement with respect to the related
Mortgage Loan.
"Liquidation Proceeds": With respect to any Liquidated Loan, any amounts
(including the proceeds of any Insurance Policy) recovered by the Master
Servicer in connection with such Liquidated Loan, whether through trustee's
sale, foreclosure sale or otherwise, and including, without limitation, sale
proceeds received upon the sale of REO Property.
"Loan Purchase Price": With respect to any Mortgage Loan purchased from the
Trust on a Remittance Date pursuant to Sections 3.2, 3.3, 3.4, or 10.13(f)
hereof, an amount equal to the Principal Balance of such Mortgage Loan as of the
date of purchase (after giving effect to the related Monthly Remittance remitted
by the Master Servicer on such Remittance Date), plus interest on the
outstanding Principal Balance thereof as of the beginning of the preceding
Remittance Period computed at the related Coupon Rate less the rate at which the
25
Master Servicing Fee is calculated, plus the aggregate amounts of (i) all
unreimbursed Reimbursable Advances and (ii) all Delinquency Advances which the
Master Servicer has theretofore failed to remit with respect to such Mortgage
Loan.
"Loan-to-Value Ratio": As of any particular date (i) with respect to any
First Mortgage Loan, the ratio of (A) the original principal balance of the Note
relating to such First Mortgage Loan to (B) the Appraised Value and (ii) with
respect to any Second Mortgage Loan, the ratio of (A) an amount equal to the sum
of (a) the remaining principal balance of the Senior Lien note relating to such
First Mortgage Loan and (b) the original principal balance of the Note relating
to such Second Mortgage Loan to (B) the Appraised Value as of the date of
origination of such Second Mortgage Loan.
"London Business Day": A day on which banks are open for dealing in foreign
currency and exchange in London and New York City.
"Lower Tier Distribution Amount": As of any Payment Date, the sum of (i)
the Group I Available Funds and (ii) the Group II Available Funds.
"Lower-Tier Interests": As defined in Section 2.8(c) hereof.
"Lower-Tier REMIC": The segregated pool of assets held by the Trust
consisting of the Mortgage Loans.
"Lower Tier Required Subordinate Amount": With respect to any Distribution
Date, an amount equal to the product of (a) the product of (i) 0.50 and (ii) the
sum of the principal balances of ▇▇-▇, ▇▇-▇ and LT-8 divided by the Pool
Principal Balance then outstanding and (b) the sum of the Group I and Group II
Specified Subordinated Amounts.
"Lower Tier Subordinated Amount": As of any date of determination, (i) 0.50
times the sum of the principal balances of LT-5, LT-7, and LT-8 minus (ii) the
sum of the principal balances of LT-5 and LT-7, in each case as of such date of
determination.
"Master Servicer": Access Financial Lending Corp., a Delaware corporation.
"Master Servicer's Trust Receipt": The Master Servicer's trust receipt in
the form set forth in Exhibit F hereto.
"Master Servicing Fee": With respect to any Mortgage Loan, an amount
retained by the Master Servicer from collections of interest on the Mortgage
Loans as compensation for its servicing duties relating to such Mortgage Loan
pursuant to Section 10.15 hereof and equal to 0.45% per annum
26
of the then outstanding principal amount of such Mortgage Loan as of the first
day of each Remittance Period payable on a monthly basis; provided, that if the
Seller is no longer the Master Servicer, such rate may be increased to a rate
not in excess of 0.50% and if the Trustee is acting as Master Servicer such rate
shall be equal to 0.50%.
"Maximum LT-8 Interest Deferral Amount": With respect to any Distribution
Date, the excess of (i) accrued interest at the stated interest rate applicable
to LT-8 for such Distribution Date on a balance equal to the principal balance
of LT-8 minus the Lower Tier Subordinated Amount, in each case for such
Distribution Date over (ii) interest on LT-5 and LT-7 for such Distribution
Date.
"Monthly Remittance": The Group I Monthly Remittance or the Group II
Monthly Remittance, as the case may be.
"Moody's": ▇▇▇▇▇'▇ Investors Service, Inc.
"Mortgage": The mortgage, deed of trust or other instrument creating a
first or second lien on an estate in fee simple interest in real property
securing a Note.
"Mortgage Loan": Each of the mortgage loans sold by the Seller to the Trust
on the Startup Day, together with any Qualified Replacement Mortgages
substituted therefor by the Seller in accordance with Section 3.2, 3.3 or 3.4
hereof as from time to time are held as a part of the Trust Estate, the Mortgage
Loans originally so held being identified in the related Mortgage Loan Schedule.
The term "Mortgage Loan" includes the terms "First Mortgage Loan" and "Second
Mortgage Loan". The term "Mortgage Loan" includes any Mortgage Loan which is
Delinquent, which relates to a foreclosure or which relates to a Property which
is REO Property prior to such Property's disposition by the Trust. Any mortgage
loan which, although intended by the parties hereto to have been, and which
purportedly was, transferred and assigned to the Trust by the Seller, in fact
was not transferred and assigned to the Trust for any reason whatsoever,
including, without limitation, the incorrectness of the statement set forth in
Section 3.3(b)(i) hereof with respect to such mortgage loan, shall nevertheless
be considered a "Mortgage Loan" for all purposes of this Agreement.
"Mortgage Loan Group": Each of Group I and Group II.
"Mortgage Loan Schedules": The schedules of Mortgage Loans, separated by
Mortgage Loan Group and by Sub- Servicer, listing each Mortgage Loan conveyed on
the Startup Day and setting forth as to each Mortgage Loan the following
27
information: (i) the name of the Mortgagor, (ii) the street address of the
Property, (iii) the town or city in which the Property is located, (iv) the
Principal Balance as of the CutOff Date, (v) the account number, (vi) the
original principal amount, (vii) the current Coupon Rate, (viii) the first date
on which a scheduled monthly payment is due under the Note, (ix) the original
stated maturity date of the Note, (x) the State in which the Property is
located, (xi) the zip code of the Property, (xii) the Loan-to-Value Ratio,
(xiii) the Loan-to-Value Ratio of any Second Mortgage Loan calculated by
disregarding the amount described in clause (ii)(a) of the definition of
"Loan-to-Value Ratio", (xiv) whether the Property is owner-occupied or non-owner
occupied, (xv) whether the Property is a single family residence, two-to-four
family residence, a condominium, a townhouse or a rowhouse and (xvi) if such
Mortgage Loan is a "balloon loan", the amortization terms (e.g., 30 year
amortization due in 15 years).
"Mortgagor": The obligor on a Note.
"Net Insurance Proceeds": As to any Mortgage Loan, Insurance Proceeds net
of unreimbursed Reimbursable Advances relating thereto. In no event shall Net
Insurance Proceeds with respect to any Mortgage Loan be less than zero.
"Net Liquidation Proceeds": As to any Liquidated Loan, Liquidation Proceeds
net of unreimbursed Reimbursable Advances relating to such Mortgage Loan. In no
event shall Net Liquidation Proceeds with respect to any Liquidated Loan be less
than zero.
"Net Pool Balance": As of any Payment Date, the sum of the Pool Principal
Balance less the sum of the principal balances of the Class LT-5, LT-7, and LT-8
Certificates.
"Net Proceeds": The sum of, without duplication, Net Liquidation Proceeds,
Net Insurance Proceeds and Net Released Mortgage Property Proceeds.
"Net Realized Loss": With respect to any Liquidated Loan the excess, if
any, of (x) the Principal Balance thereof at the time the Mortgage Loan became a
Liquidated Loan over (y) the related Net Liquidation Proceeds.
"Net Released Mortgage Property Proceeds": As to any Mortgage Loan,
Released Mortgage Property Proceeds net of unreimbursed Reimbursable Advances
relating thereto. In no event shall Net Released Mortgage Property Proceeds with
respect to any Mortgage Loan be less than zero.
"Net Weighted Average Coupon Rate": With respect to any Mortgage Loan Group
and Remittance Period, the weighted average Coupon Rates (weighted by Principal
Balances) of the
28
related Mortgage Loans, calculated at the opening of business on the first day
of such Remittance Period, less the rate at which the Master Servicing Fee is
then calculated and less the Trustee Fee and Certificate Insurer Premium Rate.
"Nonrecoverable Advances": With respect to any Mortgage Loan, any Servicing
Advance or Delinquency Advance proposed to be made by the Master Servicer in
respect of a Mortgage Loan or REO Property which, in the good faith business
judgment of the Master Servicer, would not be ultimately recoverable from late
collections, Insurance Proceeds, Liquidation Proceeds or Released Mortgage
Property Proceeds on such Mortgage Loan or REO Property or otherwise.
Notwithstanding anything to the contrary contained in this Agreement, no
Delinquency Advance or Servicing Advance shall be required to be made by the
Master Servicer if such Delinquency Advance or Servicing Advance would, if made,
constitute a Nonrecoverable Advance.
"Note": The note or other evidence of indebtedness evidencing the
indebtedness of a Mortgagor under a Mortgage Loan.
"Officer's Certificate": A certificate signed by any Authorized Officer of
any Person delivering such certificate and delivered to the Trustee.
"Operative Documents": This Agreement, the Sale Agreement, the Insurance
and Indemnity Agreement, the Under- writing Agreement, and the Indemnification
Agreement.
"Original Group I Pool Principal Balance": The aggregate Principal Balances
of all Group I Mortgage Loans as of the Cut-Off Date, i.e., $134,737,711.47.
"Original Group II Pool Principal Balance": The aggregate Principal
Balances of all Group II Mortgage Loans as of the Cut-Off Date, i.e.,
$141,704,325.95.
"Original Pool Principal Balance": The aggregate Principal Balances of all
Mortgage Loans as of the Cut-Off Date, i.e., $276,442,037.42.
"Original Principal Balance": With respect to each Note, the outstanding
principal amount of such Note as of the Cut-Off Date.
"Outstanding": With respect to all Certificates of a Class, as of any date
of determination, all such Certificates theretofore executed and delivered
hereunder except:
29
(i) Certificates theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Certificates or portions thereof for which full and final payment
of money in the necessary amount has been theretofore deposited with the
Trustee in trust for the Owners of such Certificates;
(iii) Certificates in exchange for or in lieu of which other
Certificates have been executed and delivered pursuant to this Agreement,
unless proof satisfactory to the Trustee is presented that any such
Certificates are held by a bona fide purchaser;
(iv) Certificates alleged to have been destroyed, lost or stolen for
which replacement Certificates have been issued as provided for in Section
5.5 hereof; and
(v) With respect to voting rights, any Class A Certificates held by
the Seller, the Master Servicer, the Transferor or any affiliate of any
thereof, unless all other Class A Certificates have been paid in full.
Any Certificates in which the Certificate Insurer has an interest
pursuant to its right of subrogation shall be "Outstanding Certificates".
"Owner": The Person in whose name a Certificate is registered in the
Register.
"Payment Date": The 18th day of each month (or, if such day is not a
Business Day, the next following Business Day), commencing in the month
following the Startup Day.
"Percentage Interest": As to any Class A Certificate or Class B
Certificate, that percentage, expressed as a fraction, the numerator of which is
the original principal balance of such Certificate as of the Cut-Off Date and
the denominator of which is the original principal balance of all Certificates
of the same Class as of the Cut-Off Date; as to any Residual Certificate, that
Percentage Interest set forth on such Residual Certificate.
"Person": Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"Pool Delinquency Rate": With respect to any Remittance Period, the
fraction, expressed as a percentage, equal to (x) the aggregate Principal
Balances of all Mortgage Loans 60 or more days Delinquent as of the close of
business on the last day of such Remittance Period over (y) the Pool
30
Principal Balance as of the close of business on the last day of such Remittance
Period.
"Pool Principal Balance": As to any Payment Date, the aggregate principal
balance of the Mortgage Loans as of the close of business on the last day of the
related Remittance Period.
"Pool Rolling Three Month Delinquency Rate": As of any Payment Date the
fraction, expressed as a percentage, equal to the average of the Pool
Delinquency Rates for each of the three (or one and two, in the case of the
first and second Payment Dates), immediately preceding Remittance Periods.
"Preference Amount": As to any Payment Date:
(i) with respect to the Class A-1 Group I Certificates, any amounts
included in previous distributions to Class A-1 Group I Certificateholders of
Class A-1 Distribution Amounts (exclusive of Group I Insured Payments) which are
recovered from such Class A-1 Group I Certificateholders 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 and which have not theretofore been repaid to such Class A-1 Group
I Certificateholders provided such Class A-1 Group I Certificateholders have
complied with the provisions of Section 7.3(f);
(ii) with respect to the Class A-2 Group I Certificates, any amounts
included in previous distributions to Class A-2 Group I Certificateholders of
Class A-2 Distribution Amounts (exclusive of Group I Insured Payments) which are
recovered from such Class A-2 Group I Certificateholders 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 and which have not heretofore been repaid to such Class A-2 Group I
Certificateholders provided such Class A-2 Group I Certificateholders have
complied with the provisions of Section 7.3(f);
(iii) with respect to the Class A-3 Group I Certificates, any amounts
included in previous distributions to Class A-3 Group I Certificateholders of
Class A-3 Distribution Amounts (exclusive of Group I Insured Payments) which are
recovered from such Class A-3 Group I Certificateholders 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 and which have not theretofore been repaid to such Class A-3 Group
I Certificateholders provided
31
such Class A-3 Group I Certificateholders have complied with the provisions of
Section 7.3(f);
(iv) with respect to the Class A-4 Group I Certificates, any amounts
included in previous distributions to Class A-4 Group I Certificateholders of
Class A-4 Distribution Amounts (exclusive of Group I Insured Payments) which are
recovered from such Class A-4 Group I Certificateholders 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 and which have not heretofore been repaid to such Class A-4 Group I
Certificateholders provided such Class A-4 Group I Certificateholders have
complied with the provisions of Section 7.3(f); and
(v) with respect to the Class A-5 Group II Certificates, any amounts
included in previous distributions to Class A-5 Group II Certificateholders of
Class A-5 Distribution Amounts (exclusive of Group II Insured Payments and any
Supplemental Interest Payment Amounts) which are recovered from such Class A-5
Group II Certificateholders 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 and which have not
heretofore been repaid to such Class A-5 Group II Certificateholders provided
such Class A-5 Group II Certificateholders have complied with the provisions of
Section 7.3(f).
"Premium Amount": The Group I Premium Amount or the Group II Premium
Amount, as the case may be.
"Prepayment": Any payment of principal of a Mortgage Loan by a Mortgagor
which is received by the Master Servicer in advance of the scheduled due date
for the payment of such principal.
"Prepayment Interest Shortfalls": With respect to each Group, the sum of
the difference (caused by any Prepayments during a calendar month), if any, for
each Mortgage Loan in the related Group, between (i) the interest collected by
the Master Servicer from the Mortgagor during a calendar month, and (ii) the
full month's interest at the related Coupon Rate.
"Preservation Expenses": Expenditures made by the Master Servicer in
connection with a foreclosed Mortgage Loan prior to the liquidation thereof,
including, without limitation, expenditures for real estate property taxes,
hazard insurance premiums, property restoration or preservation. Preservation
Expenses shall constitute "Servicing Advances" for all purposes of this
Agreement.
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"Principal and Interest Account": The principal and interest account
created by the Master Servicer pursuant to Section 10.8 hereof.
"Principal Balance": As of any date of calculation and with respect to each
Mortgage Loan, the Original Principal Balance thereof less any related Principal
Remittance Amounts relating to such Mortgage Loan included in previous related
Monthly Remittances and, if applicable, the related Monthly Remittance as of
such date; provided that the Principal Balance for any Mortgage Loan which has
become a Liquidated Loan shall be zero following the date on which such Mortgage
Loan becomes a Liquidated Loan, and at all times thereafter.
"Principal Distribution Amount": The Class A-1 Principal Distribution
Amount, the Class A-2 Principal Distribution Amount, the Class A-3 Principal
Distribution Amount, the Class A-4 Principal Distribution Amount or the Class
A-5 Principal Distribution Amount, as the case may be.
"Principal Remittance Amounts": The Group I Principal Remittance Amount or
the Group II Principal Remittance Amount, as the case may be.
"Prohibited Transaction": Has the meaning as defined in Section 860F of the
Code.
"Property": The underlying real property, including the improvements
thereon, securing a Mortgage Loan.
"Prospectus": The Prospectus dated November 7, 1996 relating to Mortgage
Loan Asset Backed Securities, issuable in Series.
"Prospectus Supplement": The Prospectus Supplement dated February 25, 1997
relating to the Class A Certificates.
"Qualified Liquidation": "Qualified Liquidation" shall have the meaning set
forth from time to time in the definition thereof at Section 860F(a)(4) of the
Code (or any successor statute thereto) and applicable to the Trust.
"Qualified Mortgage": "Qualified mortgage" shall have the meaning set forth
from time to time in the definition thereof at Section 860G(a)(3) of the Code
(or any successor statute thereto) and applicable to the Trust.
"Qualified Replacement Mortgage": A Mortgage Loan substituted for another
by the Seller pursuant to Section 3.2, 3.3 or 3.4 hereof, which (i) has a fixed
rate of interest if the Mortgage Loan being replaced is a Group I Mortgage Loan
and has a variable rate of interest if the Mortgage Loan being replaced is a
Group II Mortgage Loan, (ii) has a Coupon Rate
33
at least equal to the Coupon Rate of the Mortgage Loan being replaced (which, in
the case of a Group II Mortgage Loan, shall be deemed to mean the same index and
a margin equal to or greater than the margin applicable to the Mortgage Loan
being replaced), (iii) is of the same or better property type and the same or
better occupancy status as the replaced Mortgage Loan, (iv) shall mature no
later than the latest maturity date of any Mortgage Loan then held in the
related Mortgage Loan Group (v) has a Loan-to-Value Ratio as of the Replacement
Cut-Off Date no higher than the Loan-to-Value Ratio of the replaced Mortgage
Loan at such time, (vi) shall be a First Mortgage Loan if the Mortgage Loan
being replaced was a First Mortgage Loan, and shall have the same or higher lien
priority if the Mortgage Loan being replaced was a junior Mortgage Loan, (vii)
has a Principal Balance as of the related Replacement Cut-Off Date equal to or
less than the Principal Balance of the replaced Mortgage Loan as of such
Replacement Cut-Off Date, (viii) shall be of the same or higher credit quality
classification (determined in accordance with the Seller's underwriting
guidelines) as the Mortgage Loan which such Qualified Replacement Mortgage
replaces, (ix) satisfies 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 applicable to the Trust, and (x) complies
as of the date of substitution with each representation and warranty set forth
in Section 3.2(b) hereof, all as evidenced by any Officer's Certificate of the
Seller delivered to the Trustee prior to any such substitution. In the event
that one or more mortgage loans are proposed to be substituted for one or more
Mortgage Loans, the Certificate Insurer may allow the foregoing tests to be met
on a weighted average basis or other aggregate basis acceptable to the
Certificate Insurer, as evidenced by a written approval delivered to the Trustee
by the Certificate Insurer, except that the requirement of clause (ix) hereof
must be satisfied as to each Qualified Replacement Mortgage.
"Rating Agency": Any nationally recognized statistical credit rating
agency, or its successor, that rates any Certificates at the request of the
Seller at the time of the initial issuance of the Certificates. If such agency
or a successor is no longer in existence, "Rating Agency" shall be such
statistical credit rating agency, or other comparable Person, designated by the
Seller, notice of which designation shall be given to the Trustee, the
Certificate Insurer and the Master Servicer. References herein to the highest
rating category of a rating agency shall mean AAA (with respect to long-term
ratings) or A-1+ (with respect to short-term ratings), in the case of S&P, and
Aaa (with respect to long-term ratings) or P-1 (with respect to short-term
ratings), in the case of ▇▇▇▇▇'▇, and in the case of any other Rating Agency
shall mean such equivalent ratings.
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"Record Date": With respect to the Class A-2, Class A-3 and Class A-4
Certificates and any Payment Date, the close of business on the first Business
Day of the calendar month in which such Payment Date occurs. With respect to the
Class A-1 and Class A-5 Certificates and any Payment Date, the close of business
on the Business Day immediately preceding such Payment Date.
"Reference Banks": Bankers Trust Company, ▇▇▇▇▇▇▇'▇ Bank PLC,
The Bank of Tokyo and National Westminster Bank PLC; provided that if any of the
foregoing banks are not suitable to serve as a Reference Bank, then any leading
banks selected by the Seller 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 Seller 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 Trustee.
"Register": The register maintained by the Trustee in accordance with
Section 5.4 hereof, in which the names of the Owners are set forth.
"Registration Statement": The Seller's Registration Statement number
333-07837, filed on Form S-3.
"Reimbursable Advances": As to any Mortgage Loan, all Delinquency Advances
and Servicing Advances made by the Master Servicer with respect thereto, to the
extent not previously paid to or withheld by the Master Servicer.
"Reimbursement Amount": With respect to any Class of Class A Certificates
and for any Payment Date, the sum of (x)(i) all related Insured Payments
previously received by the Trustee not previously repaid to the Certificate
Insurer pursuant to Section 7.3(b)(iii)(C), together with interest accrued on
each such related Insured Payment not previously repaid calculated from the date
the Trustee received the related Insured Payment at the Late Payment Rate and
(y) any other amounts then due and owing to the Certificate Insurer relating to
such Class A Certificates under the Insurance and Indemnity Agreement.
"Released Mortgaged Property Proceeds": Proceeds received in connection
with a taking of a Property by condemnation or the exercise of eminent domain or
in connection with a release of part of the Property.
"Relief Act Shortfalls": With respect to each Group, the aggregate
difference (caused by application of the Soldiers' and Sailors' Civil Relief Act
of 1940, as amended)
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between (i) the interest collected by the Master Servicer from the related
Mortgagor during a calendar month and (ii) the full month's interest at the
related Coupon Rate.
"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
860G of the Code, and related provisions, and regulations and rulings
promulgated thereunder, as the foregoing may be in effect from time to time.
"REMIC Trust": The segregated pool of assets consisting of the Trust Estate
except for the Supplemental Interest Payment Account.
"Remittance Date": Any date on which the Master Servicer is required to
remit moneys on deposit in a Principal and Interest Account to the Trustee,
which shall be the 13th day of each month, commencing in the month following the
Startup Day or if such day is not a Business Day the following Business Day.
"Remittance Period": The period (inclusive) beginning at the opening of
business on the second day of the calendar month immediately preceding the
calendar month in which a Remittance Date occurs and ending at the close of
business on the first day of the calendar month in which such Remittance Date
occurs.
"REO Property": A Property acquired by the Master Servicer in the name of
and on behalf of the Trust through foreclosure or deed-in-lieu of foreclosure in
connection with a defaulted Mortgage Loan.
"Replacement Cut-Off Date": With respect to any Qualified Replacement
Mortgage, the second day of the calendar month in which such Qualified
Replacement Mortgage is conveyed to the Trust.
"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 Register under the nominee name of the Depository.
"Representative": Prudential Securities Incorporated.
"Reserve Interest Rate": With respect to any Interest Determination Date,
the rate per annum that the Trustee determines to be either (i) the arithmetic
mean
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(rounded upwards if necessary to the nearest whole multiple of 1/16%) of the
one-month U.S. dollar lending rates which three New York City banks selected by
the Trustee 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 Trustee can determine no such arithmetic mean, the lowest
one-month U.S. dollar lending rate which three New York City banks selected by
the Trustee are quoting on such Interest Determination Date to leading European
banks.
"Residual Certificate": Any Class RL Certificate or any Class RU
Certificate.
"Rolling Delinquency Percentage": For any Distribution Date, the average of
the Delinquency Percentages for the Mortgage Loans as of the last day of each of
the six (or 1, 2, 3, 4, and 5 in the case of the first five Payment Dates, as
applicable) most recently ended Remittance Periods.
"Rolling Loss Percentage": As of any Distribution Date commencing on the
thirteenth Payment Date, the percentage equivalent of a fraction, the numerator
of which is the aggregate amount of Net Realized Losses incurred during the
preceding twelve calendar months, and the denominator of which is the aggregate
Pool Principal Balance as of the first day of the twelfth preceding calendar
month.
"S&P": Standard & Poor's, a division of The McGraw Hill Companies.
"Sale Agreement": The Purchase and Sale Agreement dated as of February 1,
1997 between the Seller and the Transferor.
"Second Mortgage Loan": A Mortgage Loan which constitutes a second priority
mortgage lien with respect to the related Property, as identified in the
Mortgage Loan Schedules.
"Seller": Access Financial Lending Corp., a Delaware corporation.
"Seller Optional Termination Date": The first Remittance Date on which the
then-outstanding aggregate Principal Balances of the Mortgage Loans is ten
percent or less of the Original Pool Principal Balance.
"Senior Lien": With respect to any Second Mortgage Loan, the mortgage loan
relating to the corresponding Property having a first priority lien.
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"Servicing Advance": As defined in Sections 10.9(b) and 10.13 hereof.
"Servicing Standards": As defined in Section 10.2 hereof.
"Startup Day": February 28, 1997.
"Step-Down Cumulative Loss Test": As such term is defined in the Insurance
and Indemnity Agreement.
"Step-Down Rolling Delinquency Test": As such term is defined in the
Insurance and Indemnity Agreement.
"Step-Down Rolling Loss Test": As such term is defined in the Insurance and
Indemnity Agreement.
"Step-Down Trigger": For any Payment Date after the 30th Payment Date, the
Step-Down Trigger will have occurred if each of the Step-Down Cumulative Loss
Test, the Step-Down Rolling Delinquency Test and the Step-Down Rolling Loss Test
is met. In no event will the Step-Down Trigger be deemed to have occurred for
the 30th Payment Date or any preceding Payment Date.
"Step-Up Cumulative Loss Test": As such term is defined in the Insurance
and Indemnity Agreement.
"Step-Up Rolling Delinquency Test": As such term is defined in the
Insurance and Indemnity Agreement.
"Step-Up Rolling Loss Test": As such term is defined in the Insurance and
Indemnity Agreement.
"Step-Up Trigger": For any Payment Date, the Step- Up Trigger will have
occurred if any one of the Step-Up Cumulative Loss Test, the Step-Up Rolling
Delinquency Test or the Step-Up Rolling Loss Test is met.
"Sub-Servicer": Any Person with whom the Master Servicer has entered into a
Sub-Servicing Agreement and who satisfies the requirements set forth in Section
10.3 hereof in respect of the qualification of a Sub-Servicer.
"Sub-Servicing Agreement": The written contract between the Master Servicer
and any Sub-Servicer relating to servicing and/or administration of certain
Mortgage Loans as permitted by Section 10.3 hereof.
"Subordination Deficiency Amount": The Group I Subordination Deficiency
Amount or the Group II Subordination Deficiency Amount, as the case may be.
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"Substitution Amount": As defined in Section 3.2(a) hereof.
"Supplemental Certificates": The Class B-S Certificates.
"Supplemental Interest Payment Account": The Supplemental Interest Payment
Account established in accordance with Section 7.9(a) hereof and maintained by
the Trustee.
"Supplemental Interest Payment Amount": As defined in Section 7.9(a)
hereof.
"Supplemental Interest Trust": The Access Financial Supplemental Interest
Trust 1997-1 created pursuant to Section 7.9(a) hereof.
"Tax Matters Person": The tax matters person, as defined in Section
1.860F-4(d) of the Treasury Regulations, appointed with respect to the Trust
pursuant to Section 12.17 hereof.
"Transferor": Access Financial Receivables Corp., a Delaware corporation.
"Trigger Event": An Event of Default described in clauses (viii), (ix) or
(x) of Section 11.1.
"Trust": Access Financial Mortgage Loan Trust 1997-1, the trust created
under Article II of this Agreement.
"Trust Estate": Collectively, all money, instruments, and other property to
the extent such money, instruments and other property, are subject hereto or
intended to be held in trust for the benefit of the Owners, including all
proceeds thereof, including, without limitation, (i) the Mortgage Loans, (ii)
such amounts, including Eligible Investments, as from time to time may be held
by the Trustee in any Account, and by the Master Servicer in the Principal and
Interest Account or otherwise held by the Master Servicer in trust for the
Owners (except as otherwise provided herein), (iii) any Property, the ownership
of which has been effected in the name of the Trust as a result of foreclosure
or acceptance by the Master Servicer of a deed in lieu of foreclosure and that
has not been withdrawn from the Trust, (iv) the rights, if any, of the Trust in
any Insurance Policies relating to the Mortgage Loans, (v) Net Liquidation
Proceeds (but only to the extent that such Net Liquidation Proceeds do not
exceed the Principal Balance of the related Mortgage Loan plus accrued and
unpaid interest on such Mortgage Loan) with respect to any Liquidated Loan,
39
(vi) Released Mortgaged Property Proceeds and (vii) the Certificate Insurance
Policy.
"Trustee": The Chase Manhattan Bank, a New York banking corporation,
located on the date of execution of this Agreement at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, not in its individual capacity but solely as Trustee
under this Agreement, and any successor hereunder.
"Trustee's Fee": The total of the Group I Trustee's Fee and the Group II
Trustee's Fee.
"Underwriters": Prudential Securities Incorporated and ▇.▇. ▇▇▇▇▇▇
Securities Inc.
"Underwriting Agreement": The Underwriting Agreement dated February 25,
1997 among the Seller and the Underwriters.
"Unregistered Certificates": Certificates which are not registered as
evidenced by inclusion in the Register.
"Upper-Tier REMIC": The segregated pool of assets held by the Trust
consisting of the Lower Tier Interests (except for the RL Lower-Tier Interest,
as set forth in the chart in Section 2.8(c) hereof), the Distribution Accounts
and the Certificate Insurance Policy.
Section 1.2. Use of Words and Phrases. "Herein", "hereby", "hereunder",
"hereof", "hereinbefore", "hereinafter" and other equivalent words refer to this
Agreement as a whole and not solely to the particular section of this Agreement
in which any such word is used. The definitions set forth in Section 1.1 hereof
include both the singular and the plural. Whenever used in this Agreement, any
pronoun shall be deemed to include both singular and plural and to cover all
genders.
Section 1.3. Captions; Table of Contents. The captions or headings in this
Agreement and the Table of Contents are for convenience only and in no way
define, limit or describe the scope and intent of any provisions of this
Agreement.
Section 1.4. Opinions. Each opinion with respect to the validity, binding
nature and enforceability of documents or Certificates may be qualified to the
extent that the same may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity (whether
considered in a proceeding or action in equity or at law) and may state that no
opinion is expressed on the availability of the remedy of specific enforcement,
injunctive relief or any other equitable remedy.
40
Any opinion required to be furnished by any Person hereunder must be delivered
by counsel upon whose opinion the addressee of such opinion may reasonably rely,
and such opinion may state that it is given in reasonable reliance upon an
opinion of another, a copy of which must be attached, concerning the laws of a
foreign jurisdiction. Opinions regarding REMIC matters must be furnished by
special counsel to the Seller.
Section 1.5. Calculations. All calculations of accrued interest made
pursuant to the Agreement shall be made assuming a 360-day year consisting of
twelve 30-day months, except for interest on the Class A-1 Group I and Class A-5
Group II Certificates, which calculations shall be made based on the actual
number of days over a 360-day year, or as otherwise specifically provided
herein.
ARTICLE II
THE TRUST
Section 2.1. Establishment of the Trust. The Seller does hereby create and
establish, pursuant to the laws of the State of New York and this Agreement, the
Trust, which, for convenience, shall be known as "Access Financial Mortgage Loan
Trust 1997-1". The Trust shall be deemed to consist of two sub-trusts, one with
respect to each Mortgage Loan Group.
Section 2.2. Office. The office of the Trust shall be in care of the
Trustee, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, attn:
Global Trust Services or at such other address as the Trustee may designate by
notice to the Seller, the Master Servicer, the Transferor, the Certificate
Insurer and the Owners.
Section 2.3. Purpose and Powers. The purpose of the Trust is to engage in
the following activities, and only such activities: (i) the purchase of the
Mortgage Loans; (ii) the holding of the Mortgage Loans and the Trust Estate
related thereto; (iii) the issuance of the Certificates; (iv) activities that
are necessary, suitable or convenient to accomplish the foregoing or are
incidental thereto or connected therewith, including the investment of moneys in
accordance with this Agreement; and (v) such other activities as may be required
in connection with conservation of the Trust Estate and distributions to the
Owners; provided, however, that nothing contained herein shall be construed to
permit the Trustee to take any action which would adversely affect the status of
any interest held by the Trust which is intended to be treated as a REMIC.
Section 2.4. Appointment of the Trustee; Declaration of Trust. The Seller
hereby appoints the Trustee
41
as trustee of the Trust effective as of the Startup Day, to have all the rights,
powers and duties set forth herein. The Trustee hereby acknowledges and accepts
such appointment, represents and warrants its eligibility as of the Startup Day
to serve as Trustee pursuant to Section 9.8 hereof and declares that it will
hold the Trust Estate in trust upon and subject to the conditions set forth
herein for the benefit of the Owners.
Section 2.5. Expenses of the Trust. The Master Servicer shall retain its
monthly aggregate Master Servicing Fees as provided in Section 10.15 herein; the
Trustee's Fee shall be paid monthly as provided in Section 7.3(b)(i) hereof; and
the premiums due to the Certificate Insurer shall be paid monthly as provided in
Section 7.3(b)(iii)(C) hereof; all other expenses of the Trust including any
fees and expenses incurred by the Trustee in connection with a termination of
the Trust pursuant to Article VIII shall be submitted to the Seller for its
approval, and, if so approved, shall be paid by the Seller. The reasonable fees
and expenses of the Trustee's counsel in connection with the review and delivery
of this Agreement and related documentation shall be due as of the Startup Day
and shall be paid by the Seller.
Section 2.6. Ownership of the Trust. On the Startup Day, the ownership
interests in the Trust shall be transferred as set forth in Section 4.2 hereof,
such transfer to be evidenced by issuance of the Certificates as described
therein. Thereafter, transfer of any ownership interest shall be governed by
Section 5.4 hereof.
Section 2.7. Receipt of Trust Estate. The Seller hereby directs the Trustee
to accept the property conveyed to it pursuant to Section 3.3 hereof in
connection with the establishment of the Trust, and the Trustee hereby
acknowledges receipt of such property. The Seller further directs the Trustee to
issue the Certificates, to hold the Class A Certificates as transfer agent for
the Depository as provided in Section 5.4, and to deliver the Class B
Certificates and the Residual Certificates to the Seller.
Section 2.8. Miscellaneous REMIC Provisions. (a) The Trust shall elect that
the Upper-Tier REMIC and the Lower-Tier REMIC shall be treated as REMICs under
Section 860D of the Code. Any inconsistencies or ambiguities in this Agreement
or in the administration of the Trust shall be resolved in a manner that
preserves the validity of such REMIC elections.
(b) The Class A-1 Group I Certificates, the Class A-2 Group I Certificates,
the Class A-3 Group I Certificates, the Class A-4 Group I Certificates, the
Class A-5 Group II Certificates, the uncertificated right of the
42
Supplemental Interest Account to receive the distributions described in Section
7.3(c) (the "Uncertificated Interest") are hereby designated as "regular
interests" with respect to the Upper-Tier REMIC and the Class RU Certificates
are hereby designated as the single class of "residual interest" with respect to
the Upper-Tier REMIC. The Class LT-1, LT-2, LT-3, LT-4, ▇▇-▇, ▇▇-▇, LT-7 and
LT-8 Certificates are hereby designated as "regular interests" with respect to
the Lower-Tier REMIC and the Class RL Certificates are hereby designated as the
single class of "residual interest" with respect to the Lower-Tier REMIC.
(c) The beneficial ownership interest of the Lower-Tier REMIC shall be
evidenced by the interests (the "Lower-Tier Interests") having the
characteristics and terms as follows:
Original Final
Class Companion Principal Interest Payment
Designation Classes Balance Rate Date
----------- ------- ------- ---- ----
▇▇-▇ ▇-▇ $63,500,000 (1) December 18, 2011
LT-2 A-2 $30,200,000 (1) June 18, 2013
LT-3 A-3 $21,300,000 (1) March 18, 2022
LT-4 A-4 $19,733,000 (1) March 18, 2027
LT-5 $2,000 (2) March 18, 2027
LT-6 A-5 $138,866,000 (3) March 18, 2027
LT-7 $1,959.94 (4) March 18, 2027
LT-8 $4,000 (5) March 18, 2027
RL (6) (6) March 18, 2027
------------
(1) The Net Weighted Average Coupon Rate of the Group I Mortgage Loans, plus
the Certificate Insurer Premium Rate.
(2) The Weighted Average of the Class ▇-▇, ▇-▇, ▇-▇ ▇▇▇ ▇-▇ ▇▇▇▇-▇▇▇▇▇▇▇ Rates.
(3) The Net Weighted Average Coupon Rate of the Group II Mortgage Loans, plus
the Certificate Insurer Premium Rate.
(4) The Class A-5 Pass-Through Rate.
(5) The Net Weighted Average Coupon Rate of the Mortgage Loans, plus the
Certificate Insurer Premium Rate.
(6) The RL Certificate has no principal balance and does not bear interest.
The Lower-Tier Interests LT-1, LT-2, LT-3, LT-4, ▇▇-▇, ▇▇-▇, LT-7 and LT-8 shall
be issued as non-certificated interests and recorded on the records of the
Lower-Tier REMIC as being issued to and held by the Trustee on behalf of the
Upper-Tier REMIC.
On each Payment Date, the Lower Tier Distribution Amount shall be applied
as principal and interest of particular Lower Tier Interests, other than the RL
Certificate, in amounts corresponding to the aggregate respective amounts
required to be applied as principal and interest of their related Companion
Classes (as set forth above) and the Class B Certificates pursuant to the
43
priorities set forth in section 7.3 hereof and with respect to the Lower Tier
Interests LT-5, LT-7, and LT-8,
(i) the Lower Tier Distribution Amount shall be applied as interest to
LT-5, LT-7, and LT-8 in an amount corresponding to the interest accrued on the
class principal balances of such classes at the interest rate for such class as
stated above; provided, however, that amounts payable as interest in respect of
LT-8 shall be reduced (the "LT-8 Distribution Reduction Amount") when the Lower
Tier Subordinated Amount is less than the Lower Tier Required Subordinated
Amount by the lesser of (x) the amount of such difference and (y) the Maximum
LT-8 Interest Deferral Amount. The LT-8 Distribution Reduction Amount will be
applied to proportionately reduce the principal balances of LT-5 and LT-7; in
the case of LT-5, in proportion to the amount on such Payment Date of any Group
I Subordination Increase Amount, in the case of LT-7, in proportion to the
amount on such Payment Date of any Group II Subordination Increase Amount; and
(ii) the remainder of the Lower Tier Distribution Amount shall be applied
as principal to LT-5, LT-7, and LT-8 in the following percentages:
(a) 50.00% to LT-8; and
(b) 50.00% to LT-5 and LT-7 in proportion to the Group I Principal
Distribution Amount and the Group II Principal Distribution Amount,
respectively, in each case as of such Payment Date provided that the
Lower Tier Subordinated Amount is less than or equal to the Lower Tier
Required Subordinated Amount. If not, 50.00% divided among ▇▇-▇, ▇▇-▇
and LT-8 such that the Lower Tier Subordinated Amount equals the Lower
Tier Required Subordinated Amount.
No distributions will be made on the Class RL Certificate, except that any
distribution of the proceeds of the final remaining assets of the Lower Tier
REMIC shall be distributed to the holder thereof upon presentation and surrender
of the Class RL Certificate.
(d) The Startup Day is hereby designated as the "startup day" of each REMIC
within the meaning of Section 860G(a)(9) of the Code.
44
ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS
OF THE SELLER, THE MASTER SERVICER AND THE TRANSFEROR;
CONVEYANCE OF MORTGAGE LOANS
Section 3.1. Representations and Warranties of the Seller, the Master
Servicer and the Transferor. (a) The Seller hereby represents, warrants and
covenants to the Master Servicer, the Transferor, the Trustee, the Certificate
Insurer and to the Owners as of the Startup Day that:
(i) The Seller is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and is in good
standing as a foreign corporation in each jurisdiction in which the nature
of its business, or the properties owned or leased by it make such
qualification necessary. The Seller has all requisite corporate power and
authority to own and operate its properties, to enable it to carry out its
business as presently conducted in a material manner and as proposed to be
conducted and to enter into and discharge its obligations under this
Agreement and the other Operative Documents to which it is a party in a
material manner.
(ii) The execution and delivery of this Agreement and the other
Operative Documents to which the Seller is a party, by the Seller, and its
performance and compliance with the terms of this Agreement and of the
other Operative Documents to which it is a party have been duly authorized
by all necessary corporate action on the part of the Seller and will not
violate the Seller's Certificate of Incorporation or Bylaws or constitute a
default (or an event which, with notice or lapse of time, or both, would
constitute a default) under, or result in the breach of, any material
contract, agreement or other instrument to which the Seller is a party or
by which the Seller is bound, or violate any statute or any order, rule or
regulation of any court, governmental agency or body or other tribunal
having jurisdiction over the Seller or any of its properties.
(iii) This Agreement and the other Operative Documents to which the
Seller is a party, assuming due authorization, execution and delivery by
the other parties hereto and thereto, each constitutes a valid, legal and
binding obligation of the Seller, enforceable against it in accordance with
the terms hereof and thereof, except as the enforcement hereof and thereof
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally and
by general principles of equity (whether considered in a proceeding or
action in equity or at law).
45
(iv) The Seller is not in default with respect to any order or decree
of any court or any order, regulation or demand of any federal, state,
municipal or governmental agency, which might have consequences that would
materially and adversely affect the condition (financial or other) or
operations of the Seller or its properties or might have consequences that
would materially and adversely affect its performance hereunder and under
the other Operative Documents to which it is a party.
(v) No litigation is pending or, to the best of the Seller's
knowledge, threatened against the Seller which litigation might have
consequences that would prohibit its entering into this Agreement or any
other Operative Document to which it is a party or that would materially
and adversely affect the condition (financial or otherwise) or operations
of the Seller or its properties or might have consequences that would
materially and adversely affect its performance hereunder and under the
other Operative Documents to which it is a party.
(vi) No certificate of an officer, statement furnished in writing or
report delivered pursuant to the terms hereof by the Seller contains any
untrue statement of a material fact or omits to state a material fact
necessary to make the certificate, statement or report not misleading.
(vii) The statements contained in the Registration Statement which
describe the Seller or matters or activities for which the Seller is
responsible in accordance with the Operative Documents or which are
attributed to the Seller therein are true and correct in all material
respects, and the Registration Statement does not contain any untrue
statement of a material fact with respect to the Seller or omit to state a
material fact required to be stated therein or necessary in order to
prevent the statements contained therein with respect to the Seller from
being misleading. To the best of the Seller's knowledge and belief, the
Registration Statement does not contain any untrue statement of a material
fact required to be stated therein or omit to state any material fact
required to be stated therein or necessary to make the statements contained
therein not misleading.
(viii) All actions, approvals, consents, waivers, exemptions,
variances, franchises, orders, permits, authorizations, rights and licenses
required to be taken, given or obtained, as the case may be, by or from any
federal, state or other governmental authority or agency (other than any
such actions, approvals, etc. under any state securities laws, real estate
syndication or "Blue Sky" statutes, as to which the Seller makes no such
representation or warranty), that are necessary or advisable in connection
with the purchase and sale of the Certificates and the execution and
46
delivery by the Seller of the Operative Documents to which it is a party,
have been duly taken, given or obtained, as the case may be, are in full
force and effect on the date hereof, are not subject to any pending
proceedings or appeals (administrative, judicial or otherwise) and either
the time within which any appeal therefrom may be taken or review thereof
may be obtained has expired or no review thereof may be obtained or appeal
therefrom taken, and are adequate to authorize the consummation of the
transactions contemplated by this Agreement and the other Operative
Documents on the part of the Seller and the performance by the Seller of
its obligations under this Agreement and such of the other Operative
Documents to which it is a party.
(ix) The transactions contemplated by this Agreement are in the
ordinary course of business of the Seller.
(x) The Seller received fair consideration and reasonably equivalent
value in exchange for the sale of the interests in the Mortgage Loans to
the Transferor.
(xi) The Seller did not sell any interest in any Mortgage Loan with
any intent to hinder, delay or defraud any of its creditors.
(xii) The Seller is solvent and the Seller will not be rendered
insolvent as a result of the sale of the Mortgage Loans to the Transferor.
(b) The Master Servicer hereby represents and warrants to the Seller, the
Transferor, the Trustee, the Certificate Insurer, and to the Owners as of the
Startup Day that:
(i) The Master Servicer is a corporation duly organized, validly
existing and in good standing under the laws of Delaware, and is, or a
Sub-Servicer is, in compliance with the laws of each state in which any
Property is located to the extent necessary to enable the Master Servicer
to perform its obligations hereunder. The Master Servicer and each
Sub-Servicer is in good standing as a foreign corporation in each
jurisdiction in which the nature of its business, or the properties owned
or leased by it make such qualification necessary to enable the Master
Servicer to perform its obligations hereunder. The Master Servicer has all
requisite corporate power and authority to own and operate its properties,
to carry out its business as presently conducted and as proposed to be
conducted and to enter into and discharge, either directly or through
Sub-Servicers, its obligations under this Agreement. The Master Servicer
and any Sub-Servicer (except LSI Financial Group) has equity of at least
$15,000,000 as determined in accordance with generally accepted accounting
principles. Each Sub-Servicer appointed by the Master Servicer will have
all requisite corporate power
47
and authority to own and operate its properties, to carry out its business
as presently conducted and as proposed to be conducted.
(ii) The execution and delivery of this Agreement by the Master
Servicer and its performance and compliance with the terms of this
Agreement and any Sub-Servicing Agreement have been duly authorized by all
necessary corporate action on the part of the Master Servicer and will not
violate the Master Servicer's Certificate of Incorporation or Bylaws or
constitute a default (or an event which, with notice or lapse of time, or
both, would constitute a default) under, or result in the breach of, any
material contract, agreement or other instrument to which the Master
Servicer is a party or by which the Master Servicer is bound or violate any
statute or any order, rule or regulation of any court, governmental agency
or body or other tribunal having jurisdiction over the Master Servicer or
any of its properties.
(iii) This Agreement and any Sub-Servicing Agreement, assuming due
authorization, execution and delivery by the other parties hereto and
thereto, each constitutes a valid, legal and binding obligation of the
Master Servicer, enforceable against it in accordance with the terms
hereof, except as the enforcement hereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and by general principles of equity
(whether considered in a proceeding or action in equity or at law).
(iv) The Master Servicer is not in default with respect to any order
or decree of any court or any order, regulation or demand of any federal,
state, municipal or governmental agency, which might have consequences that
would materially and adversely affect the condition (financial or other) or
operations of the Master Servicer or its properties or might have
consequences that would materially and adversely affect its performance
hereunder and under any Sub-Servicing Agreement.
(v) No litigation is pending or, to the best of the Master Servicer's
knowledge, threatened against the Master Servicer which litigation might
have consequences that would prohibit its entering into this Agreement or
any Sub-Servicing Agreement or that would materially and adversely affect
the condition (financial or otherwise) or operations of the Master Servicer
or its properties or might have consequences that would materially and
adversely affect its performance hereunder.
(vi) Each certificate of an officer, statement furnished in writing or
report delivered pursuant to the terms hereof by
48
the Master Servicer is true and correct in all material respects.
(vii) The statements contained in the Prospectus Supplement which
describe the Master Servicer under the caption "The Master Servicer" are
true and correct in all material respects.
(viii) The Master Servicing Fee is a "current (normal) servicing fee
rate" as that term is used in Statement of Financial Accounting Standards
No. 65 issued by the Financial Accounting Standards Board. Neither the
Master Servicer nor any affiliate thereof will report on any financial
statements any part of the Master Servicing Fee as an adjustment to the
sales price of the Mortgage Loans.
(ix) All actions, approvals, consents, waivers, exemptions, variances,
franchises, orders, permits, authorizations, rights and licenses required
to be taken, given or obtained, as the case may be, by or from any federal,
state or other governmental authority or agency (other than any such
actions, approvals, etc. under any state securities laws, real estate
syndication or "Blue Sky" statutes, as to which the Master Servicer makes
no such representation or warranty), that are necessary or advisable in
connection with the execution and delivery by, and the performance of the
obligations of, the Master Servicer, either directly or through a
Sub-Servicer, of this Agreement and each Sub-Servicing Agreement, have been
duly taken, given or obtained, as the case may be, are in full force and
effect on the date hereof, are not subject to any pending proceedings or
appeals (administrative, judicial or otherwise) and either the time within
which any appeal therefrom may be taken or review thereof may be obtained
has expired or no review thereof may be obtained or appeal therefrom taken,
and are adequate to authorize the consummation of the transactions
contemplated by this Agreement and each Sub-Servicing Agreement on the part
of the Master Servicer and the performance by the Master Servicer, either
directly or through a Sub-Servicer, of its obligations under this Agreement
and each Sub-Servicing Agreement.
(x) The collection practices used by the Master Servicer with respect
to the Mortgage Loans have been, in all material respects, legal, proper,
prudent and customary in the non-conforming credit residential loan
servicing business.
(xi) The transactions contemplated by this Agreement are in the
ordinary course of business of the Master Servicer.
(c) The Transferor hereby represents and warrants to the Seller, the Master
Servicer, the Trustee, the Certificate Insurer, and to the Owners as of the
Startup Day that:
49
(i) The Transferor is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and is in good
standing as a foreign corporation in each jurisdiction in which the nature
of its business, or the properties owned or leased by it make such
qualification necessary. The Transferor has all requisite corporate power
and authority to own and operate its properties, to enable it to carry out
its business as presently conducted in a material manner and as proposed to
be conducted and to enter into and discharge its obligations under this
Agreement and the other Operative Documents to which it is a party in a
material manner.
(ii) The execution and delivery of this Agreement and the other
Operative Documents to which the Transferor is a party, by the Transferor,
and its performance and compliance with the terms of this Agreement and of
the other Operative Documents to which it is a party have been duly
authorized by all necessary corporate action on the part of the Transferor
and will not violate the Transferor's Certificate of Incorporation or
Bylaws or constitute a default (or an event which, with notice or lapse of
time, or both, would constitute a default) under, or result in the breach
of, any material contract, agreement or other instrument to which the
Transferor is a party or by which the Transferor is bound, or violate any
statute or any order, rule or regulation of any court, governmental agency
or body or other tribunal having jurisdiction over the Transferor.
(iii) This Agreement and the other Operative Documents to which the
Transferor is a party, assuming due authorization, execution and delivery
by the other parties hereto and thereto, each constitutes a valid, legal
and binding obligation of the Transferor, enforceable against it in
accordance with the terms hereof and thereof, except as the enforcement
hereof and thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors'
rights generally and by general principles of equity (whether considered in
a proceeding or action in equity or at law).
(iv) The Transferor is not in default with respect to any order or
decree of any court or any order, regulation or demand of any federal,
state, municipal or governmental agency, which might have consequences that
would materially and adversely affect its performance hereunder and under
the other Operative Documents to which it is a party.
(v) No litigation is pending or, to the best of the Transferor's
knowledge, threatened against the Transferor which litigation might have
consequences that would prohibit its entering into this Agreement or any
other Operative
50
Document to which it is a party or that would materially and adversely
affect its performance hereunder and under the other Operative Documents to
which it is a party.
(vi) No certificate of an officer, statement furnished in writing or
report delivered pursuant to the terms hereof by the Transferor contains
any untrue statement of a material fact or omits to state a material fact
necessary to make the certificate, statement or report not misleading.
(vii) All actions, approvals, consents, waivers, exemptions,
variances, franchises, orders, permits, authorizations, rights and licenses
required to be taken, given or obtained, as the case may be, by or from any
federal, state or other governmental authority or agency (other than any
such actions, approvals, etc. under any state securities laws, real estate
syndication or "Blue Sky" statutes, as to which the Transferor makes no
such representation or warranty), that are necessary or advisable in
connection with the purchase and sale of the Certificates and the execution
and delivery by the Transferor of the Operative Documents to which it is a
party, have been duly taken, given or obtained, as the case may be, are in
full force and effect on the date hereof, are not subject to any pending
proceedings or appeals (administrative, judicial or otherwise) and either
the time within which any appeal therefrom may be taken or review thereof
may be obtained has expired or no review thereof may be obtained or appeal
therefrom taken, and are adequate to authorize the consummation of the
transactions contemplated by this Agreement and the other Operative
Documents on the part of the Transferor and the performance by the
Transferor of its obligations under this Agreement and such of the other
Operative Documents to which it is a party.
(viii) The transactions contemplated by this Agreement are in the
ordinary course of business of the Transferor.
(ix) The Transferor received fair consideration and reasonably
equivalent value in exchange for the sale of the interests in the Mortgage
Loans to the Trust.
(x) The Transferor did not sell any interest in any Mortgage Loan with
any intent to hinder, delay or defraud any of its creditors.
(xi) The Transferor is solvent and the Transferor will not be rendered
insolvent as a result of the sale of the Mortgage Loans to the Trust.
(d) The Transferor additionally covenants that it shall be operated in such
a manner that it would not be substantively consolidated in the trust estate of
any other Person in the event
51
of a bankruptcy or insolvency of such Person and in such regard, the Transferor
shall:
(A) not become involved in the day-to-day management of any other
Person;
(B) not permit the Seller to become involved in the day-to-day
management of the Transferor except to the extent provided in the
Operative Documents;
(C) not engage in transactions with any other Person other than
those activities permitted by its certificate of incorporation and
matters necessarily incident thereto;
(D) maintain separate corporate records and books of account in a
separate business office from any other Person;
(E) maintain its assets separately from the assets of any other
Person (including through the maintenance of a separate bank account);
(F) maintain separate financial statements, books and records
from any other Person;
(G) not guarantee any other Person's obligations or advance funds
to any other Person for the payment of expenses or otherwise;
(H) conduct all business correspondence of the Transferor and
other communications in the Transferor's own name;
(I) not act as an agent of any other Person in any capacity
except pursuant to contractual documents indicating such capacity and
only in respect of transactions permitted by its certificate of
incorporation and matters necessarily incident thereto;
(J) not fail to hold appropriate meetings of the Board of
Directors at least annually and otherwise as necessary to authorize
all corporate action;
(K) not fail to hold meetings of the stockholders at least
annually;
(L) not form, or cause to be formed, any subsidiaries;
(M) not act as an agent of the Seller nor permit the Seller to
act as its agent except to the limited extent permitted under the
Operative Documents;
52
(N) maintain two independent directors at all times;
(O) maintain a separate office from the Seller; and
(P) not engage in intercorporate transactions except to the
extent permitted by its certificate of incorporation and bylaws;
(e) It is understood and agreed that the representations and warranties set
forth in this Section 3.1 shall survive delivery of the Mortgage Loans to the
Trustee.
Upon discovery by any of the Seller, the Master Servicer, the Transferor,
the Certificate Insurer or the Trustee of a breach of any of the representations
and warranties set forth in this Section 3.1(c) which materially and adversely
affects the interests of the Owners or of the Certificate Insurer, the party
discovering such breach shall give prompt written notice to the other parties
and the Certificate Insurer; provided that, the Trustee shall have no duty or
responsibility to inquire, investigate, determine or obtain actual knowledge of
facts or events constituting a breach of any such representations or warranties.
Within 30 days of its discovery or its receipt of notice of breach, the Master
Servicer shall cure such breach in all material respects and, upon the Master
Servicer's continued failure to cure such breach, may thereafter be removed
pursuant to Section 11.1 hereof.
Section 3.2. Covenants of the Seller to Take Certain Actions with Respect
to the Mortgage Loans in Certain Situations. (a) Upon the actual knowledge of
the Seller, the Master Servicer, the Transferor, the Certificate Insurer or the
Trustee that the statements set forth in (ii), (x), (xiii), (xix), (xxxii),
(xxxiii) or (xxxix) of subsection (b) below were untrue in any material respect
as of the Startup Day or that any of the other statements set forth in
subsection (b) below were untrue as of the Startup Day with the result that the
interests of the Owners or the interests of the Certificate Insurer are
materially and adversely affected, the party discovering such breach shall give
prompt written notice to the other parties and the Certificate Insurer.
Upon the earliest to occur of the Seller's discovery, its receipt of notice
of breach from any one of the other parties or the Certificate Insurer or such
time as a situation resulting from an existing statement which is untrue
materially and adversely affects the interests of the Owners or of the
Certificate Insurer as set forth above, the Seller hereby covenants and warrants
that it shall promptly cure such breach in all material respects or it shall,
subject to the further requirements of this paragraph, on the second Remittance
Date next succeeding such discovery, receipt of notice or such time (i)
substitute in lieu of each Mortgage Loan which has given rise to the requirement
for action by the Seller a
53
Qualified Replacement Mortgage and, if the outstanding principal amount of such
Qualified Replacement Mortgage as of the applicable Replacement Cut-Off Date is
less than the Principal Balance of such Mortgage Loan as of such Replacement
Cut-Off Date, deliver an amount equal to such difference together with accrued
and unpaid interest on such amount calculated at the related Coupon Rate less
the rate at which the Master Servicing Fee is calculated, if any, of the
Mortgage Loan being replaced (such aggregate amount, the "Substitution Amount"),
together with the aggregate amount of all unreimbursed Delinquency Advances and
Servicing Advances theretofore made with respect to such Mortgage Loan to the
Master Servicer for deposit in the Principal and Interest Account or (ii)
purchase such Mortgage Loan from the Trust at a purchase price equal to the Loan
Purchase Price thereof, which purchase price shall be delivered to the Master
Servicer for deposit in the Principal and Interest Account. In connection with
any such proposed purchase or substitution, the Seller at its expense, shall
cause to be delivered to the Trustee and to the Certificate Insurer an opinion
of counsel experienced in federal income tax matters stating whether or not such
a proposed purchase or substitution would constitute a Prohibited Transaction
for the Trust or would jeopardize the status of either REMIC as a REMIC and the
Seller shall only be required to take either such action to the extent such
action would not constitute a Prohibited Transaction for the Trust or would not
jeopardize the status of either the Upper-Tier REMIC or the Lower-Tier REMIC as
a REMIC. Notwithstanding the foregoing, the fact that a remedy would constitute
a Prohibited Transaction with respect to a Mortgage Loan shall not reduce the
obligation hereunder of the Seller to effect another remedy with respect to such
Mortgage Loan. It is understood and agreed that the obligation of the Seller so
to cure the defect, substitute or purchase any Mortgage Loan as to which such a
statement set forth below is untrue in any material respect and has not been
remedied, along with the indemnification remedy available under Section 12.21(b)
shall constitute the sole remedies available to the Owners, the Trustee or the
Certificate Insurer respecting any such statement.
(b) (i) The information with respect to each Mortgage Loan set forth
in the related Mortgage Loan Schedule is true and correct in all material
respects as of the Cut-Off Date;
(ii) Each Mortgage Loan File has been or will be delivered to the
Trustee on the Startup Day;
(iii) Each Mortgage Loan being transferred to the Trustee is a
Qualified Mortgage and is a Mortgage;
(iv) 93.13% of the Original Group I Pool Principal Balance and 94.94%
of the Original Group II Pool Principal Balance have corresponding
Properties that are improved by a one-to-four family residential dwelling
and the remaining Mortgage Loans have corresponding Properties that are
improved
54
by modular housing, manufactured housing, PUD, SF row houses, townhouses or
duplexes;
(v) As of the Cut-Off Date, no Mortgage Loan in Group I had a
Loan-to-Value Ratio in excess of 90% and the weighted average Loan-to-Value
Ratio for Group I was approximately 74.73%, no Mortgage Loan in Group II
had a Loan-to-Value Ratio in excess of 90% and the weighted average
Loan-to-Value Ratio for Group II was approximately 78.153%;
(vi) Each Mortgage Loan is being serviced by or on behalf of the
Master Servicer;
(vii) The Note related to each Group I Mortgage Loan bears a fixed
Coupon Rate of at least 7.0% per annum; the Note related to each Group II
Mortgage Loan bears interest based on an index of six-month LIBOR, adjusts
either every sixth month or every twenty-fourth month or every thirty-sixth
month, has a margin of at least 3.625%, an adjustment cap of at least 1.0%,
a lifetime cap of at least 13.50% and a Coupon Rate as of the Cut-Off Date
of at least 7.35%;
(viii) Notes representing not more than 44.26% of the Original Group I
Pool Principal Balance of the Mortgage Loans provide for a "balloon"
payment at the end of the 15th year, and notes representing not more than
0.42% of the Original Group II Pool Principal Balance of the Mortgage Loans
provide for a "balloon" payment at the end of the 15th year (such Mortgage
Loans having 30-year amortization schedules);
(ix) As of the Cut-Off Date, each Mortgage is a valid and subsisting
first or second lien (as identified in the Mortgage Loan Schedule) of
record on the Property subject in the case of any Second Mortgage Loan only
to a Senior Lien on such Property and subject in all cases to the
exceptions to title set forth in the title insurance policy with respect to
the related Mortgage Loan, which exceptions are generally acceptable to
banking institutions in connection with their regular mortgage lending
activities, and such other exceptions to which similar properties are
commonly subject and which do not individually, or in the aggregate,
materially and adversely affect the benefits of the security intended to be
provided by such Mortgage;
(x) Immediately prior to the transfer and assignment contemplated by
the Sale Agreement, the Seller held good and indefeasible title to, and was
the sole owner of, each Mortgage Loan conveyed by the Seller subject to no
liens, charges, mortgages, encumbrances or rights of others except as set
forth in paragraph (ix) or other liens which will be released
simultaneously with such transfer and assignment; and immediately upon the
transfer and assignment contemplated the Trust will hold good and
indefeasible title to, and be the
55
sole owner of, each Mortgage Loan subject to no liens, charges, mortgages,
encumbrances or rights of others except as set forth in paragraph (ix) or
other liens which will be released simultaneously with such transfer and
assignment;
(xi) As of the Cut-Off Date, no Mortgage Loan is more than 59 days
delinquent, and Mortgage Loans (in the aggregate) representing no more than
9.44% of the Original Group I Pool Principal Balance of the Mortgage Loans
are 30-59 days delinquent, and no more than 5.85% of the Original Group II
Pool Principal Balance of the Mortgage Loans are 30-59 days delinquent;
(xii) As of the Startup Day, each Property is free of substantial damage
and is in good repair;
(xiii) As of the Startup Day, there is no valid and enforceable offset,
defense or counterclaim to any Note or Mortgage, including the obligation
of the related Mortgagor to pay the unpaid principal of or interest on such
Note;
(xiv) As of the Startup Day, there is no delinquent tax or assessment lien
on any Property, nor is there any claim for work, labor or material
affecting any Property which is or may be a lien prior to, or equal with,
the lien of the related Mortgage except, in each case, those which are
insured against by any title insurance policy referred to in paragraph
(xvi) below;
(xv) Each Mortgage Loan complies and at the time it was made complied in
all material respects with all applicable state and federal laws and
regulations, including, without limitation, the federal Truth-in-Lending
Act, Real Estate Settlement Procedure Act and other consumer protection
laws, usury, equal credit opportunity, disclosure and recording laws;
(xvi) With respect to each Mortgage Loan, a lender's title insurance
policy, issued in standard California Land Title Association form or
American Land Title Association form in the state in which the related
Property is situated, in an amount at least equal to the Original Principal
Balance of such Mortgage Loan insuring the mortgagee's interest under the
related Mortgage Loan as the holder of a valid first mortgage lien of
record in the case of each First Mortgage Loan or second mortgage lien of
record in the case of each Second Mortgage Loan on the real property
described in the related Mortgage, as the case may be, subject only to
exceptions of the character referred to in paragraph (ix) above, was
effective on the date of the origination of such Mortgage Loan, and, as of
the Startup Day, such policy will be valid and thereafter such policy shall
continue in full force and effect. The assignment to the Trust of the
benefits of the
56
mortgage title insurance does not require the consent of or notification to
the insurer. No claims have been made under such mortgage title insurance
policies and no prior holder of the related mortgage has done, by act or
omission, anything that would impair the coverage of such mortgage title
insurance policy;
(xvii) At the Startup Day, the improvements upon each Property are
covered by a valid and existing hazard insurance policy (which may be a
blanket policy of the type described in Section 10.11(c) hereof) with a
generally acceptable carrier that provides for fire and extended coverage
representing coverage not less than the least of (A) the outstanding
principal balance of the related Mortgage Loan (together, in the case of a
Second Mortgage Loan, with the outstanding principal balance of the Senior
Lien), (B) the minimum amount required to compensate for damage or loss on
a replacement cost basis or (C) the full insurable value of the Property
and in any event which is not less than the amount necessary to avoid the
operation of any coinsurance provisions with respect to the Property in the
event of any loss less than the amount of the insurance coverage and
consistent with the amount that would have been required as of the date of
origination by the related originator in its normal residential mortgage
lending activities with respect to similar properties in the same locality.
All hazard insurance policies are the valid and binding obligation of the
insurer and contain a standard mortgagee clause naming the originator, its
successors and assigns, as mortgagee. All premiums thereon have been paid.
Such insurance policy requires prior notice to the insured of termination
or cancellation, and no such notice has been received. The Mortgage
obligates the Mortgagor thereunder to maintain all such insurance at the
Mortgagor's cost and expense, and upon the Mortgagor's failure to do so,
authorizes the holder of the Mortgage to obtain and maintain such insurance
at the Mortgagor's cost and expense and to seek reimbursement therefor from
the Mortgagor;
(xviii) If any Property is in an area identified in the Federal
Register by the Federal Emergency Management Agency as having special flood
hazards, a flood insurance policy (which may be a blanket policy of the
type described in Sections 10.11(b) and 10.11(c) hereof) in a form meeting
the requirements of the current guidelines of the Federal Insurance
Administration is in effect with respect to such Property with a generally
acceptable carrier in an amount representing coverage not less than the
least of (A) the outstanding principal balance of the related Mortgage Loan
(together, in the case of a Second Mortgage Loan, with the outstanding
principal balance of the Senior Lien), (B) the minimum amount required to
compensate for damage or loss on a replacement cost basis or (C) the
maximum amount of insurance that is available under the Flood Disaster
Protection Act of
57
1973, as amended. All flood insurance policies are the valid and binding
obligation of the insurer and contain a standard mortgagee clause naming
the originator, its successors and assigns, as mortgagee. All premiums
thereon have been paid. Such flood insurance policy requires prior notice
to the insured of termination or cancellation, and no such notice has been
received. The Mortgage obligates the Mortgagor thereunder to maintain all
such flood insurance at the Mortgagor's cost and expense, and upon the
Mortgagor's failure to do so, authorizes the holder of the Mortgage to
obtain and maintain such flood insurance at the Mortgagor's cost and
expense and to seek reimbursement therefor from the Mortgagor;
(xix) Each Mortgage and Note is the legal, valid and binding
obligation of the maker thereof and is enforceable in accordance with its
terms, except only as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and by general principles of
equity (whether considered in a proceeding or action in equity or at law),
and all parties to each Mortgage Loan had full legal capacity to execute
all documents relating to such Mortgage Loan and convey the estate therein
purported to be conveyed; there is only one original Note with respect to
each Mortgage Loan;
(xx) The Seller has caused and will cause to be performed any and all
acts required to be performed to preserve the rights and remedies of the
Trust in any Insurance Policies applicable to any Mortgage Loans delivered
by the Seller including, to the extent such Mortgage Loan is not covered by
a blanket policy described in Section 10.11(c) hereof, any necessary
notifications of insurers, assignments of policies or interests therein,
and establishments of co-insured, joint loss payee and mortgagee rights in
favor of the Trustee;
(xxi) Each original Mortgage was recorded or is in the process of
being recorded, and all subsequent assignments of the original Mortgage
have been recorded in the appropriate jurisdictions wherein such
recordation is necessary to perfect the lien thereof for the benefit of the
Trustee (or, subject to Section 3.3 hereof, are in the process of being
recorded);
(xxii) The terms of each Note and each Mortgage have not been
impaired, altered or modified in any respect, except by a written
instrument which has been recorded, if necessary, to protect the interests
of the Owners and which has been delivered to the Trustee. The substance of
any such alteration or modification is reflected on the related Mortgage
Loan Schedule;
58
(xxiii) The proceeds of each Mortgage Loan have been fully disbursed,
and there is no obligation on the part of the mortgagee to make future
advances thereunder. Any and all requirements as to completion of any
on-site or off-site improvements and as to disbursements of any escrow
funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing or recording such Mortgage Loans were paid;
(xxiv) Except for one Group I Mortgage Loan with a Principal Balance
of $60,000 as of the Cut-Off Date, no Mortgage Loan was originated under a
buydown plan;
(xxv) No Mortgage Loan has a shared appreciation feature, or other
contingent interest feature;
(xxvi) Each Property is located in the state identified in the related
Mortgage Loan Schedule and consists of one parcel of real property (or
several parcels secured by a blanket mortgage) with a residential dwelling
erected thereon;
(xxvii) Each Mortgage contains a provision for the acceleration of the
payment of the unpaid principal balance of the related Mortgage Loan in the
event the related Property is sold without the prior consent of the
mortgagee thereunder;
(xxviii) Any advances made after the date of origination of a Mortgage
Loan but prior to the Cut-Off Date have been consolidated with the
outstanding principal amount secured by the related Mortgage, and the
secured principal amount, as consolidated, bears a single interest rate and
single repayment term reflected on the Mortgage Loan Schedule. The
consolidated principal amount does not exceed the original principal amount
of the related Mortgage Loan. No Note permits or obligates the Master
Servicer to make future advances to the related Mortgagor at the option of
the Mortgagor;
(xxix) There is no proceeding pending or threatened for the total or
partial condemnation of any Property, nor is such a proceeding currently
occurring, and each Property is undamaged by waste, fire, earthquake or
earth movement;
(xxx) All of the improvements which were included for the purposes of
determining the Appraised Value of any Property lie wholly within the
boundaries and building restriction lines of such Property, and no
improvements on adjoining properties encroach upon such Property, except in
each case exceptions which are stated in the title insurance policy and
affirmatively insured;
59
(xxxi) With respect to each Mortgage constituting a deed of trust, a
trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in such Mortgage,
and no fees or expenses are or will become payable by the Owners or the
Trust to the trustee under the deed of trust, except in connection with a
trustee's sale after default by the related Mortgagor;
(xxxii) Each Mortgage contains customary and enforceable provisions
which render the rights and remedies of the holder thereof adequate for the
realization against the related Property of the benefits of the security,
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 that would materially interfere with
the right to sell the related Property at a trustee's sale or the right to
foreclose on the related Mortgage;
(xxxiii) Except as provided by clause (xi) of this subsection 3.2(b),
there is no default, breach, violation or event of acceleration existing
under any Mortgage or the related 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
the Seller has not waived any default, breach, violation or event of
acceleration;
(xxxiv) No instrument of release or waiver has been executed in
connection with any Mortgage Loan, and no Mortgagor has been released, in
whole or in part;
(xxxv) Each Mortgage Loan conforms, and all such Mortgage Loans in the
aggregate conform, in all material respects to the description thereof set
forth in the Registration Statement;
(xxxvi) An appraisal was performed with respect to each Mortgage Loan;
such appraisal was performed in material compliance with the appraisal
description set forth in the Prospectus;
(xxxvii) No more than 3.98% of the Original Pool Principal Balance of
the Mortgage Loans in Group I is secured by condominiums, townhouses or
rowhouses, and no more than 4.85% of the Original Pool Principal Balance of
the Mortgage Loans in Group II is secured by condominiums, townhouses or
rowhouses;
(xxxviii) The credit underwriting guidelines applicable to each
Mortgage Loan conform in all material respects to the description thereof
set forth in the Prospectus and the
60
Prospectus Supplement and each Mortgage Loan was underwritten in accordance
therewith;
(xxxix) As of the Startup Day, the Seller had no actual knowledge that
there exists on any Property any hazardous substances, hazardous wastes or
solid wastes, as such terms are defined in the Comprehensive Environmental
Response Compensation and Liability Act, the Resource Conservation and
Recovery Act of 1976, or other federal, state or local environmental
legislation;
(xl) No more than 0.97% of the Original Pool Principal Balance of the
Mortgage Loans in Group I is secured by Properties located within any
single zip code area, and no more than 0.53% of the Original Pool Principal
Balance of the Mortgage Loans in Group II is secured by Properties located
within any single zip code area; no more than 10.15% of the Original Pool
Principal Balance of the Mortgage Loans in Group I is located within any
single state, and no more than 12.31% of the Original Pool Principal
Balance of the Mortgage Loans in Group II is located within any single
state;
(xli) At least 93.13% of the Original Group I Pool Principal Balance
and at least 94.94% of the Original Group II Pool Principal Balance is
secured by Properties that are owner occupied;
(xlii) 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;
(xliii) Except for payments in the nature of escrow payments,
including, without limitation, taxes and insurance payments, 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 by the Mortgage, except for interest
accruing from the date of the Mortgage Note or date of disbursement of the
Mortgage proceeds, whichever is greater, to the day which precedes by one
month the due date of the first installment of principal and interest;
(xliv) No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation. All
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with
respect to the use and occupancy of the same, including but not limited to
certificates of occupancy and fire underwriting certificates, have been
made or obtained from the appropriate authorities and the Mortgaged
Property is lawfully occupied under applicable law;
61
(xlv) The related Mortgage Note is not and has not been secured by any
collateral, pledged account or other security except the lien of the
corresponding Mortgage;
(xlvi) There is no obligation on the part of the Seller, the
originator, the Master Servicer, the Transferor, the Trustee or any other
Person to make payments in addition to those made by the Mortgagor;
(xlvii) With respect to each Second Mortgage Loan, the related Senior
Lien requires equal monthly payments, or if it bears an adjustable interest
rate, the monthly payments for the related Senior Lien may be adjusted no
more frequently than monthly;
(xlviii) With respect to each Second Mortgage Loan, either (i) no
consent for the Mortgage Loan is required by the holder of the related
Senior Lien or (ii) such consent has been obtained and is contained in the
File;
(xlix) With respect to any Senior Lien that provided for negative
amortization or deferred interest, the balance of such Senior Lien used to
calculate the Loan-to-Value Ratio for the Second Mortgage Loan is based on
the maximum amount of negative amortization or deferred interest possible
under such Senior Lien;
(l) The maturity date of each Second Mortgage Loan is prior to the
maturity date of the related Senior Lien if such Senior Lien provides for a
balloon payment;
(li) All parties which have had any interest in the Mortgage Loan,
whether as mortgagee, assignee, pledgee or otherwise, are (or, during the
period in which they held and disposed of such interest, were) (1) in
compliance with any and all applicable licensing requirements of the laws
of the state wherein the 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 loans associations or national banks having
principal offices in such state or (D) not doing business in such state so
as to require qualification or licensing;
(lii) All amounts received on and after the Cut-Off Date with respect
to the Mortgage Loans to which the Master Servicer is not entitled have
been deposited into the Principal and Interest Account and are, as of the
Startup Day, in the Principal and Interest Account;
(liii) The Mortgage Loans were not selected for inclusion in the Trust
on any basis intended to adversely affect the Trust;
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(liv) With respect to each Property subject to a land trust (a "Land
Trust Mortgage") (a) a trustee, duly qualified under applicable law to
serve as such, has been properly designated and currently so serves and is
named as such in the land trust agreement and such trustee is named in the
Land Trust Mortgage as Mortgagor; (b) all fees and expenses of the land
trustee which have previously become due and owing have been paid and no
fees or expenses are or will become payable by the Owners or the Trust to
the land trustee under the land trust agreement; (c) the beneficiary is
solely obligated to pay any fees and expenses of the land trustee and the
priority of the lien of the Land Trust Mortgage is not and will not be
primed by the land trustee; (d) the Mortgaged Property is occupied by the
beneficiary under the land trust agreement and, if such land trust
agreement terminates, the beneficiary will become the owner of the
Mortgaged Property; (e) the beneficiary is obligated to make payments under
the Note and will have personal liability for deficiency judgments; (f) the
Land Trust Mortgage and assignment of beneficial interest relating to such
land trust held by the Trust was made in compliance with the related land
trust agreement, was validly entered into by the related land trust trustee
or beneficiary and, does not currently, and will not in the future, violate
any provision of the related land trust agreement, nor any agreement
between or amongst the beneficiaries of such land trust; (g) a UCC
financing statement has been filed, continued, and will be continued,
without intervening liens, as the first lien upon any assignment of
beneficial interest in the Land Trust Mortgage; (h) the assignment of
beneficial interest with respect to such Land Trust Mortgage held by the
Trust was at the time of such assignment the only assignment of such
beneficial interest in the Land Trust Mortgage, such assignment was
accepted by, and noted in the records of the land trust trustee, subsequent
assignment of the beneficial interest in whole or in part has not been
made, and such subsequent assignment of the beneficial interest or any part
thereof is not permitted pursuant to a written agreement between the
respective beneficiary and the Mortgagee, until the expiration of the Note
relating to the Land Trust Mortgage; (i) the Land Trust Mortgage is the
first or second lien on the Property; no lien is in place against the
beneficial interests, or any part thereof, of such Land Trust Mortgage or
collateral assignment of beneficial interest, which liens are superior to
the interest held by the Seller and the beneficial interest, or any part
thereof, of any such Land Trust Mortgage or collateral assignment of
beneficial interest has not been pledged as security for any other debt;
and the beneficiary or land trust trustee is forbidden, pursuant to a
written agreement between the beneficiary or the land trust trustee (as
applicable) and the Mortgagee, from using the land trust property or
beneficial interest, or any part of either, as security for any other debt
until the expiration date of its respective Note; and (x) the terms and
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conditions of the land trust agreement do not prevent the free and absolute
marketability of the Mortgaged Property. As of the Cut-Off Date, the
aggregate Principal Balances of Land Trust Mortgage Loans with related
Mortgaged Properties subject to land trusts does not exceed 2.50% of the
Original Pool Principal Balance;
(lv) With respect to each Property subject to a ground lease (a) the
current ground lessor has been identified and all ground rents which
previously became due and owing have been paid; (b) the ground lease term
extends, or is automatically renewable, for at least five years beyond the
maturity date of the related Mortgage Loan; (c) the ground lease has been
duly executed and recorded; (d) the amount of the ground rent and any
increases therein are clearly identified in the lease and are for
predetermined amounts at predetermined times; (e) the ground rent payment
is included in the Mortgagor's monthly payment as an expense item; (f) the
Trust has the right to cure defaults on the ground lease; and (g) the terms
and conditions of the leasehold do not prevent the free and absolute
marketability of the Property. As of the Cut-Off Date, the aggregate
Principal Balance of Mortgage Loans with related Mortgaged Properties
subject to ground leases does not exceed 5% of the Original Pool Principal
Balance;
(lvi) None of the Mortgage Loans are subject to a plan of bankruptcy
or have borrowers that have sought protection or relief under any state or
federal bankruptcy or insolvency law during the term of the related
Mortgage. With respect to each Mortgage Loan which has been the subject of
bankruptcy or insolvency proceedings, (a) as of the Cut-Off Date, the
Mortgagor is not contractually delinquent more than 30 days with respect to
any payment due under the related plan, (b) the current Loan-to-Value Ratio
is less than or equal to 85% and (c) either (i) if the current
Loan-to-Value Ratio is between 60% and 85%, as of the Cut-Off Date, the
Mortgagor has made at least six consecutive payments under the related Plan
or (ii) if the current Loan-to-Value Ratio is less than 60% as of the
Cut-Off Date, the Mortgagor has made at least three consecutive payments
under the related plan; and
(lvii) To the best of the Seller's knowledge, there is no error,
omission, misrepresentation, fraud or similar occurrence with respect to a
Mortgage Loan has taken place on the part of any person, including without
limitation the Mortgagor, any appraiser, any builder or developer, or any
other party involved in the origination of the Mortgage Loan or in the
application of any insurance in relation to such Mortgage Loan.
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(c) In the event that any Qualified Replacement Mortgage is delivered by
the Seller to the Trust pursuant to this Section 3.2, the Seller shall be
obligated to take the actions described in subsection (a) above with respect to
such Qualified Replacement Mortgage upon the discovery by any of the Owners, the
Seller, the Master Servicer, the Transferor, the Certificate Insurer, any
Sub-Servicer or the Trustee that the statements set forth in subsections (ii),
(x), (xiii), (xix), (xxxii), (xxxiii) or (xxxix) of subsection (b) above are
untrue in any material respect on the date such Qualified Replacement Mortgage
is conveyed to the Trust or that any of the other statements set forth in
subsection (b) hereof are untrue on the date such Qualified Replacement Mortgage
is conveyed to the Trust such that the interests of the Owners or the
Certificate Insurer in the related Qualified Replacement Mortgage are materially
and adversely affected; provided, however, that for the purposes of this
subsection (c) the statements in subsection (b) hereof referring to items "as of
the Cut-Off Date" or "as of the Startup Day" shall be deemed to refer to such
items as of the date such Qualified Replacement Mortgage is conveyed to the
Trust.
(d) It is understood and agreed that the covenants set forth in this
Section 3.2 shall survive delivery of the respective Mortgage Loans (including
Qualified Replacement Mortgage Loans) to the Trustee.
(e) The Seller hereby assigns to the Trustee on behalf of the Owners and
the Certificate Insurer all of its rights to recovery for breaches of
representations and warranties given by the originators of such Mortgage Loans
that are similar in import to the following (but only to the extent such
representations are given and to the extent such rights are assignable): no
error omission, misrepresentation, fraud or similar occurrence with respect to a
Mortgage Loan has taken place on the part of any person, including without
limitation the Mortgagor, any appraiser, any builder or developer, or any other
party involved in the origination of the Mortgage Loan or in the application of
any insurance in relation to such Mortgage Loan. Notwithstanding such
assignment, none of the Owners, the Certificate Insurer or the Trustee may
enforce any such remedy except to the extent that the Seller is unwilling to
enforce the remedy.
Section 3.3. Conveyance of the Mortgage Loans and Qualified Replacement
Mortgages. (a) The Transferor hereby transfers, assigns, sets over and otherwise
conveys without representation, warranty or recourse, to the Trust, all right,
title and interest of the Transferor in and to each Mortgage Loan listed on the
Mortgage Loan Schedule delivered by the Transferor on the Startup Day, and all
its right, title and interest in and to (i) scheduled payments of interest due
on each Mortgage Loan after the Cut-Off Date, (ii) scheduled payments of
principal due, and unscheduled collections of principal received, on each
Mortgage Loan on and after the Cut-Off Date, and (iii) its Insurance
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Policies; such transfer of the Mortgage Loans set forth on the Mortgage Loan
Schedule to the Trust is absolute and is intended by the Owners and all parties
hereto to be treated as a sale to the Trust.
(b) In connection with the transfer and assignment of the Mortgage Loans by
the Seller to the Transferor pursuant to the Purchase and Sale Agreement, and by
the Transferor to the Trust pursuant to this Agreement, on the Startup Day, the
Seller agrees to:
(i) deliver, or cause to be delivered, without recourse to the Trustee
on behalf of the Trust on the Startup Day with respect to each Mortgage
Loan listed on the Mortgage Loan Schedule (A) the original Notes or, if any
original Note has been lost or destroyed, certified copies thereof
(together with a lost note affidavit), endorsed without recourse by the
originator (or most recent payee) thereof "Pay to the order of The Chase
Manhattan Bank, as Trustee", (B) originals (subject to the provisions of
paragraph (d) below relating to items in the process of being recorded) of
all intervening assignments, showing a complete chain of assignment from
origination to assignment to the Trustee, including warehousing
assignments, with evidence of recording thereon, (C) originals of all
assumption and modification agreements, if any, and (D) either: (1) the
original Mortgage (subject to the provisions of paragraph (d) below
relating to items in the process of being recorded), with evidence of
recording thereon, or (2) a copy of the Mortgage certified by the public
recording office in those instances where the original recorded Mortgage
has been lost and (E) the original lender's title insurance policy issued
on the date of origination of such Mortgage Loan, together with any
endorsements thereto; provided, however, that, subject to Sections 3.3(d)
and 3.4(b), the Seller shall not be required to prepare an assignment for
any Mortgage as to which the original recording information is lacking; and
provided, further, that pending the issuance of the final title policy, the
Seller shall deliver the title commitment or title binder to insure same;
and
(ii) cause, within 10 Business Days following the Startup Day,
assignments of the Mortgages from the related originator to The Chase
Manhattan Bank to be submitted for recording in the appropriate
jurisdictions to perfect the Trustee's lien thereunder as against creditors
of or purchasers from the Seller, provided, however, that the Seller need
not cause any assignment to be submitted with respect to which the Seller
provides to the Trustee an opinion of counsel reasonably acceptable to the
Certificate Insurer to the effect that such recordation is not necessary;
the above-listed items constituting the "File" for the related Mortgage
Loan;
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(c) Notwithstanding anything to the contrary contained in this Section 3.3,
in those instances where the public recording office retains the original
Mortgage, the assignment of a Mortgage or the intervening assignments of the
Mortgage after it has been recorded, the Seller shall be deemed to have
satisfied its obligations hereunder upon delivery to the Trustee of a copy of
such Mortgage, such assignment or assignments of Mortgage certified by the
public recording office to be a true copy of the recorded original thereof.
(d) Not later than ten days following the end of the 10- Business Day
period referred to in clause (b)(ii) above, the Seller shall deliver, or cause
to be delivered, to the Trustee copies of all Mortgage assignments submitted for
recording, together with a list of all Mortgages for which no Mortgage
assignment has yet been submitted for recording, which list shall state the
reason why such Mortgage assignments have not been submitted for recording. With
respect to any Mortgage assignment disclosed on such list as not yet submitted
for recording for a reason other than a lack of original recording information,
the Trustee shall make an immediate demand on the Seller to prepare, or cause to
be prepared, such Mortgage assignments, and shall inform the Certificate Insurer
of the Seller's failure to prepare such Mortgage assignments. Thereafter, the
Trustee shall cooperate in executing any documents submitted to the Trustee in
connection with this provision. Thereafter, the Seller shall prepare, or cause
to be prepared, a Mortgage assignment for any Mortgage for which original
recording information is subsequently received by the Seller, and shall promptly
deliver a copy of such Mortgage assignment to the Trustee.
Neither the Master Servicer nor the Trustee shall be responsible for the
costs of recording any Mortgage or any assignment of Mortgage pursuant to this
Section 3.3.
Copies of all Mortgage assignments received by the Trustee shall be kept in
the related File. The Seller shall promptly deliver, or cause to be delivered,
to the Trustee such original Mortgage or intervening mortgage assignment with
evidence of recording indicated thereon upon receipt thereof from the public
recording official. If the Seller within nine months from the Startup Day shall
not have received such original Mortgage or intervening mortgage assignment from
the public recording official, it shall obtain and deliver, or cause to be
delivered, to the Trustee within ten months from the Startup Day, a copy of such
original Mortgage or mortgage assignment certified by such public recording
official to be a true and complete copy of such original Mortgage or mortgage
assignment as recorded by such public recording office.
(e) In the case of Mortgage Loans which have been prepaid in full on or
after the Cut-Off Date and prior to the Startup Day, the Seller, in lieu of the
foregoing, will deliver
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within 15 days after the Startup Day to the Trustee a certification of an
Authorized Officer in the form set forth in Exhibit J.
(f) The Seller (or an affiliate thereof) shall sell, transfer, assign, set
over and otherwise convey without recourse, to the Trustee all its right, title
and interest in and to any Qualified Replacement Mortgage delivered by it to the
Trustee on behalf of the Trust pursuant to Section 3.2 or 3.4 hereof and all its
right, title and interest to principal collected and interest accruing on such
Qualified Replacement Mortgage on and after the applicable Replacement Cut-Off
Date; provided, however, that the Seller (or such affiliate) shall reserve and
retain all right, title and interest in and to payments of principal and
interest due on such Qualified Replacement Mortgage prior to the applicable
Replacement Cut-Off Date.
(g) As to each Mortgage Loan released from the Trust in connection with the
conveyance of a Qualified Replacement Mortgage therefor, the Trustee will
transfer, assign, set over and otherwise convey without representation, warranty
or recourse, on the Seller's order, all of its right, title and interest in and
to such released Mortgage Loan and all the Trust's right, title and interest in
and to principal collected and interest accruing on such released Mortgage Loan
on and after the applicable Replacement Cut-Off Date; provided, however, that
the Trust shall reserve and retain all right, title and interest in and to
payments of principal collected and interest accruing on such released Mortgage
Loan prior to the applicable Replacement Cut-Off Date.
(h) In connection with any transfer and assignment of a Qualified
Replacement Mortgage to the Trustee on behalf of the Trust, the Seller agrees to
deliver to the Trustee the items described in Section 3.3(b) on the date of such
transfer and assignment or, if a later delivery time is permitted by Section
3.3(b), then no later than such later delivery time.
(i) As to each Mortgage Loan released from the Trust in connection with the
conveyance of a Qualified Replacement Mortgage the Trustee shall deliver on the
date of conveyance of such Qualified Replacement Mortgage and on the order of
the Seller (i) the original Note, or the certified copy, relating thereto,
endorsed without recourse, to the Seller, and (ii) such other documents as
constituted the File with respect thereto.
(j) If a Mortgage assignment is lost during the process of recording, or is
returned from the recorder's office unrecorded due to a defect therein, the
Seller shall prepare or cause to be prepared a substitute assignment or cure
such defect, as the case may be, and thereafter cause each such assignment to be
duly recorded.
(k) The Seller shall reflect on its records that the Mortgage Loans have
been sold to the Trust.
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Section 3.4. Acceptance by Trustee; Certain Substitutions of Mortgage
Loans; Certification by Trustee. (a) The Trustee agrees to execute and deliver
on the Startup Day an acknowledgment of receipt of the items delivered by the
Seller in the form attached as Exhibit K hereto (the "Initial Trustee
Certification"), and declares that it will hold such documents and any
amendments, replacement or supplements thereto, as well as any other assets
included in the definition of Trust Estate and delivered to the Trustee, as
Trustee in trust upon and subject to the conditions set forth herein for the
benefit of the Owners. The Trustee agrees, for the benefit of the Owners, to
review such items within 45 days after the Startup Day (or, with respect to any
document delivered after the Startup Day, within 45 days of receipt and with
respect to any Qualified Replacement Mortgage, within 45 days after the
assignment thereof) and to deliver to the Seller, the Master Servicer, any
Sub-Servicer, the Transferor and the Certificate Insurer a Pool Certification in
the form attached hereto as Exhibit L (the "Interim Trustee Certification").
Within 12 months from the Startup Day, the Trustee shall review the contents of
the Files and deliver to the Seller, the Master Servicer, any Sub-Servicer, the
Transferor and the Certificate Insurer a Pool Certification in the form attached
hereto as Exhibit M (the "Final Trustee Certification").
The Trustee shall certify in the Initial Trustee Certification that it has
examined each Note to confirm that except as otherwise described in such
certification it is in possession of an executed original Note endorsed to the
Trustee. The Trustee shall certify in the Interim and Final Trustee
Certifications that except as described in such certification, as to each
Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan
paid in full or any Mortgage Loan specifically identified in such Certification
as not covered by such Certification), (i) all documents required to be
delivered to it pursuant to this Agreement are in its possession and have been
executed, (ii) the original Note bearing an original endorsement to the Trustee
from the original payee (or set of original endorsements evidencing a complete
chain of title from the original payee to the Trustee) is in its possession;
(iii) such documents have been reviewed by it and have not been mutilated,
damaged, torn or otherwise physically altered and relate to such Mortgage Loan
identified in the Mortgage Loan Schedule and (iv) based on its examination and
only as to the foregoing documents, the information set forth on the Mortgage
Loan Schedule as to loan number, name of mortgagor and address, date of
origination, the original stated maturity date, the Original Principal Balance,
the Coupon Rate, the scheduled monthly payment of principal and interest and the
date in each month or which the related payments are due, accurately reflects
the information set forth in the File. The Trustee shall be under no duty or
obligation pursuant to this Section 3.4 to inspect, review or examine any such
documents, instruments, certificates or other papers to determine that they are
genuine, enforceable, or appropriate for the represented purpose or that they
are other than
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what they purport to be on their face, nor shall the Trustee be under any duty
to determine independently whether there are any intervening assignments or
assumption or modification agreements with respect to any Mortgage Loan. In the
Interim and Final Trustee Certifications, the Trustee based on its examination
of the Files shall also either confirm, or list as an exception that:
(i) each Note and Mortgage bears an original signature or signatures
purporting to be that of the person or persons named as the maker and
mortgagor/trustor;
(ii) the principal amount of the indebtedness secured by the Mortgage is
identical to the original principal amount of the Note;
(iii) the assignment of Mortgage is in the form "The Chase Manhattan Bank,
as Trustee" and bears a signature that purports to be the signature of an
authorized officer of the Person which the related File suggests was the
immediately prior record holder of such Mortgage;
(iv) if intervening assignments are included in the File, each such
intervening assignment bears a signature that purports to be the signature of
the mortgagee/beneficiary and/or the assignee;
(v) the address of the real property set forth in the title insurance
policy or preliminary title report or commitment to issue a title policy is
identical to the real property address contained in the Mortgage and such policy
or commitment is for an amount equal to the original principal amount of the
Note; and
(vi) it has received an original Mortgage with evidence of recordation and
assignment, in each case, with evidence of recordation thereon or a copy thereof
certified to be true and correct by the public recording office in possession of
such Mortgage and assignment.
Following the delivery of the Final Trustee Certification, the Trustee shall
provide to the Seller, the Master Servicer, the Transferor and the Certificate
Insurer no less frequently than monthly, updated certifications indicating the
then current status of exceptions, until all such exceptions have been
eliminated.
(b) If the Trustee during such 45-day period in connection with the Interim
Trustee Certification, or 12-month period in connection with the Final Trustee
Certification finds any document constituting a part of a File which is not
properly executed, has not been received, or is unrelated to the Mortgage Loans
identified in the Mortgage Loan Schedule or the Trustee is unable to make any of
the other required certifications, or that any Mortgage Loan does not conform in
a material respect to the description thereof as set forth in the Mortgage Loan
Schedule, the
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Trustee shall promptly so notify the Seller, the Master Servicer, the Transferor
and the Certificate Insurer. 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 items delivered by the Seller pursuant to Section
3.3(b)(i) is limited solely to such procedures as are necessary to enable the
Trustee to complete Exhibits K, L and M hereto.
The Seller agrees to use reasonable efforts to remedy a material defect in
a document constituting part of a File of which it is so notified by the
Trustee. If, however, (i) in the case of a defect consisting of the failure of
the Seller to deliver an original Mortgage and any intervening mortgage
assignment evidencing a complete chain of title to the Trustee with evidence of
recording thereon, on the first Remittance Date following the 12 month period
from the Startup Day and (ii) in the case of all other defects within 60 days
after the Trustee's notice to it respecting such defect the Seller has not
remedied the defect and the defect materially and adversely affects the interest
in the related Mortgage Loan of the Owners or of the Certificate Insurer, the
Seller will on the next succeeding Remittance Date (i) substitute in lieu of
such Mortgage Loan a Qualified Replacement Mortgage and, deliver the
Substitution Amount applicable thereto to the Master Servicer for deposit in the
Principal and Interest Account or (ii) purchase such Mortgage Loan at a purchase
price equal to the Loan Purchase Price thereof, which purchase price shall be
delivered to the Master Servicer for deposit in the Principal and Interest
Account.
In connection with any such proposed purchase or substitution the Seller
shall cause at the Seller's expense to be delivered to the Trustee and to the
Certificate Insurer an opinion of counsel experienced in federal income tax
matters stating whether or not such a proposed purchase or substitution would
constitute a Prohibited Transaction for the Trust or would jeopardize the status
of either the Upper-Tier REMIC or the Lower-Tier REMIC as a REMIC, and the
Seller shall only be required to take either such action to the extent such
action would not constitute a Prohibited Transaction for either the Upper-Tier
REMIC or the Lower-Tier REMIC as a REMIC or would not jeopardize the status of
either the Upper-Tier REMIC or the Lower-Tier REMIC as a REMIC. Any required
purchase or substitution, if delayed by the absence of such opinion shall
nonetheless occur upon the earlier of (i) the occurrence of a default or
imminent default with respect to the Mortgage Loan or (ii) the delivery of such
opinion.
Section 3.5. Cooperation Procedures. (a) The Seller shall, in connection
with the delivery of each Qualified Replacement Mortgage to the Trustee, provide
the Trustee with the information set forth in the related Mortgage Loan Schedule
with respect to such Qualified Replacement Mortgage.
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(b) The Seller and the Trustee covenant to provide each other and the
Certificate Insurer with all data and information required to be provided by
them hereunder at the times required hereunder, and additionally covenant
reasonably to cooperate with each other in providing any additional information
required by any of them or the Certificate Insurer in connection with their
respective duties hereunder.
ARTICLE IV
ISSUANCE AND SALE OF CERTIFICATES
Section 4.1. Issuance of Certificates. On the Startup Day, upon the
Trustee's receipt from the Seller of an executed Delivery Order in the form set
forth as Exhibit H hereto, the Trustee shall execute, authenticate and deliver
the Certificates on behalf of the Trust in accordance with the directions set
forth in such Delivery Order.
Section 4.2. Sale of Certificates. At 11 a.m. New York City time on the
Startup Day, at the offices of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇, the Seller will sell and convey the Mortgage Loans and the money,
instruments and other property related thereto to the Trustee, and the Trustee
will (i) hold the Class A Certificates as transfer agent for the Depository,
with an aggregate Percentage Interest in each Class equal to 100%, registered in
the name of Cede & Co. or in such other names as the Underwriters shall direct
against payment of the purchase price thereof by wire transfer of immediately
available funds to the Trustee for disbursement to the Seller and (ii) deliver
to the Seller, the Class B Certificates and the Residual Certificates, with an
aggregate Percentage Interest equal to 100%, registered as the Seller shall
request. Upon receipt of the proceeds of the sale of the Certificates, the
Seller shall (a) pay the initial premiums due to the Certificate Insurer and (b)
pay other fees and expenses identified by the Seller.
ARTICLE V
CERTIFICATES AND TRANSFER OF INTERESTS
Section 5.1. Terms. (a) The Certificates are pass-through securities having
the rights described therein and herein. Distributions on the Certificates are
payable solely from payments received on or with respect to the Mortgage Loans
(other than the Master Servicing Fees), moneys in the Certificate Account, the
Principal and Interest Account, the Supplemental Interest Payment Account,
Insured Payments made by the Certificate Insurer, Delinquency Advances and
Compensating Interest payments made by the Master Servicer or otherwise held by
the Master Servicer in trust for the Owners, except as otherwise provided
herein, and from
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earnings on moneys and the proceeds of property held as a part of the Trust
Estate. Each Certificate entitles the Owner thereof to receive distributions in
accordance with this Agreement and in a specified portion of the aggregate
distribution due to the related Class of Certificates, pro rata in accordance
with such Owner's Percentage Interest and in the case of the Class A-5
Certificates, certain amounts payable from the Supplemental Interest Payment
Account.
(b) Each Owner is required, and hereby agrees, to return to the Trustee any
Certificate with respect to which the Trustee has made the final distribution
due thereon. Any such Certificate as to which the Trustee has made the final
distribution thereon shall be deemed cancelled and shall no longer be
Outstanding for any purpose of this Agreement, whether or not such Certificate
is ever returned to the Trustee.
Section 5.2. Forms. The Certificates of each Class shall be in
substantially the forms set forth as the related Exhibits to this Agreement,
with such appropriate insertions, omissions, substitutions and other variations
as are required or permitted by this Agreement or as may in the Seller's
judgment be necessary, appropriate or convenient to comply, or facilitate
compliance, with applicable laws, and may have such letters, numbers or other
marks of identification and such legends or endorsements placed thereon as may
be required to comply with the rules of any applicable securities laws or as
may, consistently herewith, be determined necessary by the Authorized Officer of
the Trustee executing such Certificates, as evidenced by his execution thereof.
Section 5.3. Execution, Authentication and Delivery. Each Certificate shall
be executed on behalf of the Trust, by the manual signature of one of the
Trustee's Authorized Officers and shall be authenticated by the manual signature
of one of the Trustee's Authorized Officers.
Certificates bearing the manual signature of individuals who were at any
time the proper officers of the Trustee shall bind the Trust, notwithstanding
that such individuals or any of them have ceased to hold such offices prior to
the execution and delivery of such Certificates or did not hold such offices at
the date of authentication of such Certificates.
No Certificate shall be valid until executed and authenticated as set forth
above.
Certificates delivered on the Startup Day shall be dated the Startup Day;
all Certificates delivered thereafter shall be dated the date of authentication.
Section 5.4. Registration and Transfer of Certificates. (a) The Trustee
shall cause to be kept a register (the "Register")
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in which, subject to such reasonable regulations as it may prescribe, the
Trustee shall provide for the registration of Certificates and the registration
of transfer of Certificates.
(b) Subject to the provisions of Section 5.8 hereof with respect to the
Unregistered Certificates, upon surrender for registration of transfer of any
Certificate at the office designated as the location of the Register, the
Trustee shall execute and authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of a like
Class and in the aggregate principal or notional amount of the Certificate so
surrendered.
(c) At the option of any Owner, Certificates of any Class owned by such
Owner may be exchanged for other Certificates authorized of like Class, tenor
and a like aggregate original principal or notional amount and bearing numbers
not contemporaneously outstanding, upon surrender of the Certificates to be
exchanged at the office designated as the location of the Register. Whenever any
Certificate is so surrendered for exchange, the Trustee shall execute and
authenticate and deliver the Certificate or Certificates which the Owner making
the exchange is entitled to receive.
(d) All Certificates issued upon any registration of transfer or exchange
of Certificates shall be valid evidence of the same ownership interests in the
Trust and entitled to the same benefits under this Agreement as the Certificates
surrendered upon such registration of transfer or exchange.
(e) Every Certificate presented or surrendered for registration of transfer
or exchange shall be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Trustee duly executed by the Owner thereof
or his attorney duly authorized in writing.
(f) No service charge shall be made to an Owner for any registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any registration of transfer or exchange of Certificates; any
other expenses in connection with such transfer or exchange shall be an expense
of the Trust.
(g) It is intended that the Class A Certificates be registered so as to
participate in a global book-entry system with the Depository, as set forth
herein. Each Class of Class A Certificates shall be initially issued in the form
of a single fully registered Class A Certificate of the related Class with a
denomination equal to the original principal balance of the related Class. Upon
initial issuance, the ownership of such Class A Certificates shall be registered
in the Register in the name of
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Cede & Co., or any successor thereto, as nominee for the Depository.
The minimum denominations shall be $1,000 for any Class A Certificate,
$100,000 for any Class B Certificate, and 10% Percentage Interest for any
Residual Certificate.
The Seller and the Trustee are hereby authorized to execute and deliver the
Representation Letter with the Depository.
With respect to Class A Certificates registered in the Register in the name
of Cede & Co., as nominee of the Depository, the Seller, the Master Servicer,
the Transferor and the Trustee shall have no responsibility or obligation to the
Depository's "Direct Participants" or "Indirect Participants" or beneficial
owners for which the Depository holds Class A Certificates from time to time as
a Depository. Without limiting the immediately preceding sentence, the Seller,
the Master Servicer, the Transferor and the Trustee shall have no responsibility
or obligation with respect to (i) the accuracy of the records of the Depository,
Cede & Co., or any Direct or Indirect Participant with respect to the ownership
interest in the Class A Certificates, (ii) the delivery to any Direct or
Indirect Participant or any other Person, other than a registered Owner of a
Class A Certificate as shown in the Register, of any notice with respect to the
Class A Certificates or (iii) the payment to, or withholding with respect to,
any Direct or Indirect Participant or any other Person, other than a registered
Owner of a Class A Certificate as shown in the Register, of any amount with
respect to any distribution of principal or interest on the Class A
Certificates. No Person other than a registered Owner of a Class A Certificate
as shown in the Register shall receive a certificate evidencing such Class A
Certificate. The Certificate Issuer shall have no responsibility for or
obligation with respect to the accuracy of the records of the Depository, Cede &
Co., or any Direct or Indirect Participant with respect to the ownership
interest in the Class A Certificates.
Upon delivery by the Depository to the Trustee of written notice to the
effect that the Depository has determined to substitute a new nominee in place
of Cede & Co., and subject to the provisions hereof with respect to the payment
of interest by the mailing of checks or drafts to the registered Owners of Class
A Certificates appearing as registered Owners in the registration books
maintained by the Trustee at the close of business on a Record Date, the name
"Cede & Co." in this Agreement shall refer to such new nominee of the
Depository.
(h) In the event that (i) the Depository or the Seller advises the Trustee
in writing that the Depository is no longer willing or able to discharge
properly its responsibilities as nominee and depository with respect to the
Class A Certificates and the Seller is unable to locate a qualified successor,
(ii) the Seller at its sole option elects to terminate the book-entry system
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through the Depository or (iii) after an Event of Default, Owners of
Certificates evidencing at least 51% Percentage Interests of any Class affected
thereby notify the Seller that the continuation of a book-entry system is not in
the best interests of such Class of Owners, the Class A Certificates or any
Class, as applicable, shall no longer be restricted to being registered in the
Register in the name of Cede & Co. (or a successor nominee) as nominee of the
Depository. At that time, the Class A Certificates shall be registered in the
name of and deposited with a successor depository operating a global book-entry
system, as may be acceptable to the Seller, or such depository's agent or
designee but, if the Seller does not select such alternative global book-entry
system, then the Trustee shall notify the Owners of the Class A Certificates in
writing of the termination of the book-entry system and the Class A Certificates
may be registered in whatever name or names registered Owners of Class A
Certificates transferring Class A Certificates shall designate, in accordance
with the provisions hereof.
(i) Notwithstanding any other provision of this Agreement to the contrary,
so long as any Class A Certificate is registered in the name of Cede & Co., as
nominee of the Depository, all distributions of principal or interest on such
Class A Certificates and all notices with respect to such Class A Certificates
shall be made and given, respectively, in the manner provided in the
Representation Letter.
Section 5.5. Mutilated, Destroyed, Lost or Stolen Certificates. If (i) 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 (ii) in the case of any mutilated Certificate, such mutilated
Certificate shall first be surrendered to the Trustee, and in the case of any
destroyed, lost or stolen Certificate, there shall be first delivered to the
Trustee such security or indemnity as may be reasonably required by it to hold
the Trustee harmless, then, in the absence of notice to the Trustee that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute and authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
Class, tenor and aggregate principal amount, bearing a number not
contemporaneously outstanding.
Upon the issuance of any new Certificate under this Section, the Trustee
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto; any other expense
in connection with such issuance shall be an expense of the Owner.
Every new Certificate issued pursuant to this Section in exchange for or in
lieu of any mutilated, destroyed, lost or stolen Certificate shall constitute
evidence of a substitute interest in the Trust, and shall be entitled to all the
benefits of this Agreement equally and proportionately with any and all other
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Certificates of the same Class duly issued hereunder and such mutilated,
destroyed, lost or stolen Certificate shall not be valid for any purpose.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Certificates.
Section 5.6. Persons Deemed Owners. The Trustee and the Certificate Insurer
and any of their respective agents may treat the Person in whose name any
Certificate is registered as the Owner of such Certificate for the purpose of
receiving distributions with respect to such Certificate and for all other
purposes whatsoever, and neither the Trustee nor the Certificate Insurer nor any
of their respective agents shall be affected by notice to the contrary.
Section 5.7. Cancellation. All Certificates surrendered for registration of
transfer or exchange shall, if surrendered to any Person other than the Trustee,
be delivered to the Trustee and shall be promptly cancelled by it. No
Certificate shall be authenticated in lieu of or in exchange for any Certificate
cancelled as provided in this Section, except as expressly permitted by this
Agreement. All cancelled Certificates may be held or destroyed by the Trustee in
accordance with its standard policies.
Section 5.8. Limitation on Transfer of Ownership Rights. (a) No sale or
other transfer of any Unregistered Certificate (other than the initial sale of
the Unregistered Certificates upon the issuance thereof) shall be made to any
Person unless such Person delivers to the Trustee (i) a completed certificate in
the form attached as Exhibit D hereto, (ii) if required by the terms of such
certificate, an opinion to the effect that such sale or other transfer will not
violate any applicable federal or state securities laws and (iii) an opinion
that such transfer will not jeopardize the REMIC status of either REMIC or the
deductibility of interest with respect to the Certificates; no sale or other
transfer of any Unregistered Certificate shall be made to any Person until such
Person delivers to the Trustee either (i) an opinion of counsel from the
prospective transferee of such Certificate, acceptable to, and in form and
substance satisfactory to the Seller, to the effect that such transferee is not
a pension or benefit plan or individual retirement arrangement that is subject
to the Employee Retirement Income Security Act of 1974, as amended ("ERISA") or
to Section 4975 of the Code or an entity whose underlying assets are deemed to
be assets of such a plan or arrangement by reason of such plan's or
arrangement's investments in the entity, as determined under U.S. Department of
Labor Regulations 29 C.F.R. ss. 2510.3-101 or otherwise, collectively, a "Plan"
or (ii) the representation set forth in Paragraph D of Exhibit D hereto.
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(b) No sale or other transfer of record or beneficial ownership of a
Residual Certificate (whether pursuant to a purchase, a transfer resulting from
a default under a secured lending agreement or otherwise) shall be made to a
Disqualified Organization. The transfer, sale or other disposition of a Residual
Certificate (whether pursuant to a purchase, a transfer resulting from a default
under a secured lending agreement or otherwise) to a Disqualified Organization
shall be deemed to be of no legal force or effect whatsoever and such transferee
shall not be deemed to be an Owner for any purpose hereunder, including, but not
limited to, the receipt of distributions on such Residual Certificate.
Furthermore, in no event shall the Trustee accept surrender for transfer,
registration of transfer, or register the transfer, of any Residual Certificate
nor authenticate and make available any new Residual Certificate unless the
Trustee has received an affidavit from the proposed transferee in the form
attached hereto as Exhibit E. Each holder of a Residual Certificate by his
acceptance thereof, shall be deemed for all purposes to have consented to the
provisions of this Section 5.8(b).
(c) Notwithstanding anything to the contrary herein, no sale or other
transfer of record or beneficial ownership of a Class B Certificate or a
Residual Certificate shall be made to any Person until such Person delivers to
the Trustee either (i) an opinion of counsel from the prospective transferee of
such Certificate, acceptable to, and in form and substance satisfactory to the
Seller, to the effect that such transferee is not a Plan or (ii) the
representation set forth in Paragraph D of Exhibit D hereto. Any such
Certificateholder desiring to effect such transfer shall, and does hereby agree
to, indemnify the Seller, the Master Servicer, the Transferor, the Certificate
Insurer and the Trustee against any liability, cost or expense (including
attorney's fees) that may result if the transfer is in violation of such
statute.
Section 5.9. Assignment of Rights. An Owner may pledge, encumber,
hypothecate or assign all or any part of its right to receive distributions
hereunder, but such pledge, encumbrance, hypothecation or assignment shall not
constitute a transfer of an ownership interest sufficient to render the
transferee an Owner of the Trust without compliance with the provisions of
Section 5.4 and Section 5.8 hereof.
ARTICLE VI
COVENANTS
Section 6.1. Distributions. On each Payment Date, the Trustee will
distribute, from funds comprising the Trust Estate, to the Owners of record of
the Certificates as of the related Record Date, such Owners' Percentage
Interests in the amounts required to be distributed to the Owners of each Class
of Certificates on such
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Payment Date. For so long as the Class A Certificates are in book- entry form
with the Depository, the only "Owner" of the Class A Certificates will be the
Depository.
Section 6.2. Money for Distributions to be Held in Trust;
Withholding. (a) All payments of amounts due and payable with respect to any
Certificate that are to be made from amounts withdrawn from the Certificate
Account pursuant to Section 7.3 hereof shall be made by and on behalf of the
Trustee.
(b) The Trustee on behalf of the Trust shall comply with all
requirements of the Code and applicable state and local law with respect to the
withholding from any distributions made by it to any Owner of any applicable
withholding taxes imposed thereon and with respect to any applicable reporting
requirements in connection therewith.
(c) Any money held by the Trustee in trust for the payment of
any amount due with respect to any Class A Certificate, Class B Certificate or
Residual Certificate and remaining unclaimed by the Owner of such certificate
for three years after such amount has become due and payable shall be discharged
from such trust and be paid to the Seller; and the Owner of such Class A
Certificate, Class B Certificate or Residual Certificate shall thereafter, as an
unsecured general creditor, look only to the Seller for payment thereof (but
only to the extent of the amounts so paid to the Seller), and all liability of
the Trustee with respect to such trust money shall thereupon cease; provided,
however, that the Trustee, before being required to make any such payment, shall
at the written request and expense of the Seller cause to be published once, in
the eastern edition of The Wall Street Journal, notice that such money remains
unclaimed and that, after a date specified therein, which shall be not fewer
than 30 days from the date of such publication, any unclaimed balance of such
money then remaining will be paid to the Seller. The Trustee shall, at the
direction of the Seller, also adopt and employ, at the expense of the Seller,
any other reasonable means of notification of such payment (including, but not
limited to, mailing notice of such payment to Owners whose right to or interest
in moneys due and payable but not claimed is determinable from the records of
the Trustee at the last address of record for each such Owner).
Section 6.3. Protection of Trust Estate. (a) The Trustee will hold the
Trust Estate in trust for the benefit of the Owners and, upon request of the
Certificate Insurer or the Seller and at the expense of the Seller, will from
time to time execute and deliver all such supplements and amendments hereto
pursuant to Section 12.14 hereof and all instruments of further assurance and
other instruments, and will take such other action upon such reasonable request,
to:
(i) more effectively hold in trust all or any portion of the Trust
Estate;
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(ii) perfect, publish notice of, or protect the validity of any grant
made or to be made by this Agreement;
(iii) enforce any of the Mortgage Loans;
(iv) preserve and defend title to the Trust Estate and the rights of
the Trustee, and the ownership interests of the Owners represented thereby,
in such Trust Estate against the claims of all Persons and parties; or
(v) perfect a security interest in the Mortgage Loans, in the event
that the conveyance by the Seller did not constitute a sale.
(b) The Trustee shall have the power to enforce, and shall enforce the
obligations of the other parties to this Agreement by action, suit or proceeding
at law or equity, and shall also have the power to enjoin, by action or suit in
equity, any acts or occurrences which may be unlawful or in violation of the
rights of the Owners; provided, however, that nothing in this Section shall
require any action by the Trustee unless the Trustee shall first (i) have been
furnished indemnity satisfactory to it against the costs, expenses and
liabilities to be incurred in compliance with such action and (ii) when required
by this Agreement, have been requested to take such action by the Certificate
Insurer, or, with the consent of the Certificate Insurer by a majority of the
Percentage Interests represented by any Class of Class A Certificates, or, if
there are no longer any Class A Certificates then Outstanding, by such
percentage of the Percentage Interests represented by any Class of Class B
Certificates then Outstanding.
(c) The Trustee shall execute any instrument reasonably required pursuant
to this Section so long as such instrument does not conflict with this Agreement
or with the Trustee's fiduciary duties.
Section 6.4. Performance of Obligations. The Trustee will not take any
action that would release the Seller, the Master Servicer or the Transferor from
any of their respective covenants or obligations under any instrument or
document relating to the Trust Estate or the Certificates or which would result
in the amendment, hypothecation, subordination, termination or discharge of, or
impair the validity or effectiveness of, any such instrument or document, except
with the prior written consent of the Certificate Insurer, or as expressly
provided in this Agreement or such other instrument or document.
Section 6.5. Negative Covenants. The Trustee will not, to the extent within
the control of the Trustee, take any of the following actions:
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(i) sell, transfer, exchange or otherwise dispose of any of the Trust
Estate except as expressly permitted by this Agreement;
(ii) claim any credit on or make any deduction from the distributions
payable in respect of the Certificates (other than amounts properly
withheld from such payments under the Code) or assert any claim against any
present or former Owner by reason of the payment of any taxes levied or
assessed upon any of the Trust Estate;
(iii) incur, assume or guaranty on behalf of the Trust any
indebtedness of any Person except pursuant to this Agreement;
(iv) dissolve or liquidate in whole or in part the Trust Estate,
except pursuant to Article VIII hereof; or
(v) (A) impair the validity or effectiveness of this Agreement, or
release any Person from any covenants or obligations with respect to the
Trust or to the Certificates under this Agreement, except as may be
expressly permitted hereby or (B) create or extend any lien, charge,
adverse claim, security interest, mortgage or other encumbrance to or upon
the Trust Estate or any part thereof or any interest therein or the
proceeds thereof.
Section 6.6. No Other Powers. The Trustee will not, to the extent within
the control of the Trustee, permit the Trust to engage in any business activity
or transaction other than those activities permitted by Section 2.3 hereof.
Section 6.7. Limitation of Suits. No Owner shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Agreement
or the Certificate Insurance Policy, or for the appointment of a receiver or
trustee, or for any other remedy hereunder, unless:
(1) such Owner has previously given written notice to the Seller, the
Transferor, the Certificate Insurer and the Trustee of such Owner's
intention to institute such proceeding;
(2) the Owners of not less than 25% of the Percentage Interests
represented by any Class of Class A Certificates, or, if there are no
Class A Certificates then Outstanding, by such percentage of the
Percentage Interests of any Class of Class B Certificates then
Outstanding, shall have made written request to the Trustee to
institute such proceeding in its own name as representative of the
Owners;
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(3) the Trustee for 30 days after its receipt of such notice, request and
offer of indemnity has failed to institute such proceeding; and
(4) no direction inconsistent with such written request has been given to
the Trustee during such 30-day period by the Certificate Insurer or by
the Owners of a majority of the Percentage Interests represented by
each Class of Class A Certificates or, if there are no Class A
Certificates then Outstanding, by such percentage of the Percentage
Interests represented by any Class of Class B Certificates then
Outstanding;
it being understood and intended that no one or more Owners shall have any right
in any manner whatever by virtue of, or by availing themselves of, any provision
of this Agreement to affect, disturb or prejudice the rights of any other Owner
of the same Class or to obtain or to seek to obtain priority or preference over
any other Owner of the same Class or to enforce any right under this Agreement,
except in the manner herein provided and for the equal and ratable benefit of
all the Owners of the same Class.
In the event the Trustee shall receive conflicting or inconsistent requests
and indemnity from two or more groups of Owners, each representing less than a
majority of the applicable Class of Certificates, the Trustee shall act at the
direction of the Certificate Insurer.
Section 6.8. Unconditional Rights of Owners to Receive Distributions.
Notwithstanding any other provision in this Agreement, the Owner of any
Certificate shall have the right, which is absolute and unconditional, to
receive distributions to the extent provided herein and therein with respect to
such Certificate or to institute suit for the enforcement of any such
distribution, and such right shall not be impaired without the consent of such
Owner.
Section 6.9. Rights and Remedies Cumulative. Except as otherwise provided
herein, no right or remedy herein conferred upon or reserved to the Seller, the
Master Servicer, the Transferor, the Trustee, to the Owners or to the
Certificate Insurer is intended to be exclusive of any other right or remedy,
and every right and remedy shall, to the extent permitted by law, be cumulative
and in addition to every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. Except as otherwise
provided herein, the assertion or employment of any right or remedy hereunder,
or otherwise, shall not prevent the concurrent assertion or employment of any
other appropriate right or remedy.
Section 6.10. Delay or Omission Not Waiver. No delay of the Seller, Master
Servicer, the Transferor, the Trustee, or any Owner of any Certificate or the
Certificate Insurer to exercise any right or remedy under this Agreement shall
impair any such right or
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remedy or constitute a waiver of any such right or remedy. Every right and
remedy given by this Article VI or by law to the Seller or to the Owners or the
Certificate Insurer may be exercised from time to time, and as often as may be
deemed expedient, by the Seller or by the Owners or the Certificate Insurer, as
the case may be.
Section 6.11. Control by Owners. Either (x) the Certificate Insurer or (y)
with the consent of the Certificate Insurer, the Owners of a majority of the
Percentage Interests represented by each Class of Class A Certificates then
Outstanding or, if there are no Class A Certificates then Outstanding, by such
majority of the Percentage Interests represented by any Class of Class B
Certificates then Outstanding, may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, provided
that:
(1) such direction shall not be in conflict with any rule of law or with
this Agreement;
(2) the Trustee shall have been provided with indemnity satisfactory to
it; and
(3) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction; provided, however, that
the Trustee need not take any action which it determines might involve
it in liability or may be unjustly prejudicial to the Owners not so
directing.
ARTICLE VII
ACCOUNTS, FLOW OF FUNDS,
DISTRIBUTIONS AND REPORTS
Section 7.1. 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 Master Servicer, or by any Sub-Servicer and (b)
Insured Payments in accordance with the terms of the Certificate Insurance
Policy. The Trustee shall hold all such money and property received by it as
part of the Trust Estate and shall apply it as provided in this Agreement.
Section 7.2. Establishment of Accounts. The Trustee shall establish and
maintain, at the corporate trust office of the Trustee, a Certificate Account, a
Class A Group I Distribution Account, a Class A Group II Distribution Account
and a Class B Distribution Account, each to be held by the Trustee as a
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segregated trust account so long as the Trustee qualifies as a Designated
Depository Institution and if the Trustee does not so qualify, then by any
Designated Depository Institution in the name of the Trust for the benefit of
the Owners of the Certificates and the Certificate Insurer, as their interests
may appear.
In administering the Accounts the Trustee may establish such sub-Accounts
as the Trustee deems desirable.
Section 7.3. Flow of Funds. (a) The Trustee shall deposit to the
Certificate Account:
(i) with respect to the Group I Mortgage Loans, without duplication, upon
receipt, each Group I Monthly Remittance remitted by the Master
Servicer or any Sub-Servicer, together with any amounts received by
the Trustee in connection with the termination of the Trust insofar as
such amounts relate to the Group I Mortgage Loans; and
(ii) with respect to the Group II Mortgage Loans, without duplication, upon
receipt, each Group II Monthly Remittance remitted by the Master
Servicer or any Sub-Servicer, together with any amounts received by
the Trustee in connection with the termination of the Trust, insofar
as such amounts relate to the Group II Mortgage Loans.
(b) On each Payment Date, the Trustee shall make the following allocations,
disbursements and transfers from the Group I Available Funds and from the Group
II Available Funds 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) first, the Trustee shall pay first, to itself the related
Trustee's Fee then due;
(ii) [Reserved];
(iii)second, the Trustee shall allocate the following amounts in the
following order of priority:
(A) from the Available Funds then on deposit in the Certificate
Account with respect to each Group, the lesser of (x) the
Available Funds with respect to such Group and (y) the
Insured Distribution Amount with respect to such Group shall
be allocated to the Class A Distribution Account with
respect to such Group;
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(B) from the remaining Available Funds then on deposit in the
Certificate Account with respect to each Group, the lesser
of (x) such remaining Available Funds, and (y) the excess of
(i) the Insured Distribution Amount with respect to the
other Group over (ii) the amount then on deposit in the
Class A Distribution Account with respect to such Group
(such excess, the "Insured Shortfall" with respect to such
Group), shall be allocated to the Class A Distribution
Accounts for the other Group;
(C) (i) from the remaining Available Funds then on deposit in
the Certificate Account with respect to each Group to the
Certificate Insurer, the lesser of (x) such remaining
Available Funds with respect to each Group and (y) the
Premium Amount and any Reimbursement Amount then due to the
Certificate Insurer;
(ii) from the remaining Available Funds then on deposit in
the Certificate Account with respect to each Group to the
Certificate Insurer, the lesser of (x) such remaining
Available Funds and (y) any amounts remaining due to the
Certificate Insurer after application of (c)(i) above with
respect to the other Group (such amount, a "Reimbursement
Shortfall" with respect to a Group) shall be paid to the
Certificate Insurer on behalf of the other Group;
(iii) from the Available Funds then on deposit in the
Certificate Account with respect to each Group, the lesser
of (x) the Available Funds with respect to such Group and
(y) the excess of (i) the Interest Distribution Amount with
respect to such Group over (ii) the Insured Interest
Distribution Amount with respect to such Group shall be
allocated to the Class A Distribution Account with respect
to such Group;
(D) from the remaining Available Funds then on deposit in the
Certificate Account with respect to such Group, the lesser
of (x) such remaining Available Funds with respect to such
Group and (y) the excess
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of (i) the Principal Distribution Amount applicable to such
Group and Payment Date over (ii) all amounts then on deposit
in the respective Class A Distribution Account that are
allocable to principal, shall be allocated to such Class A
Distribution Account;
(E) from the remaining Available Funds then on deposit in the
Certificate Account with respect to each Group, the lesser
of (x) such remaining Available Funds and (y) the
Subordination Deficiency Amount applicable to the other
Group on such Payment Date, shall be allocated to the
respective Class A Distribution Account as a Subordination
Increase Amount;
(F) from the remaining Available Funds then on deposit in the
Certificate Account with respect to each Group, the lesser
of (x) such remaining Available Funds with respect to such
Group and (y) the Class B Interest, shall be allocated to
the Class B Distribution Account and applied as a
distribution of interest on account of the Class B
Certificates;
(G) from the remaining Available Funds then on deposit in the
Certificate Account with respect to such Group, the lesser
of (x) such remaining Available Funds and (y) the Class B
Principal Balance as of such Payment Date, assuming that the
amount then on deposit in the Class B Distribution Account
as a result of the application of clause (F) above has been
applied as a distribution of principal on account of the
Class B Principal Balance on such Payment Date, shall be
allocated to the Class B Distribution Account and applied as
a distribution of principal on the Class B Principal
Balance; and
(H) all amounts then remaining on deposit in the Certificate
Account shall be distributed to the Owners of the Residual
Certificates on such Payment Date.
(c) On each Payment Date, the Trustee shall make the following
disbursements from amounts deposited in the Distribution Accounts pursuant to
Subsection (b) above, together with the amount
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of any Insured Payment with respect to a Group deposited to the respective
Distribution Account:
(i) the Trustee shall pay, pari passu from the amount then on deposit
in the Class A Group I Distribution Account:
(A) to the Owners of the Class A-1 Group I Certificates, the
Class A-1 Distribution Amount for such Payment Date;
(B) to the Owners of the Class A-2 Group I Certificates, the
Class A-2 Distribution Amount for such Payment Date;
(C) to the Owners of the Class A-3 Group I Certificates, the
Class A-3 Distribution Amount for such Payment Date; and
(D) to the Owners of the Class A-4 Group I Certificates, the
Class A-4 Distribution Amount for such Payment Date;
provided, however, that if, on any Payment Date, (x) the
Certificate Insurer is then in default under the Certificate
Insurance Policy and (y) a Group I Subordination Deficit exists,
then any distribution of the Group I Principal Distribution
Amount on such Payment Date shall be made pro rata to the Owners
of each of the Class A-1 Group I Certificates, the Class A-2
Group I Certificates, the Class A-3 Group I Certificates and the
Class A-4 Group I Certificates on such Payment Date;
(ii) the Trustee shall pay from the amount then on deposit in the
Class A Group II Distribution Account, to the Owners of the Class
A-5 Group II Certificates, the Class A-5 Distribution Amount for
such Payment Date; and
(iii)the Trustee shall transfer from the amounts then on deposit in
the Class B Distribution Account, to the Supplemental Interest
Payment Account, the Class B Distribution Amount for such Payment
Date; such transfer shall be deemed a distribution on the Class B
Certificates.
(d) Any amounts properly distributed to the Owners of the Class B
Certificates or to the Owners of the Residual Certificates pursuant to the terms
of this Agreement shall be distributed free of the subordination described
herein, and any such amounts shall in no event be required to be returned to the
Trustee or paid over to the Owners of the Class A Certificates.
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(e) Whenever, during the administration of the Trust, there comes into the
possession of the Trustee any money or property which this Agreement does not
otherwise require to be distributed on account of the Class A Certificates or
the Class B Certificates or to the Certificate Insurer, the Trustee shall
distribute such money or other property to the Owners of the Class RU
Certificates.
(f) Each Owner of a Class A Certificate which pays any Preference Amounts
theretofore received by such Owner on account of such Class A Certificate will
be entitled to receive reimbursement for such amounts from the Certificate
Insurer in accordance with the terms of the Certificate Insurance Policy, but
only after (i) delivering a copy to the Trustee of a final, nonappealable order
(a "Preference Order") of a court having competent jurisdiction under the United
States Bankruptcy Code demanding payment of such amount to the bankruptcy court
and (ii) irrevocably assigning such Owner's claim with respect to such
Preference Order to the Certificate Insurer in such form as is required by the
Certificate Insurer. In no event shall the Certificate Insurer pay more than one
Insured Payment in respect of any Preference Amount.
Section 7.4. Investment of Accounts. (a) All or a portion of any Account
held by the Trustee shall be invested and reinvested by the Trustee in the name
of the Trustee for the benefit of the Owners, as described in Section 7.4(c)
hereof. No investment in any Account shall mature later than the Business Day
immediately preceding the next Payment Date and shall be held until maturity.
(b) Subject to Section 9.1 hereof, the Trustee shall not in any way be held
liable by reason of any insufficiency in any Account held by the Trustee
resulting from any loss on any Eligible Investment included therein (except to
the extent that the bank serving as Trustee is the obligor thereon).
(c) Until it is directed in writing by the Seller to invest in another
Eligible Investment, the Trustee shall invest in Eligible Investments described
in paragraph (h) of Section 7.5 hereof.
(d) All income or other gain from investments in any Account held by the
Trustee shall be deposited in such Account immediately on receipt, and any loss
resulting from such investments shall be charged to such Account.
Section 7.5. Eligible Investments. The following are Eligible Investments:
(a) Direct general obligations of the United States or the obligations of
any agency or instrumentality of the United States, the timely payment or the
guarantee of which constitutes a full faith and credit obligation of the United
States.
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(b) Federal Housing Administration debentures, but excluding any such
securities whose terms do not provide for payment of a fixed dollar amount upon
maturity or call for redemption.
(c) FHLMC senior debt obligations, but excluding any such securities whose
terms do not provide for payment of a fixed dollar amount upon maturity or call
for redemption.
(d) FNMA senior debt obligations, but excluding any such securities whose
terms do not provide for payment of a fixed dollar amount upon maturity or call
for redemption.
(e) Federal funds, certificates of deposit, time and demand deposits, and
bankers' acceptances (having original maturities of not more than 365 days) of
any domestic bank (which may include the Trustee or its affiliate), the
short-term debt obligations of which have been rated A-1 or better by S&P and
P-1 by ▇▇▇▇▇'▇.
(f) Deposits of any bank or savings and loan association which has combined
capital, surplus and undivided profits of at least $50,000,000 which deposits
are not in excess of the applicable limits insured by the Bank Insurance Fund or
the Savings Association Insurance Fund of the FDIC, provided that the long-term
deposits of such bank or savings and loan association are rated at least "BBB"
by S&P and "Baa3" by ▇▇▇▇▇'▇.
(g) Commercial paper (having original maturities of not more than 270 days)
rated A-1 or better by S&P and P-1 by ▇▇▇▇▇'▇.
(h) Investments in money market funds (including those of the Trustee or
its affiliates (for which separate compensation may be received)) rated at least
AAAm or AAAm-G by S&P and Aaa or P-1 by ▇▇▇▇▇'▇.
(i) Such other investments as have been approved in writing by S&P, ▇▇▇▇▇'▇
and the Certificate Insurer;
provided that no instrument described above is permitted to evidence either the
right to receive (a) only interest with respect to obligations underlying such
instrument or (b) both principal and interest payments derived from obligations
underlying such instrument and the interest and principal payments with respect
to such instrument provide a yield to maturity at par greater than 120% of the
yield to maturity at par of the underlying obligations; and provided, further,
that no instrument described above may be purchased at a price greater than par
if such instrument may be prepaid or called at a price less than its purchase
price prior to stated maturity. Any Eligible Investment may be purchased by or
through the Trustee or any of its affiliates. The Trustee or its affiliates may
act as sponsor, manager, depository or advisor with regard to any Eligible
Investment.
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Section 7.6. Reports by Trustee. (a) On each Payment Date the Trustee shall
report in writing to each Owner and to the Seller, the Master Servicer, and the
Transferor with a copy to the Certificate Insurer, S&P and ▇▇▇▇▇'▇:
(i) the amount of the distribution with respect to each Class of
Certificates;
(ii) the amount of such distributions allocable to principal,
separately identifying the aggregate amount of any Prepayments or other
unscheduled recoveries of principal included therein;
(iii) the amount of such distributions allocable to interest;
(iv) the amount of such distributions allocable to any Carry-Forward
Amount;
(v) the then-outstanding principal balance of each Class of Class A
Certificates as of such Payment Date, together with the principal amount,
by class, of each Class A Certificate (based on a Certificate in the
original principal amount of $1,000) then Outstanding, in each case after
giving effect to any payment of principal on such Payment Date;
(vi) the then-outstanding principal balance of each class of Class B
Certificates, together with the principal amount, by class, of each Class B
Certificate (based on a Certificate in the original principal amount of
$1,000) then Outstanding, in each case after giving effect to any payment
of principal on such Payment Date;
(vii) the total of any Substitution Amounts and any Loan Purchase
Prices included in such distribution;
(viii) the amount of any Supplemental Interest Payment Amount, Class
B-S Certificate distribution and any Interest Advance on such Payment Date,
together with the amount of any unreimbursed Interest Advance then owed to
the Designated Residual Owner;
(ix) the amount of the Master Servicing Fee paid with respect to each
of the two Mortgage Loan Groups with respect to the related Remittance
Period;
(x) the amount of any Group I Insured Payment or any Group II Insured
Payment made with respect to such Payment Date; and
(xi) as of such Payment Date, the Group I Subordinated Amount and the
Group II Subordinated Amount.
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In preparing the report under this Section 7.6, the Trustee shall rely
solely upon the electronic report described in Section 10.8(d)(ii) hereof being
received from the Master Servicer or any Sub-Servicer. The Trustee shall not be
responsible for its obligations under this Section 7.6 unless and until it
receives such report from the Master Servicer.
(b) On each Payment Date the Trustee will additionally inform the Seller,
the Master Servicer, the Transferor, the Certificate Insurer, S&P and ▇▇▇▇▇'▇
with respect to the following:
(i) the Group I Available Funds and the Group II Available Funds for
the related Payment Date;
(ii) the Pool Principal Balance with respect to each of the two
Mortgage Loan Groups as of the end of the related Remittance Period;
(iii) the number and Principal Balances of all Mortgage Loans in each
of the two Mortgage Loan Groups which were the subject of Prepayments
during the related Remittance Period;
(iv) the total amount of payments in respect of or allocable to
interest on the Mortgage Loans in each of the three Mortgage Loan Groups
received or deemed to have been received from the related Mortgagors by the
Master Servicer or any Sub-Servicer during the related Remittance Period
(including any net income from REO Properties received during the related
Remittance Period);
(v) the aggregate of all principal payments received or deemed to have
been received from the related Mortgagors in each of the three Mortgage
Loan Groups by the Master Servicer or any Sub-Servicer during the related
Remittance Period;
(vi) the aggregate of any Insurance Proceeds received or deemed to
have been received by the Master Servicer or any Sub-Servicer during the
related Remittance Period with respect to each of the three Mortgage Loan
Groups;
(vii) the aggregate of any Released Mortgaged Property Proceeds
received or deemed to have been received by the Master Servicer or any
Sub-Servicer during the related Remittance Period with respect to each of
the three Mortgage Loan Groups;
(viii) the aggregate of any Liquidation Proceeds, Liquidation Expenses
and Net Liquidation Proceeds received or deemed to have been received by
the Master Servicer or any Sub-Servicer, and Net Realized Losses incurred,
during the related Remittance Period with respect to each of the three
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Mortgage Loan Groups, the Group I Cumulative Net Realized Losses, the Group
II Cumulative Net Realized Losses, and the aggregate Cumulative Net
Realized Losses since the Startup Day and during the prior 12-month period
and the Pool Rolling Three Month Delinquency Rate;
(ix) the total amount of Compensating Interest payments paid or to be
paid by the Master Servicer or any Sub-Servicer pursuant to Section 10.10
hereof with respect to each of the three Mortgage Loan Groups;
(x) the amount of Delinquency Advances made by the Master Servicer or
any Sub-Servicer pursuant to Section 10.9 hereof with respect to such
Payment Date with respect to each of the three Mortgage Loan Groups;
(xi) the monthly Master Servicing Fee and any additional servicing
fees paid to the Master Servicer or any Sub-Servicer pursuant to Section
10.15 hereof with respect to each of the three Mortgage Loan Groups;
(xii) the amount of Delinquency Advances with respect to each of the
three Mortgage Loan Groups reimbursable to the Master Servicer or any
Sub-Servicer during such Remittance Period pursuant to Section 10.9 hereof
and not previously reimbursed;
(xiii) the amount of any Servicing Advance made by the Master Servicer
or any Sub-Servicer pursuant to Sections 10.9 and 10.13 hereof with respect
to each of the three Mortgage Loan Groups and not previously reimbursed;
(xiv) the Class A-1 Distribution Amount, the Class A-2 Distribution
Amount, the Class A-3 Distribution Amount, the Class A-4 Distribution
Amount, the Class A-5 Distribution Amount, and the Class B Distribution
Amount, with the components thereof stated separately;
(xv) the weighted average remaining term to maturity and Net Weighted
Average Coupon Rate of the Mortgage Loans with respect to each of the three
Mortgage Loan Groups as of the close of business on the last day of the
related Remittance Period;
(xvi) the Group I Subordinated Amount, Group I Subordination
Deficiency Amount, Group I Specified Subordinated Amount, Group I
Subordination Increase Amount, the Group II Subordinated Amount, Group II
Subordination Deficiency Amount, Group II Specified Subordinated Amount and
Group II Subordination Increase Amount;
(xvii) the Group I Excess Subordinated Amount, Group I Subordination
Reduction Amount, Group II Excess Subordinated
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Amount and Group II Subordination Reduction Amount, for the related Payment
Date;
(xviii) the number of Mortgage Loans in each of the three Mortgage
Loan Groups at the beginning and end of the related Remittance Period;
(xix) the Group I Shortfall Amount and the Group II Shortfall Amount
for the related Payment Date; and
(xx) such other information as the Certificate Insurer or the Seller
may reasonably request and which is derived from information which is
produced or available in the ordinary course of the Master Servicer's or
any Sub-Servicer's business or which otherwise materially relates to the
transactions contemplated hereby and is provided to the Trustee by the
electronic report described in Section 10.8(d)(ii) hereof.
(c) In addition, on each Payment Date the Trustee will disseminate to each
Owner, the Seller, the Master Servicer and to the Transferor with a copy to the
Certificate Insurer, S & P and ▇▇▇▇▇'▇, together with the information described
in Subsection (a) preceding, the following information with respect to each of
the three Mortgage Loan Groups as of the close of business on the last day of
the related Remittance Period, which is required to be prepared by the Master
Servicer or a Sub-Servicer and furnished to the Trustee pursuant to Section
10.8(d)(ii) hereof for such purpose on or prior to the related Remittance Date:
(i) the total number of Mortgage Loans and the aggregate Principal
Balances thereof, together with the number and aggregate principal balances
of 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
in foreclosure proceedings (and whether any such Mortgage Loans are also
included in any of the statistics described in the foregoing clause (i));
(iii) the number and aggregate principal balances of all Mortgage
Loans relating to Mortgagors in bankruptcy proceedings (and whether any
such Mortgage Loans are also included in any of the statistics described in
the foregoing clauses (i) and (ii));
(iv) the number and aggregate principal balances of all Mortgage Loans
relating to REO Properties (and whether any such Mortgage Loans are also
included in any of the statistics described in the foregoing clauses (i),
(ii) and (iii));
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(v) the number and aggregate principal balances of all Mortgage Loans
as to which foreclosure proceedings were commenced during the prior
Remittance Period;
(vi) a schedule regarding cumulative foreclosures since the Cut-Off
Date; and
(vii) the book value of any REO Property and any income received from
REO Properties during the prior Remittance Period.
The Seller, the Master Servicer, the Transferor and the Trustee on behalf
of Certificateholders and the Trust (the "Trust Parties") hereby authorize the
Certificate Insurer to include the information contained in reports provided to
the Certificate Insurer hereunder (the "Information") on Bloomberg, an on-line
computer based information network maintained by Bloomberg L.P. ("Bloomberg"),
or in other electronic or print information services. The Trust Parties agree
not to commence any actions or proceedings, or otherwise assert any claims,
against the Certificate Insurer or its affiliates or any of the Certificate
Insurer's or its affiliates' respective agents, representatives, directors,
officers or employees (collectively, the "Certificate Insurer Parties"), arising
out of, or related to or in connection with the dissemination and/or use of any
Information by the Certificate Insurer, including, but not limited to, claims
based on allegations of inaccurate, incomplete or erroneous transfer of
information by the Certificate Insurer to Bloomberg or otherwise (other than in
connection with the Certificate Insurer's gross negligence or willful
misconduct). The Trust Parties waive their rights to assert any such claims
against the Certificate Insurer Parties and fully and finally release the
Certificate Insurer Parties from any and all such claims, demands, obligations,
actions and liabilities (other than in connection with the Certificate Insurer's
gross negligence or willful misconduct). The Certificate Insurer makes no
representations or warranties, expressed or implied, of any kind whatsoever with
respect to the accuracy, adequacy, timeliness, completeness, merchantability or
fitness for any particular purpose of any Information in any form or manner. The
Certificate Insurer reserves the right at any time to withdraw or suspend the
dissemination of the Information by the Certificate Insurer. The authorizations,
covenants and obligations of the Trust Parties under this section shall be
irrevocable and shall survive the termination of this Agreement.
Section 7.7. Drawings under the Certificate Insurance Policy and Reports by
Trustee. (a) On each Determination Date the Trustee shall determine, no later
than 12:00 noon on such Determination Date, whether a Group I Shortfall Amount
or a Group II Shortfall Amount has theretofore occurred and will remain uncured
on the following Payment Date, and whether a Group I Shortfall Amount or a Group
II Shortfall Amount with respect to either the Group I Mortgage Loans, or the
Group II Mortgage Loans
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will occur on the following Payment Date. If the Trustee determines that a Group
I Shortfall Amount or a Group II Shortfall Amount has theretofore occurred and
will remain uncured or will occur, the Trustee shall furnish the Certificate
Insurer and the Seller with a completed Notice in the form set forth as Exhibit
A to the Certificate Insurance Policy. The Notice shall specify the amount of
the Insured Payment and shall constitute a claim for an Insured Payment pursuant
to the Certificate Insurance Policy.
(b) The Trustee shall report to the Seller, the Master Servicer, the
Transferor and the Certificate Insurer with respect to the amounts then held in
each Account held by the Trustee and the identity of the investments included
therein, as the Seller, the Master Servicer, the Transferor or the Certificate
Insurer may from time to time request. Without limiting the generality of the
foregoing, the Trustee shall, at the request of the Seller, the Master Servicer,
the Transferor or the Certificate Insurer transmit promptly to the Seller, the
Master Servicer, the Transferor and the Certificate Insurer copies of all
accountings of receipts in respect of the Mortgage Loans furnished to it by the
Master Servicer or a Sub-Servicer.
(c) Upon receipt of Insured Payments from the Certificate Insurer under the
Certificate Insurance Policy, the Trustee shall deposit such Insured Payments in
the Policy Payments Account. The Trustee shall withdraw Insured Payments from
the Policy Payments Account in accordance with section 13.4(a). The Trustee
shall distribute all Insured Payments received, or the proceeds thereof, in
accordance with Section 7.3(b) and 7.3(c) to the Owners of the Class A
Certificates of the related Class.
(d) The Trustee shall (i) receive Insured Payments as attorney-in-fact of
each Owner of the Class A Certificates of the related Class receiving any
Insured Payment from the Certificate Insurer and (ii) disburse such Insured
Payment to the Owners of the related Class A Certificates as set forth in
Section 7.3(b) and 7.3(c). The Certificate Insurer shall be entitled to receive
the related Reimbursement Amount pursuant to Section 7.5(b)(iii)(C) hereof with
respect to each Insured Payment made by the Certificate Insurer. The Trustee
hereby agrees on behalf of each Owner of Class A Certificates and the Trust for
the benefit of the Certificate Insurer that it recognizes that to the extent the
Certificate Insurer makes Insured Payments, either directly or indirectly (as by
paying through the Trustee), to the Owners of such Class A Certificates, the
Certificate Insurer will be entitled to receive the related Reimbursement Amount
pursuant to Section 7.5(b)(iii)(C) hereof.
(e) Insured Payments disbursed by the Trustee from proceeds of the
Certificate Insurance Policy shall not be considered payment by the Trust Fund
nor shall such payments discharge the obligation of the Trust Fund with respect
to the related Class A Certificates, and the Certificate Insurer shall
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become the owner of such unpaid amounts due from the Trust Fund in respect of
the related Class A Certificates. The Trustee hereby agrees on behalf of each
Holder of a related Class A Certificate for the benefit of the Certificate
Insurer that it recognizes that to the extent the Certificate Insurer makes
Insured Payments, either directly or indirectly (as by paying through the
Trustee), to the Owners of any Class A Certificates, the Certificate Insurer
will be subrogated to the rights of such Owners with respect to such Insured
Payment, shall be deemed to the extent of payments so made to be a registered
Owner of such Class A Certificates and shall receive all future distributions
until all such Insured Payments by the Certificate Insurer, together with
interest thereon at the interest rate borne by the related Class A Certificates,
have been fully reimbursed. To evidence such subrogation, the Trustee shall note
the Certificate Insurer's rights as subrogee on the registration books
maintained by the Trustee upon receipt from the Certificate Insurer of proof of
payment of any Insured Payment.
Section 7.8. Allocation of Realized Losses. If, on any Payment Date,
following the making of all allocations, transfers and distributions (other than
as provided in this Section) on such Payment Date (x) the sum of the Class A-1
Principal Balance, the Class A-2 Principal Balance, the Class A-3 Principal
Balance, the Class A-4 Principal Balance, the Class A-5 Principal Balance, and
the Class B Principal Balance exceeds (y) the Pool Principal Balance as of the
close of business on the last day of the related Remittance Period (any such
excess, "Allocable Losses"), such Allocable Losses shall be applied as a
reduction of the Class B Principal Balance until the Class B Principal Balance
has been reduced to zero.
Section 7.9. Supplemental Interest Payments.
(a) The parties hereto do hereby create and establish a trust, the "Access
Financial Supplemental Interest Trust 1997-1" (the "Supplemental Interest
Trust"). The Supplemental Interest Trust shall hold a trust account, the
"Supplemental Interest Payment Account", to be held by the Trustee in its name
on behalf of the Supplemental Interest Trust.
If, on any Determination Date, the Trustee determines that the amount to be
available on the next Payment Date in the Supplemental Interest Payment Account
(such amount, the "Supplemental Interest Payment Amount") is less than the
excess of (i) the Class A-5 Full Interest Distribution Amount over (ii) the
Class A-5 Interest Distribution Amount as of such Payment Date (the "Class A-5
Formula Interest Shortfall"), the Trustee shall deliver a notice in the form of
Exhibit O hereto to the Designated Residual Owner demanding that the Designated
Residual Owner fund the Class A-5 Formula Interest Shortfall on the related
Payment Date. The amount so funded by the Designated Residual Owner on any such
Payment Date is the "Interest Advance" for such Payment Date. The Trustee shall
deposit any Interest Advance received by it in the
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amount of the Class A-5 Formula Interest Shortfall into the Class A Group II
Distribution Account.
On each Payment Date the Trustee shall withdraw from the Supplemental
Interest Payment Account and deposit in the Group II Distribution Account the
Class A-5 Formula Interest Shortfall; provided that the amount to be withdrawn
may not exceed the Supplemental Interest Payment Amount (such amount, the
"Funded Amount").
(b) Any portion of the Supplemental Interest Payment Amount after
application of clause (a) above (the "Remaining Amount") shall be applied in the
following order of priority:
(i) first, to the Designated Residual Owner, as reimbursement for
unpaid Interest Advances, together with interest thereon (the "Interest
Advance Reimbursement Amount"), with the earliest Interest Advances being
deemed to be paid first; and
(ii) second, to the Owners of the Class B-S Certificates, all
remaining amounts then on deposit in the Supplemental Interest Payment
Account, to such Owners pro rata in accordance with the Percentage
Interests.
ARTICLE VIII
TERMINATION OF TRUST
Section 8.1. Termination of Trust. The Trust created hereunder and all
obligations created by this Agreement will terminate upon the earlier of (i) the
payment to the Owners of all Certificates of all amounts held by the Trustee and
required to be paid to such Owners pursuant to this Agreement upon the later to
occur of (a) the final payment or other liquidation (or any advance made with
respect thereto) of the last Mortgage Loan in the Trust Estate or (b) the
disposition of all property acquired in respect of any Mortgage Loan remaining
in the Trust Estate or (ii) at any time when a Qualified Liquidation of the
Trust is effected as described below. To effect a termination of this Agreement
pursuant to clause (b) above, the Owners of all Certificates then Outstanding
shall (x) unanimously direct the Trustee on behalf of the Trust to adopt a plan
of complete liquidation with respect to each REMIC, as contemplated by Section
860F(a)(4) of the Code and (y) provide to the Trustee an opinion of counsel
experienced in federal income tax matters to the effect that such liquidation
constitutes a Qualified Liquidation and the Trustee either shall sell the
Mortgage Loans and distribute the proceeds of the liquidation of the Trust
Estate, or shall distribute equitably in kind all of the assets of the Trust
Estate to the remaining Owners of the Certificates each in accordance with such
plan, so that the liquidation or distribution of the Trust Estate, the
distribution
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of any proceeds of the liquidation and the termination of this Agreement occur
no later than the close of the 90th day after the date of adoption of the plan
of liquidation and such liquidation qualifies as a Qualified Liquidation. In no
event, however, will the Trust created by this Agreement continue beyond the
expiration of twenty-one (21) years from the death of the last survivor of the
descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late Ambassador of the United States to
the United Kingdom, living on the date hereof. The Trustee shall give written
notice of termination of the Agreement to the Certificate Insurer and each Owner
in the manner set forth in Section 12.5 hereof.
Section 8.2. Termination Upon Option of the Seller.
(a) On any Remittance Date on or after the Remittance Date on which the
then-outstanding aggregate Principal Balances of the Mortgage Loans is ten
percent or less of the Original Pool Principal Balance, the Seller may determine
to purchase and may cause the purchase from the Trust of all (but not fewer than
all) Mortgage Loans and all property theretofore acquired in respect of any
Mortgage Loan by foreclosure, deed in lieu of foreclosure, or otherwise then
remaining in the Trust Estate at a price equal to 100% of the aggregate
Principal Balances of the related Mortgage Loans as of the day of termination
minus amounts remitted from the Principal and Interest Account to the
Certificate Account representing collections of principal on the Mortgage Loans
during the current Remittance Period, plus (i) one month's interest on such
amount computed at the weighted average Coupon Rate for the related Mortgage
Loan Group, (ii) the aggregate amount of any unreimbursed Delinquency Advances,
including amounts which would be Delinquency Advances which the Master Servicer
has theretofore failed to remit, (iii) any amount owing to the Trustee, (iv) any
Reimbursement Amount owing to the Certificate Insurer and the Trustee, (v) any
Insured Payment due on the related Payment Date, (vi) the amount of any unpaid
Interest Advances and (vii) the aggregate amount of any unpaid Supplemental
Interest Payment Amounts. The Seller shall pay such termination price to the
Trustee for deposit in the Certificate Account. In connection with such
termination, the Master Servicer shall remit to the Trustee all amounts (net of
investment earnings and providing for investment losses pursuant to Section
10.8(b) hereof, net of the Master Servicing Fee and net of amounts reimbursable
for Delinquency Advances and Servicing Advances) then on deposit in the
Principal and Interest Account for deposit to the Certificate Account, which
deposit shall be deemed to have occurred immediately preceding such purchase.
(b) In connection with any such purchase, the Seller shall provide to the
Trustee an opinion of counsel experienced in federal income tax matters to the
effect that such purchase constitutes a Qualified Liquidation with respect to
each REMIC.
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(c) Promptly following any such purchase, the Trustee will release the
Files, with appropriate endorsements and transfer documents, to the Seller or
otherwise upon its order.
Section 8.3. Auction Sale. If the Seller fails, by the ninetieth day
following the first Remittance Date on which such option may be exercised, to
exercise its purchase option pursuant to Section 8.2 hereof, then upon receipt
of written notice and direction from the Seller, the Trustee will notify the
Representative (or, if the Representative is unable or unwilling, another
investment banking or whole-loan trading firm selected by the Seller (the
Representative or such other investment bank or trading firm, the "Advisor") who
will solicit on behalf of the Trustee competitive bids for the purchase of the
Mortgage Loans for fair market value. Such solicitation shall be conducted
substantially in the manner described in Exhibit N hereto. In the event that
satisfactory bids are received as described below, the proceeds of the sale of
such assets shall be deposited into the Certificate Account. The Trustee will
ask the Advisor to solicit, on behalf of the Trustee, good-faith bids from no
fewer than two prospective purchasers that are considered at the time to be
competitive participants in the home equity market. The Advisor will consult
with any securities brokerage houses identified by the Seller as then making a
market in the Class A Certificates to obtain a determination as to whether the
fair market value of such assets has been offered.
Any purchaser of such Mortgage Loans must agree to the continuation of the
Master Servicer or any successor Master Servicer as servicer of the assets on
terms substantially similar to those in this Agreement.
If the highest good-faith bid received by the Advisor from a qualified
bidder is, in the judgment of the Representative, not less than the fair market
value of such Mortgage Loans and if such bid would equal the amount set forth in
the following sentence, the Trustee, following consultation with and written
direction from the Advisor and the Seller, will sell and assign such Mortgage
Loans without representation, warranty or recourse to such highest bidder and
will redeem the Class A Certificates. For the Trustee to consummate the sale,
the bid must be at least equal to the termination price set forth in Section
8.2(a) hereof. In addition, the bid must be in an amount sufficient to pay the
fees and expenses of the Trustee owing hereunder. If such conditions are not
met, the Trustee will, following consultation with the Advisor and the Seller,
decline to consummate such sale. In addition, the Trustee will decline to
consummate such sale unless it receives from the Advisor an opinion of counsel
addressed to it and the Certificate Insurer that such sale will not give rise
either to any "prohibited transaction" tax under section 860F(a)(1) of the Code
or to any tax on contributions to the REMIC after the "startup day" under
section 860G(d)(1) of the Code. In the event such sale is not consummated in
accordance with the foregoing, the
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Trustee will not be under any obligation to solicit any further bids or
otherwise to negotiate any further sale of the Mortgage Loans. In such event,
however, if directed by the Seller, the Trustee may solicit bids from time to
time in the future for the purchase of the Mortgage Loans upon the same terms
described above. The Trustee may consult with the Advisor and the advice of the
Advisor shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted by it hereunder. The Seller shall
reimburse the Trustee for any fees incurred under this Section 8.3 if a sale is
not consummated.
On each Payment Date following the Trustee's failure to obtain a
satisfactory bid as described in this Section 8.3, the Class A-5 Pass-Through
Rate shall be 7.775%.
Section 8.4. Disposition of Proceeds. The Trustee shall, upon receipt
thereof, deposit the proceeds of any liquidation or termination of the Trust
Estate pursuant to this Article VIII to the Certificate Account for application
as provided in Section 7.3 hereof.
ARTICLE IX
THE TRUSTEE
Section 9.1. Certain Duties and Responsibilities.
(a) The Trustee (i) except during the continuance of an Event of Default,
undertakes to perform such duties and only such duties as are specifically set
forth in this Agreement, and no implied covenants or obligations shall be read
into this Agreement against the Trustee and (ii) in the absence of bad faith on
its part, may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or opinions
furnished pursuant to and conforming to the requirements of this Agreement; but
in the case of any such certificates or opinions which by any provision hereof
are specifically required to be furnished to the Trustee, shall be under a duty
to examine the same to determine whether or not they conform to the requirements
of this Agreement.
During the continuance of an Event of Default, the Trustee shall exercise
such of the rights and powers vested in it by this Agreement, and use the same
degree of care and skill in their exercise as a prudent person would exercise or
use under the circumstances with respect to such person's property or affairs.
(b) Notwithstanding the retention of the Master Servicer pursuant hereto
and subject to the provisions of Section 11.1 hereof, the Trustee is hereby
empowered (but not obligated) to perform the duties of the Master Servicer
hereunder following the failure of the Master Servicer to perform pursuant
hereto.
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Specifically, and not in limitation of the foregoing, the Trustee shall have the
power (but not the obligation):
(i) to collect Mortgagor payments;
(ii) to foreclose on defaulted Mortgage Loans;
(iii)to enforce due-on-sale clauses and to enter into assumption and
substitution agreements as permitted by Article X hereof;
(iv) to deliver instruments of satisfaction pursuant to Article X
hereof;
(v) to enforce the Mortgage Loans; and
(vi) to make Delinquency Advances and Servicing Advances and to pay
Compensating Interest, in the manner required by this Agreement.
(c) No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct, except that:
(i) this subsection shall not be construed to limit the effect of
clause (a) of this Section;
(ii) the Trustee shall not be liable for any error of judgment made in
good faith by an Authorized Officer, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent
facts;
(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 the Seller or the Certificate
Insurer or, with the Certificate Insurer's consent, of the Owners
of a majority in Percentage Interest of the Certificates of the
affected Class or Classes relating to the time, method and place
of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the
Trustee, under this Agreement relating to such Certificates;
(iv) The Trustee shall not be required to take notice or be deemed to
have notice or knowledge of any default by the Seller or by the
Master Servicer unless the Trustee shall have received written
notice thereof. In the absence of actual receipt of such notice,
the Trustee may conclusively assume that there is no such
default; and
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(v) Subject to the other provisions of this Agreement and without
limiting the generality of this Section, the Trustee shall have
no duty (A) to see to any recording, filing, or depositing of
this Agreement, any Mortgage or any agreement referred to herein
or any financing statement or continuation statement evidencing a
security interest, or to see to the maintenance of any such
recording or filing or depositing or to any rerecording, refiling
or redepositing of any thereof, (B) to see to any insurance, (C)
to see the payment or discharge of any tax, assessment, or other
governmental charge or any lien or encumbrance of any kind owing
with respect to, assessed or levied against, any property of the
Trust, (D) to confirm or verify the contents of any reports or
certificates of the Master Servicer or any Sub-Servicer delivered
to the Trustee pursuant to this Agreement or any Sub-Servicing
Agreement believed by the Trustee to be genuine and to have been
signed or presented by the proper party or parties.
(d) Whether or not therein expressly so provided, every provision of this
Agreement relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.
(e) No provision of this Agreement shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it and none of the provisions contained in this Agreement shall in
any event require the Trustee to perform, or be responsible for the manner of
performance of, any of the obligations of the Master Servicer hereunder except
during such time, if any, as the Trustee shall be the successor to, and be
vested with the rights, duties and powers and privileges of, the Master Servicer
in accordance with the terms of this Agreement.
(f) The permissive right of the Trustee to take actions enumerated in this
Agreement shall not be construed as a duty and the Trustee shall not be
answerable for other than its own negligence or willful misconduct.
(g) The Trustee shall be under no obligation to institute any suit, or to
take any remedial proceeding under this Agreement, or to take any steps in the
execution of the trusts hereby created or in the enforcement of any rights and
powers hereunder until it shall be indemnified to its reasonable satisfaction
against any and all costs and expenses, outlays and
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counsel fees and other reasonable disbursements and against all liability,
except liability which is adjudicated to have resulted from its negligence or
willful misconduct, in connection with any action so taken.
Section 9.2. Removal of Trustee for Cause. (a) The Trustee may be removed
pursuant to clause (b) hereof upon the occurrence of any of the following events
(whatever the reason for such event and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(1) the Trustee shall fail to distribute to the Owners entitled thereto on
any Payment Date amounts available for distribution in accordance with
the terms hereof; or
(2) the Trustee shall fail in the performance of, or breach, any covenant
or agreement of the Trustee in this Agreement, or if any
representation or warranty of the Trustee made in this Agreement or in
any certificate or other writing delivered pursuant hereto or in
connection herewith shall prove to be incorrect in any material
respect as of the time when the same shall have been made, and such
failure or breach shall continue or not be cured for a period of 30
days after there shall have been given, by registered or certified
mail, to the Trustee by the Seller or the Certificate Insurer or by
the Owners of at least 25% of the aggregate Percentage Interest
represented by any Class of Class A Certificates, or, if there are no
Class A Certificates then Outstanding, by such Percentage Interest
represented by any Class of Class B Certificates, a written notice
specifying such failure or breach and requiring it to be remedied
(unless the Trustee is aware of such breach as evidenced by notice
from the Trustee pursuant to Section 9.2(b) in which case the 30 day
cure period shall begin at the time such notice was given); or
(3) a decree or order of a court or agency or supervisory authority having
jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings, or for the winding-up
or liquidation of its affairs, shall have been entered against the
Trustee, and such decree or order shall have remained in force
undischarged or unstayed for a period of 60 days; or
(4) a conservator or receiver or liquidator or sequestrator or custodian
of the property of the Trustee is appointed in any insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings of or
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relating to the Trustee or relating to all or substantially all of its
property; or
(5) the Trustee shall become insolvent (however insolvency is evidenced),
generally fail to pay its debts as they come due, file or consent to
the filing of a petition to take advantage of any applicable
insolvency or reorganization statute, make an assignment for the
benefit of its creditors, voluntarily suspend payment of its
obligations, or take corporate action for the purpose of any of the
foregoing.
(b) The Seller and the Trustee shall give notice to each other, to the
Certificate Insurer, the Transferor and to each Owner if it becomes aware that
an event described in Subsection (a) has occurred and is continuing.
(c) If any event described in Subsection (a) occurs and is continuing, then
and in every such case (x) the Seller or the Certificate Insurer or (y) with the
consent of the Certificate Insurer, the Owners of a majority of the Percentage
Interest represented by any Class of Class A Certificates, or, if there are no
Class A Certificates then Outstanding, by such Percentage Interest represented
by any Class of Class B Certificates then Outstanding, may, whether or not the
Trustee resigns pursuant to Section 9.9 hereof, immediately, concurrently with
the giving of notice to the Trustee, appoint a successor trustee pursuant to the
terms of Section 9.9 hereof.
Section 9.3. Certain Rights of the Trustee. Except as otherwise provided in
Section 9.1 hereof:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, note 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) any request or direction of the Seller or the Owners of any Class
of Certificates mentioned herein shall be sufficient if evidenced in
writing;
(c) whenever in the administration of this Agreement the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad
faith on its part, rely upon an Officer's Certificate;
(d) the Trustee may consult with counsel, and the written advice of
such counsel shall be full and complete authorization and protection in
respect of any action taken,
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suffered or omitted by it hereunder in good faith and in reasonable
reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Agreement at the request or direction
of any of the Owners pursuant to this Agreement, unless such Owners shall
have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction;
(f) 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, direction, consent, order,
bond, note or other paper or document, but the Trustee in its discretion
may make such further inquiry or investigation into such facts or matters
as it may see fit;
(g) 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 the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder; and
(h) the Trustee shall not be liable for any action it takes or omits
to take in good faith which it reasonably believes to be authorized by the
Authorized Officer of any Person or within its rights or powers under this
Agreement other than as to validity and sufficiency of its authentication
of the Certificates.
Section 9.4. Not Responsible for Recitals or Issuance of Certificates. The
recitals contained herein and in the Certificates, except any such recitals
relating to the Trustee, shall be taken as the statements of the Seller and the
Master Servicer and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representation as to the validity or sufficiency of this
Agreement, any offering materials relating to the Certificates, or of the
Certificates other than as to the validity and sufficiency of its authentication
of the Certificates.
Section 9.5. May Hold Certificates. The Trustee or any other agent of the
Trust, in its individual or any other capacity, may become an Owner or pledgee
of Certificates and may otherwise deal with the Trust with the same rights it
would have if it were not Trustee or such other agent.
Section 9.6. Money Held in Trust. Money held by the Trustee in trust
hereunder need not be segregated from other trust funds except to the extent
required herein or required by law. The
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Trustee shall be under no liability for interest on any money received by it
hereunder except as otherwise agreed with the Seller and except to the extent of
income or other gain on investments which are deposits in or certificates of
deposit of the Trustee in its commercial capacity and income or other gain
actually received by the Trustee on Eligible Investments.
Section 9.7. Compensation and Reimbursement. The Trustee shall receive
compensation for fees and reimbursement for expenses pursuant to Section 2.5
hereof and Section 7.3(b)(i) hereof. The Trustee shall have no lien on the Trust
Estate for the payment of such fees and expenses.
Section 9.8. Corporate Trustee Required; Eligibility. There shall at all
times be a Trustee hereunder which shall be a corporation or association
acceptable to the Certificate Insurer and organized and doing business under the
laws of the United States of America or of any State authorized under such laws
to exercise corporate trust powers, having a combined capital and surplus of at
least $100,000,000, subject to supervision or examination by the United States
of America, having a rating or ratings acceptable to the Seller and having a
long-term deposit rating of at least BBB from S&P and Baa2 from ▇▇▇▇▇'▇ (or such
lower rating as may be acceptable to S&P, ▇▇▇▇▇'▇ and the Certificate Insurer).
If such Trustee 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 or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall, upon the request of the Seller or the
Certificate Insurer resign immediately in the manner and with the effect
hereinafter specified in this Article IX.
Section 9.9. Resignation and Removal; Appointment of Successor. (a) No
resignation or removal of the Trustee and no appointment of a successor trustee
pursuant to this Article IX shall become effective until the acceptance of
appointment by the successor trustee under Section 9.10 hereof.
(b) The Trustee, or any trustee or trustees hereafter appointed, may resign
at any time by giving written notice of resignation to the Certificate Insurer,
the Seller, the Master Servicer and to the Transferor and by mailing notice of
resignation by first-class mail, postage prepaid, to the Owners at their
addresses appearing on the Register. Upon receiving notice of resignation, the
Seller shall promptly appoint a successor trustee or trustees satisfying the
eligibility requirements of Section 9.8 by written instrument, in duplicate,
executed on behalf of the Trust by an Authorized Officer of the Seller, one copy
of which instrument shall be delivered to the Trustee so resigning and one
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copy to the successor trustee or trustees. If no successor trustee shall have
been 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, or any Owner
may, on behalf of himself and all others similarly situated, petition any such
court for the appointment of a successor trustee. Such court may thereupon,
after such notice, if any, as it may deem proper and prescribed, appoint a
successor trustee.
(c) If at any time the Trustee shall cease to be eligible under Section 9.8
hereof and shall fail to resign after written request therefor by the Seller or
the Certificate Insurer, the Seller or the Certificate Insurer may remove the
Trustee and the Seller, with the consent of the Certificate Insurer, or the
Certificate Insurer may appoint a successor trustee by written instrument, in
duplicate, executed on behalf of the Trust by an Authorized Officer of the
Seller or the Certificate Insurer, one copy of which instrument shall be
delivered to the Trustee so removed and one copy to the successor trustee.
(d) The Owners of a majority of the Percentage Interests represented by any
Class of Class A Certificates with the consent of the Certificate Insurer, or,
if there are no Class A Certificates then Outstanding, by such Percentage
Interest represented by any Class of Class B Certificates then Outstanding, may
at any time remove the Trustee and appoint a successor trustee by delivering to
the Trustee to be removed, to the successor trustee so appointed, to the Seller
and to the Certificate Insurer, copies of the record of the act taken by the
Owners, as provided for in Section 12.3 hereof.
(e) If the Trustee fails to perform its duties in accordance with the terms
of this Agreement or becomes ineligible to serve as Trustee, the Seller or the
Certificate Insurer may remove the Trustee and the Seller, with the consent of
the Certificate Insurer, or the Certificate Insurer may appoint a successor
trustee by written instrument, in triplicate, signed by the Seller or the
Certificate Insurer duly authorized, one complete set to the Seller, one
complete set to the Trustee so removed and one complete set to the successor
trustee so appointed.
(f) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of the Trustee for any cause, the
Seller shall promptly appoint a successor trustee satisfying the eligibility
requirements of Section 9.8.
(g) The Seller shall give notice of any removal of the Trustee by mailing
notice of such event by first-class mail, postage prepaid, to the Owners as
their names and addresses appear in the Register. Each notice shall include the
name of the successor trustee and the address of its corporate trust office.
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Section 9.10. Acceptance of Appointment by Successor Trustee. Every
successor trustee appointed hereunder shall execute, acknowledge and deliver to
the Seller on behalf of the Trust and to its predecessor Trustee an instrument
accepting such appointment hereunder and stating its eligibility to serve as
Trustee hereunder, and thereupon the resignation or removal of the predecessor
Trustee shall become effective and such successor trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers,
trusts, duties and obligations of its predecessor hereunder; but, on request of
the Seller or the successor trustee, such predecessor Trustee shall, upon
payment of its charges then unpaid, execute and deliver an instrument
transferring to such successor trustee all of the rights, powers and trusts of
the Trustee so ceasing to act, and shall duly assign, transfer and deliver to
such successor trustee all property and money held by such trustee so ceasing to
act hereunder. Upon request of any such successor trustee, the Seller on behalf
of the Trust shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor trustee all such rights, powers and
trusts. The Seller shall reimburse the Trustee for any costs reasonably incurred
hereunder resulting from the Trustee's removal under Section 9.09(d) hereof.
Upon acceptance of appointment by a successor Trustee as provided in this
Section, the Seller shall mail notice thereof by first-class mail, postage
prepaid, to the Owners at their last addresses appearing in the Register. The
Seller shall send a copy of such notice to the Rating Agencies. If the Seller
fails to mail such notice within ten days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to be mailed at
the expense of the Seller.
No successor trustee shall accept its appointment unless at the time of
such acceptance such successor shall be qualified and eligible under this
Article IX.
Section 9.11. Merger, Conversion, Consolidation or Succession to Business
of the Trustee. Any corporation or association into which the Trustee may be
merged or converted or with which it may be consolidated, or any corporation or
association resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation or association succeeding to all or
substantially all of the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, without the execution or filing of any paper
or any further act on the part of any of the parties hereto; provided, however,
that such corporation or association shall be otherwise qualified and eligible
under this Article IX. In case any Certificates have been executed, but not
delivered, by the Trustee then in office, any successor by merger, conversion or
consolidation to such Trustee may adopt such execution and deliver the
Certificates so executed with the same effect as if such successor Trustee had
itself executed such Certificates.
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Section 9.12. Reporting; Withholding. (a) The Trustee shall timely provide
to the Owners the Internal Revenue Service's Form 1099 and any other statement
required by applicable Treasury regulations as determined by the Seller, and
shall withhold, as required by applicable law, federal, state or local taxes, if
any, applicable to distributions to the Owners, including but not limited to
backup withholding under Section 3406 of the Code and the withholding tax on
distributions to foreign investors under Sections 1441 and 1442 of the Code.
(b) The Trustee shall timely file all reports required to be filed by the
Trust with any federal, state or local governmental authority having
jurisdiction over the Trust, including other reports that must be filed with the
Owners, such as the Internal Revenue Service's Form 1066 and Schedule Q and the
form required under Section 6050K of the Code, if applicable. Furthermore, the
Trustee shall report to Owners, if required, with respect to the allocation of
expenses pursuant to Section 212 of the Code in accordance with the specific
instructions to the Trustee by the Seller with respect to such allocation of
expenses. The Trustee shall collect any forms or reports from the Owners
determined by the Seller to be required under applicable federal, state and
local tax laws.
(c) The Trustee shall provide to the Internal Revenue Service and to
persons described in section 860(E)(e)(3) and (6) of the Code the information
described in Treasury Regulation section 1.860D-1(b)(5)(ii), or any successor
regulation thereto. Such information will be provided in the manner described in
Treasury Regulation section 1.860E-2(a)(5), or any successor regulation thereto.
Section 9.13. Liability of the Trustee. Except during the continuance of an
Event of Default, the Trustee shall be liable in accordance herewith only to the
extent of the obligations specifically imposed upon and undertaken by the
Trustee herein. Neither the Trustee nor any of the directors, officers,
employees or agents of the Trustee shall be under any liability on any
Certificate or otherwise to any Account, the Seller, the Master Servicer, any
Sub-Servicer, the Transferor or any Owner 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
Trustee or any such Person against any liability which would otherwise be
imposed by reason of negligent action, negligent failure to act or bad faith in
the performance of duties or by reason of reckless disregard of obligations and
duties hereunder. Subject to the foregoing sentence, the Trustee shall not be
liable for losses on investments of amounts in any Account (except for any
losses on obligations on which the bank serving as Trustee is the obligor). In
addition, the Seller covenants and agrees to indemnify the Trustee, and when the
Trustee is acting as Master Servicer, the Trustee in its capacity as Master
Servicer, from, and
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hold it harmless against, any and all losses, liabilities, damages, claims or
expenses (including reasonable and documented legal fees and expenses) other
than those resulting from the negligence or bad faith of the Trustee. The
Trustee and any director, officer, employee or agent of the Trustee may rely and
shall be protected in acting or refraining from acting in good faith on any
certificate, notice or other document of any kind prima facie properly executed
and submitted by the Authorized Officer of any Person respecting any matters
arising hereunder.
Section 9.14. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust Estate or any Property may at the time be located, the Master
Servicer and the Trustee acting jointly and with the consent of the Certificate
Insurer 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 all or any part of the Trust Estate or
separate Trustee or separate Trustees of any part of the Trust Estate, and to
vest in such Person or Persons, in such capacity and for the benefit of the
Owners and the Certificate Insurer, such title to the Trust Estate, or any part
thereof, and, subject to the other provisions of this Section 9.14, such powers,
duties, obligations, rights and trusts as the Master Servicer and the Trustee
may consider necessary or desirable. If the Master Servicer shall not have
joined in such appointment within 15 days after the receipt by it of a request
so to do, or in the case any event indicated in Section 9.2 of this Agreement
shall have occurred and be continuing, the Trustee alone (with the consent of
the Certificate Insurer) shall have the power to make such appointment. No
co-Trustee or separate Trustee hereunder shall be required to meet the terms of
eligibility as a successor Trustee under Section 9.8 and no notice to Owners of
the appointment of any co-Trustee or separate Trustee shall be required under
Section 9.9.
Every separate Trustee and co-Trustee shall, to the extent permitted, be
appointed and act subject to the following provisions and conditions:
(i) All rights, powers, duties and obligations conferred or imposed
upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate Trustee or co-Trustee jointly
(it being understood that such separate Trustee or co-Trustee is not
authorized to act separately without the Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed (whether as Trustee hereunder or
as successor to the Master Servicer hereunder), the Trustee shall be
incompetent or unqualified to perform such act or acts, in which event such
rights, powers, duties and obligations (including the holding of title to
the Trust
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Estate or any portion thereof in any such jurisdiction) shall be exercised
and performed singly by such separate Trustee or co-Trustee, but solely at
the direction of the Trustee;
(ii) No co-Trustee hereunder shall be held personally liable by reason
of any act or omission of any other co- Trustee hereunder; and
(iii) The Master Servicer and the Trustee acting jointly with the
consent of the Certificate Insurer may at any time accept the resignation
of or remove any separate Trustee or co-Trustee.
Any notice, request or other writing given to the Trustee shall be deemed
to have been given to each of the then separate Trustees and co-Trustees, as
effectively as if given to each of them. Every instrument appointing any
separate Trustee or co-Trustee shall refer to this Agreement and the conditions
of this Section 9.14. Each separate Trustee and co-Trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Master Servicer.
Any separate Trustee or co-Trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate Trustee or co-Trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor Trustee.
ARTICLE X
SERVICING AND ADMINISTRATION
OF MORTGAGE LOANS
Section 10.1. General Servicing Procedures. (a) Acting directly or through
one or more Sub-Servicers as provided in Section 10.3, the Master Servicer shall
service and administer the Mortgage Loans in accordance with this Agreement and
shall have full power and authority, acting alone, to do or cause to be done any
and all things in connection with such servicing and administration which it may
deem necessary or desirable and consistent with the terms of this Agreement.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Master
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Servicer shall not have any duties, responsibilities, or fiduciary relationship
with the parties hereto except those expressly set forth herein, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or shall otherwise exist against the Master
Servicer.
(b) The Master Servicer may, and is hereby authorized to, perform any of
its servicing responsibilities with respect to all or certain of the Mortgage
Loans through a Sub-Servicer as it may from time to time designate, but no such
designation of a Sub-Servicer shall serve to release the Master Servicer from
any of its obligations under this Agreement. Such Sub-Servicer shall have all
the rights and powers of the Master Servicer with respect to such Mortgage Loans
under this Agreement.
(c) Without limiting the generality of the foregoing, but subject to the
provisions of this Article X, the Master Servicer in its own name or in the name
of a Sub-Servicer hereby is authorized and empowered, which authorization may
further be evidenced, at the reasonable request of the Master Servicer, by a
power of attorney executed and delivered by the Trustee, on behalf of itself,
the Owners and the Trustee or any of them, (i) to execute and deliver any and
all instruments of satisfaction or cancellation or of partial or full release or
discharge and all other comparable instruments with respect to the Mortgage
Loans and with respect to the Properties, (ii) to institute foreclosure
proceedings or obtain a deed in lieu of foreclosure so as to effect ownership of
any Property in the name of the Trust, and (iii) to hold title in the name of
the Trust to any Property upon such foreclosure or deed in lieu of foreclosure
on behalf of the Trustee; provided, however, that to the extent any instrument
described in clause (i) preceding would be delivered by the Master Servicer
outside of its ordinary procedures for mortgage loans held for its own account
the Master Servicer shall, prior to executing and delivering such instrument,
obtain the prior written consent of the Certificate Insurer, and provided
further, however, that Section 10.14(a) shall constitute a power of attorney
from the Trustee to the Master Servicer to execute an instrument of satisfaction
(or assignment of mortgage without recourse) with respect to any Mortgage Loan
paid in full (or with respect to which payment in full has been escrowed).
Subject to Sections 10.13 and 10.14, the Trustee shall execute any powers of
attorney and other documents as the Master Servicer or such Sub-Servicer shall
reasonably request and that are provided to the Trustee to enable the Master
Servicer and such Sub-Servicer to carry out their respective servicing and
administrative duties hereunder. The costs to the Master Servicer of delivering
any satisfactions described in clause (i) above shall be paid by the Master
Servicer to the extent not recoverable from the related Mortgagor under
applicable state law.
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(d) The Master Servicer, with the approval of the Seller, shall have the
right to approve requests of Mortgagors for consent to (i) partial releases of
Mortgages and (ii) alterations and removal, demolition or division of Properties
subject to Mortgages. No such request shall be approved by the Master Servicer
unless: (1) (x) the provisions of the related Note and Mortgage have been
complied with; (y) the Loan-to-Value Ratio (which may, for this purpose, be
determined at the time of any such action in a manner reasonably acceptable to
the Certificate Insurer) after any release does not exceed the Loan-to-Value
Ratio set forth for such Mortgage Loan in the Mortgage Loan Schedule; and (z)
the lien priority, monthly payment, Coupon Rate or maturity date of the related
Mortgage is not affected (except in accordance with Section 10.2) or (2) the
Certificate Insurer shall have approved the granting of such request and shall
not unreasonably withhold such approval.
(e) The Master Servicer shall give prompt notice to the Seller, the
Transferor, the Trustee and to the Certificate Insurer of any action, of which
the Master Servicer has actual knowledge, to (i) assert a claim against the
Trust or (ii) assert jurisdiction over the Trust.
(f) Servicing Advances incurred by the Master Servicer or any Sub-Servicer
in connection with the servicing of the Mortgage Loans (including any penalties
in connection with the payment of any taxes and assessments or other charges) on
any Property shall be recoverable by the Master Servicer or such Sub-Servicer to
the extent described in this Agreement.
(g) Each of the Seller, the Master Servicer, any Sub-Servicer, the
Transferor, the Trustee and the Certificate Insurer shall be entitled to rely,
and shall be fully protected in relying, upon any promissory note, writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document reasonably believed by it to be genuine and correct and to have been
signed, sent or made by the proper person or persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the
Mortgagor(s)), independent accountants and other experts selected by the Seller,
the Master Servicer, each Sub-Servicer, the Transferor, the Trustee or the
Certificate Insurer. The Master Servicer shall be fully justified in failing or
refusing to take any action under this Agreement for which failure or refusal it
has sought and received instructions from the Owners and which failure or
refusal has been consented to by the Certificate Insurer. The Master Servicer
shall in all cases be fully protected in acting, or in refraining from acting,
under this Agreement and the Mortgage Loans in accordance with an express
written request of the Owners to which the Certificate Insurer has consented,
and such request and any action taken or failure to act pursuant thereto shall
be binding upon the Seller, the Master Servicer, the Transferor, the Trustee,
the Certificate Insurer and
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all Owners. In the event of any conflicting instructions or requests, the
instructions or requests delivered by the Certificate Insurer shall prevail,
unless such instructions or requests violate the express terms of this Agreement
or violate applicable law.
(h) The Master Servicer shall have no liability to the Seller, the
Transferor, the Trustee, the Certificate Insurer, the Owners or any other Person
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 the foregoing shall not apply to any breach of representations or
warranties made by the Master Servicer herein, or to any specific liability
imposed upon the Master Servicer pursuant to this Agreement or any liability
that would otherwise be imposed upon the Master Servicer by reason of its
willful misconduct, bad faith or negligence in the performance of its duties
hereunder or by reason of its reckless disregard of its obligations or duties
hereunder.
Section 10.2. Collection of Certain Mortgage Loan Payments. The Master
Servicer shall generally service the Mortgage Loans in a prudent manner
consistent with the Master Servicer's Servicing and Collection Guide (the
"Servicing Standards"), and agrees to make reasonable efforts to collect all
payments called for under the terms and provisions of the Mortgage Loans, and
shall, to the extent such procedures shall be consistent with this Agreement,
follow collection procedures for all Mortgage Loans at least as rigorous as
those the Master Servicer would take in servicing similar mortgage loans and in
collecting payments thereunder for its own account. Consistent with the
foregoing, the Master Servicer may (i) in its discretion waive or permit to be
waived any late payment charge or assumption fee or any other fee or charge
which the Master Servicer would be entitled to retain pursuant to Section 10.15
as servicing compensation, (ii) extend the due date for payments due on a Note
for a period (with respect to each payment as to which the due date is extended)
not greater than 125 days after the initially scheduled due date for such
payment and (iii) amend any Note to extend the maturity thereof, provided that
no maturity shall be extended beyond the maturity date of the Mortgage Loan with
the latest maturity date and that no more than 1.0% of the Original Pool
Principal Balance of the Mortgage Loans shall have a maturity date which has
been extended beyond the maturity date thereof at the Cut-off Date; provided
further, with respect to clauses (i), (ii) and (iii), that such action does not
violate applicable REMIC provisions. In the event the Master Servicer shall
consent to the deferment of the due dates for payments due on a Note, the Master
Servicer shall nonetheless make payment of any required Delinquency Advance with
respect to the payments so extended to the same extent as if such installment
were due, owing and Delinquent and had not been deferred, and shall be entitled
to reimbursement therefor in accordance with Sections 10.8(d)(i)(D) and 10.9(a)
hereof.
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The Master Servicer may not waive prepayment charges or penalty interest in
connection with Prepayments. Any such amounts so received shall be paid over to
the Seller as received.
Section 10.3. Sub-Servicing Agreements Between Master Servicer and
Sub-Servicers. The Master Servicer may enter into Sub-Servicing Agreements for
any servicing and administration of Mortgage Loans with any institution which is
in compliance with the laws of each state necessary to enable it to perform its
obligations under such Sub-Servicing Agreement and which (i) has been designated
an approved seller-servicer by FHLMC or FNMA for first and second mortgage loans
and (ii) (except for LSI Financial Group), has equity of at least $15,000,000,
as determined in accordance with generally accepted accounting principles, and
(iii) must have demonstrated proficiency in the servicing of mortgage loans
having similar characteristics (including credit characteristics) to the
Mortgage Loans. The Master Servicer shall give notice to the Seller, the
Transferor, the Trustee, ▇▇▇▇▇'▇, S&P and the Certificate Insurer of the removal
or appointment of any Sub-Servicer; no such removal or appointment shall be
effective unless the Trustee shall have received the prior consent of ▇▇▇▇▇'▇,
the Certificate Insurer and S&P. Any such Sub-Servicing Agreement shall be
consistent with and not violate the provisions of this Agreement. For purposes
of this Agreement, the Master Servicer shall be deemed to have received payments
on or with respect to Mortgage Loans when any Sub-Servicer has received such
payments. For purposes of this Agreement, the Master Servicer shall be deemed to
have made a payment required to be made by it hereunder when any Sub-Servicer
has made such payment in the manner required of the Master Servicer hereunder.
For purposes of this Agreement, the Master Servicer shall be deemed to have
delivered any document required to be delivered by it hereunder when any
Sub-Servicer has delivered such document in the manner required of the Master
Servicer hereunder. As of the Startup Day, the only Sub-Servicer is LSI
Financial Group.
Section 10.4. Successor Sub-Servicers. Each Sub- Servicing Agreement shall
expressly provide that the Master Servicer or the Trustee shall be entitled to
terminate any Sub-Servicing Agreement in accordance with the terms and
conditions of such Sub-Servicing Agreement and to enter into a Sub-Servicing
Agreement with a successor Sub-Servicer which qualifies under Section 10.3. The
Trustee shall have no duty or obligation hereunder to monitor or supervise the
performance of any Sub- Servicer.
Section 10.5. Liability of Master Servicer. The Master Servicer shall not
be relieved of its obligations under this Agreement notwithstanding any
Sub-Servicing Agreement or any of the provisions of this Agreement relating to
agreements or arrangements between the Master Servicer and a Sub-Servicer or
otherwise, and the Master Servicer shall be obligated to the same extent and
under the same terms and conditions as if it alone were servicing and
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administering the Mortgage Loans. The Master Servicer shall be entitled to enter
into any agreement with a Sub-Servicer for indemnification of the Master
Servicer by such Sub-Servicer and nothing contained in such Sub-Servicing
Agreement shall be deemed to limit or modify this Agreement.
Section 10.6. No Contractual Relationship Between Sub-Servicer and Trustee
or the Owners. Any Sub-Servicing Agreement and any other transactions or
services relating to the Mortgage Loans involving a Sub-Servicer (other than the
Sub-Servicing Agreement dated the date hereof among the Master Servicer, LSI
Financial Group and the Trustee) shall be deemed to be between the Sub-Servicer,
the Master Servicer and any other parties thereto alone and the Transferor, the
Trustee and the Owners shall not be deemed parties thereto and shall have no
claims, rights, obligations, duties or liabilities with respect to any
Sub-Servicer except as set forth in Sections 10.4 and 10.7, unless expressly
made a party thereto.
Section 10.7. Assumption or Termination of Sub-Servicing Agreement by
Trustee. In connection with the assumption of the responsibilities, duties and
liabilities and of the authority, power and rights of the Master Servicer
hereunder by the Trustee pursuant to Section 11.1, it is understood and agreed
that the Master Servicer's rights and obligations under any Sub-Servicing
Agreement then in force between the Master Servicer and a Sub-Servicer may be
assumed or terminated by the Trustee at its option, and the Master Servicer
shall cause each Sub-Servicing Agreement to so provide. Each Sub-Servicing
Agreement shall contain term provisions at least as restrictive as those
contained herein with respect to the Master Servicer.
The Master Servicer shall, upon request of the Trustee, but at the expense
of the Master Servicer, deliver to the assuming party documents and records
relating to each Sub-Servicing Agreement and an accounting of amounts collected
and held by it and otherwise use its best reasonable efforts to effect the
orderly and efficient transfer of the Sub-Servicing Agreements to the assuming
party.
Section 10.8. Principal and Interest Account.
(a) The Master Servicer shall establish and maintain at one or more
Designated Depository Institutions the Principal and Interest Account as a
segregated account.
Subject to Subsections (c) and (d) below, the Master Servicer and any
Sub-Servicer shall deposit all collections (other than amounts escrowed for
taxes and insurance) related to the Mortgage Loans to the Principal and Interest
Account on a daily basis (but no later than the first Business Day after
receipt).
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On or before the Startup Day, the Master Servicer shall deposit to the
Principal and Interest Account (i) all scheduled payments due and collected
(other than amounts escrowed for taxes and insurance) on the Mortgage Loans
after the Cut-Off Date and prior to the Startup Day and (ii) all unscheduled
collections (other than amounts escrowed for taxes and insurance) on the
Mortgage Loans received on or after the Cut-Off Date and prior to the Startup
Day.
(b) All funds in the Principal and Interest Account shall be invested in
Eligible Investments maturing not later than the Business Day immediately
preceding the related Remittance Date; provided, however, in the event that
Trustee is acting as Successor Master Servicer, such amounts may be held
uninvested. The Principal and Interest Account shall be held in trust in the
name of the Trustee for the benefit of the Owners. Any investment earnings on
funds held in the Principal and Interest Account shall be for the account of the
Master Servicer and may only be withdrawn from the Principal and Interest
Account by the Master Servicer immediately following the remittance of the
Monthly Remittances by the Master Servicer. Any investment losses shall be paid
by the Master Servicer to the Principal and Interest Account from the Master
Servicer's own funds. Any references herein to amounts on deposit in the
Principal and Interest Account shall refer to amounts net of such investment
earnings and to additional amounts in respect of investment losses. The Trustee
shall have no responsibility or liability for actions taken by the Master
Servicer, including withdrawals, with respect to the Principal and Interest
Accounts.
(c) The Master Servicer shall deposit to the Principal and Interest Account
all principal and interest payments from the related Mortgagors received by the
Master Servicer (including any Prepayments), Net Proceeds, other recoveries or
amounts related to the Mortgage Loans received by the Master Servicer,
Compensating Interest, Delinquency Advances together with any amounts which are
reimbursable to the Master Servicer from the Principal and Interest Account, the
amount of any Loan Purchase Price received or paid by the Master Servicer, the
amount of any Substitution Amount received by the Master Servicer, REO income
pursuant to Section 10.13(c) hereof, and amounts required to be deposited
therein pursuant to Section 10.11 hereof in connection with blanket insurance
policies and any proceeds received by the Master Servicer in connection with the
termination of the Trust, but net of (i) the Master Servicing Fee with respect
to each Mortgage Loan and other servicing compensation to the Master Servicer as
permitted by Section 10.15 hereof, (ii) Net Proceeds to the extent such Net
Proceeds exceed the sum of (I) the Principal Balance of the related Mortgage
Loan, plus (II) accrued and unpaid interest on such Mortgage Loan at the Coupon
Rate applicable to the related Remittance Period (net of the Master Servicing
Fee) and (iii) prepayment charges and similar amounts to be paid over to the
Seller pursuant to Section 10.2 hereof. Amounts described in clause (ii) of the
preceding sentence
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shall be retained by the Master Servicer as additional servicing compensation or
paid over to the related Mortgagor if required by law.
(d) (i) The Master Servicer may make withdrawals from the Principal and
Interest Account only for the following purposes:
(A) to effect the timely remittance to the Trustee of the related Monthly
Remittance due on each Remittance Date;
(B) to withdraw investment earnings on amounts on deposit in the Principal
and Interest Account;
(C) to withdraw amounts that have been deposited to the Principal and
Interest Account in error;
(D) to reimburse itself for amounts which represent Reimbursable Advances
made by the Master Servicer from its own funds and subsequently
collected from the related Mortgagor; and
(E) to clear and terminate the Principal and Interest Account in
connection with the termination of the Trust.
(ii) On the tenth day of each month (or the immediately following Business
Day if the tenth day does not fall on a Business Day), the Master Servicer shall
send to the Trustee a report, in such electronic form as may be agreed upon by
the Master Servicer, the Seller, the Certificate Insurer and the Trustee,
detailing the payments on the Mortgage Loans for each of the Mortgage Loan
Groups during the prior Remittance Period. Such report shall be in the form and
have the specifications as may be agreed to between the Master Servicer, the
Seller, and the Trustee from time to time and, in any event, shall have such
information as shall be necessary to enable the Trustee to perform its
obligations hereunder.
In addition, on or prior to each Remittance Date, the Master Servicer will
furnish to the Seller, the Transferor, the Trustee and to the Certificate
Insurer the following information for each of the three Mortgage Loan Groups as
of the close of business on the first business day of the current calendar
month:
(A) the total number of Mortgage Loans and the aggregate Principal
Balances thereof, together with the number and aggregate principal
balances of Mortgage Loans (a) 30-59 days Delinquent, (b) 60-89 days
Delinquent and (c) 90 or more days Delinquent;
(B) the number and aggregate principal balances of all Mortgage Loans in
foreclosure proceedings (and whether any such Mortgage Loans are also
included
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in any of the statistics described in the foregoing clause (A));
(C) the number and aggregate principal balances of all Mortgage Loans
relating to Mortgagors in bankruptcy proceedings (and whether any such
Mortgage Loans are also included in any of the statistics described in
the foregoing clauses (A) and (B));
(D) the number and aggregate principal balances of all Mortgage Loans
relating to REO Properties (and whether any such Mortgage Loans are
also included in any of the statistics described in the foregoing
clauses (A), (B) and (C));
(E) the number and aggregate principal balances of all Mortgage Loans as
to which foreclosure proceedings were commenced during the prior
Remittance Period;
(F) a schedule regarding cumulative foreclosures since the Cut-Off Date;
(G) a schedule regarding the Group I Cumulative Net Realized Losses, the
Group II Cumulative Net Realized Losses, and the Cumulative Net
Realized Losses;
(H) the book value of any REO Property and any income received from REO
Properties during the prior Remittance Period; and
(I) such other information as the Trustee, the Seller, the Certificate
Insurer or the Transferor may reasonably request and as is produced by
the Master Servicer in the ordinary course of its business.
(iii) On each Remittance Date the Master Servicer shall remit the Group I
Monthly Remittance and the Group II Monthly Remittance to the Trustee by wire
transfer, or otherwise make funds available in immediately available funds.
(e) In connection with any exercise by the Seller of its option and related
termination under Article VIII hereof, upon written request of the Seller, the
Master Servicer shall remit to the Trustee all amounts (net of investment
earnings and providing for investment losses pursuant to Section 10.8(b), net of
the Master Servicing Fee and net of amounts reimbursable for Delinquency
Advances and Servicing Advances) then on deposit in the Principal and Interest
Account for deposit to the Certificate Account, which deposit shall be deemed to
have occurred immediately preceding such purchase.
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Section 10.9. Delinquency Advances and Servicing Advances. (a) If the
amount on deposit in the Principal and Interest Account with respect to any
Mortgage Loan Group as of any Remittance Date is less than the related Monthly
Remittance for such Remittance Date, the Master Servicer shall deposit to the
Principal and Interest Account with respect to such Mortgage Loan Group a
sufficient amount of its own funds to make such amount equal to the related
Monthly Remittance for such Remittance Date. Such amounts of the Master
Servicer's own funds so deposited are "Delinquency Advances". Any Delinquency
Advances funded by the Master Servicer from its own funds are reimbursable from
subsequent collections on or with respect to the related Mortgage Loan,
including Liquidation Proceeds, Insurance Proceeds, Released Mortgaged Property
Proceeds, and payments from the related Mortgagor. Notwithstanding anything to
the contrary contained in this Agreement, no Delinquency Advance or Servicing
Advance shall be required to be made by the Master Servicer if such Delinquency
Advance or Servicing Advance would, if made, constitute a Nonrecoverable
Advance.
The Master Servicer shall be permitted to fund its payment of Delinquency
Advances on any Remittance Date from collections on any Mortgage Loan deposited
to the Principal and Interest Account subsequent to the related Remittance
Period, and shall deposit to the Certificate Account with respect to Delinquency
Advances funded from amounts on deposit in the Principal and Interest Account
(i) collections from the Mortgagor whose delinquency gave rise to the shortfall
which resulted in such Delinquency Advance and (ii) Net Liquidation Proceeds
recovered on account of the related Mortgage Loan to the extent of the amount of
aggregate Delinquency Advances related thereto. In any event, to the extent the
Master Servicer uses such funds, the Master Servicer must reimburse the
Principal and Interest Account by the next Remittance Date to the extent
necessary to provide for the related Monthly Remittance.
(b) The Master Servicer will pay all reasonable and customary
"out-of-pocket" costs and expenses (including reasonable legal fees) incurred in
the performance of its servicing obligations including, but not limited to, the
cost of (i) Preservation Expenses, (ii) any enforcement or judicial proceedings,
including foreclosures, (iii) the management and liquidation of REO Property
(including, without limitation, realtors' commissions) and (iv) advances made
for taxes, insurance and other charges against the Property. Each such
expenditure will constitute a "Servicing Advance". The Master Servicer may
recover Servicing Advances from the Mortgagors to the extent permitted by the
Mortgage Loans or, if not theretofore recovered from the Mortgagor on whose
behalf such Servicing Advance was made, from Liquidation Proceeds, Insurance
Proceeds and/or Released Mortgage Property Proceeds realized with respect to the
related Mortgage Loan. In no case may the Master Servicer recover Servicing
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Advances from the principal and interest payments on any Mortgage Loan or from
any amounts relating to any other Mortgage Loan.
Section 10.10. Compensating Interest. A full month's interest at the
related Coupon Rate less the Master Servicing Fee is due to the Trustee on the
outstanding Principal Balance of each Mortgage Loan as of the beginning of each
Remittance Period. If a Prepayment of a Mortgage Loan occurs during any calendar
month, any difference between the interest collected from the Mortgagor during
such calendar month and the full month's interest at the related Coupon Rate
less the Master Servicing Fee with respect to such Mortgage Loan ("Compensating
Interest") that is due shall be deposited prior to the Remittance Date by the
Master Servicer to the Principal and Interest Account and shall be included in
the related Monthly Remittance to be made available to the Trustee on the next
succeeding Remittance Date. The Master Servicer shall not be entitled to
reimbursement for Compensating Interest payments.
Section 10.11. Maintenance of Insurance. (a) The Master Servicer shall
cause to be maintained with respect to each Mortgage Loan a hazard insurance
policy with a generally acceptable carrier licensed in the state in which the
Property is located that provides for fire and extended coverage, and which
provides for a recovery by the Trust of insurance proceeds relating to such
Mortgage Loan in an amount not less than the least of (i) the outstanding
principal balance of the Mortgage Loan (together in the case of a Second
Mortgage Loan, with the outstanding principal balance of the Senior Lien), (ii)
the minimum amount required to compensate for loss or damage on a replacement
cost basis and (iii) the full insurable value of the premises and which
otherwise conforms to the description thereof set forth in clause (xvii) of
Section 3.2(b). The Master Servicer shall indemnify the Trust out of the Master
Servicer's own funds for any loss to the Trust resulting from the Master
Servicer's failure to maintain the insurance required by this paragraph.
(b) If the Mortgage Loan at the time of origination relates to a Property
in an area identified in the Federal Register by the Federal Emergency
Management Agency as having special flood hazards, the Master Servicer will
cause to be maintained with respect thereto a flood insurance policy in a form
meeting the requirements of the current guidelines of the Federal Insurance
Administration with a generally acceptable carrier, and which provides for a
recovery by the Master Servicer on behalf of the Trust of insurance proceeds
relating to such Mortgage Loan of not less than the least of (i) the outstanding
principal balance of the Mortgage Loan, (ii) the minimum amount required to
compensate for damage or loss on a replacement cost basis and (iii) the maximum
amount of insurance that is available under the Flood Disaster Protection Act of
1973, as amended and which otherwise conforms to the description thereof set
forth in clause (xviii) of Section 3.2(b). The Master Servicer shall indemnify
the Trust and the Certificate Insurer out of the Master Servicer's own funds for
any
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loss to the Trust and the Certificate Insurer resulting from the Master
Servicer's failure to maintain the insurance required by this Section.
(c) In the event that the Master Servicer shall obtain and maintain a
blanket policy with an insurer acceptable to the Certificate Insurer insuring
against fire and hazards of extended coverage on all of the Mortgage Loans,
then, to the extent such policy names the Master Servicer as loss payee and
provides coverage in an amount equal to the aggregate unpaid principal balance
on the Mortgage Loans with co-insurance, and otherwise complies with the
requirements of this Section 10.11, the Master Servicer shall be deemed
conclusively to have satisfied its obligations with respect to fire and hazard
insurance coverage under this Section 10.11, it being understood and agreed that
such blanket policy may contain a deductible clause, in which case the Master
Servicer shall, in the event that there shall not have been maintained on the
related Property a policy complying with subsection (a) of this Section 10.11,
and there shall have been a loss which would have been covered by such policy,
deposit in the Principal and Interest Account from the Master Servicer's own
funds the difference, if any, between the amount that would have been payable
under a policy complying with subsection (a) of this Section 10.11 and the
amount paid under such blanket policy. Upon the request of the Trustee, the
Master Servicer shall cause to be delivered to the Trustee, a certified true
copy of such policy.
(d) The Seller shall indemnify the Master Servicer for any loss to the
Master Servicer if any Mortgage Loan does not, at the time the Master Servicer
assumed the servicing of such Mortgage Loan, have in place the insurance
described in Sections 3.2(b)(xvi) and (xvii) hereof and described herein and, if
applicable, Section 3.2(b)(xviii) hereof. Without limiting the obligations of
the Seller pursuant to Section 3.2, the Master Servicer shall only be required
to maintain insurance on any Property if such insurance was in place at the time
the Master Servicer assumed the servicing of the related Mortgage Loan.
Section 10.12. Due-on-Sale Clauses; Assumption and Substitution Agreements.
(a) When a Property has been or is about to be conveyed by the Mortgagor, the
Master Servicer shall, to the extent it has knowledge of such conveyance or
prospective conveyance, exercise its rights to accelerate the maturity of the
related Mortgage Loan under any "due on sale" clause contained in the related
Mortgage or Note; provided, however, that the Master Servicer shall not exercise
any such right if the "due on sale" clause, in the reasonable belief of the
Master Servicer, is not enforceable under applicable law; and provided, further,
that the Master Servicer may refrain from exercising any such right if the
Certificate Insurer gives its prior consent to such non-enforcement.
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(b) The Mortgage Loan, if assumed, shall conform in all respects to the
requirements, representations and warranties of this Agreement. The Master
Servicer shall notify the Trustee in writing that any applicable assumption or
substitution agreement has been completed and shall forward to the Trustee the
original recorded copy of such assumption or substitution agreement, which copy
shall be added by the Trustee in writing to the related File and which shall,
for all purposes, be considered a part of such File to the same extent as all
other documents and instruments constituting a part thereof. The Master Servicer
shall be responsible for recording any such assumption or substitution
agreements. In connection with any such assumption or substitution agreement,
the required monthly payment on the related Mortgage Loan shall not be changed
but shall remain as in effect immediately prior to the assumption or
substitution, the stated maturity or outstanding principal amount of such
Mortgage Loan shall not be changed, the Coupon Rate shall not be changed nor
shall any required monthly payments of principal or interest be deferred or
forgiven. Any fee collected by the Master Servicer or the Sub-Servicer for
consenting to any such conveyance or entering into an assumption or substitution
agreement shall be retained by or paid to the Master Servicer as additional
servicing compensation.
(c) Notwithstanding the foregoing clauses (a) and (b) or any other
provision of this Agreement, the Master Servicer shall not be deemed to be in
default, breach or any other violation of its obligations hereunder by reason of
any assumption of a Mortgage Loan by operation of law or any assumption which
the Master Servicer may be restricted by law from preventing, for any reason
whatsoever.
Section 10.13. Realization Upon Defaulted Mortgage Loans. (a) The Master
Servicer shall foreclose upon or otherwise comparably effect the ownership in
the name of the Trust of Properties relating to defaulted Mortgage Loans as to
which no satisfactory arrangements can be made for collection of Delinquent
payments and which the Master Servicer has not purchased pursuant to Section
10.13(f), unless the Master Servicer reasonably believes that Net Liquidation
Proceeds with respect to such Mortgage Loan would not be increased as a result
of such foreclosure or other action, in which case such Mortgage Loan will be
charged-off and will become a Liquidated Loan. The Master Servicer shall have no
obligation to purchase any Property at any foreclosure sale. The Master Servicer
will give notice of any such charge-off to the Certificate Insurer by delivery
of a Liquidation Report in the form attached as Exhibit G hereto. In connection
with such foreclosure or other conversion, the Master Servicer shall exercise
foreclosure procedures with the same degree of care and skill in their exercise
or use, as it would exercise or use under the circumstances in the conduct of
its own affairs. Any amounts, including Liquidation Expenses, advanced by the
Master Servicer in connection with such foreclosure or other action shall
constitute "Servicing Advances" within the meaning of Section 10.9(b) hereof.
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(b) The Master Servicer shall sell any REO Property within 23 months of its
acquisition by the Trust, unless the Master Servicer obtains for the Trustee an
opinion of counsel experienced in federal income tax matters, addressed to the
Trustee, the Certificate Insurer and the Master Servicer, to the effect that the
holding by the Trust of such REO Property for a greater specified period will
not result in the imposition of taxes on "Prohibited Transactions" of the Trust
as defined in Section 860F of the Code or cause the REMICs to fail to qualify
under the REMIC Provisions at any time that any Certificates are outstanding.
(c) Notwithstanding the generality of the foregoing provisions, the Master
Servicer shall manage, conserve, protect and operate each REO Property for the
Owners solely for the purpose of its prompt disposition and sale in a manner
which does not cause such REO Property to fail to qualify as "foreclosure
property" within the meaning of Section 860G(a)(8) of the Code or result in the
receipt by the Trust of any "income from non-permitted assets" within the
meaning of Section 860F(a)(2)(B) of the Code or any "net income from foreclosure
property" which is subject to taxation under the REMIC Provisions. Pursuant to
its efforts to sell such REO Property, the Master Servicer shall either itself
or through an agent selected by the Master Servicer protect and conserve such
REO Property in the same manner and to such extent as is customary in the
locality where such REO Property is located and may, incident to its
conservation and protection of the interests of the Owners and the Certificate
Insurer, rent the same, or any part thereof, as the Master Servicer deems to be
in the best interest of the Owners and the Certificate Insurer for the period
prior to the sale of such REO Property. The net income from the sale of an REO
Property shall be deposited in the Principal and Interest Account.
(d) If the Master Servicer has reason to believe that a Property which the
Master Servicer is contemplating acquiring in foreclosure or by deed in lieu of
foreclosure contains environmental or hazardous waste risks known to the Master
Servicer, the Master Servicer shall notify the Seller, the Transferor, the
Trustee and the Certificate Insurer prior to acquiring the Property. The Master
Servicer shall not institute foreclosure actions with respect to such a property
if it reasonably believes that such action would not be consistent with the
Servicing Standards, and the Master Servicer is not permitted to take any action
with respect to such a Property without the prior written approval of the
Seller, the Transferor, the Trustee, and the Certificate Insurer, and in no
event shall the Master Servicer be required to manage, operate or take any other
action with respect thereto which the Master Servicer in good faith believes
will result in "clean-up" or other liability under applicable law, unless the
Master Servicer receives an indemnity acceptable to it in its sole discretion.
(e) The Master Servicer shall determine, with respect to each defaulted
Mortgage Loan, when it has recovered, whether
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through trustee's sale, foreclosure sale or otherwise, all amounts, if any, it
expects to recover from or on account of such defaulted Mortgage Loan, whereupon
such Mortgage Loan shall become a "Liquidated Loan". The Master Servicer shall
deliver to the Seller, the Transferor, the Trustee and the Certificate Insurer
on each Remittance Date a Liquidation Report in the form annexed as Exhibit G
hereto with respect to each Mortgage Loan as to which the Master Servicer made a
determination that such Mortgage Loan has become a Liquidated Loan during the
related Remittance Period.
(f) The Master Servicer has the right and the option, but not the
obligation, to purchase for its own account any Mortgage Loan which becomes
Delinquent, in whole or in part, as to four consecutive monthly installments or
any Mortgage Loan as to which enforcement proceedings have been brought by the
Master Servicer pursuant to this Section 10.13 or which is in default or as to
which a default is imminent. Any such Mortgage Loan so purchased shall be
purchased on a Remittance Date at a purchase price equal to the Loan Purchase
Price thereof, which purchase price shall be deposited in the Principal and
Interest Account.
(g) The Master Servicer shall consult with the Seller with respect to its
obligations under this Section 10.13.
Section 10.14. Trustee to Cooperate; Release of Files. (a) Upon the payment
in full of any Mortgage Loan (including the repurchase of any Mortgage Loan or
any liquidation of such Mortgage Loan through foreclosure or otherwise), or the
receipt by the Master Servicer of a notification that payment in full will be
escrowed in a manner customary for such purposes, the Master Servicer shall
deliver to the Trustee a Master Servicer's Trust Receipt. Upon receipt of such
Master Servicer's Trust Receipt, the Trustee shall promptly release the related
File, in trust to (i) the Master Servicer, (ii) an escrow agent or (iii) any
employee, agent or attorney of the Trustee, in each case pending its release by
the Master Servicer, such escrow agent or such employee, agent or attorney of
the Trustee, as the case may be. Upon any such payment in full, or the receipt
of such notification that such funds have been placed in escrow, the Master
Servicer is authorized to give, as attorney-in-fact for the Trustee and the
mortgagee under the Mortgage which secured the Note, an instrument of
satisfaction (or assignment of Mortgage without recourse) regarding the Property
relating to such Mortgage, which instrument of satisfaction or assignment, as
the case may be, shall be delivered to the Person or Persons entitled thereto
against receipt therefor of payment in full, it being understood and agreed that
no expense incurred in connection with such instrument of satisfaction or
assignment, as the case may be, shall be chargeable to the Principal and
Interest Account. In lieu of executing any such satisfaction or assignment, as
the case may be, the Master Servicer may prepare and submit to the Trustee, a
satisfaction (or assignment without recourse, if requested by the Person or
Persons entitled thereto) in form for execution by the Trustee with all
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requisite information completed by the Master Servicer; in such event, the
Trustee shall execute and acknowledge such satisfaction or assignment, as the
case may be, and deliver the same with the related File, as aforesaid.
(b) From time to time and as appropriate in the servicing of any Mortgage
Loan, including, without limitation, foreclosure or other comparable conversion
of a Mortgage Loan or collection under any applicable Insurance Policy, the
Trustee shall (except in the case of the payment or liquidation pursuant to
which the related File is released to an escrow agent or an employee, agent or
attorney of the Trustee), promptly upon request of the Master Servicer and
delivery to the Trustee of a Master Servicer's Trust Receipt, release the
related File to the Master Servicer and shall execute such documents as shall be
reasonably necessary to the prosecution of any such proceedings, including,
without limitation, an assignment without recourse of the related Mortgage to
the Master Servicer. The Trustee shall complete in the name of the Trustee any
endorsement in blank on any Note prior to releasing such Note to the Master
Servicer. Such receipt shall obligate the Master Servicer to return the File to
the Trustee when the need therefor by the Master Servicer no longer exists
unless the Mortgage Loan shall be liquidated, in which case, upon receipt of the
liquidation information, in physical or electronic form, the Master Servicer's
Trust Receipt shall be released by the Trustee to the Master Servicer.
Notwithstanding the foregoing, at no time shall the Trustee release to the
Master Servicer pursuant to this Section 10.14 a quantity of Files in excess of
10% of the number of Mortgage Loans within the Pool, excluding Files relating to
Mortgage Loans which have been paid in full or have become Liquidated Loans
(unless otherwise approved by the Certificate Insurer).
(c) In all cases where the Master Servicer needs the Trustee to sign any
document or to release a File within a particular period of time, the Master
Servicer shall notify an Authorized Officer of the Trustee by telephone or
telecopy of such need and the Trustee shall thereupon use its best efforts to
comply with the Master Servicer's needs, but in any event will comply within two
Business Days of such request.
Section 10.15. Master Servicing Compensation. As compen- sation for its
activities hereunder, the Master Servicer shall be entitled to retain the amount
of the Master Servicing Fee with respect to each Mortgage Loan. Additional
servicing compensation in the form of release and satisfaction fees (to the
extent allowed by law), bad check charges, assumption fees, late payment
charges, and any other servicing-related fees, Net Proceeds not required to be
deposited in the Principal and Interest Account pursuant to Section 10.8(c)(ii)
and similar items may, to the extent collected from Mortgagors, be retained by
the Master Servicer.
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Section 10.16. Annual Statement as to Compliance. The Master Servicer, at
its own expense, will deliver to the Seller, the Transferor, the Trustee and the
Certificate Insurer, annually, commencing in 1998, an Officer's Certificate
stating, as to each signer thereof, that (i) a review of the activities of the
Master Servicer during such preceding fiscal year and of 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 Master Servicer has
fulfilled all its obligations under this Agreement for such year, or, if there
has been a default in the fulfillment of one or more such obligations,
specifying each such default known to such officer and the nature and status
thereof including the steps being taken by the Master Servicer to remedy such
default. Any Sub-Servicer which is not a Master Servicer Affiliate also shall
deliver an annual statement as to compliance in the form described above or the
Master Servicer shall cover their performance in their statement. These
statements shall be available to Owners upon written request.
Section 10.17. Annual Independent Certified Public Accountants' Reports.
Annually, commencing in 1998, the Master Servicer, at its own expense, shall
cause to be delivered to the Seller, the Transferor, the Trustee, the
Certificate Insurer, ▇▇▇▇▇'▇ and S&P a letter or letters of a firm of
independent, nationally recognized certified public accountants reasonably
acceptable to the Certificate Insurer stating that such firm has, with respect
to the Master Servicer's overall servicing operations (i) performed applicable
tests in accordance with the compliance testing procedures as set forth in
Appendix 3 of the "Audit Guide for Audits of HUD Approved Non-Supervised
Mortgages" or (ii) examined such operations in accordance with the requirements
of the Uniform Single Attestation Program for Mortgage Bankers, and stating such
firm's conclusions relating thereto. These reports will be made available to
Owners upon written request.
Section 10.18. Access to Certain Documentation and Information Regarding
the Mortgage Loans; Confidentiality. The Master Servicer shall provide to the
Seller, the Transferor, the Trustee, the Certificate Insurer, and the
supervisory agents and examiners (as required in the latter case by applicable
state and federal regulations) of each of the foregoing access to the
documentation regarding the Mortgage Loans, such access being afforded without
charge but only upon reasonable request and during normal business hours at the
offices of the Master Servicer designated by it.
Upon any change in the format of the computer tape maintained by the Master
Servicer in respect of the Mortgage Loans, the Master Servicer shall deliver a
copy of such computer tape to the Trustee and the Seller and in addition shall
provide a copy of such computer tape to the Trustee and the Seller at such other
times as the Trustee and the Seller may request.
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The Master Servicer, the Trustee, and the Certificate Insurer shall keep
confidential (including from affiliates thereof) information concerning the
Mortgage Loans and the underwriting criteria for the Mortgage Loans, except as
required by law.
Each of the Seller, the Transferor, the Trustee and the Certificate Insurer
acknowledges the proprietary nature of the software, software procedures,
software development tools, know-how, methodologies, processes and technologies
of the Master Servicer and any Sub-Servicer and agrees (i) that it shall use the
same means as it uses to protect its own confidential information, but in no
event less than reasonable means, to avoid disclosure by it or its agents or
employees to any third party of any confidential or proprietary information of
the Master Servicer or any Sub-Servicer, and (ii) that all such software,
software procedures, software development tools, know-how, methodologies,
process and technologies that are based upon trade secrets or proprietary
information of the Master Servicer or any Sub-Servicer shall be and remain the
property of the Master Servicer or any Sub-Servicer and that each of the Seller,
the Transferor, the Trustee and the Certificate Insurer will have no interest
therein or claim thereto. Each Sub-Servicer shall be a third-party beneficiary
of this paragraph.
Section 10.19. Assignment of Agreement. The Master Servicer may not assign
its obligations under this Agreement, in whole or in part, unless it shall have
first obtained (i) the written consent of the Seller, the Trustee and
Certificate Insurer and (ii) the Trustee and Certificate Insurer shall have
received a confirmation letter from one or more rating agencies confirming the
rating of the Class A Certificates as AAA or its equivalent; provided, however,
that any assignee must meet the eligibility requirements set forth in Section
11.1(g) hereof for a successor servicer.
Section 10.20. Inspections by Certificate Insurer and Account Parties;
Errors and Omissions Insurance. (a) At any reasonable time and from time to time
upon reasonable notice, the Seller, the Transferor, the Certificate Insurer, the
Trustee, or any agents or representatives thereof may inspect the Master
Servicer's servicing operations and discuss the servicing operations of the
Master Servicer. The out-of-pocket costs and expenses incurred by the Master
Servicer or its agents or representatives in connection with any such
examinations or discussions shall be paid by the requesting party prior to the
occurrence and continuance of an Event of Default, and by the Master Servicer
after the occurrence and during the continuance of an Event of Default.
(b) The Master Servicer agrees to maintain or cause a Sub-Servicer to
maintain errors and omissions coverage and a fidelity bond, each at least to the
extent required by Section 305 of Part I of FNMA Guide or any successor
provision thereof or such
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other insurance arrangements reasonably satisfactory to the Certificate Insurer.
Section 10.21. Financial Statements. The Master Servicer understands that,
in connection with the transfer of the Certificates, Owners may request that the
Master Servicer make available upon written request to prospective Owners any
publicly available annual audited financial statements of the Master Servicer
for one or more of the most recently completed four fiscal years for which such
statements are available, which request shall not be unreasonably denied. Such
financial statements shall also be supplied to the Certificate Insurer.
The Master Servicer also agrees to make available on a reasonable basis to
the Seller, the Transferor, the Trustee, the Certificate Insurer, any Owner or
any prospective Owner a knowledgeable financial or accounting officer for the
purpose of answering reasonable questions respecting recent developments
affecting the Master Servicer or the financial statements of the Master Servicer
and to permit the Seller, the Transferor, the Trustee, the Certificate Insurer,
any Owner or any prospective Owner to inspect the Master Servicer's servicing
facilities during normal business hours for the purpose of satisfying the
Seller, the Transferor, the Trustee, the Certificate Insurer, any Owner or such
prospective Owner that the Master Servicer has the ability to service the
Mortgage Loans in accordance with this Agreement.
Each requesting party shall use the same means as it uses to protect its
own confidential information, but in no event less than reasonable means, to
avoid disclosure by it or its agents or employees to any third party of any
confidential or proprietary information of the Master Servicer.
Section 10.22. REMIC. The Master Servicer covenants and agrees for the
benefit of the Owners (i) to take no action which would result in the
termination of REMIC status for either REMIC, (ii) not to engage in any
"prohibited transaction", as such term is defined in Section 860F(a)(2) of the
Code and (iii) not to engage in any other action which may result in the
imposition of any other taxes under the Code.
Section 10.23. The Designated Depository Institution. The Master Servicer
shall give the Seller, the Transferor, the Trustee and the Certificate Insurer
(a) at least thirty days' prior written notice of any anticipated change of the
Designated Depository Institution at which the Principal and Interest Account is
maintained and (b) written notice of any change in the ratings of such
Designated Depository Institution of which the Master Servicer is aware, within
two Business Days after discovery.
Section 10.24. Appointment of Custodian. If the Master Servicer determines
that the Trustee is unable to deliver Files to the Master Servicer as required
pursuant to Section 10.14 hereof,
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the Master Servicer shall so notify the Seller, the Transferor, the Trustee, the
Certificate Insurer, S&P and ▇▇▇▇▇'▇, and make request that a custodian
acceptable to the Seller, the Master Servicer, the Transferor and the
Certificate Insurer be appointed to retain custody of the Files on behalf of the
Trustee. The Seller, the Transferor and the Trustee agree to co-operate
reasonably with the Master Servicer in connection with the appointment of such
custodian. The Trustee shall pay from the Trustee's Fee all reasonable fees and
expenses of such custodian, in an amount not to exceed 1 basis point of the Pool
Principal Balance.
ARTICLE XI
EVENTS OF DEFAULT; REMOVAL OF MASTER SERVICER; MERGER
Section 11.1. Removal of Master Servicer; Resignation of Master Servicer.
(a) The Certificate Insurer (or, with the consent of the Certificate Insurer,
the Seller or the Owners of Class A Certificates evidencing at least a majority
in Percentage Interest of all Class A Certificates) may remove the Master
Servicer upon the occurrence of any of the following events (each, an "Event of
Default"):
(i) The Master Servicer shall (I) apply for or consent to the
appointment of a receiver, trustee, liquidator or custodian or similar
entity with respect to itself or its property, (II) admit in writing its
inability to pay its debts generally as they become due, (III) make a
general assignment for the benefit of creditors, (IV) be adjudicated a
bankrupt or insolvent, (V) commence a voluntary case under the federal
bankruptcy laws of the United States of America or file a voluntary
petition or answer seeking reorganization, an arrangement with creditors or
an order for relief or seeking to take advantage of any insolvency law or
file an answer admitting the material allegations of a petition filed
against it in any bankruptcy, reorganization or insolvency proceeding or
(VI) cause corporate action to be taken by it for the purpose of effecting
any of the foregoing; or
(ii) If without the application, approval or consent of the Master
Servicer, a proceeding shall be instituted in any court of competent
jurisdiction, under any law relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking in respect of the Master
Servicer an order for relief or an adjudication in bankruptcy,
reorganization, dissolution, winding up, liquidation, a composition or
arrangement with creditors, a readjustment of debts, the appointment of a
trustee, receiver, conservator, liquidator or custodian or similar entity
with respect to the Master Servicer or of all or any substantial part of
its assets, or other like relief in respect thereof under any bankruptcy or
insolvency law, and, if such proceeding is being contested by the Master
Servicer
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in good faith, the same shall (A) result in the entry of an order for
relief or any such adjudication or appointment or (B) continue undismissed
or pending and unstayed for any period of sixty (60) consecutive days; or
(iii) The Master Servicer shall fail to perform any one or more of its
obligations hereunder (other than its obligations referenced in clauses
(vi) and (vii) below) and shall continue in default thereof for a period of
thirty (30) days after the earlier to occur of (x) the date on which an
Authorized Officer of the Master Servicer knows or reasonably should know
of such failure or (y) receipt by the Master Servicer of a written notice
from the Trustee, any Owner, the Seller, the Transferor or the Certificate
Insurer of said failure; or
(iv) The Master Servicer shall fail to cure any breach of any of its
representations and warranties set forth in Section 3.1(c) which materially
and adversely affects the interests of the Owners or Certificate Insurer
for a period of thirty (30) days after the earlier of (x) the date on which
an Authorized Officer of the Master Servicer knows or reasonably should
know of such breach or (y) receipt by the Master Servicer of a written
notice from the Trustee, any Owner, the Seller, the Transferor or the
Certificate Insurer of such breach; or
(v) If the Certificate Insurer pays out any money under the
Certificate Insurance Policy, or if the Certificate Insurer otherwise funds
any shortfall with its own money, because the amounts available to the
Trustee (other than from the Certificate Insurer) are insufficient to make
required distributions on the Class A Certificates; or
(vi) The failure by the Master Servicer to make any required Servicing
Advance for a period of 30 days following the earlier of (x) the date on
which an Authorized Officer of the Master Servicer knows or reasonably
should know of such failure or (y) receipt by the Master Servicer of a
written notice from the Trustee, any Owner, the Seller, the Transferor or
the Certificate Insurer of such failure; or
(vii) The failure by the Master Servicer to make any required
Delinquency Advance, to pay any Compensating Interest or to pay over any
Monthly Remittance or other amounts required to be remitted by the Master
Servicer pursuant to this Agreement; or
(viii) If on any Payment Date the Pool Rolling Three Month Delinquency
Rate (including all foreclosures and REO Properties) exceeds 4.75% during
the period February 1, 1997 through January 31, 1998, 5.50% during the
period February 1, 1998 through January 31, 1999, 6.25% during the period
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February 1, 1999 through January 31, 2000, 7.25% during the period February
1, 2000 through January 31, 2001, 8.25% during the period February 1, 2001
through January 31, 2002, or 10.00% after February 1, 2002; or
(ix) If on any Payment Date occurring in February of any year,
commencing in February 1998, the aggregate Pool Cumulative Net Realized
Losses over the prior twelve month period exceed 0.75% of the average Pool
Principal Balance as of the close of business on the last day of each of
the twelve preceding Remittance Periods; or
(x) If on any Payment Date the aggregate Pool Cumulative Net Realized
Losses for all prior Remittance Periods since the Startup Day exceed 3.25%
of the Original Pool Principal Balance;
provided, however, that (x) prior to any removal of the Master Servicer pursuant
to clauses (ii) through (iv) and (vi) of this Section 11.1(a), any applicable
grace period granted by any such clause shall have expired prior to the time
such occurrence shall have been remedied and (y) in the event of the refusal or
inability of the Master Servicer to comply with its obligations described in
clause (vii) above, such removal shall be effective (without the requirement of
any action on the part of the Seller, the Transferor, the Certificate Insurer or
of the Trustee) at 4 p.m. New York City time on the second Business Day
following the day on which the Trustee notifies an Authorized Officer of the
Master Servicer that a required amount described in clause (vii) above has not
been received by the Trustee, unless the required amount described in clause
(vii) above is paid by the Master Servicer prior to such time or the Certificate
Insurer grants an extension of time for such payment. Upon the Trustee's
obtaining actual knowledge that a required amount described in clause (vii)
above has not been made by the Master Servicer, the Trustee shall so notify an
Authorized Officer of the Master Servicer, and the Certificate Insurer, as soon
as is reasonably practical.
(b) Upon the occurrence of an Event of Default as described in clauses
(viii), (ix) or (x) of Section 11.1(a), the Certificate Insurer may remove the
Master Servicer; provided, however, that if such occurrence of an Event of
Default is the result of circumstances beyond the Master Servicer's control, the
Master Servicer shall not be removed, and provided further, that in the event of
any disagreement between the Seller and the Certificate Insurer, the decision of
the Certificate Insurer shall control.
(c) The Master Servicer shall not resign from the obligations and duties
hereby imposed on it, except upon determination that its duties hereunder are no
longer permissible under applicable law or are in material conflict by reason of
applicable law with any other activities carried on by it, the
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other activities of the Master Servicer so causing such a conflict being of a
type and nature carried on by the Master Servicer at the date of this Agreement.
Any such determination permitting the resignation of the Master Servicer shall
be evidenced by an opinion of counsel to such effect which shall be delivered to
the Seller, the Transferor, the Trustee and the Certificate Insurer.
(d) No removal or resignation of the Master Servicer shall become effective
until the Trustee or a successor Master Servicer acceptable to the Certificate
Insurer shall have assumed the Master Servicer's responsibilities and
obligations in accordance with this Section.
(e) Upon removal or resignation of the Master Servicer, the Master Servicer
also shall promptly deliver or cause to be delivered to a successor Master
Servicer or the Trustee all the books and records (including, without
limitation, records kept in electronic form) that the Master Servicer has
maintained for the Mortgage Loans, including all tax bills, assessment notices,
insurance premium notices and all other documents as well as all original
documents then in the Master Servicer's possession.
(f) Any collections received by the Master Servicer after removal or
resignation shall be endorsed by it to the Trustee and remitted directly and
immediately to the Trustee or the successor Master Servicer.
(g) Upon removal or resignation of the Master Servicer, the Trustee (x) may
solicit bids for a successor Master Servicer as described below, and (y) pending
the appointment of a successor Master Servicer as a result of soliciting such
bids, shall serve as Master Servicer; provided, however, that the Trustee shall
not be liable for any acts, omissions or obligations of the Master Servicer
prior to such succession or for any breach by the Master Servicer of any of its
representations and warranties contained in this Agreement or in any related
document or agreement. The Trustee shall, if it is unable to obtain a qualifying
bid and is prevented by law from acting as Master Servicer, appoint, or petition
a court of competent jurisdiction to appoint, any housing and home finance
institution, bank or mortgage servicing institution which (i) has been
designated as an approved seller-servicer by FNMA or FHLMC for first and second
mortgage loans, (ii) has equity of not less than $15,000,000, as determined in
accordance with generally accepted accounting principles, and (iii) must have
demonstrated proficiency in the servicing of mortgage loans having similar
characteristics (including credit characteristics) to the Mortgage Loans, (iv)
and must be acceptable to the Certificate Insurer as the successor to the Master
Servicer hereunder in the assumption of all or any part of the responsibilities,
duties or liabilities of the Master Servicer hereunder.
The compensation of any successor Master Servicer (including, without
limitation, the Trustee) so appointed shall be
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the aggregate Master Servicing Fees, together with the other servicing
compensation in the form of assumption fees, late payment charges or otherwise
as provided in Sections 10.8 and 10.15.
(h) In the event the Trustee solicits bids as provided above, the Trustee
shall solicit, by public announcement, bids from housing and home finance
institutions, banks and mortgage servicing institutions meeting the
qualifications set forth above. Such public announcement shall specify that the
successor Master Servicer shall be entitled to the full amount of the aggregate
Master Servicing Fees as servicing compensation (including the servicing
compensation received in the form of assumption fees, late payment charges or
otherwise) as provided in Sections 10.8 and 10.15. Within thirty days after any
such public announcement, the Trustee shall, with the consent of the Certificate
Insurer, negotiate and effect the sale, transfer and assignment of the servicing
rights and responsibilities hereunder to the qualified party submitting the
highest satisfactory bid. The Trustee shall deduct from any sum received by the
Trustee from the successor to the Master Servicer in respect of such sale,
transfer and assignment all costs and expenses of any public announcement and of
any sale, transfer and assignment of the servicing rights and responsibilities
hereunder. After such deductions, the remainder of such sum shall be paid by the
Trustee to the Master Servicer at the time of such sale, transfer and assignment
to the successor Master Servicer.
(i) The Trustee and such successor Master Servicer shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession. The Master Servicer agrees to cooperate with the Trustee and any
successor Master Servicer in effecting the termination of the Master Servicer's
servicing responsibilities and rights hereunder and shall promptly provide the
Trustee or such successor Master Servicer, as applicable, all documents and
records reasonably requested by it to enable it to assume the Master Servicer's
functions hereunder and shall promptly also transfer to the Trustee or such
successor Master Servicer, as applicable, all amounts which then have been or
should have been deposited in the Principal and Interest Account by the Master
Servicer or which are thereafter received with respect to the Mortgage Loans.
Neither the Trustee nor any other successor Master Servicer shall be held liable
by reason of any failure to make, or any delay in making, any distribution
hereunder or any portion thereof caused by (i) the failure of the Master
Servicer to deliver, or any delay in delivering, cash, documents or records to
it, or (ii) restrictions imposed by any regulatory authority having jurisdiction
over the Master Servicer.
(j) The Trustee or any other successor Master Servicer, upon assuming the
duties of Master Servicer hereunder, shall immediately make all Delinquency
Advances and pay all Compensating Interest which the Master Servicer has
theretofore failed to remit with respect to the Mortgage Loans; provided,
however, that if the
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Trustee is acting as successor Master Servicer or another successor Master
Servicer has become the Master Servicer, the Trustee or such other successor
Master Servicer, as the case may be, shall only be required to make Delinquency
Advances (including the Delinquency Advances described in this clause (j)) if,
in the Trustee's or such other successor Master Servicer's, as the case may be,
reasonable good faith judgment, such Delinquency Advances will ultimately be
recoverable from the related Mortgage Loans. The Trustee, while acting as Master
Servicer hereunder, shall only be obligated to make payments with respect to
Compensating Interest to the extent of its Master Servicing Fee.
(k) The Master Servicer that is being removed or is resigning shall give
notice to the Mortgagors and to the Rating Agencies of the transfer of the
servicing to the successor Master Servicer.
(l) Any successor Master Servicer shall assume all rights and obligations
of the predecessor Master Servicer under this Agreement, except those arising
before succession (other than the obligation to make Delinquency Advances) and
under Section 3.1(b) (insofar as such provisions relate to the predecessor
Master Servicer).
(m) If the Master Servicer is removed pursuant to Section 11.1(a) or the
first paragraph of Section 11.1(b) hereof the Master Servicer shall remain
entitled to reimbursement for Reimbursable Advances to the extent that the
related amounts are thereafter recovered with respect to the related Mortgage
Loans.
Section 11.2. Trigger Events; Removal of Master Servicer.
(a) Upon determination by the Certificate Insurer that a Trigger Event has
occurred, the Certificate Insurer shall give notice of such Trigger Event to the
Master Servicer, the Seller, the Trustee and to ▇▇▇▇▇'▇ and S&P.
(b) At any time after such determination and while a Trigger Event is
continuing, the Certificate Insurer may direct the Trustee to remove the Master
Servicer if the Certificate Insurer makes a determination that the manner of
master servicing was a factor contributing to the end of the delinquencies or
losses incurred in the Trust Fund.
(c) Upon receipt of directions to remove the Master Servicer pursuant to
the preceding clause (b), the Trustee shall notify the Master Servicer that it
has been terminated and the Master Servicer shall be terminated in the same
manner as specified in Section 11.1.
(d) After notice of occurrence of a Trigger Event has been given and while
a Trigger Event is continuing, until and
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unless the Master Servicer has been removed as provided in clause (b), the
Master Servicer covenants and agrees to act as the Master Servicer for a term
from the occurrence of the Trigger Event to the end of the calendar quarter in
which such Trigger Event occurs, which term may at the Certificate Insurer's
discretion be extended by notice to the Trustee for successive terms of three
(3) calendar months each, until the termination of the Trust Fund. The Master
Servicer will, upon the receipt of each such notice of extension (a "Master
Servicer Extension Notice") become bound for the duration of the term covered by
such Master Servicer Extension Notice to continue as Master Servicer subject to
and in accordance with this Agreement. If, as of the fifteenth (15th) day prior
to the last day of any term as the Master Servicer, the Trustee shall not have
received any Master Servicer Extension Notice from the Certificate Insurer, the
Trustee shall, within five (5) days thereafter, give written notice of such
nonreceipt to the Certificate Insurer and the Master Servicer. If any such term
expires without a Master Servicer Extension Notice then the Trustee shall act as
Master Servicer as provided in Section 11.1.
(e) No provision of this Section 11.2 shall have the effect of limiting the
rights of the Company, the Trustee, the Certificateholders or the Certificate
Insurer under Section 11.1.
Section 11.3. Merger, Conversion, Consolidation or Succession to Business
of Master Servicer. Subject to the immediately succeeding sentence, any
corporation into which the Master Servicer may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Master Servicer shall be a party, or
any corporation succeeding to all or substantially all of the business of the
Master Servicer, shall be the successor of the Master Servicer hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto provided (x) that such corporation meets the
qualifications set forth in Section 11.1(g) and (y) that any successor Master
Servicer must meet the qualifications set forth in Section 11.1(g). Any
Affiliate into which the Master Servicer may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation of the Master Servicer and an Affiliate, or any
Affiliate succeeding to all or substantially all of the business of the Master
Servicer, shall be the successor of the Master Servicer hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto.
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ARTICLE XII
MISCELLANEOUS
Section 12.1. Compliance Certificates and Opinions. Upon any application or
request by the Seller, the Transferor or the Owners to the Trustee to take any
action under any provision of this Agreement, the Seller, the Transferor or the
Owners, as the case may be, shall furnish to the Trustee a certificate stating
that all conditions precedent, if any, provided for in this Agreement relating
to the proposed action have been complied with, except that in the case of any
such application or request as to which the furnishing of any documents is
specifically required by any provision of this Agreement relating to such
particular application or request, no additional certificate need be furnished.
Except as otherwise specifically provided herein, each certificate or
opinion with respect to compliance with a condition or covenant provided for in
this Agreement shall include:
(a) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based; and
(c) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
Section 12.2. Form of Documents Delivered to the Trustee. In any case where
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by,
or covered by the opinion of, only one such Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an
opinion with respect to some matters and one or more other such Persons as to
other matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.
Any certificate of an Authorized Officer of the Trustee may be based,
insofar as it relates to legal matters, upon an opinion of counsel, unless such
Authorized Officer knows, or in the exercise of reasonable care should know,
that the opinion is erroneous. Any such certificate of an Authorized Officer of
the Trustee or any opinion of counsel may be based, insofar as it relates to
factual matters upon a certificate or opinion of, or representations by, one or
more Authorized Officers of the Seller,
137
the Master Servicer or of the Transferor, stating that the information with
respect to such factual matters is in the possession of the Seller, the Master
Servicer or the Transferor, unless such Authorized Officer or counsel knows, or
in the exercise of reasonable care should know, that the certificate or opinion
or representations with respect to such matters are erroneous. Any opinion of
counsel may also be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an Authorized Officer of the
Trustee, stating that the information with respect to such matters is in the
possession of the Trustee, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous. Any opinion of counsel may be based
on the written opinion of other counsel, in which event such opinion of counsel
shall be accompanied by a copy of such other counsel's opinion and shall include
a statement to the effect that such counsel believes that such counsel and the
Trustee may reasonably rely upon the opinion of such other counsel.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Agreement, they may, but need not, be consolidated and
form one instrument.
Section 12.3. Acts of Owners. (a) Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Agreement to
be given or taken by the Owners may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Owners in person or by
agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Trustee, and, where it is hereby expressly required,
delivered to and with the consent of the Seller, the Transferor and the
Certificate Insurer. Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the "act" of
the Owners signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Agreement and conclusive in favor of the Trustee and the
Trust, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by
the certificate of any notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Whenever such execution is
by an officer of a corporation or a member of a partnership on behalf of such
corporation or partnership, such certificate or affidavit shall also constitute
sufficient proof of his authority.
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(c) The ownership of Certificates shall be proved by the Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Owner of any Certificate shall bind the Owner of every
Certificate issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof, in respect of anything done, omitted or suffered to
be done by the Trustee or the Trust in reliance thereon, whether or not notation
of such action is made upon such Certificates.
Section 12.4. Notices, etc. to Trustee. Any request, demand, authorization,
direction, notice, consent, waiver or act of the Owners or other documents
provided or permitted by this Agreement to be made upon, given or furnished to,
or filed with the Trustee by any Owner or by the Seller shall be sufficient for
every purpose hereunder if made, given, furnished or filed in writing to or with
and received by the Trustee at its corporate trust office as set forth in
Section 12.19 hereof.
Section 12.5. Notices and Reports to Owners; Waiver of Notices. Where this
Agreement provides for notice to Owners of any event or the mailing of any
report to Owners, such notice or report shall be sufficiently given (unless
otherwise herein expressly provided) if mailed, first-class postage prepaid, to
each Owner affected by such event or to whom such report is required to be
mailed, at the address of such Owner as it appears on the Register, not later
than the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice or the mailing of such report. In any case where a notice
or report to Owners is mailed in the manner provided above, neither the failure
to mail such notice or report nor any defect in any notice or report so mailed
to any particular Owner shall affect the sufficiency of such notice or report
with respect to other Owners, and any notice or report which is mailed in the
manner herein provided shall be conclusively presumed to have been duly given or
provided.
Where this Agreement provides for notice in any manner, such notice may be
waived in writing by any Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Owners shall be filed with the Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
In case, by reason of the suspension of regular mail service as a result of
a strike, work stoppage or similar activity, it shall be impractical to mail
notice of any event to Owners when such notice is required to be given pursuant
to any provision of this Agreement, then any manner of giving such notice as the
Seller shall direct to the Trustee shall be deemed to be a sufficient giving of
such notice.
139
Where this Agreement provides for notice to any rating agency that rated
any Certificates, failure to give such notice shall not affect any other rights
or obligations created hereunder.
Section 12.6. Rules by Trustee and Seller. The Trustee may make reasonable
rules for any meeting of Owners. The Seller may make reasonable rules and set
reasonable requirements for its functions.
Section 12.7. Successors and Assigns. All covenants and agreements in this
Agreement by any party hereto shall bind its successors and assigns, whether so
expressed or not.
Section 12.8. Severability. In case any provision in this Agreement or in
the Certificates shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
Section 12.9. Benefits of Agreement. Nothing in this Agreement or in the
Certificates, expressed or implied, shall give to any Person, other than the
Owners, the Certificate Insurer and the parties hereto and their successors
hereunder, any benefit or any legal or equitable right, remedy or claim under
this Agreement.
Section 12.10. Legal Holidays. In any case where the date of any Remittance
Date, any Payment Date, any other date on which any distribution to any Owner is
proposed to be paid, or any date on which a notice is required to be sent to any
Person pursuant to the terms of this Agreement shall not be a Business Day, then
(notwithstanding any other provision of the Certificates or this Agreement)
payment or mailing need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made or mailed on
the nominal date of any such Remittance Date, such Payment Date, or such other
date for the payment of any distribution to any Owner or the mailing of such
notice, as the case may be, and no interest shall accrue for the period from and
after any such nominal date, provided such payment is made in full on such next
succeeding Business Day.
Section 12.11. Governing Law. This Agreement and each Certificate shall be
construed in accordance with and governed by the laws of the State of New York
applicable to agreements made and to be performed therein.
Section 12.12. Counterparts. This instrument may be executed in any number
of counterparts, each of which so executed shall be deemed to be an original,
but all such counterparts shall together constitute but one and the same
instrument.
Section 12.13. Usury. The amount of interest payable or paid on any
Certificate under the terms of this Agreement shall be limited to an amount
which shall not exceed the maximum nonusurious
140
rate of interest allowed by the applicable laws of the State of New York or any
applicable law of the United States permitting a higher maximum nonusurious rate
that preempts such applicable New York laws, which could lawfully be contracted
for, charged or received (the "Highest Lawful Rate"). In the event any payment
of interest on any Certificate exceeds the Highest Lawful Rate, the Trust
stipulates that such excess amount will be deemed to have been paid to the Owner
of such Certificate as a result of an error and the Owner receiving such excess
payment shall promptly, upon discovery of such error or upon notice thereof from
the Trustee on behalf of the Trust, refund the amount of such excess or, at the
option of such Owner, apply the excess to the payment of principal of such
Certificate, if any, remaining unpaid. In addition, all sums paid or agreed to
be paid to the Trustee for the benefit of Owners of Certificates for the use,
forbearance or detention of money shall, to the extent permitted by applicable
law, be amortized, prorated, allocated and spread throughout the full term of
such Certificates.
Section 12.14. Amendment. The Seller, the Master Servicer, the Transferor
and the Trustee, may at any time and from time to time, with the prior written
consent of the Certificate Insurer but without the consent of the Owners, amend
this Agreement, and the Trustee shall consent to such amendment, for the purpose
of (i) curing any ambiguity, or correcting or supplementing any provision hereof
which may be inconsistent with any other provision hereof, or to add provisions
hereto which are not inconsistent with the provisions hereof, (ii) upon receipt
of an opinion of counsel experienced in federal income tax matters to the effect
that no entity-level tax will be imposed on the Trust or upon the transferor of
a Residual Certificate as a result of the ownership of any Residual Certificate
by a Disqualified Organization, removing the restriction on transfer set forth
in Section 5.8(b) hereof or (iii) complying with the requirements of the Code
and the regulations proposed or promulgated thereunder; provided, however, that
any such action shall not, as evidenced by an opinion of counsel delivered to
the Trustee, materially and adversely affect the interests of any Owner or
materially and adversely affect (without its written consent) the rights and
interests of the Certificate Insurer.
This Agreement may also be amended by the Seller, the Master Servicer, the
Transferor and the Trustee at any time and from time to time, with the prior
written approval of the Certificate Insurer and of not less than 66 2/3% of the
Percentage Interest represented by each affected Class of Certificates then
Outstanding, for the purpose of adding any provisions or changing in any manner
or eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Owners hereunder; provided, however, that no such
amendment shall (a) change in any manner the amount of, or change the timing of,
payments which are required to be distributed to any Owner without the consent
of the Owner of such Certificate or (b) reduce the aforesaid percentages of
Percentage Interests which are required to
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consent to any such amendments, without the consent of the Owners of all
Certificates of the Class or Classes affected then Outstanding.
The Trustee shall be entitled to receive upon request, and shall be fully
protected in relying in good faith upon, an opinion of counsel reasonably
acceptable to the Trustee stating that the execution of such amendment is
authorized or permitted by this Agreement.
Promptly after the execution of any such amendment, the Trustee shall
furnish written notification of the substance of such amendment to each Owner
and to the Rating Agencies.
The Certificate Insurer and the Owners, if they so request, shall be
provided with copies of any amendments to this Agreement, together with copies
of any opinions or other documents or instruments executed in connection
therewith.
The Trustee shall not be required to enter into any amendment which affects
its rights or obligations hereunder.
The definitions of "Group I Specified Subordinated Amount" and "Group II
Specified Subordinated Amount" may be amended by the Seller, the Master
Servicer, the Transferor and the Trustee, with the consent of the Certificate
Insurer, in any respect without the consent of, or notice to, the Owners of any
Certificates; provided, (x) that the Certificate Insurer is not then in default,
(y) that the effect of such change would not be to alter materially (in the
judgment of the Seller) the weighted average life of the related Class A
Certificates and (z) the then-current ratings on the related Class A
Certificates are not thereby reduced.
Section 12.15. REMIC Status; Taxes. (a) The Tax Matters Person shall
prepare and file or cause to be filed with the Internal Revenue Service Federal
tax or information returns with respect to each REMIC and the Certificates
containing such information and at the times and in such manner as may be
required by the Code or applicable Treasury regulations, and shall furnish to
Owners such statements or information at the times and in such manner as may be
required thereby. For this purpose, the Tax Matters Person may, but need not,
rely on any proposed regulations of the United States Department of the
Treasury. The Tax Matters Person shall indicate the election to treat each REMIC
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, as Tax Matters Person appointed
pursuant to Section 12.17 hereof shall sign all tax information returns filed
pursuant to this Section 12.16. The Tax Matters Person shall provide information
necessary for the computation of tax imposed on the transfer of a Residual
Certificate to a Disqualified Organization, or an agent of a Disqualified
Organization, or a pass-through
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entity in which a Disqualified Organization is the record holder of an interest.
The Trustee shall not be required to file a separate tax return for the
Supplemental Interest Trust.
(b) The Tax Matters Person shall timely file all reports required to be
filed by the Trust with any federal, state or local governmental authority
having jurisdiction over the Trust, including other reports that must be filed
with the Owners, such as the Internal Revenue Service's Form 1066 and Schedule Q
and the form required under Section 6050K of the Code, if applicable to REMICs.
Furthermore, the Tax Matters Person shall report to Owners, if required, with
respect to the allocation of expenses pursuant to Section 212 of the Code in
accordance with the specific instructions to the Tax Matters Person by the
Seller with respect to such allocation of expenses. The Tax Matters Person shall
collect any forms or reports from the Owners determined by the Seller to be
required under applicable federal, state and local tax laws.
(c) The Tax Matters Person shall provide to the Internal Revenue Service
and to persons described in Section 860E(e)(3) and (6) of the Code the
information described in Treasury Regulation Section 1.860D-1(b)(5)(ii), or any
successor regulation thereto. Such information will be provided in the manner
described in Treasury Regulation Section 1.860E-2(a)(5), or any successor
regulation thereto.
(d) The Seller covenants and agrees to within ten Business Days after the
Startup Day provide to the Trustee any information necessary to enable the
Trustee to meet its obligations under subsections (b) and (c) above.
(e) The Trustee, the Seller and the Master Servicer each covenants and
agrees for the benefit of the Owners (i) to take no action which would result in
the termination of "REMIC" status for either REMIC, (ii) not to engage in any
"prohibited transaction", as such term is defined in Section 860F(a)(2) of the
Code and (iii) not to engage in any other action which may result in the
imposition on the Trust of any other taxes under the Code, including, without
limitation, for purposes of this paragraph any alteration, modification,
amendment, extension, waiver or forbearance with respect to any Mortgage Loan.
(f) The Trust shall, for federal income tax purposes, maintain books on a
calendar year basis and report income on an accrual basis.
(g) No Eligible Investment shall be sold prior to its stated maturity
(unless sold pursuant to a plan of liquidation in accordance with Article VIII
hereof).
(h) Neither the Seller nor the Trustee shall enter into any arrangement by
which the Trustee will receive a fee or other
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compensation for services rendered pursuant to this Agreement, which fee or
other compensation is paid from the Trust Estate, other than as expressly
contemplated by this Agreement.
(i) Notwithstanding the foregoing clauses (g) and (h), the Trustee, the
Seller may engage in any of the transactions prohibited by such clauses,
provided that the Trustee shall have received an opinion of counsel experienced
in federal income tax matters to the effect that such transaction does not
result in a tax imposed on the Trustee or cause a termination of REMIC status
for either REMIC; provided, however, that such transaction is otherwise
permitted under this Agreement.
Section 12.16. Additional Limitation on Action and Imposition of Tax. (a)
Any provision of this Agreement to the contrary notwithstanding, the Trustee
shall not, without having obtained an opinion of counsel experienced in federal
income tax matters to the effect that such transaction does not result in a tax
imposed on the Trust or cause a termination of REMIC status for either REMIC,
(i) sell any assets in the Trust Estate, (ii) accept any contribution of assets
after the Startup Day or (iii) agree to any modification of this Agreement.
(b) In the event that any tax is imposed on "prohibited transactions" as
defined in Section 860F(a)(2) of the Code, on the "net income from foreclosure
property" as defined in Section 860G(c) of the Code, on any contribution to
either REMIC after the Startup Day pursuant to Section 860G(d) of the Code, or
any other tax is imposed, such tax shall be paid by (i) the Trustee, if such tax
arises out of or results from the Trustee's negligence or willful misconduct,
(ii) the Master Servicer, if such tax arises out of or results from a breach by
the Master Servicer of any of its obligations under this Agreement, or otherwise
(iii) the Owners of the Residual Certificates in proportion to their Percentage
Interests. To the extent such tax is chargeable against the Owners of the
Residual Certificates, notwithstanding anything to the contrary contained
herein, the Trustee is hereby authorized to retain from amounts otherwise
distributable to the Owners of the Residual Certificates on any Payment Date
sufficient funds for the payment of such tax.
Section 12.17. Appointment of Tax Matters Person. A Tax Matters Person will
be appointed by the Owners of the Residual Certificates for all purposes of the
Code and such Tax Matters Person will perform, or cause to be performed, such
duties and take, or cause to be taken, such actions, as are required to be
performed or taken by the Tax Matters Person under the Code. The Trustee hereby
agrees to act as the Tax Matters Person (and the Trustee is hereby appointed by
the Owners of the Residual Certificates as the Tax Matters Person) for each
REMIC held by the Trust.
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Section 12.18. Reports to the Securities and Exchange Commission. The
Trustee shall, on behalf of the Trust, cause to filed with the Securities and
Exchange Commission any periodic reports required to be filed under the
provisions of the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Securities and Exchange Commission thereunder. Upon the
request of the Trustee, each of the Master Servicer and the Seller shall
cooperate with the Trustee in the preparation of any such report and shall
provide to the Trustee in a timely manner all such information as the Trustee
may reasonably request in connection with the performance of its duties and
obligations under this Section.
Section 12.19. Notices. All notices hereunder shall be given as follows,
until any superseding instructions are given to all other Persons listed below:
The Seller: Access Financial Lending Corp.
and Master ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
Servicer ▇▇▇▇▇ ▇▇▇
▇▇. ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: General Counsel
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
The Transferor: Access Financial Receivables Corp.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇. ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: General Counsel
The Trustee: The Chase Manhattan Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Global Trust Services
Access Financial Mortgage
Loan Trust 1997-1
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
The Certificate
Insurer: Financial Security Assurance, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Senior Vice President-
Surveillance
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or such other address or telecopy
number as may hereafter be furnished
to the Trustee and the Master
Servicer in writing by the
145
Certificate Insurer. In each case in which a
notice or other communication to the
Certificate Insurer refers to an Event of
Default or a claim under the Certificate
Insurance Policy or with respect to which
failure on the part of the Certificate Insurer
to respond shall be deemed to constitute
consent or acceptance, then a copy of such
notice or other communication should also be
sent to the attention of the General Counsel
and the Head- Financial Guaranty Group and
shall be marked to indicate "URGENT MATERIAL
ENCLOSED."
Moody's: ▇▇▇▇▇'▇ Investors Service
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: The Home Equity
Monitoring Department
S & P: Standard & Poor's
▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Residential Mortgage
Surveillance Dept.
Underwriters: c/o Prudential Securities
Incorporated
▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Section 12.20. Grant of Security Interest. It is the express intent of the
parties hereto that the conveyance of the Mortgage Loans and all other assets
constituting the Trust Estate by the Transferor to the Trust be, and be
construed as, a sale of the Mortgage Loans and such other assets constituting
the Trust Estate by the Transferor and not a pledge by the Seller to secure a
debt or other obligation of the Transferor. However, in the event that,
notwithstanding the aforementioned intent of the parties, the Mortgage Loans and
other assets constituting the Trust Estate are held to be property of the
Seller, then (a) it is the express intent of the parties that such conveyance be
deemed as a pledge of the Mortgage Loans and all other assets constituting the
Trust Estate to the Trust to secure a debt or other obligation of the Seller and
this Agreement shall be deemed to be a security agreement within the meaning of
the Uniform Commercial Code and the conveyance provided for in Section 3.3
hereof shall be deemed a grant by the Transferor to the Trust of a security
interest in all
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of the Transferor's right, title and interest in and to the Mortgage Loans and
all other assets constituting the Trust Estate.
Accordingly, the Transferor hereby grants to the Trustee a security
interest in the Mortgage Loans and all other assets constituting the Trust
Estate for the purpose of securing to the Trust the performance by the
Transferor of the obligations under this Agreement. Notwithstanding the
foregoing, the parties hereto intend the conveyance pursuant to Section 3.3 to
be a true, absolute and unconditional sale of the Mortgage Loans and all other
assets constituting the Trust Estate by the Transferor to the Trust, the
Transferor shall take such actions, and the Trustee shall take such actions as
directed by the Transferor, as may be necessary to ensure that if this Agreement
were deemed to create a security interest, such security interest would be
deemed to be a perfected security interest of first priority under applicable
law and will be maintained as such for the term of this Agreement. Without
limiting the generality of the foregoing, the Seller shall file, or shall cause
to be filed, all filings necessary to maintain the effectiveness of any original
filings necessary under the Uniform Commercial Code to perfect the Trustee's
security interest in or lien on the Mortgage Loans for the benefit of the
Owners, including, without limitation, (x) continuation statements and (y) such
other statements as may be occasioned by (i) any change of name of the
Transferor or Trustee, (ii) any change of location of the place of business or
the chief executive office of the Transferor or (iii) any transfer of any
interest of the Transferor in any Mortgage Loan; provided, however, that with
respect to clauses (i) through (iii) above, the Transferor shall notify the
Trustee of any changes related thereto.
Section 12.21. Indemnification.
(a) The Master Servicer agrees to indemnify and hold the Trustee, the
Transferor, the Certificate Insurer, each Certificateholder harmless against any
and all claims, losses, penalties, fines, forfeitures, reasonable legal fees and
related costs, judgments, and any other reasonable costs, fees and expenses that
were caused by (i) the failure of the Master Servicer to perform its duties and
service the Mortgage Loans in compliance with the terms of this Agreement and
the Servicing Standards and (ii) a breach of any of the Master Servicer's
representations, covenants and warranties contained in this Agreement. This
indemnity shall survive the termination of this Agreement and the payment of the
Mortgage Loans, provided, that the Master Servicer shall have no liability to
indemnify any such indemnified party under this Agreement to the extent that any
such losses, penalties, fines, forfeitures, costs, fees, judgments, liabilities,
damages, claims or expenses were caused by the negligence, willful misconduct or
bad faith of such indemnified party. If the Master Servicer shall have made any
indemnity payment pursuant to this Section 12.21(a) and the recipient thereafter
collects from another Person any amount relating to the matters covered by the
foregoing
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indemnity, the recipient shall promptly repay such amount to the Master
Servicer.
Promptly after receipt by any of the above-mentioned indemnified parties of
notice of any claim or commencement of any action discussed above, such
indemnified party shall, if a claim in respect thereof is to be made against the
Master Servicer, promptly notify the Master Servicer in writing of the claim or
the commencement of that action; provided, however, that the failure to notify
the Master Servicer shall not relieve it from any liability which it may have
under this Section 12.21(a) except to the extent it has been materially
prejudiced by such failure; and provided, further, that the failure to notify
the Master Servicer shall not relieve it from any liability which it may have to
the above-mentioned indemnified parties otherwise than under this Section
12.21(a).
(b) The Seller agrees to indemnify and hold the Master Servicer, the
Transferor, the Certificate Insurer, the Trustee, each Certificateholder
harmless against any and all claims, losses, penalties, fines, forfeitures,
reasonable legal fees and related costs, judgments and other reasonable costs,
fees and expenses that were caused by (i) the failure of the Seller to perform
its duties in accordance with the terms of this Agreement or (ii) a breach of
any of the Seller's representations, covenants, and warranties contained in this
Agreement. This indemnity shall survive the termination of this Agreement, the
payment of the Mortgage Loans and the removal or resignation of the Trustee;
provided, that the Seller shall have no liability to indemnify any such
indemnified party under this Agreement to the extent that any such losses,
penalties, fines, forfeitures, costs, fees and judgments, liabilities, damages,
claims or expenses were caused by the negligence, willful misconduct or bad
faith of such indemnified party. If the Seller shall have made any indemnity
payment pursuant to this Section 12.21 and the recipient thereafter collects
from another Person any amount relating to the matters covered by the foregoing
indemnity, the recipient shall promptly repay such amount to the Seller.
Promptly after receipt by any of the above-mentioned indemnified parties of
notice of any claim or commencement of any action discussed above, such
indemnified party shall, if a claim in respect thereof is to be made against the
Seller, promptly notify the Seller in writing of the claim or the commencement
of that action; provided, however, that the failure to notify the Seller shall
not relieve it from any liability which it may have under this Section 12.21(b)
except to the extent it has been materially prejudiced by such failure; and
provided, further, that the failure to notify the Seller shall not relieve it
from any liability which it may have to the above-mentioned indemnified parties
otherwise than under this Section 12.21(b).
148
(c) The Seller hereby covenants and agrees to indemnify, exonerate and hold
the Master Servicer, the Transferor, the Trustee, the Trust Estate, the Owners,
the Certificate Insurer, their respective directors, officers, agents and
employees (collectively, the "Indemnified Persons") harmless from and against
any and all damages, losses, liabilities, obligations, penalties, fines, claims,
litigation, demands, defenses, judgments, suits, proceedings, costs,
disbursements or expenses (including, without limitation, reasonable attorneys'
and experts' fees and disbursements as they become due and without waiting for
the ultimate outcome of the matter) of any kind or of any nature whatsoever
which may at any time be imposed upon, incurred by or asserted or awarded
against any Indemnified Person arising from or out of any Hazardous Substances
(as defined below) on, in, under or affecting all or any portion of any of the
Properties. The matters covered by the foregoing indemnity shall include,
without limitation, all of the following: (i) the costs of removal of any and
all Hazardous Substances from all or any portion of the Properties or any
adjacent property, (ii) the costs required to take necessary precautions to
protect against the release of Hazardous Substances on, in, under or affecting
any of the Properties into the air, ground, water, other public domain or any
adjacent property to the extent required by applicable Environmental Laws or any
governmental authority, including, without limitation, the costs and expenses of
environmental testing and assessments, and (iii) the costs incurred to comply,
in connection with all or any portion of the Properties, with all applicable
Environmental Laws, including without limitation fines, penalties, and
administrative and overhead costs charged by any governmental entity.
The obligations of the Seller under this Section to compensate the
Indemnified Persons and to reimburse them for expenses (including, without
limitation, litigation expenses), disbursements and advances shall survive the
termination of this Agreement and the resignation or removal of the Trustee, and
continue thereafter for so long as any liability or expenses indemnified against
may be imposed under applicable Environmental Law (as defined below) against any
Indemnified Person.
(d) In no event shall any Person be indemnified for any losses, expenses,
damages, claims or liabilities incurred by such Person by reason of such
Person's (or such Person's agents) willful malfeasance, bad faith or negligence.
"Hazardous Substance" shall include, without limitation: (i) those
substances included within the definitions of one or more of the terms
"hazardous substances," "hazardous materials" and "toxic substances" in CERCLA,
RCRA, and the Hazardous Materials Transportation Act, as amended, 49 U.S.C.
▇▇.▇▇. 1801 et seq., and in the regulations promulgated pursuant to said laws
under applicable law; (ii) those substances listed in the United States
Department of Transportation Table (49 CFR 172 1 01 and amendments thereto) or
149
by the Environmental Protection Agency (or any successor agency) as hazardous
substances (40 CFR Part 302 and amendments thereto); (iii) such other
substances, materials and wastes as are or become regulated under applicable
local, state or Federal laws or regulations, or which are classified as
hazardous or toxic under Federal, state, or local laws or regulations; and (iv)
any material, waste or substance which is (a) petroleum; (b) friable asbestos;
(c) polychlorinated biphenyls; (d) designated as a "Hazardous Substance"
pursuant to Section 311 of the Clean Water Act, as amended, 13 U.S.C. ▇▇.▇▇.
1321 et seq. (33 U.S.C. ▇▇.▇▇. 1321) or designated as "toxic pollutants" subject
to Chapter 26 of the Clean Water Act pursuant to Section 307 of the Clean Water
Act (33 U.S.C. ▇▇.▇▇. 1317); (e) flammable explosive; or (f) radioactive
materials.
"Environmental Law" shall mean any Federal, state or local statute, law,
regulation, order, consent decree, judgment, permit, license, code, covenant,
deed restriction, common law, ordain or other requirement relating to public
health, safety or the environment, including, without limitation, those relating
to releases, discharges or emissions to air, water, land or ground water, to the
withdrawal or use of groundwater, to the use and handling of polychlorinated
biphenyls or asbestos, to the disposal, treatment, storage or management of
hazardous or solid waste, or Hazardous Substances or crude oil, or any fraction
thereof, or to exposure to toxic hazardous materials, to the handling,
transportation, discharge or release of gaseous or liquid Hazardous Substances
and any regulation, order, notice or demand issued pursuant to such law, statute
or ordinance, in each case applicable to the property of Borrower or the
operation, construction or modification of any thereof, including without
limitation the following: CERCLA, the Solid Waste Disposal Act, as amended by
the Resource Conservation and Recovery Act of 1976 and the Hazardous and Sold
Waste Amendments of 1984, the Hazardous Materials Transportation Act, as
amended, the Federal Water Pollution Control Act, as amended by the Clean Water
Act of 1976, the Safe Drinking Water Control Act, the Clean Air Act of 1966, as
amended, the Toxic Substances Control Act of 1976, the Occupational Safety and
Health Act of 1977, as amended, the Emergency Planning and Community
Right-to-Know Act of 1986, the National Environmental Policy Act of 1975 and the
Oil Pollution Act of 1990 and any similar or implementing state law, and any
state statute and any further amendments to these laws, providing for financial
responsibility for cleanup or other actions with respect to the release or
threatened release of Hazardous Substances or crude oil, or any fraction thereof
and all rules, regulations, guidance documents and publication promulgated
thereunder.
150
ARTICLE XIII
CERTAIN MATTERS REGARDING THE CERTIFICATE INSURER
Section 13.1. Rights of the Certificate Insurer to Exercise Rights of the
Owners of the Class A Certificates. By accepting its Certificate, each Owner of
a Class A Certificate agrees that unless a Certificate Insurer Default exists,
the Certificate Insurer shall be deemed to be the Class A Certificateholders for
all purposes (other than with respect to payment on the Class A Certificates)
and will be entitled to exercise all rights of the Class A Certificateholders
under this Agreement.
In addition, each Owner of a Class A Certificate agrees that, unless a
Certificate Insurer Default exists, the rights specifically set forth above may
be exercised by the Owners of Class A Certificates only with the prior written
consent of the Certificate Insurer.
Section 13.2. Trustee to Act Solely with Consent of the Certificate
Insurer. Unless a Certificate Insurer Default exists, the Trustee shall not:
(i) agree to any amendment to this Agreement; or
(ii) undertake any litigation pursuant to or in connection with this
Agreement; or
(iii)terminate or assume any Sub-Servicing Agreement pursuant to this
Agreement;
without the prior written consent of the Certificate Insurer which consent shall
not be unreasonably withheld; provided, however, if a Certificate Insurer
Default occurs hereunder, the Trustee shall act hereunder without Certificate
Insurer consent.
Section 13.3. Trust Fund and Accounts Held for Benefit of the Certificate
Insurer. The Trustee shall hold the Trust Estate and the Mortgage Files for the
benefit of the Owners and the Certificate Insurer and all references in this
Agreement and in the Certificates to the benefit of Owners 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.
The Master Servicer hereby acknowledges and agrees that it shall service
and administer the Mortgage Loans and any REO Properties, and shall maintain the
Principal and Interest Account, for the benefit of the Owners and for the
benefit of the Certificate Insurer, and all references in this Agreement to the
151
benefit of or actions on behalf of the Owners shall be deemed to include the
Certificate Insurer.
Section 13.4. Claims Upon the Policy; Policy Payments Account. (a) The
Trustee shall establish a separate special purpose trust account for the benefit
of Owners of the Class A Certificates and the Certificate Insurer referred to
herein as the "Policy Payments Account" over which the Trustee shall have
exclusive control and sole right of withdrawal. The Trustee shall deposit any
amount paid under the Certificate Insurance Policy in the Policy Payments
Account and distribute such amount only for purposes of payment to Owners of
Class A Certificates of the Insured Payments for which a claim was made and such
amount may not be applied to satisfy any costs, expenses or liabilities of the
Master Servicer, the Trustee or the Trust. Amounts paid under the Certificate
Insurance Policy shall be transferred to the related Class A Distribution
Account in accordance with the next succeeding paragraph and disbursed by the
Trustee to Owners of Class A Certificates in accordance with Section 7.3. It
shall not be necessary for such payments to be made by checks or wire transfers
separate from the checks or wire transfers used to pay the Insured Payments with
other funds available to make such payment. However, the amount of any payment
of principal of or interest on the Class A Certificates to be paid from funds
transferred from the Policy Payments Account shall be noted as provided in
paragraph (b) below in the Register and in the statement to be furnished to
Owners of the Certificates pursuant to Section 7.6. Funds held in the Policy
Payments Account shall not be invested by the Trustee.
On any Payment Date with respect to which a claim has been made under the
Certificate Insurance Policy, the amount of any funds received by the Trustee as
a result of any claim under the Certificate Insurance Policy, to the extent
required to pay the related Insured Distribution Amount on such Payment Date
shall be withdrawn from the Policy Payments Account and deposited in the related
Distribution Account and applied by the Trustee, together with the other funds
to be withdrawn from the related Distribution Account pursuant to this
Agreement, directly to the payment in full of the related Insured Distribution
Amount due on the related Class A Certificates. Funds received by the Trustee as
a result of any claim under the Certificate Insurance Policy shall be deposited
by the Trustee in the Policy Payments Account and used solely for payment to the
Owners of the Class A Certificates and may not be applied to satisfy any costs,
expenses or liabilities of the Master Servicer, the Trustee or the Trust Fund.
Any funds remaining in the Policy Payments Account on the first Business Day
following a Payment Date shall be remitted to the Certificate Insurer, pursuant
to the instructions of the Certificate Insurer, by the end of such Business Day.
(b) The Trustee shall keep a complete and accurate record of the amount of
interest and principal paid in respect of any Class A Certificate from moneys
received under the Certificate
152
Insurance Policy. The Certificate Insurer shall have the right to inspect such
records at reasonable times during normal business hours upon one Business Day's
prior notice to the Trustee.
(c) The Trustee shall promptly notify the Certificate Insurer and Fiscal
Agent of any proceeding or the institution of any action, of which a Responsible
Officer of the Trustee has actual knowledge, seeking the avoidance as a
preferential transfer under applicable bankruptcy, insolvency, receivership or
similar law (a "Preference Claim") of any distribution made with respect to the
Class A Certificates. Each Owner of a Class A Certificate, by its purchase of
Class A Certificates, the Master Servicer and the Trustee hereby 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 the rights of the
Master Servicer, the Trustee and each Owner of a Class A Certificate in the
conduct of any such Preference Claim, including, without limitation, all rights
of any party to an adversary proceeding action with respect to any court order
issued in connection with any such Preference Claim.
Section 13.5. Effects of Payments by the Certificate Insurer. To the extent
that the Certificate Insurer makes Insured Payments it will be entitled to
receive the related Reimbursement Amounts, pursuant to Section 7.3(b)(iii)(C)
hereof.
The Trustee and the Master 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 Owners as
otherwise set forth herein.
Section 13.6. Notices to the Certificate Insurer. All notices, statements,
reports, certificates or opinions required by this Agreement to be sent to any
other party hereto or to any of the Owners shall also be sent to the Certificate
Insurer.
Section 13.7. Third-Party Beneficiary. Subject to the provisions below, the
Certificate Insurer is a third party beneficiary of each provision of this
Agreement that creates a right of or benefit to the Certificate Insurer. Any
right conferred to the Certificate Insurer shall not arise until the issuance by
the Certificate Insurer of the Certificate Insurance Policy and shall be
suspended during any Certificate Insurer Default described in clause (a) of the
definition thereof (except that subrogation rights which have previously arisen
shall not be
153
so suspended). During the period of any such suspension, such rights shall vest
in the Owners of the Class A Certificates, and may be exercised by the Owners of
a majority in Percentage Interest of each Class of Class A Certificates then
Outstanding or, if there are no Class A Certificates then Outstanding, by such
Percentage Interest represented by the Class B Certificates then Outstanding.
[Except for these words (and the accompanying punctuation) the rest of this
page has been intentionally left blank.]
154
IN WITNESS WHEREOF, the Seller, the Master Servicer, the Transferor and the
Trustee have caused this Agreement to be duly executed by their respective
officers thereunto duly authorized, all as of the day and year first above
written.
ACCESS FINANCIAL LENDING CORP.,
as Seller
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Financial Officer
and Secretary
ACCESS FINANCIAL LENDING CORP.,
as Master Servicer
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Financial Officer
and Secretary
ACCESS FINANCIAL RECEIVABLES CORP.,
as Transferor
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Financial Officer
THE CHASE MANHATTAN BANK,
as Trustee
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Second Vice President
[Pooling and Servicing Agreement]
EXHIBIT A-1
ACCESS FINANCIAL MORTGAGE LOAN TRUST 1997-1
MORTGAGE LOAN PASS-THROUGH CERTIFICATE
CLASS A-1 GROUP I
(Variable Pass-Through Rate)
Representing Certain Interests Relating to a Pool of
Mortgage Loans formed by
ACCESS FINANCIAL LENDING CORP.
as Seller and Master Servicer
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to Issuer or its agent
for registration of transfer, exchange, or payment, and any certificate issued
is registered in the name of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
(This Certificate does not represent an interest in, or an obligation of,
nor are the underlying Mortgage Loans insured or guaranteed by Access Financial
Lending Corp., The Chase Manhattan Bank, any Sub-Servicer or any of their
respective subsidiaries and affiliates. This Certificate represents a fractional
ownership interest in the Trust Estate described herein, moneys in the Principal
and Interest Account or otherwise held by the Master Servicer or any
Sub-Servicer in trust for the Owners (except as otherwise provided in the
Pooling and Servicing Agreement) and certain other rights relating thereto and
is payable only from amounts received by the Trustee (i) relating to the
Mortgage Loans held by the Trust and (ii) pursuant to the Certificate Insurance
Policy.)
No.: A-1-1 February 28, 1997
-----------------
Date
$63,500,000 December 18, 2011 003916 BB 8
----------- ----------------- -----------
Original Principal Final Scheduled CUSIP
Amount Payment Date
Cede & Co.
--------------------------------------------------------------------------------
Registered Owner
The registered Owner named above is the registered Owner of a fractional
undivided interest in (i) a pool of mortgage loans, consisting of first and
second liens (the "Mortgage Loans") formed by Access Financial Lending Corp.
(the "Seller"), a Delaware corporation, and held in trust by The Chase Manhattan
Bank, a New York banking corporation, as trustee (the "Trustee"), on behalf of
Access Financial Mortgage Loan Trust 1997-1 (the "Trust") pursuant to that
certain Pooling and Servicing Agreement dated as of February 1, 1997 (the
"Pooling and Servicing Agreement") among Access Financial Receivables Corp., as
transferor (the "Transferor"), Access Financial Lending Corp., as seller and as
master servicer (the "Master Servicer"), and the Trustee, (ii) such amounts,
including Eligible Investments, as from time to time may be held by the Trustee
in the Accounts held by the Trustee pursuant to the Pooling and Servicing
Agreement or by the Master Servicer or any Sub-Servicer in the Principal and
Interest Account created pursuant to the Pooling and Servicing Agreement, or
otherwise held by the Master Servicer or any Sub-Servicer in trust for the
Owners (except as otherwise provided in the Pooling and Servicing Agreement),
(iii) any Property, the ownership of which has been effected in the name of the
Master Servicer or any Sub-Servicer on behalf of the Trust as a result of
foreclosure or acceptance by the Master Servicer or a Sub-Servicer of a deed in
lieu of foreclosure and that has not been withdrawn from the Trust, (iv) the
rights, if any, of the Trust in any Insurance Policy relating to the Mortgage
Loans, (v) Net Proceeds (but only to the extent such Net Proceeds do not exceed
the sum of the Principal Balance of the related Mortgage Loan plus accrued and
unpaid interest on such Mortgage Loan), and (vi) the Certificate Insurance
Policy. Such Mortgage Loans and other amounts and property enumerated above are
hereinafter referred to as the "Trust Estate."
The Original Principal Amount set forth above is equal to the product of
(i) the Percentage Interest represented by this Certificate and (ii) the
aggregate original principal amount of the Class A-1 Group I Certificates on
February 28, 1997 (the "Startup Day"), which aggregate amount on February 28,
1997 was $63,500,000. The Owner hereof is entitled to principal payments on each
Payment Date, as hereinafter described, which will fully amortize such Original
Principal Amount over the period from the date of initial delivery hereof to the
final Payment Date of the Class A-1 Group I Certificates. The Class A Group I
Certificates have been tranched into four "sequential pay" Classes, such that
the Class A-4 Group I Certificates are entitled to receive no principal
distributions until the Class A-3 Principal Balance has been reduced to zero,
the Class A-3 Group I Certificates are entitled to receive no principal
distributions until the Class A-2 Principal Balance has been reduced to zero and
the Class A-2 Group I Certificates are entitled to receive no
2
principal distributions until the Class A-1 Principal Balance has been reduced
to zero.
Upon receiving the final distribution hereon, the Owner hereof is required
to send this Certificate to the Trustee. The Pooling and Servicing Agreement
provides that, in any event, upon the making of the final distribution due on
this Certificate, this Certificate shall be deemed cancelled for all purposes
under the Pooling and Servicing Agreement.
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN A CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G AND
860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING
COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING
REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS
REPRESENTED HEREBY.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT NATIONAL
MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
This Certificate is one of a Class of duly-authorized Certificates
designated as Access Financial Mortgage Loan Trust 1997-1, Mortgage Loan
Pass-Through Certificates, Class A-1 Group I, and issued under and subject to
the terms, provisions and conditions of the Pooling and Servicing Agreement, to
which Pooling and Servicing Agreement the Owner of this Certificate by virtue of
acceptance hereof assents and by which such Owner is bound. Issued under the
Pooling and Servicing Agreement are Certificates designated as Access Financial
Mortgage Loan Trust 1997-1, Mortgage Loan Pass-Through Certificates, Class A-1
Group I (the "Class A-1 Group I Certificates"), Class A-2 Group I (the "Class
A-2 Group I Certificates"), Class A-3 Group I (the "Class A-3 Group I
Certificates"), Class A-4 Group I (the "Class A-4 Group I Certificates"), Class
A-5 Group II (the "Class A-5 Group II Certificates"), Class B (the "Class B
Certificates"), Class B-S (the "Class B-S Certificates"), and Class RL and Class
RU (the "Residual Certificates"). The Class A-1 Group I Certificates, the Class
A-2 Group I Certificates, the Class A-3 Group I Certificates, the Class A-4
Group I Certificates, the Class A-5 Group II Certificates (collectively, the
"Class A Certificates"), the Class B Certificates, the Class B-S Certificates
and the Residual Certificates are collectively referred to herein as the
"Certificates."
3
As more fully described in the Pooling and Servicing Agreement, each Class
of Certificates has a specified priority to the collections on the related Pool
of Mortgage Loans which comprise the related Available Funds. In addition,
Financial Security Assurance, Inc., as Certificate Insurer, is required pursuant
to the Certificate Insurance Policy to make available to the Trustee on each
Payment Date 100% of the Insured Distribution Amount on each Payment Date.
Terms capitalized herein and not otherwise defined herein shall have the
respective meanings set forth in the Pooling and Servicing Agreement.
On the 18th day of each month, or, if such day is not a Business Day, then
the next succeeding Business Day (each such day being a "Payment Date")
commencing March 18, 1997, the Owners of the Class A-2 Group I Certificates, the
Class A-3 Group I Certificates and the Class A-4 Group I Certificates, as of the
close of business on the first Business Day of the current calendar month in
which such Payment Date occurs (for the Class A-2 through A-4 Group I
Certificates, the "Record Date") will be entitled to receive the Class A-2
Distribution Amount, the Class A-3 Distribution Amount and Class A-4
Distribution Amount, respectively, relating to such Payment Date. On each
Payment Date commencing March 18, 1997, the Owners of the Class A-1 Group I
Certificates and the Class A-5 Group II Certificates as of the close of business
on the Business Day immediately preceding such Payment Date occurs (for the
Class A-1 Group I Certificates and the Class A-5 Group II Certificates, the
"Record Date") will be entitled to receive the Class A-1 Distribution Amount or
the Class A-5 Distribution Amount, respectively, relating to such Payment Date.
Distributions will be made in immediately available funds to Owners of
Certificates, by wire transfer or otherwise, to the account of an Owner at a
domestic bank or other entity having appropriate facilities therefor, if such
Owner has so notified the Trustee, or by check mailed to the address of the
person entitled thereto as it appears on the Register.
Each Owner of record of a Class A-1 Group I Certificate, Class A-2 Group I
Certificate, Class A-3 Group I Certificate, Class A-4 Group I Certificate and
Class A-5 Group II Certificate will be entitled to receive such Owner's
Percentage Interest in the amounts due on such Payment Date to the Owners of the
Class A-1 Group I Certificate, Class A-2 Group I Certificate, Class A-3 Group I
Certificate, Class A-4 Group I Certificate and Class A-5 Group II Certificate,
respectively.
The Percentage Interest of each Class A-1 Group I Certificate as of any
date of determination will be equal to
4
the percentage obtained by dividing the Original Principal Amount set forth on
such Class A-1 Group I Certificate by $63,500,000.
The Class A-1 Distribution Amount for any Payment Date will be an amount
equal to the Class A-1 Interest Distribution Amount for such Payment Date, the
Class A-1 Principal Distribution for such Payment Date, the Class A-1 Interest
Carry-Forward Amount for such Payment Date and the Class A-1 Principal
Carry-Forward Amount for such Payment Date, as such terms are defined in the
Pooling and Servicing Agreement.
Pursuant to the Certificate Insurance Policy, Financial Security Assurance,
Inc. (the "Certificate Insurer") is required, to the extent of any insufficiency
in the related Available Funds, to make Insured Payments available to the
Trustee necessary to deposit the full amount of the related Insured Distribution
Amount to the Distribution Account (other than amounts to be paid to the
Certificate Insurer) on each Payment Date. Pursuant to the Pooling and Servicing
Agreement, from amounts on deposit in the related Distribution Account, the
Class A-1 Distribution Amount will be distributed to the Owners of the Class A-1
Group I Certificates. The Certificate Insurer will be subrogated to the rights
of the Owners of the Class A-1 Group I Certificates with respect to the related
Insured Payments.
The Owner of this Certificate is required to notify the Trustee promptly in
writing upon the receipt of a court order pursuant to which any amount received
by the Owners of the Class A-1 Group I Certificates is recoverable and sought to
be recovered as a voidable preference by a trustee in bankruptcy pursuant to the
United States Bankruptcy Code and is required to enclose a copy of such order
with such notice to the Trustee.
The Trustee is required to duly and punctually pay distributions with
respect to this Certificate in accordance with the terms hereof and the Pooling
and Servicing Agreement. Amounts properly withheld under the Code or applicable
state or local law by any Person from a distribution to any Owner shall be
considered as having been paid by the Trustee to such Owner for all purposes of
the Pooling and Servicing Agreement.
Access Financial Lending Corp., as Master Servicer, pursuant to the Pooling
and Servicing Agreement will service the Mortgage Loans. The Pooling and
Servicing Agreement permits the Master Servicer to enter into Sub-Servicing
Agreements with certain institutions eligible for appointment as Sub-Servicers
for the servicing and administration of the Mortgage Loans. No appointment of
any Sub-Servicer shall
5
release the Master Servicer from any of its obligations under the Pooling and
Servicing Agreement.
This Certificate does not represent a deposit or other obligation of, or an
interest in, nor are the underlying Mortgage Loans insured or guaranteed by,
Access Financial Lending Corp., The Chase Manhattan Bank, any Sub-Servicer, or
any of their respective subsidiaries and affiliates and are not insured or
guaranteed by the Federal Deposit Insurance Corporation, the Government National
Mortgage Association, or any other governmental agency.
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Owner of any Certificate shall have the right which is absolute
and unconditional to receive distributions to the extent provided in the Pooling
and Servicing Agreement with respect to such Certificate or to institute suit
for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the obligations created
thereby will terminate upon the earlier of (i) the payment to the Owners of all
Certificates of all amounts held by the Trustee and required to be paid to such
Owners pursuant to the Pooling and Servicing Agreement upon the later to occur
of (a) the final payment or other liquidation (or any advance made with respect
thereto) of the last Mortgage Loan in the Trust Estate or (b) the disposition of
all property acquired in respect of any Mortgage Loan remaining in the Trust
Estate or (ii) at any time when a Qualified Liquidation of the Upper-Tier REMIC
and the Lower- Tier REMIC is effected as described in the Pooling and Servicing
Agreement.
The Pooling and Servicing Agreement provides that the Seller may, at its
option, purchase from the Trust all (but not fewer than all) remaining Mortgage
Loans and other property then constituting the Trust Estate, and thereby effect
early retirement of the Certificates, on any Remittance Date when the aggregate
outstanding Principal Balance of the Mortgage Loans is ten percent or less of
the Original Pool Principal Balance. If the Seller declines to exercise such
option within ninety days following such date, the Trustee shall solicit bids
for the purchase of all Mortgage Loans remaining in the Trust. If satisfactory
bids are received as
6
described in the Pooling and Servicing Agreement, the Trustee shall effect early
retirement of the Certificates. If satisfactory bids are not received, the
Trustee shall decline to sell the Mortgage Loans and shall not be under any
obligation to solicit any further bids or otherwise negotiate any further sale
of the Mortgage Loans. Such sale and consequent termination of the Trust must
constitute a "qualified liquidation" of each REMIC established by the Trust
under Section 860F of the Internal Revenue Code of 1986, as amended, including,
without limitation, the requirement that the qualified liquidation takes place
over a period not to exceed ninety days.
The Trustee is required to give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
The Certificate Insurer, or if a Certificate Insurer Default has occurred
and is continuing, the Owners of a majority of the Percentage Interests
represented by any Class of Class A Certificates, or if there are no Class A
Certificates then Outstanding, by such Percentage Interest represented by the
Class B Certificates then Outstanding, upon compliance with the requirements set
forth in the Pooling and Servicing Agreement, have the right to exercise any
trust or power set forth in the Pooling and Servicing Agreement with respect to
the Certificates or the Trust Estate.
As provided in the Pooling and Servicing Agreement, the transfer of this
Certificate is registrable in the Register upon surrender of this Certificate
for registration of transfer at the office designated as the location of the
Register, and thereupon one or more new Certificates of like Class, tenor and a
like Percentage Interest will be issued to the designated transferee or
transferees.
The Trustee is required to furnish certain information on each Payment Date
to the Owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
The Class A-1 Group I Certificates are issuable only as registered
Certificates in denominations of $1,000 original principal amount and integral
multiples of $1,000 in excess thereof (except for one odd Certificate). As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class A-1 Group I Certificates are exchangeable
for new Class A-1 Group I Certificates of authorized denominations evidencing
the same aggregate principal amount.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may
7
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith.
The Trustee and any agent of the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither
the Trustee nor any such agent shall be affected by notice to the contrary,
except as may otherwise be specifically provided in the Pooling and Servicing
Agreement with respect to the Certificate Insurer.
8
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of the Trust.
THE CHASE MANHATTAN BANK, as
Trustee
By:_____________________________
Title:__________________________
Trustee Authentication
THE CHASE MANHATTAN BANK, as Trustee
By: _________________________
Title: ______________________
Dated: February 28, 1997
9
EXHIBIT A-2
ACCESS FINANCIAL MORTGAGE LOAN TRUST 1997-1
6.600% MORTGAGE LOAN PASS-THROUGH CERTIFICATE
CLASS A-2 GROUP I
(6.600% Pass-Through Rate)
Representing Certain Interests Relating to a Pool of
Mortgage Loans formed by
ACCESS FINANCIAL LENDING CORP.
as Seller and Master Servicer
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to Issuer or its agent
for registration of transfer, exchange, or payment, and any certificate issued
is registered in the name of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
(This Certificate does not represent an interest in, or an obligation of,
nor are the underlying Mortgage Loans insured or guaranteed by Access Financial
Lending Corp., The Chase Manhattan Bank, any Sub-Servicer or any of their
respective subsidiaries and affiliates. This Certificate represents a fractional
ownership interest in the Trust Estate described herein, moneys in the Principal
and Interest Account or otherwise held by the Master Servicer or any
Sub-Servicer in trust for the Owners (except as otherwise provided in the
Pooling and Servicing Agreement) and certain other rights relating thereto and
is payable only from amounts received by the Trustee (i) relating to the
Mortgage Loans held by the Trust and (ii) pursuant to the Certificate Insurance
Policy.)
No.: A-2-1 February 28, 1997
-----------------
Date
$30,200,000 June 18, 2013 003916 BC 6
----------- ------------- -----------
Original Principal Final Scheduled CUSIP
Amount Payment Date
Cede & Co.
--------------------------------------------------------------------------------
Registered Owner
The registered Owner named above is the registered Owner of a fractional
undivided interest in (i) a pool of mortgage loans, consisting of first and
second liens (the "Mortgage Loans") formed by Access Financial Lending Corp.
(the "Seller"), a Delaware corporation, and held in trust by The Chase Manhattan
Bank, a New York banking corporation, as trustee (the "Trustee"), on behalf of
Access Financial Mortgage Loan Trust 1997-1 (the "Trust") pursuant to that
certain Pooling and Servicing Agreement dated as of February 1, 1997 (the
"Pooling and Servicing Agreement") among the Access Financial Receivables Corp.,
as transferor (the "Transferor"), Access Financial Lending Corp., as seller and
as master servicer (the "Master Servicer"), and the Trustee, (ii) such amounts,
including Eligible Investments, as from time to time may be held by the Trustee
in the Accounts held by the Trustee pursuant to the Pooling and Servicing
Agreement or by the Master Servicer or any Sub-Servicer in the Principal and
Interest Account created pursuant to the Pooling and Servicing Agreement, or
otherwise held by the Master Servicer or any Sub-Servicer in trust for the
Owners (except as otherwise provided in the Pooling and Servicing Agreement),
(iii) any Property, the ownership of which has been effected in the name of the
Master Servicer or any Sub-Servicer on behalf of the Trust as a result of
foreclosure or acceptance by the Master Servicer or a Sub-Servicer of a deed in
lieu of foreclosure and that has not been withdrawn from the Trust, (iv) the
rights, if any, of the Trust in any Insurance Policies relating to the Mortgage
Loans, (v) Net Proceeds (but only to the extent such Net Proceeds do not exceed
the sum of the Principal Balance of the related Mortgage Loan plus accrued and
unpaid interest on such Mortgage Loan), and (vi) the Certificate Insurance
Policy. Such Mortgage Loans and other amounts and property enumerated above are
hereinafter referred to as the "Trust Estate."
The Original Principal Amount set forth above is equal to the product of
(i) the Percentage Interest represented by this Certificate and (ii) the
aggregate original principal amount of the Class A-2 Group I Certificates on
February 28, 1997 (the "Startup Day"), which aggregate amount on February 28,
1997 was $30,200,000. The Owner hereof is entitled to principal payments on each
Payment Date, as hereinafter described, which will fully amortize such Original
Principal Amount over the period from the date of initial delivery hereof to the
final Payment Date of the Class A-2 Group I Certificates. The Class A Group I
Certificates have been tranched into four "sequential pay" Classes, such that
the Class A-4 Group I Certificates are entitled to receive no principal
distributions until the Class A-3 Principal Balance has been reduced to zero,
the Class A-3 Group I Certificates are entitled to receive no principal
distributions until the Class A-2 Principal Balance has been reduced to zero and
the Class A-2 Group I Certificates are entitled to receive no
2
principal distributions until the Class A-1 Principal Balance has been reduced
to zero.
Upon receiving the final distribution hereon, the Owner hereof is required
to send this Certificate to the Trustee. The Pooling and Servicing Agreement
provides that, in any event, upon the making of the final distribution due on
this Certificate, this Certificate shall be deemed cancelled for all purposes
under the Pooling and Servicing Agreement.
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN A CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G AND
860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING
COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING
REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS
REPRESENTED HEREBY.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT NATIONAL
MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
This Certificate is one of a Class of duly-authorized Certificates
designated as Access Financial Mortgage Loan Trust 1997-1, Mortgage Loan
Pass-Through Certificates, Class A-2 Group I, and issued under and subject to
the terms, provisions and conditions of the Pooling and Servicing Agreement, to
which Pooling and Servicing Agreement the Owner of this Certificate by virtue of
acceptance hereof assents and by which such Owner is bound. Issued under the
Pooling and Servicing Agreement are Certificates designated as Access Financial
Mortgage Loan Trust 1997-1, Mortgage Loan Pass-Through Certificates, Class A-1
Group I (the "Class A-1 Group I Certificates"), Class A-2 Group I (the "Class
A-2 Group I Certificates"), Class A-3 Group I (the "Class A-3 Group I
Certificates"), Class A-4 Group I (the "Class A-4 Group I Certificates"), Class
A-5 Group II (the "Class A-5 Group II Certificates"), Class B (the "Class B
Certificates"), Class B-S (the "Class B-S Certificates"), and Class RL and Class
RU (the "Residual Certificates"). The Class A-1 Group I Certificates, the Class
A-2 Group I Certificates, the Class A-3 Group I Certificates, the Class A-4
Group I Certificates, the Class A-5 Group II Certificates, (collectively, the
"Class A Certificates"), the Class B Certificates, the Class B-S Certificates
and the Residual Certificates are collectively referred to herein as the
"Certificates."
3
As more fully described in the Pooling and Servicing Agreement, each Class
of Certificates has a specified priority to the collections on the related Pool
of Mortgage Loans which comprise the related Available Funds. In addition,
Financial Security Assurance, Inc., as Certificate Insurer, is required pursuant
to the Certificate Insurance Policy to make available to the Trustee on each
Payment Date 100% of the Insured Distribution Amount on each Payment Date.
Terms capitalized herein and not otherwise defined herein shall have the
respective meanings set forth in the Pooling and Servicing Agreement.
On the 18th day of each month, or, if such day is not a Business Day, then
the next succeeding Business Day (each such day being a "Payment Date")
commencing March 18, 1997, the Owners of the Class A-2 Group I Certificates, the
Class A-3 Group I Certificates and the Class A-4 Group I Certificates, as of the
close of business on the first Business Day of the current calendar month in
which such Payment Date occurs (for the Class A-2 through A-4 Group I
Certificates, the "Record Date") will be entitled to receive the Class A-2
Distribution Amount, the Class A-3 Distribution Amount and Class A-4
Distribution Amount, respectively, relating to such Payment Date. On each
Payment Date commencing March 18, 1997, the Owners of the Class A-1 Group I
Certificates and the Class A-5 Group II Certificates, as of the close of
business on the Business Day immediately preceding such Payment Date occurs (for
the Class A-1 Group I Certificates and the Class A-5 Group II Certificates, the
"Record Date") will be entitled to receive the Class A-1 Distribution Amount or
the Class A-5 Distribution Amount, respectively, relating to such Payment Date.
Distributions will be made in immediately available funds to Owners of
Certificates, by wire transfer or otherwise, to the account of an Owner at a
domestic bank or other entity having appropriate facilities therefor, if such
Owner has so notified the Trustee, or by check mailed to the address of the
person entitled thereto as it appears on the Register.
Each Owner of record of a Class A-1 Group I Certificate, Class A-2 Group I
Certificate, Class A-3 Group I Certificate, Class A-4 Group I Certificate and
Class A-5 Group II Certificate will be entitled to receive such Owner's
Percentage Interest in the amounts due on such Payment Date to the Owners of the
Class A-1 Group I Certificate, Class A-2 Group I Certificate, Class A-3 Group I
Certificate, Class A-4 Group I Certificate and Class A-5 Group II Certificate,
respectively.
The Percentage Interest of each Class A-2 Group I Certificate as of any
date of determination will be equal to
4
the percentage obtained by dividing the Original Principal Amount set forth on
such Class A-2 Group I Certificate by $30,200,000.
The Class A-2 Distribution Amount for any Payment Date will be an amount
equal to the Class A-2 Interest Distribution Amount for such Payment Date, the
Class A-2 Principal Distribution for such Payment Date, the Class A-2 Interest
Carry-Forward Amount for such Payment Date and the Class A-2 Principal
Carry-Forward Amount for such Payment Date, as such terms are defined in the
Pooling and Servicing Agreement.
Pursuant to the Certificate Insurance Policy, Financial Security Assurance,
Inc. (the "Certificate Insurer") is required, to the extent of any insufficiency
in the related Available Funds, to make Insured Payments available to the
Trustee necessary to deposit the full amount of the related Insured Distribution
Amount to the Distribution Account (other than amounts to be paid to the
Certificate Insurer) on each Payment Date. Pursuant to the Pooling and Servicing
Agreement, from amounts on deposit in the related Distribution Account, the
Class A-2 Distribution Amount will be distributed to the Owners of the Class A-2
Group I Certificates. The Certificate Insurer will be subrogated to the rights
of the Owners of the Class A-2 Group I Certificates with respect to the related
Insured Payments.
The Owner of this Certificate is required to notify the Trustee promptly in
writing upon the receipt of a court order pursuant to which any amount received
by the Owners of the Class A-2 Group I Certificates is recoverable and sought to
be recovered as a voidable preference by a trustee in bankruptcy pursuant to the
United States Bankruptcy Code and is required to enclose a copy of such order
with such notice to the Trustee.
The Trustee is required to duly and punctually pay distributions with
respect to this Certificate in accordance with the terms hereof and the Pooling
and Servicing Agreement. Amounts properly withheld under the Code or applicable
state or local law by any Person from a distribution to any Owner shall be
considered as having been paid by the Trustee to such Owner for all purposes of
the Pooling and Servicing Agreement.
Access Financial Lending Corp., as Master Servicer, pursuant to the Pooling
and Servicing Agreement will service the Mortgage Loans. The Pooling and
Servicing Agreement permits the Master Servicer to enter into Sub-Servicing
Agreements with certain institutions eligible for appointment as Sub-Servicers
for the servicing and administration of the Mortgage Loans. No appointment of
any Sub-Servicer shall
5
release the Master Servicer from any of its obligations under the Pooling and
Servicing Agreement.
This Certificate does not represent a deposit or other obligation of, or an
interest in, nor are the underlying Mortgage Loans insured or guaranteed by,
Access Financial Lending Corp., The Chase Manhattan Bank, any Sub-Servicer, or
any of their respective subsidiaries and affiliates and are not insured or
guaranteed by the Federal Deposit Insurance Corporation, the Government National
Mortgage Association, or any other governmental agency.
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Owner of any Certificate shall have the right which is absolute
and unconditional to receive distributions to the extent provided in the Pooling
and Servicing Agreement with respect to such Certificate or to institute suit
for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the obligations created
thereby will terminate upon the earlier of (i) the payment to the Owners of all
Certificates of all amounts held by the Trustee and required to be paid to such
Owners pursuant to the Pooling and Servicing Agreement upon the later to occur
of (a) the final payment or other liquidation (or any advance made with respect
thereto) of the last Mortgage Loan in the Trust Estate or (b) the disposition of
all property acquired in respect of any Mortgage Loan remaining in the Trust
Estate or (ii) at any time when a Qualified Liquidation of the Upper-Tier REMIC
and the Lower- Tier REMIC is effected as described in the Pooling and Servicing
Agreement.
The Pooling and Servicing Agreement provides that the Seller may, at its
option, purchase from the Trust all (but not fewer than all) remaining Mortgage
Loans and other property then constituting the Trust Estate, and thereby effect
early retirement of the Certificates, on any Remittance Date when the aggregate
outstanding Principal Balance of the Mortgage Loans is ten percent or less of
the Original Pool Principal Balance. If the Seller declines to exercise such
option within ninety days following such date, the Trustee shall solicit bids
for the purchase of all Mortgage Loans remaining in the Trust. If satisfactory
bids are received as
6
described in the Pooling and Servicing Agreement, the Trustee shall effect early
retirement of the Certificates. If satisfactory bids are not received, the
Trustee shall decline to sell the Mortgage Loans and shall not be under any
obligation to solicit any further bids or otherwise negotiate any further sale
of the Mortgage Loans. Such sale and consequent termination of the Trust must
constitute a "qualified liquidation" of each REMIC established by the Trust
under Section 860F of the Internal Revenue Code of 1986, as amended, including,
without limitation, the requirement that the qualified liquidation takes place
over a period not to exceed ninety days.
The Trustee is required to give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
The Certificate Insurer, or if a Certificate Insurer Default has occurred
and is continuing, the Owners of a majority of the Percentage Interests
represented by any Class of Class A Certificates, or if there are no Class A
Certificates then Outstanding, by such Percentage Interest represented by the
Class B Certificates then Outstanding, upon compliance with the requirements set
forth in the Pooling and Servicing Agreement, have the right to exercise any
trust or power set forth in the Pooling and Servicing Agreement with respect to
the Certificates or the Trust Estate.
As provided in the Pooling and Servicing Agreement, the transfer of this
Certificate is registrable in the Register upon surrender of this Certificate
for registration of transfer at the office designated as the location of the
Register, and thereupon one or more new Certificates of like Class, tenor and a
like Percentage Interest will be issued to the designated transferee or
transferees.
The Trustee is required to furnish certain information on each Payment Date
to the Owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
The Class A-2 Group I Certificates are issuable only as registered
Certificates in denominations of $1,000 original principal amount and integral
multiples of $1,000 in excess thereof (except for one odd Certificate). As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class A-2 Group I Certificates are exchangeable
for new Class A-2 Group I Certificates of authorized denominations evidencing
the same aggregate principal amount.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may
7
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith.
The Trustee and any agent of the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither
the Trustee nor any such agent shall be affected by notice to the contrary,
except as may otherwise be specifically provided in the Pooling and Servicing
Agreement with respect to the Certificate Insurer.
8
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of the Trust.
THE CHASE MANHATTAN BANK, as
Trustee
By:_____________________________
Title:__________________________
Trustee Authentication
THE CHASE MANHATTAN BANK, as Trustee
By: _________________________
Title: ______________________
Dated: February 28, 1997
9
EXHIBIT A-3
ACCESS FINANCIAL MORTGAGE LOAN TRUST 1997-1
6.925% MORTGAGE LOAN PASS-THROUGH CERTIFICATE
CLASS A-3 GROUP I
(6.925% Pass-Through Rate)
Representing Certain Interests Relating to a Pool of
Mortgage Loans formed by
ACCESS FINANCIAL LENDING CORP.
as Seller and Master Servicer
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to Issuer or its agent
for registration of transfer, exchange, or payment, and any certificate issued
is registered in the name of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
(This Certificate does not represent an interest in, or an obligation of,
nor are the underlying Mortgage Loans insured or guaranteed by Access Financial
Lending Corp., The Chase Manhattan Bank, any Sub-Servicer or any of their
respective subsidiaries and affiliates. This Certificate represents a fractional
ownership interest in the Trust Estate described herein, moneys in the Principal
and Interest Account or otherwise held by the Master Servicer or any
Sub-Servicer in trust for the Owners (except as otherwise provided in the
Pooling and Servicing Agreement) and certain other rights relating thereto and
is payable only from amounts received by the Trustee (i) relating to the
Mortgage Loans held by the Trust and (ii) pursuant to the Certificate Insurance
Policy.)
No.: A-3-1 February 28, 1997
-----------------
Date
$21,300,000 March 18, 2022 003916 BD 4
----------- -------------- -----------
Original Principal Final Scheduled CUSIP
Amount Payment Date
Cede & Co.
--------------------------------------------------------------------------------
Registered Owner
The registered Owner named above is the registered Owner of a fractional
undivided interest in (i) a pool of mortgage loans, consisting of first and
second liens (the "Mortgage Loans") formed by Access Financial Lending Corp.
(the "Seller"), a Delaware corporation, and held in trust by The Chase Manhattan
Bank, a New York banking corporation, as trustee (the "Trustee"), on behalf of
Access Financial Mortgage Loan Trust 1997-1 (the "Trust") pursuant to that
certain Pooling and Servicing Agreement dated as of February 1, 1997 (the
"Pooling and Servicing Agreement") among Access Financial Receivables Corp., as
transferor (the "Transferor"), Access Financial Lending Corp., as seller and as
master servicer (the "Master Servicer"), and the Trustee, (ii) such amounts,
including Eligible Investments, as from time to time may be held by the Trustee
in the Accounts held by the Trustee pursuant to the Pooling and Servicing
Agreement or by the Master Servicer or any Sub-Servicer in the Principal and
Interest Account created pursuant to the Pooling and Servicing Agreement, or
otherwise held by the Master Servicer or any Sub-Servicer in trust for the
Owners (except as otherwise provided in the Pooling and Servicing Agreement),
(iii) any Property, the ownership of which has been effected in the name of the
Master Servicer or a Sub-Servicer on behalf of the Trust as a result of
foreclosure or acceptance by the Master Servicer or a Sub-Servicer of a deed in
lieu of foreclosure and that has not been withdrawn from the Trust, (iv) the
rights, if any, of the Trust in any Insurance Policies relating to the Mortgage
Loans, (v) Net Proceeds (but only to the extent such Net Proceeds do not exceed
the sum of the Principal Balance of the related Mortgage Loan plus accrued and
unpaid interest on such Mortgage Loan), and (vi) the Certificate Insurance
Policy. Such Mortgage Loans and other amounts and property enumerated above are
hereinafter referred to as the "Trust Estate."
The Original Principal Amount set forth above is equal to the product of
(i) the Percentage Interest represented by this Certificate and (ii) the
aggregate original principal amount of the Class A-3 Group I Certificates on
February 28, 1997 (the "Startup Day"), which aggregate amount on February 28,
1997 was $21,300,000. The Owner hereof is entitled to principal payments on each
Payment Date, as hereinafter described, which will fully amortize such Original
Principal Amount over the period from the date of initial delivery hereof to the
final Payment Date of the Class A-3 Group I Certificates. The Class A Group I
Certificates have been tranched into four "sequential pay" Classes, such that
the Class A-4 Group I Certificates are entitled to receive no principal
distributions until the Class A-3 Principal Balance has been reduced to zero,
the Class A-3 Group I Certificates are entitled to receive no principal
distributions until the Class A-2 Principal Balance has been reduced to zero and
the Class A-2 Group I Certificates are entitled to receive no
2
principal distributions until the Class A-1 Principal Balance has been reduced
to zero.
Upon receiving the final distribution hereon, the Owner hereof is required
to send this Certificate to the Trustee. The Pooling and Servicing Agreement
provides that, in any event, upon the making of the final distribution due on
this Certificate, this Certificate shall be deemed cancelled for all purposes
under the Pooling and Servicing Agreement.
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN A CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G AND
860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING
COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING
REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS
REPRESENTED HEREBY.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT NATIONAL
MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
This Certificate is one of a Class of duly-authorized Certificates
designated as Access Financial Mortgage Loan Trust 1997-1, Mortgage Loan
Pass-Through Certificates, Class A-3 Group I, and issued under and subject to
the terms, provisions and conditions of the Pooling and Servicing Agreement, to
which Pooling and Servicing Agreement the Owner of this Certificate by virtue of
acceptance hereof assents and by which such Owner is bound. Issued under the
Pooling and Servicing Agreement are Certificates designated as Access Financial
Mortgage Loan Trust 1997-1, Mortgage Loan Pass-Through Certificates, Class A-1
Group I (the "Class A-1 Group I Certificates"), Class A-2 Group I (the "Class
A-2 Group I Certificates"), Class A-3 Group I (the "Class A-3 Group I
Certificates"), Class A-4 Group I (the "Class A-4 Group I Certificates"), Class
A-5 Group II (the "Class A-5 Group II Certificates"), Class B (the "Class B
Certificates"), Class B-S (the "Class B-S Certificates"), and Class RL and Class
RU (the "Residual Certificates"). The Class A-1 Group I Certificates, the Class
A-2 Group I Certificates, the Class A-3 Group I Certificates, the Class A-4
Group I Certificates, the Class A-5 Group II Certificates (collectively, the
"Class A Certificates"), the Class B Certificates, the Class B-S Certificates
and the Residual Certificates are collectively referred to herein as the
"Certificates."
3
As more fully described in the Pooling and Servicing Agreement, each Class
of Certificates has a specified priority to the collections on the related Pool
of Mortgage Loans which comprise the related Available Funds. In addition,
Financial Security Assurance, Inc., as Certificate Insurer, is required pursuant
to the Certificate Insurance Policy to make available to the Trustee on each
Payment Date 100% of the Insured Distribution Amount on each Payment Date.
Terms capitalized herein and not otherwise defined herein shall have the
respective meanings set forth in the Pooling and Servicing Agreement.
On the 18th day of each month, or, if such day is not a Business Day, then
the next succeeding Business Day (each such day being a "Payment Date")
commencing March 18, 1997, the Owners of the Class A-2 Group I Certificates, the
Class A-3 Group I Certificates and the Class A-4 Group I Certificates, as of the
close of business on the first Business Day of the current calendar month in
which such Payment Date occurs (for the Class A-2 through A-4 Group I
Certificates, the "Record Date") will be entitled to receive the Class A-2
Distribution Amount, the Class A-3 Distribution Amount and the Class A-4
Distribution Amount, respectively, relating to such Payment Date. On each
Payment Date commencing March 18, 1997, the Owners of the Class A-1 Group I
Certificates and the Class A-5 Group II Certificates, as of the close of
business on the Business Day immediately preceding such Payment Date occurs (for
the Class A-1 Group I Certificates and the Class A-5 Group II Certificates, the
"Record Date") will be entitled to receive the Class A-1 Distribution Amount or
the Class A-5 Distribution Amount, respectively, relating to such Payment Date.
Distributions will be made in immediately available funds to Owners of
Certificates, by wire transfer or otherwise, to the account of an Owner at a
domestic bank or other entity having appropriate facilities therefor, if such
Owner has so notified the Trustee, or by check mailed to the address of the
person entitled thereto as it appears on the Register.
Each Owner of record of a Class A-1 Group I Certificate, Class A-2 Group I
Certificate, Class A-3 Group I Certificate, Class A-4 Group I Certificate and
Class A-5 Group II Certificate will be entitled to receive such Owner's
Percentage Interest in the amounts due on such Payment Date to the Owners of the
Class A-1 Group I Certificate, Class A-2 Group I Certificate, Class A-3 Group I
Certificate, Class A-4 Group I Certificate and Class A-5 Group II Certificate,
respectively.
The Percentage Interest of each Class A-3 Group I Certificate as of any
date of determination will be equal to
4
the percentage obtained by dividing the Original Principal Amount set forth on
such Class A-3 Group I Certificate by $21,300,000.
The Class A-3 Distribution Amount for any Payment Date will be an amount
equal to the Class A-1 Interest Distribution Amount for such Payment Date, the
Class A-3 Principal Distribution for such Payment Date, the Class A-3 Interest
Carry-Forward Amount for such Payment Date and the Class A-3 Principal
Carry-Forward Amount for such Payment Date, as such terms are defined in the
Pooling and Servicing Agreement.
Pursuant to the Certificate Insurance Policy, Financial Security Assurance,
Inc. (the "Certificate Insurer") is required, to the extent of any insufficiency
in the related Available Funds, to make Insured Payments available to the
Trustee necessary to deposit the full amount of the related Insured Distribution
Amount to the Distribution Account (other than amounts to be paid to the
Certificate Insurer) on each Payment Date. Pursuant to the Pooling and Servicing
Agreement, from amounts on deposit in the related Distribution Account, the
Class A-3 Distribution Amount will be distributed to the Owners of the Class A-3
Group I Certificates. The Certificate Insurer will be subrogated to the rights
of the Owners of the Class A-3 Group I Certificates with respect to the related
Insured Payments.
The Owner of this Certificate is required to notify the Trustee promptly in
writing upon the receipt of a court order pursuant to which any amount received
by the Owners of the Class A-3 Group I Certificates is recoverable and sought to
be recovered as a voidable preference by a trustee in bankruptcy pursuant to the
United States Bankruptcy Code and is required to enclose a copy of such order
with such notice to the Trustee.
The Trustee is required to duly and punctually pay distributions with
respect to this Certificate in accordance with the terms hereof and the Pooling
and Servicing Agreement. Amounts properly withheld under the Code or applicable
state or local law by any Person from a distribution to any Owner shall be
considered as having been paid by the Trustee to such Owner for all purposes of
the Pooling and Servicing Agreement.
Access Financial Lending Corp., as Master Servicer, pursuant to the Pooling
and Servicing Agreement will service the Mortgage Loans. The Pooling and
Servicing Agreement permits the Master Servicer to enter into Sub-Servicing
Agreements with certain institutions eligible for appointment as Sub-Servicers
for the servicing and administration of the Mortgage Loans. No appointment of
any Sub-Servicer shall
5
release the Master Servicer from any of its obligations under the Pooling and
Servicing Agreement.
This Certificate does not represent a deposit or other obligation of, or an
interest in, nor are the underlying Mortgage Loans insured or guaranteed by,
Access Financial Lending Corp., The Chase Manhattan Bank, any Sub-Servicer, or
any of their respective subsidiaries and affiliates and are not insured or
guaranteed by the Federal Deposit Insurance Corporation, the Government National
Mortgage Association, or any other governmental agency.
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Owner of any Certificate shall have the right which is absolute
and unconditional to receive distributions to the extent provided in the Pooling
and Servicing Agreement with respect to such Certificate or to institute suit
for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the obligations created
thereby will terminate upon the earlier of (i) the payment to the Owners of all
Certificates of all amounts held by the Trustee and required to be paid to such
Owners pursuant to the Pooling and Servicing Agreement upon the later to occur
of (a) the final payment or other liquidation (or any advance made with respect
thereto) of the last Mortgage Loan in the Trust Estate or (b) the disposition of
all property acquired in respect of any Mortgage Loan remaining in the Trust
Estate or (ii) at any time when a Qualified Liquidation of the Upper-Tier REMIC
and the Lower- Tier REMIC is effected as described in the Pooling and Servicing
Agreement.
The Pooling and Servicing Agreement provides that the Seller may, at its
option, purchase from the Trust all (but not fewer than all) remaining Mortgage
Loans and other property then constituting the Trust Estate, and thereby effect
early retirement of the Certificates, on any Remittance Date when the aggregate
outstanding Principal Balance of the Mortgage Loans is ten percent or less of
the Original Pool Principal Balance. If the Seller declines to exercise such
option within ninety days following such date, the Trustee shall solicit bids
for the purchase of all Mortgage Loans remaining in the Trust. If satisfactory
bids are received as
6
described in the Pooling and Servicing Agreement, the Trustee shall effect early
retirement of the Certificates. If satisfactory bids are not received, the
Trustee shall decline to sell the Mortgage Loans and shall not be under any
obligation to solicit any further bids or otherwise negotiate any further sale
of the Mortgage Loans. Such sale and consequent termination of the Trust must
constitute a "qualified liquidation" of each REMIC established by the Trust
under Section 860F of the Internal Revenue Code of 1986, as amended, including,
without limitation, the requirement that the qualified liquidation takes place
over a period not to exceed ninety days.
The Trustee is required to give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
The Certificate Insurer, or if a Certificate Insurer Default has occurred
and is continuing, the Owners of a majority of the Percentage Interests
represented by any Class of Class A Certificates, or if there are no Class A
Certificates then Outstanding, by such Percentage Interest represented by the
Class B Certificates then Outstanding, upon compliance with the requirements set
forth in the Pooling and Servicing Agreement, have the right to exercise any
trust or power set forth in the Pooling and Servicing Agreement with respect to
the Certificates or the Trust Estate.
As provided in the Pooling and Servicing Agreement, the transfer of this
Certificate is registrable in the Register upon surrender of this Certificate
for registration of transfer at the office designated as the location of the
Register, and thereupon one or more new Certificates of like Class, tenor and a
like Percentage Interest will be issued to the designated transferee or
transferees.
The Trustee is required to furnish certain information on each Payment Date
to the Owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
The Class A-3 Group I Certificates are issuable only as registered
Certificates in denominations of $1,000 original principal amount and integral
multiples of $1,000 in excess thereof (except for one odd Certificate). As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class A-3 Group I Certificates are exchangeable
for new Class A-3 Group I Certificates of authorized denominations evidencing
the same aggregate principal amount.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may
7
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith.
The Trustee and any agent of the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither
the Trustee nor any such agent shall be affected by notice to the contrary,
except as may otherwise be specifically provided in the Pooling and Servicing
Agreement with respect to the Certificate Insurer.
8
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of the Trust.
THE CHASE MANHATTAN BANK, as
Trustee
By:_____________________________
Title:__________________________
Trustee Authentication
THE CHASE MANHATTAN BANK, as Trustee
By: _________________________
Title: ______________________
Dated: February 28, 1997
9
EXHIBIT A-4
ACCESS FINANCIAL MORTGAGE LOAN TRUST 1997-1
7.275% MORTGAGE LOAN PASS-THROUGH CERTIFICATE
CLASS A-4 GROUP I
(7.275% Pass-Through Rate)
Representing Certain Interests Relating to a Pool of
Mortgage Loans formed by
ACCESS FINANCIAL LENDING CORP.
as Seller and Master Servicer
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to Issuer or its agent
for registration of transfer, exchange, or payment, and any certificate issued
is registered in the name of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
(This Certificate does not represent an interest in, or an obligation of,
nor are the underlying Mortgage Loans insured or guaranteed by Access Financial
Lending Corp., The Chase Manhattan Bank, any Sub-Servicer or any of their
respective subsidiaries and affiliates. This Certificate represents a fractional
ownership interest in the Trust Estate described herein, moneys in the Principal
and Interest Account or otherwise held by the Master Servicer or any
Sub-Servicer in trust for the Owners (except as otherwise provided in the
Pooling and Servicing Agreement) and certain other rights relating thereto and
is payable only from amounts received by the Trustee (i) relating to the
Mortgage Loans held by the Trust and (ii) pursuant to the Certificate Insurance
Policy.)
No.: A-4-1 February 28, 1997
-----------------
Date
$19,733,000 March 18, 2027 003916 BE 2
----------- -------------- -----------
Original Principal Final Scheduled CUSIP
Amount Payment Date
Cede & Co.
--------------------------------------------------------------------------------
Registered Owner
The registered Owner named above is the registered Owner of a fractional
undivided interest in (i) a pool of mortgage loans, consisting of first and
second liens (the "Mortgage Loans") formed by Access Financial Lending Corp.
(the "Seller"), a Delaware corporation, and held in trust by The Chase Manhattan
Bank, a New York banking corporation, as trustee (the "Trustee"), on behalf of
Access Financial Mortgage Loan Trust 1997-1 (the "Trust") pursuant to that
certain Pooling and Servicing Agreement dated as of February 1, 1997 (the
"Pooling and Servicing Agreement") among Access Financial Receivables Corp., as
transferor (the "Transferor"), Access Financial Lending Corp., as seller and as
master servicer (the "Master Servicer"), and the Trustee, (ii) such amounts,
including Eligible Investments, as from time to time may be held by the Trustee
in the Accounts held by the Trustee pursuant to the Pooling and Servicing
Agreement by the Master Servicer or any Sub-Servicer in the Principal and
Interest Account created pursuant to the Pooling and Servicing Agreement, or
otherwise held by the Master Servicer or any Sub-Servicer in trust for the
Owners (except as otherwise provided in the Pooling and Servicing Agreement),
(iii) any Property, the ownership of which has been effected in the name of the
Master Servicer or any Sub-Servicer on behalf of the Trust as a result of
foreclosure or acceptance by the Master Servicer or any Sub-Servicer of a deed
in lieu of foreclosure and that has not been withdrawn from the Trust, (iv) the
rights, if any, of the Trust in any Insurance Policies relating to the Mortgage
Loans, (v) Net Proceeds (but only to the extent such Net Proceeds do not exceed
the sum of the Principal Balance of the related Mortgage Loan plus accrued and
unpaid interest on such Mortgage Loan), and (vi) the Certificate Insurance
Policy. Such Mortgage Loans and other amounts and property enumerated above are
hereinafter referred to as the "Trust Estate."
The Original Principal Amount set forth above is equal to the product of
(i) the Percentage Interest represented by this Certificate and (ii) the
aggregate original principal amount of the Class A-4 Group I Certificates on
February 28, 1997 (the "Startup Day"), which aggregate amount on February 28,
1997 was $19,733,000. The Owner hereof is entitled to principal payments on each
Payment Date, as hereinafter described, which will fully amortize such Original
Principal Amount over the period from the date of initial delivery hereof to the
final Payment Date of the Class A-4 Group I Certificates. The Class A Group I
Certificates have been tranched into four "sequential pay" Classes, such that
the Class A-4 Group I Certificates are entitled to receive no principal
distributions until the Class A-3 Principal Balance has been reduced to zero,
the Class A-3 Group I Certificates are entitled to receive no principal
distributions until the Class A-2 Principal Balance has been reduced to zero and
the Class A-2 Group I Certificates are entitled to receive no
2
principal distributions until the Class A-1 Principal Balance has been reduced
to zero.
Upon receiving the final distribution hereon, the Owner hereof is required
to send this Certificate to the Trustee. The Pooling and Servicing Agreement
provides that, in any event, upon the making of the final distribution due on
this Certificate, this Certificate shall be deemed cancelled for all purposes
under the Pooling and Servicing Agreement.
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN A CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G AND
860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING
COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING
REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS
REPRESENTED HEREBY.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT NATIONAL
MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
This Certificate is one of a Class of duly-authorized Certificates
designated as Access Financial Mortgage Loan Trust 1997-1, Mortgage Loan
Pass-Through Certificates, Class A-4 Group I, and issued under and subject to
the terms, provisions and conditions of the Pooling and Servicing Agreement, to
which Pooling and Servicing Agreement the Owner of this Certificate by virtue of
acceptance hereof assents and by which such Owner is bound. Issued under the
Pooling and Servicing Agreement are Certificates designated as Access Financial
Mortgage Loan Trust 1997-1, Mortgage Loan Pass-Through Certificates, Class A-1
Group I (the "Class A-1 Group I Certificates"), Class A-2 Group I (the "Class
A-2 Group I Certificates"), Class A-3 Group I (the "Class A-3 Group I
Certificates"), Class A-4 Group I (the "Class A-4 Group I Certificates"), Class
A-5 Group II (the "Class A-5 Group II Certificates"), Class B (the "Class B
Certificates"), Class B-S (the "Class B-S Certificates"), and Class RL and Class
RU (the "Residual Certificates"). The Class A-1 Group I Certificates, the Class
A-2 Group I Certificates, the Class A-3 Group I Certificates, the Class A-4
Group I Certificates, the Class A-5 Group II Certificates (collectively, the
"Class A Certificates"), the Class B Certificates, the Class B-S Certificates
and the Residual Certificates are collectively referred to herein as the
"Certificates."
3
As more fully described in the Pooling and Servicing Agreement, each Class
of Certificates has a specified priority to the collections on the related Pool
of Mortgage Loans which comprise the related Available Funds. In addition,
Financial Security Assurance, Inc., as Certificate Insurer, is required pursuant
to the Certificate Insurance Policy to make available to the Trustee on each
Payment Date 100% of the Insured Distribution Amount on each Payment Date.
Terms capitalized herein and not otherwise defined herein shall have the
respective meanings set forth in the Pooling and Servicing Agreement.
On the 18th day of each month, or, if such day is not a Business Day, then
the next succeeding Business Day (each such day being a "Payment Date")
commencing March 18, 1997, the Owners of the Class A-2 Group I Certificates, the
Class A-3 Group I Certificates and the Class A-4 Group I Certificates, as of the
close of business on the first Business Day of the current calendar month in
which such Payment Date occurs (for the Class A-2 through A-4 Group I
Certificates, the "Record Date") will be entitled to receive the Class A-2
Distribution Amount, the Class A-3 Distribution Amount and the Class A-4
Distribution Amount, respectively, relating to such Payment Date. On each
Payment Date commencing March 18, 1997, the Owners of the Class A-1 Group I
Certificates and the Class A-5 Group II Certificates, as of the close of
business on the Business Day immediately preceding such Payment Date occurs (for
the Class A-1 Group I Certificates and the Class A-5 Group II Certificates, the
"Record Date") will be entitled to receive the Class A-1 Distribution Amount or
the Class A-5 Distribution Amount, respectively, relating to such Payment Date.
Distributions will be made in immediately available funds to Owners of
Certificates, by wire transfer or otherwise, to the account of an Owner at a
domestic bank or other entity having appropriate facilities therefor, if such
Owner has so notified the Trustee, or by check mailed to the address of the
person entitled thereto as it appears on the Register.
Each Owner of record of a Class A-1 Group I Certificate, Class A-2 Group I
Certificate, Class A-3 Group I Certificate, Class A-4 Group I Certificate and
Class A-5 Group II Certificate will be entitled to receive such Owner's
Percentage Interest in the amounts due on such Payment Date to the Owners of the
Class A-1 Group I Certificate, Class A-2 Group I Certificate, Class A-3 Group I
Certificate, Class A-4 Group I Certificate and Class A-5 Group II Certificate,
respectively.
The Percentage Interest of each Class A-4 Group I Certificate as of any
date of determination will be equal to
4
the percentage obtained by dividing the Original Principal Amount set forth on
such Class A-4 Group I Certificate by $19,733,000.
The Class A-4 Distribution Amount for any Payment Date will be an amount
equal to the Class A-4 Interest Distribution Amount for such Payment Date, the
Class A-4 Principal Distribution for such Payment Date, the Class A-4 Interest
Carry-Forward Amount for such Payment Date and the Class A-4 Principal
Carry-Forward Amount for such Payment Date, as such terms are defined in the
Pooling and Servicing Agreement.
Pursuant to the Certificate Insurance Policy, Financial Security Assurance,
Inc. (the "Certificate Insurer") is required, to the extent of any insufficiency
in the related Available Funds, to make Insured Payments available to the
Trustee necessary to deposit the full amount of the related Insured Distribution
Amount to the Distribution Account (other than amounts to be paid to the
Certificate Insurer) on each Payment Date. Pursuant to the Pooling and Servicing
Agreement, from amounts on deposit in the related Distribution Account, the
Class A-4 Distribution Amount will be distributed to the Owners of the Class A-4
Group I Certificates. The Certificate Insurer will be subrogated to the rights
of the Owners of the Class A-4 Group I Certificates with respect to the related
Insured Payments.
The Owner of this Certificate is required to notify the Trustee promptly in
writing upon the receipt of a court order pursuant to which any amount received
by the Owners of the Class A-4 Group I Certificates is recoverable and sought to
be recovered as a voidable preference by a trustee in bankruptcy pursuant to the
United States Bankruptcy Code and is required to enclose a copy of such order
with such notice to the Trustee.
The Trustee is required to duly and punctually pay distributions with
respect to this Certificate in accordance with the terms hereof and the Pooling
and Servicing Agreement. Amounts properly withheld under the Code or applicable
state or local law by any Person from a distribution to any Owner shall be
considered as having been paid by the Trustee to such Owner for all purposes of
the Pooling and Servicing Agreement.
Access Financial Lending Corp., as Master Servicer, pursuant to the Pooling
and Servicing Agreement will service the Mortgage Loans. The Pooling and
Servicing Agreement permits the Master Servicer to enter into Sub-Servicing
Agreements with certain institutions eligible for appointment as Sub-Servicers
for the servicing and administration of the Mortgage Loans. No appointment of
any Sub-Servicer shall
5
release the Master Servicer from any of its obligations under the Pooling and
Servicing Agreement.
This Certificate does not represent a deposit or other obligation of, or an
interest in, nor are the underlying Mortgage Loans insured or guaranteed by,
Access Financial Lending Corp., The Chase Manhattan Bank, any Sub-Servicer, or
any of their respective subsidiaries and affiliates and are not insured or
guaranteed by the Federal Deposit Insurance Corporation, the Government National
Mortgage Association, or any other governmental agency.
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Owner of any Certificate shall have the right which is absolute
and unconditional to receive distributions to the extent provided in the Pooling
and Servicing Agreement with respect to such Certificate or to institute suit
for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the obligations created
thereby will terminate upon the earlier of (i) the payment to the Owners of all
Certificates of all amounts held by the Trustee and required to be paid to such
Owners pursuant to the Pooling and Servicing Agreement upon the later to occur
of (a) the final payment or other liquidation (or any advance made with respect
thereto) of the last Mortgage Loan in the Trust Estate or (b) the disposition of
all property acquired in respect of any Mortgage Loan remaining in the Trust
Estate or (ii) at any time when a Qualified Liquidation of the Upper-Tier REMIC
and the Lower- Tier REMIC is effected as described in the Pooling and Servicing
Agreement.
The Pooling and Servicing Agreement provides that the Seller may, at its
option, purchase from the Trust all (but not fewer than all) remaining Mortgage
Loans and other property then constituting the Trust Estate, and thereby effect
early retirement of the Certificates, on any Remittance Date when the aggregate
outstanding Principal Balance of the Mortgage Loans is ten percent or less of
the Original Pool Principal Balance. If the Seller declines to exercise such
option within ninety days following such date, the Trustee shall solicit bids
for the purchase of all Mortgage Loans remaining in the Trust. If satisfactory
bids are received as
6
described in the Pooling and Servicing Agreement, the Trustee shall effect early
retirement of the Certificates. If satisfactory bids are not received, the
Trustee shall decline to sell the Mortgage Loans and shall not be under any
obligation to solicit any further bids or otherwise negotiate any further sale
of the Mortgage Loans. Such sale and consequent termination of the Trust must
constitute a "qualified liquidation" of each REMIC established by the Trust
under Section 860F of the Internal Revenue Code of 1986, as amended, including,
without limitation, the requirement that the qualified liquidation takes place
over a period not to exceed ninety days.
The Trustee is required to give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
The Certificate Insurer, or if a Certificate Insurer Default has occurred
and is continuing, the Owners of a majority of the Percentage Interests
represented by any Class of Class A Certificates, or if there are no Class A
Certificates then Outstanding, by such Percentage Interest represented by the
Class B Certificates then Outstanding, upon compliance with the requirements set
forth in the Pooling and Servicing Agreement, have the right to exercise any
trust or power set forth in the Pooling and Servicing Agreement with respect to
the Certificates or the Trust Estate.
As provided in the Pooling and Servicing Agreement, the transfer of this
Certificate is registrable in the Register upon surrender of this Certificate
for registration of transfer at the office designated as the location of the
Register, and thereupon one or more new Certificates of like Class, tenor and a
like Percentage Interest will be issued to the designated transferee or
transferees.
The Trustee is required to furnish certain information on each Payment Date
to the Owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
The Class A-4 Group I Certificates are issuable only as registered
Certificates in denominations of $1,000 original principal amount and integral
multiples of $1,000 in excess thereof (except for one odd Certificate). As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class A-4 Group I Certificates are exchangeable
for new Class A-4 Group I Certificates of authorized denominations evidencing
the same aggregate principal amount.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may
7
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith.
The Trustee and any agent of the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither
the Trustee nor any such agent shall be affected by notice to the contrary,
except as may otherwise be specifically provided in the Pooling and Servicing
Agreement with respect to the Certificate Insurer.
8
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of the Trust.
THE CHASE MANHATTAN BANK, as
Trustee
By:_____________________________
Title:__________________________
Trustee Authentication
THE CHASE MANHATTAN BANK, as Trustee
By: _________________________
Title: ______________________
Dated: February 28, 1997
9
EXHIBIT A-5
ACCESS FINANCIAL MORTGAGE LOAN TRUST 1997-1
MORTGAGE LOAN PASS-THROUGH CERTIFICATE
CLASS A-5 GROUP II
(Variable Pass-Through Rate)
Representing Certain Interests Relating to a Pool of
Mortgage Loans formed by
ACCESS FINANCIAL LENDING CORP.
as Seller and Master Servicer
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to Issuer or its agent
for registration of transfer, exchange, or payment, and any certificate issued
is registered in the name of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
(This Certificate does not represent an interest in, or an obligation of,
nor are the underlying Mortgage Loans insured or guaranteed by Access Financial
Lending Corp., The Chase Manhattan Bank, any Sub-Servicer or any of their
respective subsidiaries and affiliates. This Certificate represents a fractional
ownership interest in the Trust Estate described herein, moneys in the Principal
and Interest Account or otherwise held by the Master Servicer or any
Sub-Servicer in trust for the Owners (except as otherwise provided in the
Pooling and Servicing Agreement) and certain other rights relating thereto and
is payable only from amounts received by the Trustee (i) relating to the
Mortgage Loans held by the Trust and (ii) pursuant to the Certificate Insurance
Policy.)
No.: A-5-1 February 28, 1997
-----------------
Date
$138,866,000 March 18, 2027 003916 BF 9
------------ -------------- -----------
Original Principal Final Scheduled CUSIP
Amount Payment Date
Cede & Co.
--------------------------------------------------------------------------------
Registered Owner
The registered Owner named above is the registered Owner of a fractional
undivided interest in (i) a pool of mortgage loans, consisting of first and
second liens (the "Mortgage Loans") formed by Access Financial Lending Corp.
(the "Seller"), a Delaware corporation, and held in trust by The Chase Manhattan
Bank, a New York banking corporation, as trustee (the "Trustee"), on behalf of
Access Financial Mortgage Loan Trust 1997-1 (the "Trust") pursuant to that
certain Pooling and Servicing Agreement dated as of February 1, 1997 (the
"Pooling and Servicing Agreement") among Access Financial Receivables Corp., as
transferor (the "Transferor"), Access Financial Lending Corp., as seller and as
master servicer (the "Master Servicer"), and the Trustee, (ii) such amounts,
including Eligible Investments, as from time to time may be held by the Trustee
in the Accounts held by the Trustee pursuant to the Pooling and Servicing
Agreement by the Master Servicer or any Sub-Servicer in the Principal and
Interest Account created pursuant to the Pooling and Servicing Agreement, or
otherwise held by the Master Servicer or any Sub-Servicer in trust for the
Owners (except as otherwise provided in the Pooling and Servicing Agreement),
(iii) any Property, the ownership of which has been effected in the name of the
Master Servicer or any Sub-Servicer on behalf of the Trust as a result of
foreclosure or acceptance by the Master Servicer or any Sub-Servicer of a deed
in lieu of foreclosure and that has not been withdrawn from the Trust, (iv) the
rights, if any, of the Trust in any Insurance Policies relating to the Mortgage
Loans, (v) Net Proceeds (but only to the extent such Net Proceeds do not exceed
the sum of the Principal Balance of the related Mortgage Loan plus accrued and
unpaid interest on such Mortgage Loan), and (vi) the Certificate Insurance
Policy. Such Mortgage Loans and other amounts and property enumerated above are
hereinafter referred to as the "Trust Estate."
The Original Principal Amount set forth above is equal to the product of
(i) the Percentage Interest represented by this Certificate and (ii) the
aggregate original principal amount of the Class A-5 Group II Certificates on
February 28, 1997 (the "Startup Day"), which aggregate amount on February 28,
1997 was $138,866,000. The Owner hereof is entitled to principal payments on
each Payment Date, as hereinafter described, which will fully amortize such
Original Principal Amount over the period from the date of initial delivery
hereof to the final Payment Date of the Class A-5 Group II Certificates.
Upon receiving the final distribution hereon, the Owner hereof is required
to send this Certificate to the Trustee. The Pooling and Servicing Agreement
provides that, in any event, upon the making of the final distribution due on
this Certificate, this Certificate shall be deemed cancelled for all purposes
under the Pooling and Servicing Agreement.
2
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN A CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G AND
860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING
COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING
REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS
REPRESENTED HEREBY.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT NATIONAL
MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
This Certificate is one of a Class of duly-authorized Certificates
designated as Access Financial Mortgage Loan Trust 1997-1 Mortgage Loan
Pass-Through Certificates, Class A-5 Group II, and issued under and subject to
the terms, provisions and conditions of the Pooling and Servicing Agreement, to
which Pooling and Servicing Agreement the Owner of this Certificate by virtue of
acceptance hereof assents and by which such Owner is bound. Issued under the
Pooling and Servicing Agreement are Certificates designated as Access Financial
Mortgage Loan Trust 1997-1, Mortgage Loan Pass-Through Certificates, Class A-1
Group I (the "Class A-1 Group I Certificates"), Class A-2 Group I (the "Class
A-2 Group I Certificates"), Class A-3 Group I (the "Class A-3 Group I
Certificates"), Class A-4 Group I (the "Class A-4 Group I Certificates"), Class
A-5 Group II (the "Class A-5 Group II Certificates"), Class B (the "Class B
Certificates"), Class B-S (the "Class B-S Certificates"), and Class RL and Class
RU (the "Residual Certificates"). The Class A-1 Group I Certificates, the Class
A-2 Group I Certificates, the Class A-3 Group I Certificates, the Class A-4
Group I Certificates, the Class A-5 Group II Certificates (collectively, the
"Class A Certificates"), the Class B Certificates, the Class B-S Certificates
and the Residual Certificates are collectively referred to herein as the
"Certificates."
As more fully described in the Pooling and Servicing Agreement, each Class
of Certificates has a specified priority to the collections on the related Pool
of Mortgage Loans which comprise the related Available Funds. In addition,
Financial Security Assurance, Inc., as Certificate Insurer, is required pursuant
to the Certificate Insurance Policy to make available to the Trustee on each
Payment Date 100% of the Insured Distribution Amount on each Payment Date.
3
Terms capitalized herein and not otherwise defined herein shall have the
respective meanings set forth in the Pooling and Servicing Agreement.
On the 18th day of each month, or, if such day is not a Business Day, then
the next succeeding Business Day (each such day being a "Payment Date")
commencing March 18, 1997, the Owners of the Class A-2 Group I Certificates, the
Class A-3 Group I Certificates and the Class A-4 Group I Certificates, as of the
close of business on the first Business Day of the current calendar month in
which such Payment Date occurs (for the Class A-2 through A-4 Group I
Certificates, the "Record Date") will be entitled to receive the Class A-2
Distribution Amount, the Class A-3 Distribution Amount and Class A-4
Distribution Amount, respectively, relating to such Payment Date. On each
Payment Date commencing March 18, 1997, the Owners of the Class A-1 Group I
Certificates and the Class A-5 Group II Certificates, as of the close of
business on the Business Day immediately preceding such Payment Date occurs (for
the Class A-1 Group I Certificates and the Class A-5 Group II Certificates, the
"Record Date") will be entitled to receive the Class A-1 Distribution Amount or
the Class A-5 Distribution Amount, respectively, relating to such Payment Date.
Distributions will be made in immediately available funds to Owners of
Certificates, by wire transfer or otherwise, to the account of an Owner at a
domestic bank or other entity having appropriate facilities therefor, if such
Owner has so notified the Trustee, or by check mailed to the address of the
person entitled thereto as it appears on the Register.
Each Owner of record of a Class A-1 Group I Certificate, Class A-2 Group I
Certificate, Class A-3 Group I Certificate, Class A-4 Group I Certificate and
Class A-5 Group II Certificate will be entitled to receive such Owner's
Percentage Interest in the amounts due on such Payment Date to the Owners of the
Class A-1 Group I Certificate, Class A-2 Group I Certificate, Class A-3 Group I
Certificate, Class A-4 Group I Certificate and Class A-5 Group II Certificate,
respectively.
The Percentage Interest of each Class A-5 Group II Certificate as of any
date of determination will be equal to the percentage obtained by dividing the
Original Principal Amount set forth on such Class A-5 Group II Certificate by
$138,866,000.
The Class A-5 Distribution Amount for any Payment Date will be an amount
equal to the Class A-5 Interest Distribution Amount for such Payment Date, the
Class A-5 Principal Distribution for such Payment Date, the Class A-5 Interest
Carry-Forward Amount for such Payment Date and the Class A-5 Principal
Carry-Forward Amount for such Payment
4
Date, as such terms are defined in the Pooling and Servicing Agreement.
Pursuant to the Certificate Insurance Policy, Financial Security Assurance,
Inc. (the "Certificate Insurer") is required, to the extent of any insufficiency
in the related Available Funds, to make Insured Payments available to the
Trustee necessary to deposit the full amount of the related Insured Distribution
Amount to the Distribution Account (other than amounts to be paid to the
Certificate Insurer) on each Payment Date. Pursuant to the Pooling and Servicing
Agreement, from amounts on deposit in the related Distribution Account, the
Class A-5 Distribution Amount will be distributed to the Owners of the Class A-5
Group II Certificates. The Certificate Insurer will be subrogated to the rights
of the Owners of the Class A-5 Group II Certificates with respect to the related
Insured Payments.
The Owner of this Certificate is required to notify the Trustee promptly in
writing upon the receipt of a court order pursuant to which any amount received
by the Owners of the Class A-5 Group II Certificates is recoverable and sought
to be recovered as a voidable preference by a trustee in bankruptcy pursuant to
the United States Bankruptcy Code and is required to enclose a copy of such
order with such notice to the Trustee.
The Trustee is required to duly and punctually pay distributions with
respect to this Certificate in accordance with the terms hereof and the Pooling
and Servicing Agreement. Amounts properly withheld under the Code or applicable
state or local law by any Person from a distribution to any Owner shall be
considered as having been paid by the Trustee to such Owner for all purposes of
the Pooling and Servicing Agreement.
Access Financial Lending Corp., as Master Servicer, pursuant to the Pooling
and Servicing Agreement will service the Mortgage Loans. The Pooling and
Servicing Agreement permits the Master Servicer to enter into Sub-Servicing
Agreements with certain institutions eligible for appointment as Sub-Servicers
for the servicing and administration of the Mortgage Loans. No appointment of
any Sub-Servicer shall release the Master Servicer from any of its obligations
under the Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other obligation of, or an
interest in, nor are the underlying Mortgage Loans insured or guaranteed by,
Access Financial Lending Corp., The Chase Manhattan Bank, any Sub-Servicer, or
any of their respective subsidiaries and affiliates and are not insured or
guaranteed by the Federal Deposit Insurance Corporation, the Government National
Mortgage Association, or any other governmental agency.
5
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Owner of any Certificate shall have the right which is absolute
and unconditional to receive distributions to the extent provided in the Pooling
and Servicing Agreement with respect to such Certificate or to institute suit
for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the obligations created
thereby will terminate upon the earlier of (i) the payment to the Owners of all
Certificates of all amounts held by the Trustee and required to be paid to such
Owners pursuant to the Pooling and Servicing Agreement upon the later to occur
of (a) the final payment or other liquidation (or any advance made with respect
thereto) of the last Mortgage Loan in the Trust Estate or (b) the disposition of
all property acquired in respect of any Mortgage Loan remaining in the Trust
Estate or (ii) at any time when a Qualified Liquidation of the Upper-Tier REMIC
and the Lower- Tier REMIC is effected as described in the Pooling and Servicing
Agreement.
The Pooling and Servicing Agreement provides that the Seller may, at its
option, purchase from the Trust all (but not fewer than all) remaining Mortgage
Loans and other property then constituting the Trust Estate, and thereby effect
early retirement of the Certificates, on any Remittance Date when the aggregate
outstanding Principal Balance of the Mortgage Loans is ten percent or less of
the Original Pool Principal Balance. If the Seller declines to exercise such
option within ninety days following such date, the Trustee shall solicit bids
for the purchase of all Mortgage Loans remaining in the Trust. If satisfactory
bids are received as described in the Pooling and Servicing Agreement, the
Trustee shall effect early retirement of the Certificates. If satisfactory bids
are not received, the Trustee shall decline to sell the Mortgage Loans and shall
not be under any obligation to solicit any further bids or otherwise negotiate
any further sale of the Mortgage Loans. Such sale and consequent termination of
the Trust must constitute a "qualified liquidation" of each REMIC established by
the Trust under Section 860F of the Internal Revenue Code of 1986, as amended,
including, without limitation, the requirement that the qualified liquidation
takes place over a period not to exceed ninety days.
6
The Trustee is required to give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
The Certificate Insurer, or if a Certificate Insurer Default has occurred
and is continuing, the Owners of a majority of the Percentage Interests
represented by any Class of Class A Certificates, or if there are no Class A
Certificates then Outstanding, by such Percentage Interest represented by the
Class B Certificates then Outstanding, upon compliance with the requirements set
forth in the Pooling and Servicing Agreement, have the right to exercise any
trust or power set forth in the Pooling and Servicing Agreement with respect to
the Certificates or the Trust Estate.
As provided in the Pooling and Servicing Agreement, the transfer of this
Certificate is registrable in the Register upon surrender of this Certificate
for registration of transfer at the office designated as the location of the
Register, and thereupon one or more new Certificates of like Class, tenor and a
like Percentage Interest will be issued to the designated transferee or
transferees.
The Trustee is required to furnish certain information on each Payment Date
to the Owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
The Class A-5 Group II Certificates are issuable only as registered
Certificates in denominations of $1,000 original principal amount and integral
multiples of $1,000 in excess thereof (except for one odd Certificate). As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class A-5 Group II Certificates are exchangeable
for new Class A-5 Group II Certificates of authorized denominations evidencing
the same aggregate principal amount.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Trustee and any agent of the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither
the Trustee nor any such agent shall be affected by notice to the contrary,
except as may otherwise be specifically provided in the Pooling and Servicing
Agreement with respect to the Certificate Insurer.
7
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of the Trust.
THE CHASE MANHATTAN BANK, as
Trustee
By:_____________________________
Title:__________________________
Trustee Authentication
THE CHASE MANHATTAN BANK, as Trustee
By: _________________________
Title: ______________________
Dated: February 28, 1997
8
EXHIBIT B-1
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY BE MADE ONLY IN A TRANSACTION EXEMPT FROM
THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 5.8 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
ACCESS FINANCIAL MORTGAGE LOAN TRUST 1997-1
MORTGAGE LOAN PASS-THROUGH CERTIFICATE
CLASS B
Representing Certain Interests Relating to a Pool of
Mortgage Loans formed by
ACCESS FINANCIAL LENDING CORP.
as Seller and Master Servicer
(This Certificate does not represent an interest in, or an obligation of,
nor are the underlying Mortgage Loans insured or guaranteed by Access Financial
Lending Corp., The Chase Manhattan Bank, any Sub-Servicer or any of their
respective subsidiaries and affiliates. This Certificate represents a fractional
ownership interest in the Trust Estate described herein, moneys in the Principal
and Interest Account or otherwise held by the Master Servicer or any
Sub-Servicer in trust for the Owners (except as otherwise provided in the
Pooling and Servicing Agreement) and certain other rights relating thereto and
is payable only from amounts received by the Trustee relating to the Mortgage
Loans held by the Trust.)
No.: B-1 February 28, 1997
Date
610.09 March 18, 2027
Original Principal Final Scheduled
Amount Payment Date
ACCESS FINANCIAL RECEIVABLES CORP.
Registered Owner
The registered Owner named above is the registered Owner of a fractional
undivided interest in (i) a pool of mortgage loans, consisting of first and
second liens (the "Mortgage Loans") formed by Access Financial Lending Corp.
(the "Seller"), a Delaware corporation, and held in trust by The Chase Manhattan
Bank, a New York banking corporation, as trustee (the "Trustee"), on behalf of
Access Financial Mortgage Loan Trust 1997-1 (the "Trust") pursuant to that
certain Pooling and Servicing Agreement dated as of February 1, 1997 (the
"Pooling and Servicing Agreement") among Access Financial Receivables Corp., as
transferor (the "Transferor"), Access Financial Lending Corp., as seller and as
master servicer (the "Master Servicer"), and the Trustee, (ii) such amounts,
including Eligible Investments, as from time to time may be held by the Trustee
in the Accounts held by the Trustee pursuant to the Pooling and Servicing
Agreement by the Master Servicer or any Sub-Servicer in the Principal and
Interest Account created pursuant to the Pooling and Servicing Agreement, or
otherwise held by the Master Servicer or any Sub-Servicer in trust for the
Owners (except as otherwise provided in the Pooling and Servicing Agreement),
(iii) any Property, the ownership of which has been effected in the name of the
Master Servicer or any Sub-Servicer on behalf of the Trust as a result of
foreclosure or acceptance by the Master Servicer or any Sub-Servicer of a deed
in lieu of foreclosure and that has not been withdrawn from the Trust, (iv) the
rights, if any, of the Trust in any Insurance Policies relating to the Mortgage
Loans, (v) Net Proceeds (but only to the extent such Net Proceeds do not exceed
the sum of the Principal Balance of the related Mortgage Loan plus accrued and
unpaid interest on such Mortgage Loan), and (vi) the Certificate Insurance
Policy. Such Mortgage Loans and other amounts and property enumerated above are
hereinafter referred to as the "Trust Estate."
Upon receiving the final distribution hereon, the Owner hereof is required
to send this Certificate to the Trustee. The Pooling and Servicing Agreement
provides that, in any event, upon the making of the final distribution due on
this Certificate, this Certificate shall be deemed cancelled for all purposes
under the Pooling and Servicing Agreement.
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN A CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G AND
860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING
COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING
REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS
REPRESENTED HEREBY.
2
NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT NATIONAL
MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
This Certificate is one of a Class of duly-authorized Certificates
designated as Access Financial Mortgage Loan Trust 1997-1, Mortgage Loan
Pass-Through Certificates, Class B Certificates, and issued under and subject to
the terms, provisions and conditions of the Pooling and Servicing Agreement, to
which Pooling and Servicing Agreement the Owner of this Certificate by virtue of
acceptance hereof assents and by which such Owner is bound. Issued under the
Pooling and Servicing Agreement are Certificates designated as Access Financial
Mortgage Loan Trust 1997- 1, Mortgage Loan Pass-Through Certificates, Class A-1
Group I (the "Class A-1 Group I Certificates"), Class A-2 Group I (the "Class
A-2 Group I Certificates"), Class A-3 Group I (the "Class A-3 Group I
Certificates"), Class A-4 Group I (the "Class A-4 Group I Certificates"), Class
A-5 Group II (the "Class A-5 Group II Certificates"), Class B (the "Class B
Certificates"), Class B-S (the "Class B-S Certificates"), and Class RL and Class
RU (the "Residual Certificates"). The Class A-1 Group I Certificates, the Class
A-2 Group I Certificates, the Class A-3 Group I Certificates, the Class ▇- ▇
Group I Certificates, the Class A-5 Group II Certificates (collectively, the
"Class A Certificates"), the Class B Certificates, the Class B-S Certificates
and the Residual Certificates are collectively referred to herein as the
"Certificates."
As more fully described in the Pooling and Servicing Agreement, each Class
of Certificates has a specified priority to the collections on the related Pool
of Mortgage Loans which comprise the related Available Funds.
Terms capitalized herein and not otherwise defined herein shall have the
respective meanings set forth in the Pooling and Servicing Agreement.
On the 18th day of each month, or, if such day is not a Business Day, then
the next succeeding Business Day (each such day being a "Payment Date")
commencing March 18, 1997, the Owners of the Class B Certificates as of the
close of business on the first Business Day of the calendar month in which such
Payment Date occurs (the "Record Date") will be entitled to receive the Class B
Distribution Amount. Distributions will be made in immediately available funds
to Owners of Certificates, by wire transfer or otherwise, to the account of an
Owner at a domestic bank or other entity having appropriate facilities therefor,
if such Owner has so notified the Trustee, or by check mailed to the address of
the person entitled thereto as it appears on the Register.
3
Each Owner of record of a Class B Certificate will be entitled to receive
such Owner's Percentage Interest in the Class B Distribution Amount due on such
Payment Date to the Owners of the Class B Certificates. The Class B Distribution
Amount as of any date of determination will be determined as set forth in the
Pooling and Servicing Agreement.
The Trustee is required to duly and punctually pay distributions with
respect to this Certificate in accordance with the terms hereof and the Pooling
and Servicing Agreement. Amounts properly withheld under the Code or applicable
state or local law by any Person from a distribution to any Owner shall be
considered as having been paid by the Trustee to such Owner for all purposes of
the Pooling and Servicing Agreement.
Access Financial Lending Corp., as Master Servicer, pursuant to the Pooling
and Servicing Agreement will service the Mortgage Loans. The Pooling and
Servicing Agreement permits the Master Servicer to enter into Sub-Servicing
Agreements with certain institutions eligible for appointment as Sub-Servicers
for the servicing and administration of the Mortgage Loans. No appointment of
any Sub-Servicer shall release the Master Servicer from any of its obligations
under the Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other obligation of, or an
interest in, nor are the underlying Mortgage Loans insured or guaranteed by,
Access Financial Lending Corp., The Chase Manhattan Bank, any Sub-Servicer, or
any of their respective subsidiaries and affiliates and are not insured or
guaranteed by the Federal Deposit Insurance Corporation, the Government National
Mortgage Association, or any other governmental agency.
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Owner of any Certificate shall have the right which is absolute
and unconditional to receive distributions to the extent provided in the Pooling
and Servicing Agreement with respect to such Certificate or to institute suit
for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the obligations created
thereby will terminate upon the earlier of (i) the payment to the Owners of all
Certificates
4
of all amounts held by the Trustee and required to be paid to such Owners
pursuant to the Pooling and Servicing Agreement upon the later to occur of (a)
the final payment or other liquidation (or any advance made with respect
thereto) of the last Mortgage Loan in the Trust Estate or (b) the disposition of
all property acquired in respect of any Mortgage Loan remaining in the Trust
Estate or (ii) at any time when a Qualified Liquidation of the Upper-Tier REMIC
and the Lower- Tier REMIC is effected as described in the Pooling and Servicing
Agreement.
The Pooling and Servicing Agreement provides that the Seller may, at its
option, purchase from the Trust all (but not fewer than all) remaining Mortgage
Loans and other property then constituting the Trust Estate, and thereby effect
early retirement of the Certificates, on any Remittance Date when the aggregate
outstanding Principal Balance of the Mortgage Loans is ten percent or less of
the Original Pool Principal Balance. If the Seller declines to exercise such
option within ninety days following such date, the Trustee shall solicit bids
for the purchase of all Mortgage Loans remaining in the Trust. If satisfactory
bids are received as described in the Pooling and Servicing Agreement, the
Trustee shall effect early retirement of the Certificates. If satisfactory bids
are not received, the Trustee shall decline to sell the Mortgage Loans and shall
not be under any obligation to solicit any further bids or otherwise negotiate
any further sale of the Mortgage Loans. Such sale and consequent termination of
the Trust must constitute a "qualified liquidation" of each REMIC established by
the Trust under Section 860F of the Internal Revenue Code of 1986, as amended,
including, without limitation, the requirement that the qualified liquidation
takes place over a period not to exceed ninety days.
The Trustee is required to give written notice of termination of the
Pooling and Servicing Agreement to each Owner in the manner set forth therein.
As provided in the Pooling and Servicing Agreement, the transfer of this
Certificate is registrable in the Register upon surrender of this Certificate
for registration of transfer at the office designated as the location of the
Register, and thereupon one or more new Certificates of like Class, tenor and a
like Percentage Interest will be issued to the designated transferee or
transferees.
The Trustee is required to furnish certain information on each Payment Date
to the Owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
5
The Class B Certificates are issuable only as registered Certificates in
minimum denominations of $100,000 original principal amount and integral
multiples of $1,000 in excess thereof (except for one odd Class B Certificate).
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class B Certificates are exchangeable for new
Class B Certificates evidencing the same Percentage Interest as the Class B
Certificates exchanged.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Trustee and any agent of the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither
the Trustee nor any such agent shall be affected by notice to the contrary,
except as may otherwise be specifically provided in the Pooling and Servicing
Agreement with respect to the Certificate Insurer.
6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of the Trust.
THE CHASE MANHATTAN BANK, as
Trustee
By:_____________________________
Title:__________________________
Trustee Authentication
THE CHASE MANHATTAN BANK, as Trustee
By: _________________________
Title: ______________________
Dated: February 28, 1997
7
EXHIBIT B-2
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN (X) A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G AND
860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING
COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE AND (Y) CERTAIN OTHER PROPERTY
HELD IN THE SUPPLEMENTAL INTEREST PAYMENT ACCOUNT.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL SAVINGS AND
LOAN INSURANCE CORPORATION, THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY
OTHER GOVERNMENTAL AGENCY.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY BE MADE ONLY IN A TRANSACTION EXEMPT FROM
THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 5.8 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
TRANSFER OF THIS CLASS B-S CERTIFICATE IS RESTRICTED AS SET FORTH IN THE
POOLING AND SERVICING AGREEMENT.
SUPPLEMENTAL INTEREST PAYMENT ACCOUNT
RELATING TO
ACCESS FINANCIAL MORTGAGE LOAN TRUST 1997-1
CLASS B-S
(This Certificate does not represent an interest in, or an obligation of,
nor are the underlying Mortgage Loans insured or guaranteed by, Access Financial
Lending Corp., The Chase Manhattan Bank, any Sub-Servicer or any Originator or
any of their subsidiaries and affiliates. This Certificate represents a
fractional ownership interest in certain excess moneys of the Supplemental
Interest Payment Account described herein.
No: B-S-1 Date: February 28, 1997
Percentage Interest: 100% March 18, 2027
---------------
Final Scheduled
Payment Date
ACCESS FINANCIAL RECEIVABLES CORP.
--------------------------------------------------------------------------------
Registered Owner
The registered Owner named above is the registered Owner of a fractional
interest in certain excess moneys of the Supplemental Interest Payment Account
pursuant to that certain Pooling and Servicing Agreement dated as of February 1,
1997 (the "Pooling and Servicing Agreement") among Access Financial Receivables
Corp., as transferor (the "Transferor"), the Trustee and Access Financial
Lending Corp., as Master Servicer (the "Master Servicer") and as Seller.
This Certificate is one of a Class of duly authorized Certificates
designated as Access Financial Mortgage Loan Trust 1997-1, Class B-S
Certificates (the "Class B-S Certificates") and issued under and subject to the
terms, provisions and conditions of the Pooling and Servicing Agreement, to
which Pooling and Servicing Agreement the Owner of this Certificate by virtue of
acceptance hereof assents and by which such Owner is bound.
Terms capitalized herein and not otherwise defined herein shall have the
respective meanings set forth in the Pooling and Servicing Agreement.
On the 18th day of each month or, if such day is not a Business Day, then
the next succeeding Business Day (each such day being a "Payment Date"),
commencing March 18, 1997, to the persons in whose names the Class B-S
Certificates are registered at the close of business on the last business day of
the calendar month immediately preceding the calendar month in which such
Payment Date occurs (the "Record Date"), the Trustee will distribute to each
Owner of the Class B-S Certificates such Owner's Percentage Interest multiplied
by any amounts then available to be distributed to the Owners of the Class B-S
Certificates. Distributions will be made in immediately available funds, by wire
transfer or otherwise, to the account of such Owner at a domestic bank or other
entity having appropriate facilities therefor, if such Owner has so notified the
Trustee at least five business days prior to the related record date, or by
check mailed to the address of the person entitled thereto as it appears on the
Register.
Upon receiving the final distribution hereon, the Owner hereof is required
to send this Certificate to the Trustee. The Pooling and Servicing Agreement
provides that, in any event, upon the making of the final distribution due on
this Certificate, this Certificate shall be deemed cancelled for all purposes
under the Pooling and Servicing Agreement.
The Trustee is required to duly and punctually pay distributions with
respect to this Certificate in accordance with the terms hereof and the Pooling
and Servicing Agreement. Amounts properly withheld under the Code or applicable
state or local law by any person from a distribution to any Owner
2
shall be considered as having been paid by the Trustee to such Owner for all
purposes of the Pooling and Servicing Agreement.
Access Financial Lending Corp., as Master Servicer, pursuant to the Pooling
and Servicing Agreement will service the Mortgage Loans. The Pooling and
Servicing Agreement permits the Master Servicer to enter into Sub-Servicing
Agreements with certain institutions eligible for appointments as Sub-Servicers
for the servicing and administration of the Mortgage Loans. No appointment of
any Sub-Servicer shall release the Master Servicer from any of its obligations
under the Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other obligation of, or an
interest in, nor are the underlying Mortgage Loans insured or guaranteed by,
Access Financial Lending Corp., The Chase Manhattan Bank, any Sub-Servicer or
any of their subsidiaries and affiliates and are not insured or guaranteed by
the Federal Deposit Insurance Corporation, the Government National Mortgage
Association, or any other governmental agency. This Certificate is limited in
right of payment to certain collections and recoveries relating to the Mortgage
Loans, all as more specifically set forth hereinabove and in the Pooling and
Servicing Agreement.
No Owner shall have the right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Owner of any Certificate shall have the right which is absolute
and unconditional to receive distributions to the extent provided in the Pooling
and Servicing Agreement with respect to such Certificate or to institute suit
for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the obligations created
thereby will terminate upon the earlier of (i) the payment to the Owners of all
Certificates from amounts other than those available under the Certificate
Insurance Policy of all amounts held by the Trustee and required to be paid to
such Owners pursuant to the Pooling and Servicing Agreement upon the later to
occur of (a) the final payment or other liquidation (or any advance made with
respect thereto) of the last Mortgage Loan in the Trust Estate or (b) the
disposition of all property acquired in respect of any Mortgage Loan remaining
in the Trust Estate or (ii) at any time when a Qualified Liquidation of the
Upper-Tier REMIC and
3
the Lower-Tier REMIC is effected as described in the Pooling and Servicing
Agreement.
The Pooling and Servicing Agreement provides that the Seller may, at its
option, purchase from the Trust all (but no fewer than all) remaining Mortgage
Loans and other property then constituting the Trust Estate, and thereby effect
early retirement of the Certificates, on any Remittance Date when the aggregate
outstanding Principal Balance of the Mortgage Loans is ten percent or less of
the Original Pool Principal Balance. If the Seller declines to exercise such
option within ninety days following such date, the Trustee shall solicit bids
for the purchase of all Mortgage Loans remaining in the Trust. If satisfactory
bids are received as described in the Pooling and Servicing Agreement, the
Trustee shall effect early retirement of the Certificates. If satisfactory bids
are not received, the Trustee shall decline to sell the Mortgage Loans and shall
not be under any obligation to solicit any further bids or otherwise negotiate
any further sale of the Mortgage Loans. Such sale and consequent termination of
the Trust must constitute a "qualified liquidation" of each REMIC established by
the Trust under Section 860F of the Internal Revenue Code of 1986, as amended,
including, without limitation, the requirement that the qualified liquidation
takes place over a period not to exceed ninety days.
The Trustee shall give written notice of termination of the Pooling and
Servicing Agreement to each Owner in the manner set forth therein.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registrable in the Register upon surrender of this
Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in the form required by the Pooling and Servicing
Agreement duly executed by, the Owner hereof or his attorney duly authorized in
writing, and thereupon one or more new Certificates of like Class, tenor and a
like Percentage Interest in the Trust Estate will be issued to the designated
transferee or transferees.
The Trustee is required to furnish certain information on each Payment Date
to the Owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
The Class B-S Certificates are issuable only as registered Certificates. As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein
4
set forth, Class B-S Certificates are exchangeable for new Class B-S
Certificates evidencing the same Percentage Interest as the Class B-S
Certificates exchanged.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Trustee and any agent of the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither
the Trustee or any such agent shall be affected by notice to the contrary.
5
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of the Trust.
THE CHASE MANHATTAN BANK, as
Trustee
By:______________________
Name:
Title:
Trustee's Authentication
THE CHASE MANHATTAN BANK, as Trustee
By:___________________________________
Name:
Title:
6
EXHIBIT C-1
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY BE MADE ONLY IN A TRANSACTION EXEMPT FROM
THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 5.8 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT NATIONAL
MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN THE ONLY "RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G and
860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING
COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
TRANSFER OF THIS CLASS RL CERTIFICATE IS RESTRICTED AS SET FORTH IN THE
POOLING AND SERVICING AGREEMENT. NO TRANSFER OF THIS CLASS RL CERTIFICATE MAY BE
MADE TO A "DISQUALIFIED ORGANIZATION" AS DEFINED IN SECTION 860E(e)(5) OF THE
CODE. SUCH TERM INCLUDES THE UNITED STATES, ANY STATE OR POLITICAL SUBDIVISION
THEREOF, ANY FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, ANY AGENCY OR
INSTRUMENTALITY OF ANY OF THE FOREGOING (OTHER THAN CERTAIN TAXABLE
INSTRUMENTALITIES), ANY COOPERATIVE ORGANIZATION FURNISHING ELECTRIC ENERGY OR
PROVIDING TELEPHONE SERVICE TO PERSONS IN RURAL AREAS, OR ANY ORGANIZATION
(OTHER THAN A FARMERS' COOPERATIVE) THAT IS EXEMPT FROM FEDERAL INCOME TAX
UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX ON UNRELATED BUSINESS INCOME. NO
TRANSFER OF THIS CLASS RL CERTIFICATE WILL BE REGISTERED BY THE TRUSTEE UNLESS
THE PROPOSED TRANSFEREE HAS DELIVERED AN AFFIDAVIT AFFIRMING, AMONG OTHER
THINGS, THAT THE PROPOSED TRANSFEREE IS NOT A DISQUALIFIED ORGANIZATION AND IS
NOT ACQUIRING THE CLASS RL CERTIFICATE FOR THE ACCOUNT OF A DISQUALIFIED
ORGANIZATION. A COPY OF THE FORM OF AFFIDAVIT REQUIRED OF EACH PROPOSED
TRANSFEREE IS ON FILE AND AVAILABLE FROM THE TRUSTEE.
A TRANSFER IN VIOLATION OF THE APPLICABLE RESTRICTIONS MAY GIVE RISE TO A
SUBSTANTIAL TAX UPON THE TRANSFEROR OR, IN CERTAIN CASES, UPON AN AGENT ACTING
FOR THE TRANSFEREE. A PASS-THRU ENTITY THAT HOLDS THIS CLASS RL CERTIFICATE AND
THAT HAS A DISQUALIFIED ORGANIZATION AS A RECORD OWNER IN ANY TAXABLE YEAR
GENERALLY WILL BE SUBJECT TO A TAX FOR EACH SUCH YEAR EQUAL TO THE PRODUCT OF
(A) THE AMOUNT OF EXCESS INCLU-
SIONS WITH RESPECT TO THE PORTION OF THIS CERTIFICATE OWNED THROUGH SUCH
PASS-THRU ENTITY BY SUCH DISQUALIFIED ORGANIZATION, AND (B) THE HIGHEST MARGINAL
FEDERAL TAX RATE ON CORPORATIONS. FOR PURPOSES OF THE PRECEDING SENTENCE, THE
TERM "PASS-THRU" ENTITY INCLUDES REGULATED INVESTMENT COMPANIES, REAL ESTATE
INVESTMENT TRUSTS, COMMON TRUST FUNDS, PARTNERSHIPS, TRUSTS, ESTATES,
COOPERATIVES TO WHICH PART I OF SUBCHAPTER IT OF THE CODE APPLIES AND, EXCEPT AS
PROVIDED IN REGULATIONS, NOMINEES.
ACCESS FINANCIAL MORTGAGE LOAN TRUST 1997-1
MORTGAGE LOAN PASS-THROUGH CERTIFICATE
CLASS RL
Representing Certain Interests Relating to a Pool of
Mortgage Loans formed by
ACCESS FINANCIAL LENDING CORP.
as Seller and Master Servicer
(This Certificate does not represent an interest in, or an obligation of,
nor are the underlying Mortgage Loans insured or guaranteed by Access Financial
Lending Corp., The Chase Manhattan Bank, any Sub-Servicer or any of their
respective subsidiaries and affiliates. This Certificate represents a fractional
residual ownership interest in the Lower-Tier REMIC described in the Pooling and
Servicing Agreement.)
No: RL-1 Date: February 28, 1997
Percentage Interest: 100% March 18, 2027
----------------
Final Scheduled
Payment Date
ACCESS FINANCIAL RECEIVABLES CORP.
--------------------------------------------------------------------------------
Registered Owner
2
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING
REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS
REPRESENTED HEREBY.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT NATIONAL
MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
This Certificate is one of a Class of duly-authorized Certificates
designated as Access Financial Mortgage Loan Trust 1997-1, Mortgage Loan
Pass-Through Certificates, Class RL (the "Class RL Certificates"), and issued
under and subject to the terms, provisions and conditions of the Pooling and
Servicing Agreement, to which Pooling and Servicing Agreement the Owner of this
Certificate by virtue of acceptance hereof assents and by which such Owner is
bound. Issued under the Pooling and Servicing Agreement are Certificates
designated as Access Financial Mortgage Loan Trust 1997-1, Mortgage Loan
Pass-Through Certificates, Class A-1 Group I (the "Class A-1 Group I
Certificates"), Class A-2 Group I (the "Class A-2 Group I Certificates"), Class
A-3 Group I (the "Class A-3 Group I Certificates"), Class A-4 Group I (the
"Class A-4 Group I Certificates"), Class A-5 Group II (the "Class A-5 Group II
Certificates"), Class B (the "Class B Certificates"), Class B-S (the "Class B-S
Certificates"), and Class RL and Class RU (the "Residual Certificates"). The
Class A-1 Group I Certificates, the Class A-2 Group I Certificates, the Class
A-3 Group I Certificates, the Class A-4 Group I Certificates, the Class A-5
Group II Certificates (collectively, the "Class A Certificates"), the Class B
Certificates, the Class B-S Certificates and the Residual Certificates are
collectively referred to herein as the "Certificates."
Terms capitalized herein and not otherwise defined herein shall have the
respective meanings set forth in the Pooling and Servicing Agreement.
On the 18th day of each month, or, if such day is not a Business Day, then
the next succeeding Business Day (each such day being a "Payment Date"),
commencing March 18, 1997, to the Owners of the Class RL Certificates as of the
close of business on the first Business Day of the calendar month in which such
Payment Date occurs (the "Record Date"), the Trustee will distribute to each
Owner of the Class RL Certificates such Owner's Percentage Interest multiplied
by the amounts then available to be distributed to the Owners of the Class RL
Certificates. No significant distributions are anticipated to be made.
Upon receiving the final distribution hereon, the Owner hereof is required
to send this Certificate to the
3
Trustee. The Pooling and Servicing Agreement provides that, in any event, upon
the making of the final distribution due on this Certificate, this Certificate
shall be deemed cancelled for all purposes under the Pooling and Servicing
Agreement.
The Trustee is required to duly and punctually pay distributions with
respect to this Certificate in accordance with the terms hereof and the Pooling
and Servicing Agreement. Amounts properly withheld under the Code or applicable
state or local law by any Person from a distribution to any Owner shall be
considered as having been paid by the Trustee to such Owner for all purposes of
the Pooling and Servicing Agreement.
Access Financial Lending Corp., as Master Servicer, pursuant to the Pooling
and Servicing Agreement will service the Mortgage Loans. The Pooling and
Servicing Agreement permits the Master Servicer to enter into Sub-Servicing
Agreements with certain institutions eligible for appointment as Sub-Servicers
for the servicing and administration of the Mortgage Loans. No appointment of
any Sub-Servicer shall release the Master Servicer from any of its obligations
under the Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other obligation of, or an
interest in, nor are the underlying Mortgage Loans insured or guaranteed by,
Access Financial Lending Corp., The Chase Manhattan Bank, any Sub-Servicer, or
any of their respective subsidiaries and affiliates and are not insured or
guaranteed by the Federal Deposit Insurance Corporation, the Government National
Mortgage Association, or any other governmental agency.
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Owner of any Certificate shall have the right which is absolute
and unconditional to receive distributions to the extent provided in the Pooling
and Servicing Agreement with respect to such Certificate or to institute suit
for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the obligations created
thereby will terminate upon the earlier of (i) the payment to the Owners of all
Certificates of all amounts held by the Trustee and required to be paid to such
Owners pursuant to the Pooling and Servicing Agreement
4
upon the later to occur of (a) the final payment or other liquidation (or any
advance made with respect thereto) of the last Mortgage Loan in the Trust Estate
or (b) the disposition of all property acquired in respect of any Mortgage Loan
remaining in the Trust Estate or (ii) at any time when a Qualified Liquidation
of the Upper-Tier REMIC and the Lower- Tier REMIC is effected as described in
the Pooling and Servicing Agreement.
The Pooling and Servicing Agreement provides that the Seller may, at its
option, purchase from the Trust all (but not fewer than all) remaining Mortgage
Loans and other property then constituting the Trust Estate, and thereby effect
early retirement of the Certificates, on any Remittance Date when the aggregate
outstanding Principal Balance of the Mortgage Loans is ten percent or less of
the Original Pool Principal Balance. If the Seller declines to exercise such
option within ninety days following such date, the Trustee shall solicit bids
for the purchase of all Mortgage Loans remaining in the Trust. If satisfactory
bids are received as described in the Pooling and Servicing Agreement, the
Trustee shall effect early retirement of the Certificates. If satisfactory bids
are not received, the Trustee shall decline to sell the Mortgage Loans and shall
not be under any obligation to solicit any further bids or otherwise negotiate
any further sale of the Mortgage Loans. Such sale and consequent termination of
the Trust must constitute a "qualified liquidation" of each REMIC established by
the Trust under Section 860F of the Internal Revenue Code of 1986, as amended,
including, without limitation, the requirement that the qualified liquidation
takes place over a period not to exceed ninety days.
The Trustee shall give written notice of termination of the Pooling and
Servicing Agreement to each Owner in the manner set forth therein.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registrable in the Register upon surrender of this
Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in the form set forth in the Pooling and Servicing
Agreement duly executed by, the Owner hereof or his attorney duly authorized in
writing, and thereupon one or more new Certificates of like Class, tenor and a
like Percentage Interest will be issued to the designated transferee or
transferees.
The Trustee is required to furnish certain information on each Payment Date
to the Owner of this
5
Certificate, as more fully described in the Pooling and Servicing Agreement.
The Class RL Certificates are issuable only as registered Certificates. As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class RL Certificates are exchangeable for new
Class RL Certificates evidencing the same Percentage Interest as the Class RL
Certificates exchanged.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Trustee and any agent of the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither
the Trustee or any such agent shall be affected by notice to the contrary.
6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of the Trust.
THE CHASE MANHATTAN BANK, as
Trustee
By:___________________________
Title:_____________________
Trustee's Authentication
THE CHASE MANHATTAN BANK, as Trustee
By:__________________________
Title:_______________________
Dated: February 28, 1997
7
EXHIBIT C-2
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY BE MADE ONLY IN A TRANSACTION EXEMPT FROM
THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 5.8 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT NATIONAL
MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN THE ONLY "RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G and
860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING
COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
TRANSFER OF THIS CLASS RU CERTIFICATE IS RESTRICTED AS SET FORTH IN THE
POOLING AND SERVICING AGREEMENT. NO TRANSFER OF THIS CLASS RU CERTIFICATE MAY BE
MADE TO A "DISQUALIFIED ORGANIZATION" AS DEFINED IN SECTION 860E(e)(5) OF THE
CODE. SUCH TERM INCLUDES THE UNITED STATES, ANY STATE OR POLITICAL SUBDIVISION
THEREOF, ANY FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, ANY AGENCY OR
INSTRUMENTALITY OF ANY OF THE FOREGOING (OTHER THAN CERTAIN TAXABLE
INSTRUMENTALITIES), ANY COOPERATIVE ORGANIZATION FURNISHING ELECTRIC ENERGY OR
PROVIDING TELEPHONE SERVICE TO PERSONS IN RURAL AREAS, OR ANY ORGANIZATION
(OTHER THAN A FARMERS' COOPERATIVE) THAT IS EXEMPT FROM FEDERAL INCOME TAX
UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX ON UNRELATED BUSINESS INCOME. NO
TRANSFER OF THIS CLASS RU CERTIFICATE WILL BE REGISTERED BY THE TRUSTEE UNLESS
THE PROPOSED TRANSFEREE HAS DELIVERED AN AFFIDAVIT AFFIRMING, AMONG OTHER
THINGS, THAT THE PROPOSED TRANSFEREE IS NOT A DISQUALIFIED ORGANIZATION AND IS
NOT ACQUIRING THE CLASS RU CERTIFICATE FOR THE ACCOUNT OF A DISQUALIFIED
ORGANIZATION. A COPY OF THE FORM OF AFFIDAVIT REQUIRED OF EACH PROPOSED
TRANSFEREE IS ON FILE AND AVAILABLE FROM THE TRUSTEE.
A TRANSFER IN VIOLATION OF THE APPLICABLE RESTRICTIONS MAY GIVE RISE TO A
SUBSTANTIAL TAX UPON THE TRANSFEROR OR, IN CERTAIN CASES, UPON AN AGENT ACTING
FOR THE TRANSFEREE. A PASS-THRU ENTITY THAT HOLDS THIS CLASS RU CERTIFICATE AND
THAT HAS A DISQUALIFIED ORGANIZATION AS A RECORD OWNER IN ANY TAXABLE YEAR
GENERALLY WILL BE SUBJECT TO A TAX FOR EACH SUCH
YEAR EQUAL TO THE PRODUCT OF (A) THE AMOUNT OF EXCESS INCLUSIONS WITH RESPECT TO
THE PORTION OF THIS CERTIFICATE OWNED THROUGH SUCH PASS-THRU ENTITY BY SUCH
DISQUALIFIED ORGANIZATION, AND (B) THE HIGHEST MARGINAL FEDERAL TAX RATE ON
CORPORATIONS. FOR PURPOSES OF THE PRECEDING SENTENCE, THE TERM "PASS-THRU"
ENTITY INCLUDES REGULATED INVESTMENT COMPANIES, REAL ESTATE INVESTMENT TRUSTS,
COMMON TRUST FUNDS, PARTNERSHIPS, TRUSTS, ESTATES, COOPERATIVES TO WHICH PART I
OF SUBCHAPTER IT OF THE CODE APPLIES AND, EXCEPT AS PROVIDED IN REGULATIONS,
NOMINEES.
ACCESS FINANCIAL MORTGAGE LOAN TRUST 1997-1
MORTGAGE LOAN PASS-THROUGH CERTIFICATE
CLASS RU
Representing Certain Interests Relating to a Pool of
Mortgage Loans Formed by
ACCESS FINANCIAL LENDING CORP.
as Seller and Master Servicer
(This Certificate does not represent an interest in, or an obligation of,
nor are the underlying Mortgage Loans insured or guaranteed by Access Financial
Lending Corp., The Chase Manhattan Bank, any Sub-Servicer or any of their
respective subsidiaries and affiliates. This Certificate represents a fractional
residual ownership interest in the Upper-Tier REMIC described in the Pooling and
Servicing Agreement.)
No: RU-1 Date: February 28, 1997
Percentage Interest: 100% March 18, 2027
---------------
Final Scheduled
Payment Date
ACCESS FINANCIAL RECEIVABLES CORP.
--------------------------------------------------------------------------------
Registered Owner
2
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND, NOTWITHSTANDING
REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS
REPRESENTED HEREBY.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT NATIONAL
MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
This Certificate is one of a Class of duly-authorized Certificates
designated as Access Financial Mortgage Loan Trust 1997-1, Mortgage Loan
Pass-Through Certificates, Class RU (the "Class RU Certificates"), and issued
under and subject to the terms, provisions and conditions of the Pooling and
Servicing Agreement, to which Pooling and Servicing Agreement the Owner of this
Certificate by virtue of acceptance hereof assents and by which such Owner is
bound. Issued under the Pooling and Servicing Agreement are Certificates
designated as Access Financial Mortgage Loan Trust 1997-1, Mortgage Loan
Pass-Through Certificates, Class A-1 Group I (the "Class A-1 Group I
Certificates"), Class A-2 Group I (the "Class A-2 Group I Certificates"), Class
A-3 Group I (the "Class A-3 Group I Certificates"), Class A-4 Group I (the
"Class A-4 Group I Certificates"), Class A-5 Group II (the "Class A-5 Group II
Certificates"), Class B (the "Class B Certificates"), Class B-S (the "Class B-S
Certificates"), and Class RL and Class RU (the "Residual Certificates"). The
Class A-1 Group I Certificates, the Class A-2 Group I Certificates, the Class
A-3 Group I Certificates, the Class A-4 Group I Certificates, the Class A-5
Group II Certificates (collectively, the "Class A Certificates"), the Class B
Certificates, the Class B-S Certificates and the Residual Certificates are
collectively referred to herein as the "Certificates."
Terms capitalized herein and not otherwise defined herein shall have the
respective meanings set forth in the Pooling and Servicing Agreement.
On the 18th day of each month, or, if such day is not a Business Day, then
the next succeeding Business Day (each such day being a "Payment Date"),
commencing March 18, 1997, to the Owners of the Class RU Certificates as of the
close of business on the first Business Day of the calendar month immediately
preceding the calendar month in which such Payment Date occurs (the "Record
Date"), the Trustee will distribute to each Owner of the Class RU Certificates
such Owner's Percentage Interest multiplied by the amounts then available to be
distributed to the Owners of the Class RU Certificates. No significant
distributions are anticipated to be made.
3
Upon receiving the final distribution hereon, the Owner hereof is required
to send this Certificate to the Trustee. The Pooling and Servicing Agreement
provides that, in any event, upon the making of the final distribution due on
this Certificate, this Certificate shall be deemed cancelled for all purposes
under the Pooling and Servicing Agreement.
The Trustee is required to duly and punctually pay distributions with
respect to this Certificate in accordance with the terms hereof and the Pooling
and Servicing Agreement. Amounts properly withheld under the Code or applicable
state or local law by any Person from a distribution to any Owner shall be
considered as having been paid by the Trustee to such Owner for all purposes of
the Pooling and Servicing Agreement.
Access Financial Lending Corp., as Master Servicer, pursuant to the Pooling
and Servicing Agreement will service the Mortgage Loans. The Pooling and
Servicing Agreement permits the Master Servicer to enter into Sub-Servicing
Agreements with certain institutions eligible for appointment as Sub-Servicers
for the servicing and administration of the Mortgage Loans. No appointment of
any Sub-Servicer shall release the Master Servicer from any of its obligations
under the Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other obligation of, or an
interest in, nor are the underlying Mortgage Loans insured or guaranteed by,
Access Financial Lending Corp., The Chase Manhattan Bank, any Sub-Servicer, or
any of their respective subsidiaries and affiliates and are not insured or
guaranteed by the Federal Deposit Insurance Corporation, the Government National
Mortgage Association, or any other governmental agency.
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Owner of any Certificate shall have the right which is absolute
and unconditional to receive distributions to the extent provided in the Pooling
and Servicing Agreement with respect to such Certificate or to institute suit
for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the obligations created
thereby will terminate upon the earlier of (i) the payment to the Owners of all
Certificates
4
of all amounts held by the Trustee and required to be paid to such Owners
pursuant to the Pooling and Servicing Agreement upon the later to occur of (a)
the final payment or other liquidation (or any advance made with respect
thereto) of the last Mortgage Loan in the Trust Estate or (b) the disposition of
all property acquired in respect of any Mortgage Loan remaining in the Trust
Estate or (ii) at any time when a Qualified Liquidation of the Upper-Tier REMIC
and the Lower- Tier REMIC is effected as described in the Pooling and Servicing
Agreement.
The Pooling and Servicing Agreement provides that the Seller may, at its
option, purchase from the Trust all (but not fewer than all) remaining Mortgage
Loans and other property then constituting the Trust Estate, and thereby effect
early retirement of the Certificates, on any Remittance Date when the aggregate
outstanding Principal Balance of the Mortgage Loans is ten percent or less of
the Original Pool Principal Balance. If the Seller declines to exercise such
option within ninety days following such date, the Trustee shall solicit bids
for the purchase of all Mortgage Loans remaining in the Trust. If satisfactory
bids are received as described in the Pooling and Servicing Agreement, the
Trustee shall effect early retirement of the Certificates. If satisfactory bids
are not received, the Trustee shall decline to sell the Mortgage Loans and shall
not be under any obligation to solicit any further bids or otherwise negotiate
any further sale of the Mortgage Loans. Such sale and consequent termination of
the Trust must constitute a "qualified liquidation" of each REMIC established by
the Trust under Section 860F of the Internal Revenue Code of 1986, as amended,
including, without limitation, the requirement that the qualified liquidation
takes place over a period not to exceed ninety days.
The Trustee shall give written notice of termination of the Pooling and
Servicing Agreement to each Owner in the manner set forth therein.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registrable in the Register upon surrender of this
Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in the form set forth in the Pooling and Servicing
Agreement duly executed by, the Owner hereof or his attorney duly authorized in
writing, and thereupon one or more new Certificates of like Class, tenor and a
like Percentage Interest will be issued to the designated transferee or
transferees.
5
The Trustee is required to furnish certain information on each Payment Date
to the Owner of this Certificate, as more fully described in the Pooling and
Servicing Agreement.
The Class RU Certificates are issuable only as registered Certificates. As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class RU Certificates are exchangeable for new
Class RU Certificates evidencing the same Percentage Interest as the Class RU
Certificates exchanged.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Trustee and any agent of the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither
the Trustee or any such agent shall be affected by notice to the contrary.
6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of the Trust.
THE CHASE MANHATTAN BANK, as
Trustee
By:___________________________
Title:_____________________
Trustee's Authentication
THE CHASE MANHATTAN BANK, as Trustee
By:__________________________
Title:_______________________
Dated: February 28, 1997
7
EXHIBIT D
FORM OF TRANSFER CERTIFICATE
The Chase Manhattan Bank
Global Trust Services
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Access Financial Lending Corp.
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Attention: Operations
Ladies and Gentlemen:
The undersigned (the "Transferee") has agreed to purchase
from__________________________________ (the "Transferor") the following:
Class Number
------- --------
_______ ________
_______ ________
_______ ________
_______ ________
_______ ________
A. Rule 144A "Qualified Institutional Buyers" should complete this section
I. The Transferee is (check one):
________ (i) An insurance company, as defined in
Section 2(13) of the Securities Act of 1933,
as amended (the "Securities Act"), (ii) an
investment company registered under the
Investment Company Act of 1940, as amended
(the "Investment Company Act"), (iii) a
business development company as defined in
Section 2(a)(48) of the Securities Act, (iv)
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,
(v) a plan established and maintained by a
state, its political
subdivisions, or any agency or
instrumentality of a state or its political
subdivisions, for the benefit of its
employees, (vi) an employee benefit plan
within the meaning of Title I of the Employee
Retirement Income Security Act of 1974, as
amended ("ERISA"), (vii) a business
development company as defined in Section
202(a)(22) of the Investment Advisors Act of
1940, as amended, (viii) an organization
described in Section 501(c)(3) of the
Internal Revenue Code, corporation (other
than a bank as defined in Section 3(a)(2) of
the Securities Act or a savings and loan
association or other institution referenced
in Section 3(a)(2) of the Securities Act or a
foreign bank or savings and loan association
or equivalent institution), partnership, or
Massachusetts or similar business trust; or
(ix) an investment advisor registered under
the Investment Advisors Act of 1940, as
amended, which, for each of (i) through (ix),
owns and invests on a discretionary basis at
least $100 million in securities other than
securities of issuers affiliated with the
Transferee, securities issued or guaranteed
by the United States or a person controlled
or supervised by and acting as an
instrumentality of the government of the
United States pursuant to authority granted
by the Congress of the United States, bank
deposit notes and certificates of deposit,
loan participations, repurchase agreements,
securities owned but subject to a repurchase
agreement, and currency, interest rate and
commodity swaps (collectively, "Excluded
Securities");
________ a dealer registered pursuant to Section 15 of
the Securities Exchange Act of 1934, as
amended (the "Exchange Act") that in the
aggregate owns and invests on a discretionary
basis at least $10 million of securities
other than Excluded Securities and securities
constituting the whole or part of an unsold
allotment to, or subscription by, Transferee
as a participant in a public offering;
2
________ an investment company registered under the
Investment Company Act that is part of a
family of investment companies (as defined in
Rule 144A of the Securities and Exchange
Commission) which own in the aggregate at
least $100 million in securities other than
Excluded Securities and securities of issuers
that are part of such family of investment
companies;
________ an entity, all of the equity owners of which
are entities described in this Paragraph
A(I);
________ a bank as defined in Section 3(a)(2) of the
Securities Act, any savings and loan
association or other institution as
referenced in Section 3(a)(5)(A) of the
Securities Act, or any foreign bank or
savings and loan association or equivalent
institution that in the aggregate owns and
invests on a discretionary basis at least
$100 million in securities other than
Excluded Securities and has an audited net
worth of at least $25 million as demonstrated
in its latest annual financial statements, as
of a date not more than 16 months preceding
the date of transfer of the Certificates to
the Transferee in the case of a U.S. Bank or
savings and loan association, and not more
than 18 months preceding such date in the
case of a foreign bank or savings association
or equivalent institution.
II. The Transferee is acquiring such Certificates solely for its own
account, for the account of one or more others, all of which are "Qualified
Institutional Buyers" within the meaning of Rule 144A, or in its capacity as a
dealer registered pursuant to Section 15 of the Exchange Act acting in a
riskless principal transaction on behalf of a "Qualified Institutional Buyer".
The Transferee is not acquiring such Certificates with a view to or for the
resale, distribution, subdivision or fractionalization thereof which would
require registration of the Certificates under the Securities Act.
B. "Accredited Investors" should complete this Section
I. The Transferee is (check one):
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________ a bank within the meaning of Section 3(a)(2)
of the Securities Act;
________ a savings and loan association or other
institution defined in Section 3(a)(5) of the
Securities Act;
________ a broker or dealer registered pursuant to the
Exchange Act;
________ an insurance company within the meaning of
Section 2(13) of the Securities Act;
________ an investment company registered under the
Investment Company Act;
________ an employee benefit plan within the meaning
of Title I of ERISA, which has total assets
in excess of $5,000,000;
________ another entity which is an "accredited
investor" within the meaning of paragraph
(fill in) of subsection (a) of Rule 501 of
the Securities and Exchange Commission.
II. The Transferee is acquiring such Certificates solely for its own
account, for investment, and not with a view to or for the resale, distribution,
subdivision or fractionalization thereof which would require registration of the
Certificates under the Securities Act.
C. If the Transferee is unable to complete one of paragraph A(I) or
paragraph B(I) above and is not a designated PORTAL depository organization, the
Transferee must furnish an opinion in form and substance satisfactory to the
Trustee of counsel satisfactory to the Trustee to the effect that such purchase
will not violate any applicable federal or state securities laws.
D. The Transferee represents that either (a) it is not (i) an employee
benefit plan (as defined in section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")) subject to the provisions of Title I
of ERISA, (ii) a plan described in section 4975(e)(l) of the Internal Revenue
Code of 1986, or (iii) an entity whose underlying assets are deemed to be assets
of a plan described in (i) or (ii) above by reason so such plan's investment in
the entity (any such entity described in clauses (i) through
4
(iii), a "Benefit Plan Entity")* or (b) it is an insurance company general
account and, pursuant to Section I of Prohibited Transaction Class Exemption
95-60 ("PTCE 95-60"), the acquisition and holding of the Class A Certificates
and, pursuant to Section III of PTCE 95-60, the servicing, management and
operation of the Trust are with respect to such Purchaser exempt form the
"prohibited transaction" provisions of ERISA and the Code or (c) if the
Purchaser is a Benefit Plan Entity, the following:
(i) the Purchaser is not a Benefit Plan Entity with respect to an employee
benefit plan sponsored by any member of the Restricted Group (as defined in the
Private Placement Memorandum);
(ii) either (A) the person who has discretionary authority or renders
investment advice to the Purchaser with respect to the investment of plan assets
in the Class A Certificates is not an Obligor (or an affiliate) with respect to
the Mortgage Loans (as defined in the Prospectus), or (B) the person who has
such discretionary authority or renders such investment advice is an Obligor (or
an affiliate) with respect to less than 5 percent of the Receivables; and,
immediately after the acquisition of the Class A Certificates, no more than 25
percent of the assets of the Purchaser are invested in certificates representing
an interest in a trust containing assets sold or serviced by the same entity;
and
(iii) the purchaser is an "accredited investor" as defined in Rule 501(a)
of Regulation D pursuant to the 1933 Act.
Very truly yours,
--------
* Do not include option (b) or (c) for acquisitions or transfers of a class of
Certificates which has not been placed or underwritten by an entity which has an
Underwriter Exemption (as described in Prohibited Transaction Class Exception
95-60) and do not include option (c) for acquisitions or transfers of
Certificates that (i) evidence rights and interests that are subordinated to the
rights and interests evidenced by other Certificates of the Trust, or (ii) occur
at any time during which the Certificates being acquired or transferred are not
rated in one of the top three rating categories of any rating agency that
satisfies the requirements of Prohibited Transaction Exemption 89-90 and that
(a) is rating the Certificates as of the date hereof and (b) has been requested
by the issuer of the Certificates to rate the Certificates.
5
By:_______________________
Title:____________________
Dated:__________________________________
6
EXHIBIT E
FORM OF RESIDUAL CERTIFICATE
TAX MATTERS TRANSFER CERTIFICATE
AFFIDAVIT PURSUANT TO SECTION
860(e) OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED
STATE OF )
) ss:
COUNTY OF )
[NAME OF OFFICER], being first duly sworn, deposes and says:
1. That he is [Title of Officer] of [Name of Investor] (the "Investor"), a
[savings institution] [corporation] duly organized and existing under the laws
of [the State of __________] [the United States], on behalf of which he makes
this affidavit.
2. That (i) the Investor is not a "disqualified organization" and will not
be a "disqualified organization" as of [date of transfer] (For this purpose, a
"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 (other than certain taxable
instrumentalities), any cooperative organization furnishing electric energy or
providing telephone service to persons in rural areas, or any organization
(other than a farmers' cooperative) that is exempt from federal income tax
unless such organization is subject to the tax on unrelated business income);
(ii) it is not acquiring the Class RU [RL] Certificate for the account of a
disqualified organization; (iii) it consents to any amendment of the Pooling and
Servicing Agreement dated as of February 1, 1997 among Access Financial Lending
Corp., as Seller and Master Servicer, Access Financial Receivables Corp., as the
Transferor and The Chase Manhattan Bank, as Trustee that shall be deemed
necessary by the Trustee (upon advice of counsel) to constitute a reasonable
arrangement to ensure that the Class RU [RL] Certificates will not be owned
directly or indirectly by a disqualified organization; and (iv) it will not
transfer such Class RU [RL] Certificate unless (a) it has received from the
transferee an affidavit in substantially the same form as this affidavit
containing these same four representations and (b) as of the time of the
transfer, it does not have actual knowledge that such affidavit is false.
IN WITNESS WHEREOF, the Investor has caused this instrument to be executed
on its behalf, pursuant to authority of its Board of Directors, by its [Title of
Officer] and its corporate seal to be hereunto attached, attested by its
[Assistant] Secretary, this ____ day of __________, ____.
[NAME OF INVESTOR]
By:
[Name of Officer]
[Title of Officer]
[Corporate Seal]
Attest:
-------------------------
[Assistant] Secretary
Personally appeared before me the above-named [Name of Officer], known or
proved to be the same person who executed the foregoing instrument and to be the
[Title of Officer] 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
----------, ----.
-------------------------
NOTARY PUBLIC
COUNTY OF _______________
STATE OF ________________
My commission expires the ____ day of ____________,
----.
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EXHIBIT F
FORM OF MASTER SERVICER'S TRUST RECEIPT
To: The Chase Manhattan Bank
Global Trust Services
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Date:
In connection with the administration of the mortgage loans serviced by
Access Financial Lending Corp. (the "Master Servicer") pursuant to a Pooling and
Servicing Agreement dated as of February 1, 1997 (the " Pooling and Servicing
Agreement") among the Master Servicer, you, as Trustee, Access Financial
Receivables Corp., as the Transferor, and Access Financial Lending Corp., in its
capacity as Seller, the Master Servicer hereby requests a release of the File
held by you as Trustee with respect to the following described Mortgage Loan for
the reason indicated below.
Mortgagor's Name:
Loan No.:
Reason for requesting file:
_____ 1. Mortgage Loan paid in full.
(The Master Servicer hereby certifies that all amounts received
in connection with the loan and required to be remitted to the
Trustee have been or will be remitted to the Trustee pursuant to
the Pooling and Servicing Agreement.)
_____ 2. Mortgage Loan repurchased pursuant to Section 3.2,
3.3 or 3.4(b) of the Pooling and Servicing
Agreement.
_____ 3. Mortgage Loan substituted.
(The Master Servicer hereby certifies that a Qualified
Replacement Mortgage has been or will be assigned and delivered
to you along with the related File pursuant to the Pooling and
Servicing Agreement.)
_____ 4. The Mortgage Loan is being foreclosed.
_____ 5. Other. (Describe)
The undersigned acknowledges that the above File will be held by the
undersigned in accordance with the provisions of the Pooling and Servicing
Agreement and will be returned to you, except (i) if the Mortgage Loan has been
paid in full, or repurchased or substituted by a Qualified Replacement Mortgage
(in which case the File will be retained by us permanently) or (ii) except if
the Mortgage Loan is being foreclosed (in which case the File will be returned
when no longer required by us for such purpose).
Capitalized terms used herein shall have the meanings ascribed to them in
the Pooling and Servicing Agreement.
ACCESS FINANCIAL LENDING CORP.
By______________________________
Name:_________________________
Title:________________________
The Trustee hereby acknowledges the above request.
The Chase Manhattan Bank
By:_________________________________________
Name:
Title:
2
EXHIBIT G
[RESERVED]
1
EXHIBIT H
FORM OF DELIVERY ORDER
February 28, 1997
The Chase Manhattan Bank, as Trustee
Global Trust Services
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Attention: ______________
Dear Sirs:
Pursuant to Article IV of the Pooling and Servicing Agreement, dated as of
February 1, 1997 (the "Pooling and Servicing Agreement"), among Access Financial
Receivables Corp., as transferor (the "Transferor"), Access Financial Lending
Corp., as seller (the "Seller") and master servicer, and The Chase Manhattan
Bank, as trustee (the "Trustee"), the Seller HEREBY CERTIFIES that all
conditions precedent to the issuance of Access Financial Mortgage Loan Trust
1997-1 Mortgage Loan Pass-Through Certificates, Series 1997-1, Class A-1 Group
I, Class A-2 Group I, Class A-3 Group I, Class A-4 Group I, Class A-5 Group II,
Class B, Class B-S, Class RL and Class RU (the "Certificates"), HAVE BEEN
SATISFIED and HEREBY REQUESTS YOU TO AUTHENTICATE AND DELIVER said Certificates,
and to RELEASE said Certificates to the Seller thereof, or otherwise upon their
order.
Very truly yours,
ACCESS FINANCIAL LENDING
CORP.
By:________________________
Name:
Title:
EXHIBIT I
[RESERVED]
EXHIBIT J
FORM OF CERTIFICATE REGARDING PREPAID LOANS
I, _________________, _____________ of Access Financial Lending Corp., a
Delaware corporation, (the "Seller"), hereby certify that between the "Cut-Off
Date" (as defined in the Pooling and Servicing Agreement, dated as of February
1, 1997, among Access Financial Lending Corp., as seller (the "Seller") and
master servicer, Access Financial Receivables Corp., as transferor (the
"Transferor"), and The Chase Manhattan Bank, as trustee (the "Trustee") and the
"Startup Day" the attached schedule of "Mortgage Loans" (each as defined in the
Pooling and Servicing Agreement) has been prepaid in full.
Dated: February 28, 1997
By:___________________________
Name:
Title:
EXHIBIT K
TRUSTEE'S ACKNOWLEDGEMENT OF RECEIPT
The Chase Manhattan Bank, a New York banking corporation, in its capacity
as trustee (the "Trustee") under that certain Pooling and Servicing Agreement,
dated as of February 1, 1997 (the "Pooling and Servicing Agreement"), among
Access Financial Receivables Corp., as transferor (the "Transferor"), Access
Financial Lending Corp., as seller (the "Seller") and master servicer, and the
Trustee, hereby acknowledges receipt of the items delivered to it by the Seller
with respect to the Mortgage Loans relating to Access Financial Mortgage Loan
Trust 1997-1 of the Pooling and Servicing Agreement.
The Mortgage Loan Schedule relating to Access Financial Mortgage Loan Trust
1997-1 is attached to this Receipt.
The Trustee hereby additionally acknowledges that it shall review such
items as required by Section 3.4 of the Pooling and Servicing Agreement and
shall otherwise comply with Section 3.4 of the Pooling and Servicing Agreement
as required thereby.
THE CHASE MANHATTAN BANK, as
Trustee
By:________________________
Name:
Title:
Dated: February 28, 1997
EXHIBIT L
FORM OF INTERIM TRUSTEE CERTIFICATION
[DATE]
Access Financial Lending Corp.
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Attention: Operations
Prudential Securities Incorporated
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Attention: Asset-Backed Finance Group
▇.▇. ▇▇▇▇▇▇ Securities Inc.
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Financial Security Assurance, Inc.
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Re: Pooling and Servicing Agreement, dated as of
February 1, 1997, among Access Financial
Receivables Corp., as transferor, Access
Financial Lending Corp., as seller and master
servicer, and The Chase Manhattan Bank, as
trustee
Ladies and Gentlemen:
In accordance with Section 3.4 of the above-captioned Pooling and Servicing
Agreement (the "Pooling and Servicing Agreement"), the undersigned, as trustee
(the "Trustee"), hereby certifies that, as to each Mortgage Loan listed in the
Mortgage Loan Schedule relating to Access Financial Mortgage Loan Trust 1997-1
(except with respect to the Mortgage Loans, if any, listed in the attached
schedule), that:
(i) all documents required to be delivered to it are in the Trustee's
possession;
(ii) the Mortgage Note bears an original of an endorsement to the
Trustee purportedly from the original payee (or a set of original
endorsements evidencing a complete chain of title from the
original payee to the Trustee)
or if any original Note has been lost or destroyed, certified
copies thereof (together with a lost note affidavit) signed by
the originator;
(iii)such documents have been reviewed by it and relate to such
Mortgage Loan; and
(iv) based upon such review, the information set forth in items
(i)-(vi) of Section 3.4(a) of the Pooling and Servicing Agreement
as they relate to the Mortgage Loan Schedule accurately reflects
the information in the Mortgage Files.
The Trustee, based on its examination of the Mortgage Loan Files, also
hereby confirms that, as to each Mortgage Loan listed in the Mortgage Loan
Schedule (except as listed in the attached schedule), that:
(i) each Mortgage Note and Mortgage bears an original signature or
signatures purporting to be that of the person named as the maker
and mortgagor/trustor or if any original Note has been lost or
destroyed, certified copies thereof (together with a lost note
affidavit) signed by the originator;
(ii) the principal amount of the indebtedness secured by the Mortgage
is identical to the original principal amount of the Mortgage
Note;
(iii)the assignment of Mortgage to the Trustee is in the form
required by this Agreement and bears a signature that purports to
be the signature of an authorized officer of the Servicer;
(iv) if intervening assignments are included in the Mortgage Loan
File, each such intervening assignment bears a signature that
purports to be the signature of the mortgagee/beneficiary and/or
the assignee;
(v) if either a title insurance policy or a preliminary title report
or a commitment to issue a title policy is delivered, the address
of the real property set forth in such policy, report or
commitment is identical the real property address contained in
the Mortgage;
2
(vi) if either a title insurance policy or a preliminary title report
or a commitment to issue a title policy is delivered, such policy
or written commitment is for an amount equal to the original
principal amount of the Note; and
(vii)it has received an original recorded Mortgage and assignment, in
each case, with evidence of recordation thereon or a copy thereof
certified to be true and correct by the public recording office
in possession of such Mortgage and assignment.
The Trustee has made no independent examination of any documents contained
in each Mortgage File beyond the review specifically required in the Pooling and
Servicing Agreement. The Trustee makes no representation as to: (i) the
validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in each such Mortgage File or any of the Mortgage Loans
identified on said Mortgage Loan Schedule, or (ii) the collectibility,
insurability, effectiveness or suitability of any such Mortgage Loan.
Capitalized words and phrases used but not defined herein shall have the
respective meanings ascribed to them in the Pooling and Servicing Agreement.
The Chase Manhattan Bank
By:
Name:
Title:
3
EXHIBIT M
FORM OF FINAL TRUSTEE CERTIFICATION
[DATE]
Access Financial Lending Corp.
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Attention: Operations
Prudential Securities Incorporated
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Attention: Asset-Backed Finance Group
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Financial Security Assurance, Inc.
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Re: Pooling and Servicing Agreement, dated as of
February 1, 1997, among Access Financial
Receivables Corp., as transferor, Access
Financial Lending Corp., as seller and master
servicer, and The Chase Manhattan Bank, as
trustee
Ladies and Gentlemen:
In accordance with Section 3.4 of the above-captioned Pooling and Servicing
Agreement (the "Pooling and Servicing Agreement"), the undersigned, as trustee
(the "Trustee"), hereby certifies that, as to each Mortgage Loan listed in the
Mortgage Loan Schedule relating to Access Financial Mortgage Loan Trust 1997-1
(except with respect to the Mortgage Loans, if any, listed in the attached
schedule), that:
(i) all documents required to be delivered to it are in the Trustee's
possession;
(ii) the Mortgage Note bears an original of an endorsement to the
Trustee purportedly from the original payee (or a set of original
endorsements evidencing a complete chain of title from the
original payee to the Trustee) or if any original Note has been
lost or
destroyed, certified copies thereof (together with a lost note
affidavit) signed by the originator;
(iii)such documents have been reviewed by it and relate to such
Mortgage Loan; and
(iv) based upon such review, the information set forth in items
(i)-(vi) of Section 3.4(a) of the Pooling and Servicing Agreement
as they relate to the Mortgage Loan Schedule accurately reflects
the information in the Mortgage Files.
The Trustee, based on its examination of the Mortgage Loan Files, also
hereby confirms that, as to each Mortgage Loan listed in the Mortgage Loan
Schedule (except as listed in the attached schedule), that:
(i) each Mortgage Note and Mortgage bears an original signature or
signatures purporting to be that of the person named as the maker
and mortgagor/trustor or if any original Note has been lost or
destroyed, certified copies thereof (together with a lost note
affidavit) signed by the originator;
(ii) the principal amount of the indebtedness secured by the Mortgage
is identical to the original principal amount of the Mortgage
Note;
(iii)the assignment of Mortgage to the Trustee is in the form
required by this Agreement and bears a signature that purports to
be the signature of an authorized officer of the Servicer;
(iv) if intervening assignments are included in the Mortgage Loan
File, each such intervening assignment bears a signature that
purports to be the signature of the mortgagee/beneficiary and/or
the assignee;
(v) if either a title insurance policy or a preliminary title report
or a commitment to issue a title policy is delivered, the address
of the real property set forth in such policy, report or
commitment is identical the real property address contained in
the Mortgage;
(vi) if either a title insurance policy or a preliminary title report
or a commitment to
2
issue a title policy is delivered, such policy or written
commitment is for an amount equal to the original principal
amount of the Note; and
(vii)it has received an original recorded Mortgage and assignment, in
each case, with evidence of recordation thereon or a copy thereof
certified to be true and correct by the public recording office
in possession of such Mortgage and assignment.
The Trustee has made no independent examination of any documents contained
in each Mortgage File beyond the review specifically required in the Pooling and
Servicing Agreement. The Trustee makes no representation as to: (i) the
validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in each such Mortgage File or any of the Mortgage Loans
identified on said Mortgage Loan Schedule, or (ii) the collectibility,
insurability, effectiveness or suitability of any such Mortgage Loan.
Capitalized words and phrases used but not defined herein shall have the
respective meanings ascribed to them in the Pooling and Servicing Agreement.
The Chase Manhattan Bank
By:
Name:
Title:
3
EXHIBIT N
AUCTION PROCEDURES
I. Pre-Auction Process
a. If by the ninetieth day following the Seller's optional termination
date pursuant to Section 9.02 of the Pooling and Servicing Agreement,
the Seller has not exercised such option, then a plan of complete
liquidation with respect to the Mortgage Loans will be adopted by the
Trustee in order to satisfy REMIC requirements, and the Trustee will
notify Prudential Securities Incorporated (or, if Prudential
Securities Incorporated is unable or unwilling to so act, another
investment banking or whole-loan trading firm selected by the Seller
(Prudential Securities Incorporated or such other investment bank or
trading firm, the "Advisor")), as Advisor of the assets of the
proposed auction.
b. Upon receiving notice of the proposed auction, the Advisor will
initiate its general auction procedures consisting of the following:
(i) with the assistance of the Seller, prepare a general solicitation
package along with a confidentiality agreement; (ii) prepare a list of
qualified bidders, in a commercially reasonable manner; (iii) initiate
contact with all qualified bidders; (iv) send a confidentiality
agreement to all qualified bidders; (v) upon receipt of a signed
confidentiality agreement, send solicitation packages to all
interested bidders on behalf of the Trustee; and (vi) notify the
Seller of all potential bidders and anticipated timetable.
c. The general solicitation package will include: (i) the prospectus from
the public offering of the Class A Certificates ("Prospectus"); (ii) a
copy of all monthly servicing reports or a copy of all annual
servicing reports and, upon a written request, the prior years'
monthly servicing reports; (iii) a form of a purchase and sale
agreement and servicing agreement for such sale; (iv) a description of
the minimum purchase price required to cause the Trustee to sell the
Mortgage Loans as set forth in
Section 8.3 of the Pooling and Servicing Agreement; (v) a formal
bidsheet; (vi) a detailed timetable; and (vii) a preliminary data tape
of the Mortgage Loans as of the most recent Payment Date reflecting
the same data attributes used to create the original Cut-Off Date
tables for the Prospectus.
d. The Advisor will send solicitation packages to all bidders no later
than the Payment Date preceding the date of the auction, which date
shall be fifteen (15) Business Days before a Payment Date (the
"Auction Date"). Bidders will be required to submit any due diligence
questions in writing to the Advisor, for determination of their
relevancy, no later than ten (10) Business Days before the Auction
Date. The Seller and the Advisor will be required to satisfy all
relevant questions at least five (5) Business Days prior to the
Auction Date and distribute the questions and answers to all bidders.
II. Auction Process
a. The Advisor will be allowed to bid in the auction, but will not be
required to do so.
b. The Seller will also be allowed to bid in the auction if it deems
appropriate, but will not be required to do so.
c. On the Auction Date, all bids will be due by facsimile to such office
as shall be designated by the Trustee by 1:00 p.m. EST; with the
winning bidder to be notified by 2:00 p.m. EST. All acceptable bids
(as described in Section 8.3 of the Pooling and Servicing Agreement)
will be due on a conforming basis on the bid sheet contained in the
solicitation package.
d. If the Trustee receives fewer than two market value bids from
competitive participants in the home equity loan market, the Trustee
may, following consultation with the Advisor and the Seller, decline
to consummate the sale.
e. Upon notification to the winning bidder, a one percent (1%) good faith
deposit of the aggregate balance of the unpaid principal balances of
the Mortgage Loans as of the last
2
day of the preceding Remittance Period will be required to be wired to
the Trustee upon acceptance of the bid. This deposit, along with any
interest income attributable to it, will be credited to the purchase
price, but will not be refundable. The Trustee will establish a
separate account for the acceptance of the good faith deposit, until
such time as the account is fully funded and all monies are
transferred into the Certificate Account, such time not to exceed one
(1) Business Day before the final Payment Date.
f. The winning bidder will receive on the Auction Date a copy of the
draft purchase and sale agreement and servicing agreement.
g. The Advisor will provide to the Trustee a letter concluding whether or
not the winning bid is a fair market value bid. The Advisor will also
provide this letter if it is the winning bidder. In the case where the
Advisor (or the Seller) is the winning bidder, it will provide in its
letter for market comparables and valuations.
h. The auction will stipulate that the Master Servicer or a successor
Master Servicer be retained to service the Mortgage Loans sold
pursuant to the terms of the purchase and sale agreement and the
servicing agreement.
3
EXHIBIT O
FORM OF TRUSTEE REQUEST
FOR INTEREST ADVANCES
Access Financial Receivables Corp.
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▇▇. ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Re: Pooling and Servicing Agreement, dated as of
February 1, 1997, among Access Financial
Receivables Corp., as transferor, Access
Financial Lending Corp., as seller and master
servicer, and The Chase Manhattan Bank, as
trustee
Ladies and Gentlemen:
In accordance with Section 7.9 of the above-captioned Pooling and Servicing
Agreement (the "Pooling and Servicing Agreement"), the undersigned, as trustee
(the "Trustee"), hereby requests payment of the following amount representing
the Class A-5 Formula Interest Shortfall:
$___________________
Capitalized words and phrases used but not defined herein shall have the
respective meanings ascribed to them in the Pooling and Servicing Agreement.
THE CHASE MANHATTAN BANK, as
Trustee
By:_______________________
Name:
Title:
Dated: