Exhibit 4.3
GRANTOR TRUST AGREEMENT
Dated as of December 1, 1997
among
CONTISECURITIES ASSET FUNDING CORP.,
as Depositor,
CONTIMORTGAGE CORPORATION,
as Servicer,
and
MANUFACTURERS AND TRADERS TRUST COMPANY,
as Grantor Trustee
Pass-Through Certificates
Series 1997-A
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS; RULES OF CONSTRUCTION.................................3
Section 1.01 Definitions.....................................................3
Section 1.02 Use of Words and Phrases.......................................10
Section 1.03 Captions; Table of Contents....................................10
Section 1.04 Opinions.......................................................10
ARTICLE II ESTABLISHMENT AND ORGANIZATION OF THE TRUST......................11
Section 2.01 Establishment of the Trust.....................................11
Section 2.02 Office.........................................................11
Section 2.03 Purposes and Powers............................................11
Section 2.04 Appointment of the Grantor Trustee; Declaration of Trust.......11
Section 2.05 Expenses of the Trust..........................................11
Section 2.06 Ownership of the Trust.........................................12
Section 2.07 Situs of the Trust.............................................12
Section 2.08 [RESERVED].....................................................12
ARTICLE III REPRESENTATIONS, WARRANTIES AND COVENANTS OF
THE DEPOSITOR..........................................13
Section 3.01 Representations and Warranties of the Depositor................13
Section 3.02 Representations and Warranties of the Servicer.................15
Section 3.03 [RESERVED].....................................................16
Section 3.04 [RESERVED].....................................................16
Section 3.05 Conveyance of the Class A-2 Fixed Certificates.................16
Section 3.06 Acceptance by Trustee..........................................17
ARTICLE IV ISSUANCE AND SALE OF CERTIFICATES................................18
Section 4.01 Issuance of Certificates.......................................18
Section 4.02 Sale of Certificates...........................................18
ARTICLE V CERTIFICATES AND TRANSFER OF INTERESTS............................19
Section 5.01 Terms..........................................................19
Section 5.02 Forms..........................................................19
Section 5.03 Execution, Authentication and Delivery.........................19
Section 5.04 Registration and Transfer of Certificates......................20
Section 5.05 Mutilated, Destroyed, Lost or Stolen Certificates..............22
Section 5.06 Persons Deemed Owners..........................................22
Section 5.07 Cancellation...................................................22
Section 5.08 Limitation on Transfer of Ownership Rights.....................22
Section 5.09 Assignment of Rights...........................................23
ARTICLE VI COVENANTS........................................................24
Section 6.01 Distributions..................................................24
Section 6.02 Money for Distributions to be Held in Trust; Withholding.......24
Section 6.03 Protection of Trust Estate.....................................25
Section 6.04 Performance of Obligations.....................................26
Section 6.05 Negative Covenants.............................................26
Section 6.06 No Other Powers................................................26
Section 6.07 Limitation of Suits............................................26
Section 6.08 Unconditional Rights of Owners to Receive Distributions........27
Section 6.09 Rights and Remedies Cumulative.................................27
Section 6.10 Delay or Omission Not Waiver...................................28
Section 6.11 Control by Owners..............................................28
Section 6.12 Indemnification................................................28
Section 6.13 Access to Owners of Certificates' Names and Addresses..........28
ARTICLE VII ACCOUNTS, DISBURSEMENTS AND RELEASES............................30
Section 7.01 Collection of Money............................................30
Section 7.02 Establishment of Accounts......................................30
Section 7.03 Flow of Funds..................................................30
Section 7.04 [RESERVED].....................................................31
Section 7.05 Investment of Accounts.........................................32
Section 7.06 Payment of Trust Expenses......................................32
Section 7.07 Eligible Investments...........................................33
Section 7.08 Accounting and Directions by Grantor Trustee...................34
Section 7.09 Reports by Grantor Trustee to Owners and
the Certificate Insurer......................................35
Section 7.10 Reports by Grantor Trustee.....................................36
Section 7.11 Preference Payments............................................37
ARTICLE VIII SERVICING AND ADMINISTRATION OF ASSETS.........................38
Section 8.01 Servicer and Sub-Servicers.....................................38
Section 8.02 RESERVED.......................................................38
Section 8.03 RESERVED.......................................................38
Section 8.04 RESERVED.......................................................38
Section 8.05 Liability of Servicer; Indemnification.........................38
Section 8.06 [RESERVED].....................................................38
Section 8.07 [RESERVED].....................................................38
Section 8.08 Grantor Trust Account..........................................38
Section 8.09 RESERVED......................................................40
Section 8.10 Servicing Compensation.........................................40
Section 8.11 Annual Statement as to Compliance..............................40
Section 8.12 RESERVED.......................................................40
Section 8.13 Access to Certain Documentation and Information
Regarding the Class A-2 Fixed Certificates..................40
Section 8.14 Assignment of Agreement........................................40
Section 8.15 Removal of Servicer; Resignation of Servicer...................41
Section 8.16 Inspections by Certificate Insurer;
Errors and Omissions Insurance...............................42
ARTICLE IX TERMINATION OF TRUST.............................................43
Section 9.01 Termination of Trust...........................................43
Section 9.02 [RESERVED].....................................................43
Section 9.03 [RESERVED].....................................................43
Section 9.04 Disposition of Proceeds........................................43
ARTICLE X THE GRANTOR TRUSTEE...............................................44
Section 10.01 Certain Duties and Responsibilities...........................44
Section 10.02 Removal of Grantor Trustee for Cause..........................45
Section 10.03 Certain Rights of the Grantor Trustee.........................46
Section 10.04 Not Responsible for Recitals or Issuance of Certificates......47
Section 10.05 May Hold Certificates.........................................48
Section 10.06 Money Held in Trust...........................................48
Section 10.07 Compensation and Reimbursement; No Lien for Fees..............48
Section 10.08 Corporate Grantor Trustee Required; Eligibility...............48
Section 10.09 Resignation and Removal; Appointment of Successor.............48
Section 10.10 Acceptance of Appointment by Successor Grantor Trustee........50
Section 10.11 Merger, Conversion, Consolidation or Succession
to Business of the Grantor Trustee..........................50
Section 10.12 Tax Returns and Reports.......................................51
Section 10.13 Liability of the Grantor Trustee..............................51
Section 10.14 Appointment of Co-Grantor Trustee or
Separate Grantor Trustee.....................................51
ARTICLE XI MISCELLANEOUS....................................................54
Section 11.01 Compliance Certificates and Opinions..........................54
Section 11.02 Form of Documents Delivered to the Grantor Trustee............54
Section 11.03 Acts of Owners................................................55
Section 11.04 Notices, etc. to Grantor Trustee..............................55
Section 11.05 Notices and Reports to Owners; Waiver of Notices..............55
Section 11.06 Rules by Grantor Trustee......................................56
Section 11.07 Successors and Assigns........................................56
Section 11.08 Severability..................................................56
Section 11.09 Benefits of Agreement.........................................56
Section 11.10 Legal Holidays................................................57
Section 11.11 Governing Law; Submission to Jurisdiction.....................57
Section 11.12 Counterparts..................................................57
Section 11.13 Usury.........................................................58
Section 11.14 Amendment.....................................................58
Section 11.15 Paying Agent; Appointment and Acceptance of Duties............58
Section 11.16 RESERVED......................................................59
Section 11.17 Additional Limitation on Action and Imposition of Tax.........59
Section 11.18 RESERVED......................................................59
Section 11.19 The Certificate Insurer.......................................59
Section 11.20 RESERVED......................................................60
Section 11.21 Third Party Rights............................................60
Section 11.22 Notices.......................................................60
GRANTOR TRUST AGREEMENT, relating to CONTIMORTGAGE GRANTOR TRUST 1997-A
(the "Trust"), dated as of December 1, 1997 by and among CONTISECURITIES ASSET
FUNDING CORP., a Delaware corporation, in its capacity as Depositor (the
"Depositor"), CONTIMORTGAGE CORPORATION, a Delaware corporation in its capacity
as a Servicer (the "Servicer") and MANUFACTURERS AND TRADERS TRUST COMPANY, a
New York banking corporation, in its capacity as the Grantor Trustee (the
"Grantor Trustee").
WHEREAS, the Depositor wishes to establish the Trust and provide for
the allocation and sale of the beneficial interests therein and the maintenance
and distribution thereof;
WHEREAS, the Servicer has agreed to service the ContiMortgage Home
Equity Loan Trust 1997-A Pass Through Certificates Class A-2 Fixed (the "Class
A-2 Fixed Certificates") which, along with the Swap Agreement dated December 1,
1997 between National Westminster Bank, Plc (the "Swap Counterparty") and the
Grantor Trustee (the "Swap Agreement"), and the related MBIA Certificate
Insurance Policy constitute the principal assets of the Trust Estate;
WHEREAS, pursuant to the Swap Agreement the Grantor Trustee will
distribute to the Swap Counterparty on each Payment Date all amounts in respect
of interest received on the Class A-2 Fixed Certificates on such Payment Date
and shall have the right to receive from the Swap Counterparty on the related
Swap Payment Date an amount equal to interest due on such Payment Date on the
Class A-2 Floating Certificates at the Class A-2 Floating Pass-Through Rate;
WHEREAS, all things necessary to make the Certificates, when executed
and authenticated by the Grantor Trustee, valid instruments, and to make this
Agreement a valid agreement, in accordance with their and its terms, have been
done;
WHEREAS, Manufacturers and Traders Trust Company is willing
to serve in the capacity of Grantor Trustee hereunder;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the Depositor, the Servicer, and the Grantor
Trustee hereby agree as follows:
CONVEYANCE
To provide for the distribution of the interest on and/or principal of
the Certificates in accordance with their terms, all of the sums distributable
under this Agreement with respect to the Certificates and the performance of the
covenants contained in this Agreement, the Depositor hereby bargains, sells,
conveys, assigns and transfers to the Trust, without recourse and for the
exclusive benefit of the Owners of the Certificates and the Certificate Insurer,
all of its respective right, title and interest in and to any and all benefits
accruing to it from (a) the Class A-2 Fixed Certificates issued by the
ContiMortgage Home Equity Loan Trust 1997-5 (the "Home Equity Trust") pursuant
to a Pooling and Servicing Agreement dated December 1, 1997 among
ContiSecurities Asset Funding Corp., as Depositor, ContiMortgage Corporation, as
Seller and Servicer, ContiWest Corporation, as Seller and Manufacturers and
Traders Trust Company, as Trustee (the "Pooling and Servicing Agreement"); (b)
the Insurance Agreement; (c) the Certificate Insurance Policy; (d) the Swap
Agreement and (e) proceeds of all the foregoing (including, but not by way of
limitation, cash proceeds, accounts, accounts receivable, notes, drafts,
acceptances, chattel paper, checks, deposit accounts, rights to payment of any
and every kind, and other forms of obligations and receivables which at any time
constitute all or part of or are included in the proceeds of any of the
foregoing) to pay the Certificates as specified herein ((a)-(e) above shall be
collectively referred to herein as the "Trust Estate").
The Grantor Trustee acknowledges such sale, accepts the Trust
hereunder in accordance with the provisions hereof and agrees to perform the
duties herein to the best of its ability to the end that the interests of the
Owners may be adequately and effectively protected.
ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION
Section 1.01 DEFINITIONS.
For all purposes of this Agreement, the following terms shall have the
meanings set forth below, unless the context clearly indicates otherwise:
"ACCOUNT": Any account established in accordance with
Section 7.02 or 8.08 hereof.
"ACCRUAL PERIOD": With respect to the Certificates and any Payment
Date, the period commencing on the immediately preceding Payment Date (or the
Closing Date in the case of the first Payment Date) to and including the day
prior to the current Payment Date. All calculations of interest on the
Certificates will be made on the basis of the actual number of days elapsed in
the related Accrual Period and in a year of 360 days.
"AGREEMENT": This Grantor Trust Agreement, as it may be
amended from time to time, including the Exhibits and Schedules
hereto.
"AUTHORIZED OFFICER": With respect to any Person, any officer of such
Person who is authorized to act for such Person in matters relating to the
Agreement, and whose action is binding upon such Person; with respect to the
Depositor, the Servicer, initially including those individuals whose names
appear on the lists of Authorized Officers delivered at the Closing; with
respect to the Grantor Trustee, any Vice President, Assistant Vice President,
Trust Officer or any Officer of the Grantor Trustee located at the Corporate
Trust Office.
"BUSINESS DAY": Any day that is not a Saturday, Sunday or other day on
which the Certificate Insurer or commercial banking institutions in The City of
New York, or in the city in which the principal corporate trust office of the
Grantor Trustee is located, are authorized or obligated by law or executive
order to be closed.
"CERTIFICATE": Any of the Class A-2 Floating Certificates,
each representing the interests and rights described under this
Agreement.
"CERTIFICATE INSURANCE POLICY": The certificate guaranty insurance
policy (number 25457) dated December 23, 1997 issued by the Certificate Insurer
for the benefit of the Owners of the Certificates pursuant to which the
Certificate Insurer guarantees Insured Payments.
"CERTIFICATE INSURER": MBIA Insurance Corporation, a New York stock
insurance company, or any successor thereto, as issuer of the Certificate
Insurance Policy.
"CERTIFICATE INSURER DEFAULT": The existence and continuance of any of
the following:
(a) the Certificate Insurer fails to make a payment required under the
Certificate Insurance Policy in accordance with its terms; or
(b) (i) the entry by a court having jurisdiction in the premises of (A)
a final and nonappealable decree or order for relief in respect of the
Certificate Insurer in an involuntary case or proceeding under any applicable
United States federal or state bankruptcy, insolvency, rehabilitation,
reorganization or other similar law or (B) a final and nonappealable decree or
order adjudging the Certificate Insurer as bankrupt or insolvent, or approving
as properly filed a petition seeking reorganizing, rehabilitation, arrangement,
adjustment or composition of or in respect of the Certificate Insurer under any
applicable United States federal or state law, or appointing a custodian,
receiver, liquidator, rehabilitator, assignee, Grantor Trustee, sequestrator or
other similar official of the Certificate Insurer or of any substantial part of
its property, or ordering the winding-up or liquidation of its affairs, and the
continuance of any such decree or order for relief or any such other decree or
order unstayed and in effect for a period of 60 consecutive days; or
(ii) the commencement by the Certificate Insurer of a voluntary case or
proceeding under any applicable United States federal or state bankruptcy,
insolvency, reorganization or other similar law or of any other case or
proceeding to be adjudicated as bankrupt or insolvent, or the consent of the
Certificate Insurer to the entry of a decree or order for relief in respect of
the Certificate Insurer in an involuntary case or proceeding under any
applicable United States federal or state bankruptcy, insolvency case or
proceeding against the Certificate Insurer, or the acquiescence by the
Certificate Insurer to the filing of such petition or to the appointment of or
the taking possession by a custodian, receiver, liquidator, assignee, Grantor
Trustee, sequestrator or similar official of the Certificate Insurer or of any
substantial part of its property, or the failure of the Certificate Insurer to
pay debts generally as they become due, or the admission by the Certificate
Insurer in writing of its inability to pay its debts generally as they become
due, or the taking of corporate action by the Certificate Insurer in furtherance
of any such action.
"CERTIFICATE PRINCIPAL BALANCE": As of any time of determination, the
Certificate Principal Balance as of the Startup Day of all Class A-2 Floating
Certificates less any amounts actually distributed on such Class ▇- ▇ Floating
Certificates with respect to the Principal Distribution Amount pursuant to
Section 7.03(d) hereof with respect to principal thereon on all prior Payment
Dates.
"CLASS": The Class A-2 Floating Certificates.
"CLASS A-2 FLOATING CERTIFICATE": Any one of the Certificates
designated on the face thereof as a Class A-2 Floating Certificate,
substantially in the form annexed hereto as Exhibit A, authenticated and
delivered by the Grantor Trustee, representing the right to distributions as set
forth herein.
"CLASS A-2 FLOATING DISTRIBUTION AMOUNT": With respect to any Payment
Date, the sum of Current Interest, the Interest Carry Forward Amount and the
Principal Distribution Amount.
"CLASS A-2 FLOATING TERMINATION DATE": The Payment Date on which the
Certificate Principal Balance the Certificates has been reduced to zero.
"CLASS A-2 FLOATING PASS-THROUGH RATE": For any Payment Date, the
lessor of (i) LIBOR plus 0.17% per annum and (ii) 10% per annum.
"CLOSING": As defined in Section 4.02 hereof.
"CODE": The Internal Revenue Code of 1986, as amended.
"CONTIMORTGAGE": ContiMortgage Corporation, a Delaware corporation
that is the Servicer.
"CORPORATE TRUST OFFICE": The principal office of the Grantor Trustee
at ▇▇▇ ▇&▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
"CURRENT INTEREST": With respect to any Payment Date, the amount of
interest accrued on the Certificate Principal Balance immediately prior to such
Payment Date during the related Accrual Period at the Class A-2 Floating
Pass-Through Rate plus the Preference Amount owed to the Owners of the Class A-2
Floating Certificates as it relates to interest previously paid on the Class A-2
Floating Certificates.
"DEPOSITOR": ContiSecurities Asset Funding Corp., a Delaware
corporation, or any successor thereto.
"DEPOSITORY": The Depository Trust Company, ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, and any successor Depository hereafter named.
"DESIGNATED DEPOSITORY INSTITUTION": With respect to the Grantor Trust
Account, a trust account maintained by the trust department of a federal or
state chartered depository institution acceptable to the Certificate Insurer
acting in its fiduciary capacity, having combined capital and surplus of at
least $50,000,000; PROVIDED, HOWEVER, that if the Grantor Trust Account is not
maintained with the Grantor Trustee, (i) such institution shall have a long-term
debt rating of at least "A2" by Moody's, and, if rated by Fitch, at least "A" by
Fitch (ii) a short-term debt rating of at least "A-1" by Standard & Poor's and
(iii) if such Principal and Interest Account is moved to a new institution, the
Servicer shall provide the Grantor Trustee, the Certificate Insurer and the
Owners with a statement identifying the location of the Grantor Trust Account.
"DETERMINATION DATE": As to each Payment Date, the third Business Day
next preceding such Payment Date.
"DIRECT PARTICIPANT" or "DTC PARTICIPANT": Any broker-dealer, bank or
other financial institution for which the Depository holds Offered Certificates
from time to time as a securities depository.
"ELIGIBLE INVESTMENTS": Those investments so designated pursuant to
Section 7.07 hereof.
"FANNIEMAE": 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.
"FANNIEMAE GUIDE": FannieMae's Servicing Guide, as the same may be
amended by FannieMae from time to time, and the Servicer shall elect to apply
such amendments in accordance with Section 8.01 hereof.
"FDIC": The Federal Deposit Insurance Corporation, a corporate
instrumentality of the United States, or any successor thereto.
"FHLMC": The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created pursuant to the Emergency Home
Finance Act of 1970, as amended, or any successor thereof.
"FINAL DETERMINATION": [Reserved]
"FINAL SCHEDULED PAYMENT DATE": October 15, 2012.
"FISCAL AGENT": State Street Bank and Trust Company, N.A., as Fiscal
Agent for the Certificate Insurer under the Certificate Insurer Policy or any
successor thereto appointed by the Certificate Insurer.
"FITCH": Fitch IBCA, Inc.
"GRANTOR TRUST ACCOUNT": The certificate account established in
accordance with Section 7.02 hereof and maintained in the corporate trust
department of the Grantor Trustee; provided that the funds in such account shall
not be commingled with other funds held by the Grantor Trustee.
"GRANTOR TRUSTEE": Manufacturers and Traders Trust Company, a New York
banking corporation, the Corporate Trust Department of which is located on the
date of execution of this Agreement at ▇▇▇ ▇&▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
not in its individual capacity but solely as Grantor Trustee under this
Agreement, and any successor hereunder.
"GRANTOR TRUSTEE FEE": The fee payable monthly on each Payment Date
under the Pooling and Servicing Agreement as the "Trustee Fee" shall be deemed
to include any fee payable to the Grantor Trustee.
"HIGHEST LAWFUL RATE": As defined in Section 11.13.
"INSURANCE AGREEMENT": The Insurance Agreement dated as of December
23, 1997, among the Depositor, the Sellers, the Servicer, the Certificate
Insurer and the Grantor Trustee, as it may be amended from time to time.
"INSURANCE COMMITMENT LETTER": The letter dated December 22, 1997 from
MBIA to ContiMortgage Corporation.
"INSURED PAYMENT": With respect to any Payment Date, without
duplication, (A) the excess, if any, of (i) the Current Interest for the Class
A-2 Floating Certificates over (ii) the amounts available to the Grantor Trustee
for distribution of Current Interest on the Class A-2 Floating Certificates
(less any such amounts that cannot be distributed to the Owners of the Class A-2
Floating Certificates as a result of proceedings under the United States
Bankruptcy Code) without regard to any related Insured Payment to be made with
respect to such Payment Date plus (B) an amount equal to the Preference Amount
with respect to the Class A-2 Floating Certificates.
"INSURANCE PROCEEDS": Payments received with respect to any Insurance
Policy, except the Certificate Insurance Policy.
"INTEREST AMOUNT AVAILABLE": As of any Payment Date, the Interest
Remittance Amount.
"INTEREST CARRY FORWARD AMOUNT": With respect to any Payment Date, the
sum of (x) the amount, if any, by which (i) the sum of (A) the Current Interest
as of the immediately preceding Payment Date and (B) any unpaid Interest Carry
Forward Amount from all previous Payment Dates exceeds (ii) the amount of the
actual distribution with respect to interest made to the Owners of the
Certificates on such immediately preceding Payment Date and (y) 30 days'
interest on such amount at the Class A-2 Floating Pass-Through Rate.
"INTEREST REMITTANCE AMOUNT": As of any Payment Date, all interest due
on such Payment Date with respect to the Class A-2 Fixed Certificates.
"LIBOR": (A) With respect to any Accrual Period for the Certificates,
the rate determined by the Grantor Trustee on the related LIBOR Determination
Date on the basis of the offered rate for one-month U.S. dollar deposits as such
rate appears on Telerate Page 3750 as of 11:00 a.m. (London time) on such date;
provided that if such rate does not appear on Telerate Page 3750, the rate for
such date will be determined on the basis of the rates at which one-month U.S.
dollar deposits are offered by the Reference Banks at approximately 11:00 a.m.
(London time) on such date to prime banks in the London interbank market. In
such event, the Grantor Trustee will request the principal London office of each
of the Reference Banks to provide a quotation of its rate. If at least two such
quotations are provided, the rate for that date will be the arithmetic mean of
the quotations (rounded upwards if necessary to the nearest whole multiple of
1/16%). If fewer than two quotations are provided as requested, the rate for
that date will be the arithmetic mean of the rates quoted by major banks in New
York City, selected by the Servicer, at approximately 11:00 a.m. (New York City
time) on such date for one-month U.S. dollar loan to leading European banks.
"LIBOR DETERMINATION DATE": With respect to any Accrual Period for the
Certificates, the first London Business Day preceding the commencement of such
Accrual Period.
"LONDON BUSINESS DAY": Any day on which dealings in deposits of United
States dollars are transacted in the London interbank market.
"MONTHLY EXCESS INTEREST AMOUNT": [Reserved]
"MONTHLY REMITTANCE AMOUNT": As of any Payment Date, the sum of (i)
the Interest Remittance Amount and (ii) the Principal Remittance Amount for such
Payment Date.
"MOODY'S": ▇▇▇▇▇'▇ Investors Service, Inc.
"OFFERED CERTIFICATES": Collectively, the Class A-2 Floating
Certificates.
"OFFICER'S CERTIFICATE": A certificate signed by any Authorized
Officer of any Person delivering such certificate and delivered to the Grantor
Trustee.
"OPERATIVE DOCUMENTS": Collectively, this Agreement, the Underwriting
Agreement, the Certificates, the Certificate Insurance Policy, the Insurance
Agreement and the Indemnification Agreement.
"OUTSTANDING": With respect to all Certificates of a Class, as of any
date of determination, all such Certificates theretofore executed and delivered
hereunder except:
(i) Certificates theretofore canceled by the Registrar or
delivered to the Registrar 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 Grantor Trustee or any Paying Agent 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 Grantor 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 5.05 hereof; and
(v) Certificates as to which the Grantor Trustee has made the
final distribution thereon, whether or not such Certificate is ever
returned to the Grantor Trustee.
"OWNER": The Person in whose name a Certificate is registered in the
Register and the Certificate Insurer to the extent described in Section 5.06
hereof, respectively hereof; provided that solely for the purposes of
determining the exercise of any voting rights hereunder, if any Offered
Certificates are beneficially owned by a Seller or any affiliate thereof, such
Seller or such affiliate shall not be considered an Owner hereunder.
"PAYING AGENT": Initially, the Grantor Trustee, and thereafter, the
Grantor Trustee or any other Person that meets the eligibility standards for the
Paying Agent specified in Section 11.15 hereof and is authorized by the Grantor
Trustee and the Depositor to make payments on the Certificates on behalf of the
Grantor Trustee.
"PAYMENT DATE": Any date on which the Grantor Trustee is required to
make distributions to the Owners, which shall be the 15th day of each month or
if such day is not a Business Day, the next Business Day thereafter, commencing
in the month following the Startup Day.
"PERCENTAGE INTEREST": With respect to a Class of the Offered
Certificates, a fraction, expressed as a percentage, the numerator of which is
the initial Certificate Principal Balance represented by such Certificate and
the denominator of which is the aggregate initial Certificate Principal Balance
represented by all the Certificates in such Class.
"PERSON": Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"POOLING AND SERVICING AGREEMENT": The Pooling and Servicing
Agreement, dated as of December 1, 1997, among the Depositor, ContiMortgage,
ContiWest Corporation and Manufacturers and Traders Trust Company, as Trustee.
"PREFERENCE AMOUNT": With respect to the Offered Certificates, any
amounts of Current Interest and principal included in previous distributions to
the Owners of such Certificates which are recovered from such Owners as a
voidable preference by a Grantor 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 Owners.
"PREMIUM AMOUNT": As defined in the Insurance Commitment Letter.
"PRINCIPAL DISTRIBUTION AMOUNT": As of any Payment Date, an amount
equal to the Principal Remittance Amount.
"PRINCIPAL REMITTANCE AMOUNT": As of any Payment Date, the principal
received by the Trust with respect to the payment due under the Class A-2 Fixed
Certificates for such Payment Date.
"PROHIBITED TRANSACTION": The meaning set forth from time to time in
the definition thereof at Section 860F(a)(2) of the Code (or any successor
statute thereto) and applicable to the Trust.
"PROSPECTUS": The Prospectus dated December 16, 1997 constituting part
of the Registration Statement.
"PROSPECTUS SUPPLEMENT": The ContiMortgage Home Equity Loan
Pass-Through Certificates, Series 1997-5 Prospectus Supplement dated December
16, 1997 to the Prospectus.
"QUALIFIED LIQUIDATION": 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.
"RATING AGENCIES": Collectively, ▇▇▇▇▇'▇, Standard & Poor's and Fitch
or any successors thereto.
"RECORD DATE": With respect to the Class A-2 Floating Certificates,
the day immediately preceding such Payment Date.
"REFERENCE BANKS": Bankers Trust Company, Barclays 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 Grantor Trustee (or the Auction Agent in the case of the
Auction Rate Certificates) 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 either Seller or any affiliate thereof, (iii) whose
quotations appear on Telerate Page 3750 on the relevant LIBOR Determination Date
and (iv) which have been designated as such by the Grantor Trustee (or the
Auction Agent in the case of the Auction Rate Certificates).
"REGISTER": The register maintained by the Registrar in accordance
with Section 5.04 hereof, in which the names of the Owners are set forth.
"REGISTRAR": The Grantor Trustee, acting in its capacity as Registrar
appointed pursuant to Section 5.04 hereof, or any duly appointed and eligible
successor thereto.
"REGISTRATION STATEMENT": The Registration Statement filed by the
Depositor with the Securities and Exchange Commission (Registration Number
333-39505), including all amendments thereto and including the Prospectus
relating to the Offered Certificates constituting a part thereof.
"REPRESENTATION LETTER": Letters to, or agreements with, the
Depository to effectuate a book entry system with respect to the Offered
Certificates registered in the Register under the nominee name of the
Depository..
"SERVICER": ContiMortgage Corporation, a Delaware corporation, and its
permitted successors and assigns.
"SERVICER AFFILIATE": A Person (i) controlling, controlled by or under
common control with the Servicer and (ii) which is qualified to service
residential mortgage loans.
"SERVICING FEE": The fees payable under the Pooling and Servicing
Agreement as the "Servicing Fee" thereunder shall be deemed to include any fee
payable under this Agreement to the Servicer.
"STANDARD & POOR'S": Standard & Poor's Ratings Services, a division of
the ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
"STARTUP DAY": December 23, 1997.
"SWAP PAYMENT": On each Swap Payment Date, (A) the amount that is
payable to the Grantor Trustee from the Swap Counterparty equal to Current
Interest on the Class A-2 Floating Certificates or (B) the amount that is
payable to the Swap Counterparty from the Grantor Trustee, equal to
interest received on such Payment Date on the Class A-2 Fixed Certificates, in
each case in accordance with the terms of the Swap Agreement.
"SWAP PAYMENT DATE": (A) In the case of the Swap Counterparty the
third Business Day prior to a Payment Date and (B) in the case of the Grantor
Trustee such Payment Date.
"TAX RETURN": The federal income tax return to be filed on behalf of
the Trust together with any and all other information reports or returns that
may be required to be furnished to the Owners of the Certificates or filed with
the Internal Revenue Service as any other governmental taxing authority under
any applicable provision of federal, state or local tax laws.
"TELERATE PAGE 3750": The display designated as page "3750" on the Dow
▇▇▇▇▇ Telerate Capital Markets Report (or such other page as may replace page
3750 on that report for the purpose of displaying London interbank offered rates
of major banks).
"TOTAL AVAILABLE FUNDS": As of any Payment Date, the Interest Amount
Available, less any such amount that cannot be distributed to the Owners of the
Class A-2 Fixed Certificates as a result of proceedings under the United States
Bankruptcy Code.
"TRUST": ContiMortgage Grantor Trust 1997-A, the trust created under
this Agreement.
"TRUST ESTATE": As defined in the conveyance clause under this
Agreement.
"UNDERWRITERS": Greenwich Capital Markets, Inc., Bear, ▇▇▇▇▇▇▇ & Co.,
ContiFinancial Services Corporation, Credit Suisse First Boston Corporation,
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇, Inc., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ and
Nomura Securities International, Inc.
Section 1.02 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 1.01 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 1.03 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 1.04 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. 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.
END OF ARTICLE I
ARTICLE II
ESTABLISHMENT AND ORGANIZATION OF THE TRUST
Section 2.01 ESTABLISHMENT OF THE TRUST.
The parties hereto do 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 "ContiMortgage Grantor Trust 1997-A".
Section 2.02 OFFICE.
The office of the Trust shall be in care of the Grantor Trustee,
addressed to ▇▇▇ ▇&▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention Corporate Trust
Administration, or at such other address as the Grantor Trustee may designate by
notice to the Depositor, the Seller, the Certificate Insurer and the Servicer.
Section 2.03 PURPOSES AND POWERS.
The purpose of the Trust is to engage in the following activities and
only such activities: (i) the issuance of the Certificates and distribution of
payments thereon and the acquiring, owning and holding of the ContiMortgage Home
Equity Loan Trust 1997-5, Pass Through Certificates, Class A-2 Fixed
Certificates, executing the Swap Agreement and making and receiving payments
thereunder and the Trust Estate in connection therewith, and the Certificate
Insurance Policy; (ii) 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 (iii)
such other activities as may be required in connection with conservation of the
Trust Estate and distributions to the Owners.
Section 2.04 APPOINTMENT OF THE GRANTOR TRUSTEE; DECLARATION OF TRUST.
The Depositor hereby appoints the Grantor Trustee as Grantor Trustee
of the Trust effective as of the Startup Day, to have all the rights, powers and
duties set forth herein. The Grantor Trustee hereby acknowledges and accepts
such appointment, represents and warrants its eligibility as of the Startup Day
to serve as Grantor Trustee pursuant to Section 10.08 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 2.05 EXPENSES OF THE TRUST.
The expenses of the Trust, including (i) the fees of the Grantor
Trustee (including any portion of the Grantor Trustee Fee not paid pursuant to
Section 7.03(b) hereof), (ii) any reasonable expenses of the Grantor Trustee,
and (iii) any other expenses of the Trust that have been reviewed by
ContiMortgage, which review shall not be required in connection with the
enforcement of a remedy by the Grantor Trustee resulting from a default under
this Agreement, shall be paid directly by ContiMortgage. ContiMortgage shall pay
directly the reasonable fees and expenses of counsel to the Grantor Trustee. The
reasonable fees and expenses of the Grantor Trustee's counsel in connection with
the review and delivery of this Agreement and related documentation shall be
paid by ContiMortgage on the Startup Day.
Section 2.06 OWNERSHIP OF THE TRUST.
On the Startup Day the ownership interests in the Trust shall be
transferred as set forth in Section 4.02 hereof, such transfer to be evidenced
by sale of the Certificates as described therein. Thereafter, transfer of any
ownership interest shall be governed by Sections 5.04 and 5.08 hereof.
Section 2.07 SITUS OF THE TRUST.
It is the intention of the parties hereto that the Trust constitute a
trust under the laws of the State of New York. The Trust will be created and
administered in, and all Accounts maintained by the Grantor Trustee on behalf of
the Trust will be located in, the State of New York. The Trust will not have any
employees and will not have any real or personal property located in any state
other than in the State of New York and payments will be received by the Grantor
Trustee only in the State of New York and payments from the Grantor Trustee will
be made only from the State of New York. The Trust's only office will be at the
office of the Grantor Trustee as set forth in Section 2.02 hereof.
Section 2.08 [RESERVED]
END OF ARTICLE II
ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS
OF THE DEPOSITOR
Section 3.01 REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR.
The Depositor hereby represents, warrants and covenants to the Grantor
Trustee, the Certificate Insurer and the Owners that as of the Startup Day:
(a) The Depositor is a corporation duly organized, validly existing and
in good standing under the laws governing its creation and existence 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 Depositor 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 its obligations
under this Agreement and the other Operative Documents to which it is a party.
(b) The execution and delivery of this Agreement by the Depositor and
its performance and compliance with the terms of this Agreement and the other
Operative Documents to which it is a party have been duly authorized by all
necessary corporate action on the part of the Depositor and will not violate the
Depositor'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 a breach of, any material contract, agreement or
other instrument to which the Depositor is a party or by which the Depositor 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
Depositor or any of its properties.
(c) This Agreement and the other Operative Documents to which the
Depositor 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 Depositor, enforceable against it in accordance with the terms
hereof and thereof, except as the enforcement 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).
(d) The Depositor is not in default with respect to any order or decree
of any court or any order, regulation or demand of any federal, state, municipal
or governmental agency, which default would materially and adversely affect the
condition (financial or other) or operations of the Depositor or its properties
or the consequences of which would materially and adversely affect its
performance hereunder or under the other Operative Documents to which the
Depositor is a party.
(e) No litigation is pending with respect to which the Depositor has
received service of process or, to the best of the Depositor's knowledge,
threatened against the Depositor which litigation might have consequences that
would prohibit its entering into this Agreement or any other Operative Documents
to which it is a party or that would materially and adversely affect the
condition (financial or otherwise) or operations of the Depositor or its
properties or might have consequences that would materially and adversely affect
its performance hereunder and under the other Operative Documents to which the
Depositor is a party.
(f) No certificate of an officer, statement furnished in writing or
report delivered pursuant to the terms hereof by the Depositor contains any
untrue statement of a material fact or omits to state any material fact
necessary to make the certificate, statement or report not misleading.
(g) The statements contained in the Registration Statement which
describe the Depositor or matters or activities for which the Depositor is
responsible in accordance with the Operative Documents or which are attributable
to the Depositor 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 Depositor required to be stated therein or necessary to make
the statements contained therein with respect to the Depositor, in light of the
circumstances under which they were made, not misleading. 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 necessary to make the
statements contained therein, in light of the circumstances under which they
were made, not misleading. There is no fact known to the Depositor that
materially adversely affects or in the future may (so far as the Depositor can
now reasonably foresee) materially adversely affect the Depositor or the Home
Equity Loans or the ownership interests therein represented by the Certificates
that has not been set forth in the Registration Statement.
(h) 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 Depositor 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 Depositor 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 Depositor and the performance by the Depositor of its
obligations under this Agreement and such of the other Operative Documents to
which it is a party.
(i) The transactions contemplated by this Agreement are in the
ordinary course of business of the Depositor.
(j) The Depositor is not insolvent, nor will it be made insolvent by
the transfer of the Class A-2 Fixed Certificates, nor is the Depositor aware of
any pending insolvency.
(k) The transfer, assignment and conveyance of the Class A-2 Fixed
Certificates by the Depositor hereunder are not subject to the bulk transfer
laws or any similar statutory provisions in effect in any applicable
jurisdiction.
(l) The Depositor is not transferring the Class A-2 Fixed Certificates
to the Grantor Trustee with any intent to hinder, delay or defraud its
creditors.
(m) The transfer of the Class A-2 Fixed Certificates is not required
to be registered under the Securities Act of 1933, as amended.
It is understood and agreed that the representations and warranties
set forth in this Section 3.01 shall survive delivery of the respective Class
A-2 Fixed Certificates to the Grantor Trustee.
Section 3.02 REPRESENTATIONS AND WARRANTIES OF THE SERVICER.
The Servicer hereby represents, warrants and covenants to the Grantor
Trustee, the Certificate Insurer and the Owners that as of the Startup Day:
(a) The Servicer is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware, is in compliance with
the laws of each state to the extent necessary to enable it to perform its
obligations hereunder 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 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 its obligations under this Agreement and the other Operative
Documents to which it is a party.
(b) The execution and delivery of this Agreement by the Servicer and
its performance and compliance with the terms of this Agreement have been duly
authorized by all necessary corporate action on the part of the Servicer and
will not violate the 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 Servicer is a party or by
which the 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 Servicer or any of its properties.
(c) This Agreement and the Operative Documents to which the Servicer
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 Servicer, enforceable against it in accordance with the terms
hereof and thereof, 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).
(d) The 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 default might have consequences that would
materially and adversely affect the condition (financial or otherwise) or
operations of the Servicer or its properties or might have consequences that
would materially and adversely affect its performance hereunder or under the
other Operative Documents to which the Servicer is a party.
(e) No litigation is pending with respect to which the Servicer has
received service of process or, to the best of the Servicer's knowledge,
threatened against the Servicer which litigation might have consequences that
would prohibit its entering into this Agreement or any other Operative Documents
to which the Servicer is a party or that would materially and adversely affect
the condition (financial or otherwise) or operations of the Servicer or its
properties or might have consequences that would materially and adversely affect
its performance hereunder and the other Operative Documents to which the
Servicer is a party.
(f) No certificate of an officer, statement furnished in writing or
report delivered pursuant to the terms hereof by the Servicer contains any
untrue statement of a material fact or omits to state any material fact
necessary to make the certificate, statement or report not misleading.
(g) The statements contained in the Registration Statement which
describe the Servicer or matters or activities for which the Servicer is
responsible in accordance with the Operative Document or which are attributed to
the Servicer 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 Servicer or omit to state a material fact required to be
stated therein or necessary to make the statements contained therein with
respect to the Servicer, in light of the circumstances under which they were
made, not misleading.
(h) The 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.
(i) 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 Servicer makes no such representation or warranty),
that are necessary or advisable in connection with the execution and delivery by
the Servicer 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 Servicer and the
performance by the Servicer of its obligations under this Agreement and such of
the other Operative Documents to which it is a party.
(j) The transactions contemplated by this Agreement are in the
ordinary course of business of the Servicer.
It is understood and agreed that the representations and warranties
set forth in this Section 3.02 shall survive delivery of the Class A-2 Fixed
Certificates to the Grantor Trustee.
Upon discovery by any of either the Servicer, any Owner, the
Certificate Insurer or the Grantor Trustee (each, for purposes of this
paragraph, a party) of a breach of any of the representations and warranties set
forth in this Section 3.02 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. Within 60 days of its
discovery or its receipt of notice of breach, the Servicer shall cure such
breach in all material respects and, upon the Servicer's continued failure to
cure such breach, may thereafter be removed by the Grantor Trustee pursuant to
Section 8.20 hereof; provided, however, that if any party can establish to the
reasonable satisfaction of the Certificate Insurer that it is diligently
pursuing remedial action, then the cure period may be extended with the written
approval of the Certificate Insurer.
Section 3.03 [RESERVED]
Section 3.04 [RESERVED]
Section 3.05 CONVEYANCE OF THE CLASS A-2 FIXED CERTIFICATES.
On the Startup Day the Depositor, concurrently with the execution and
delivery hereof, transfers, assigns, sets over and otherwise conveys, without
recourse, to the Trust all of its respective right, title and interest in and to
the Trust Estate. The transfer by the Depositor of the Class A-2 Fixed
Certificates to the Trustee is absolute and is intended by the Owners and all
parties hereto to be treated as a sale by the Depositor.
It is intended that the sale, transfer, assignment and conveyance
herein contemplated constitute a sale of the Class A-2 Fixed Certificates
conveying good title thereto free and clear of any liens and encumbrances from
the Depositor to the Trust and that the Class A-2 Fixed Certificates not be part
of the Depositor's estate in the event of insolvency. In the event that such
conveyance is deemed to be a loan, the parties intend that the Depositor shall
be deemed to have granted to the Trustee a first priority perfected security
interest in the Trust Estate, and that this Agreement shall constitute a
security agreement under applicable law.
Section 3.06 ACCEPTANCE BY TRUSTEE .
The Trustee agrees to execute and deliver on the Startup Day an
acknowledgment of receipt of the items delivered by each of the Sellers and the
Depositor in the form attached as Exhibit E hereto, and declares that it will
hold such documents and any amendments, replacement or supplements thereto, as
well as any other assets included in the definitions 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.
END OF ARTICLE III
ARTICLE IV
ISSUANCE AND SALE OF CERTIFICATES
Section 4.01 ISSUANCE OF CERTIFICATES.
On the Startup Day, upon the Grantor Trustee's receipt from the
Depositor of an executed Delivery Order in the form set forth as Exhibit G
hereto, the Grantor Trustee shall execute, authenticate and deliver the
Certificates on behalf of the Trust.
Section 4.02 SALE OF CERTIFICATES.
At 11 a.m. New York City time on the Startup Day (the "Closing"), at
the offices of Stroock & Stroock & ▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇, the Depositor will sell and convey the Class A-2 Fixed Certificates,
instruments and other property related thereto to the Grantor Trustee, and the
Grantor Trustee will deliver to the Underwriters the Class A-2 Floating
Certificates with an aggregate Percentage Interest 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 Grantor Trustee.
Upon the Grantor Trustee's receipt of the entire net proceeds of the
sale of the Class A-2 Floating Certificates, the Grantor Trustee shall remit the
entire balance of such net proceeds to the Depositor in accordance with
instructions delivered by the Depositor.
END OF ARTICLE IV
ARTICLE V
CERTIFICATES AND TRANSFER OF INTERESTS
Section 5.01 TERMS.
(a) The Certificates are pass-through securities having the rights
described therein and herein. Notwithstanding references herein or therein with
respect to the Certificates to "principal" and "interest" no debt of any Person
is represented thereby, nor are the Certificates guaranteed by any Person except
for the rights of the Grantor Trustee on behalf of the Owners of the
Certificates with respect to the Certificate Insurance Policy. The Certificates
are payable solely from payments received on or with respect to the Class A-2
Fixed Certificates, payments received by the Grantor Trustee under the Swap
Agreement, moneys in the Grantor Trust Account, earnings on moneys and the
proceeds of property held as a part of the Trust Estate and the Certificate
Insurance Policy. Each Certificate entitles the Owner thereof to receive monthly
on each Payment Date, in order of priority of distributions with respect to such
Certificates as set forth in Section 7.03, a specified portion of such payments
with respect to the Class A-2 Fixed Certificates, PRO RATA in accordance with
such Owner's Percentage Interest.
(b) Each Owner is required, and hereby agrees, to return to the
Grantor Trustee any Certificate with respect to which the Grantor Trustee has
made the final distribution due thereon. Any such Certificate as to which the
Grantor Trustee has made the final distribution thereon shall be deemed canceled
and shall no longer be Outstanding for any purpose of this Agreement, whether or
not such Certificate is ever returned to the Grantor Trustee.
Section 5.02 FORMS.
The Class A-2 Fixed Certificates shall be in substantially the forms
set forth in Exhibit A hereof, respectively, with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Agreement or as may in the Depositor'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 by
the Authorized Officer of the Depositor executing such Certificates, as
evidenced by his execution thereof.
Section 5.03 EXECUTION, AUTHENTICATION AND DELIVERY.
Each Certificate shall be executed and authenticated by the manual or
facsimile signature of one of the Grantor Trustee's Authorized Officers. Upon
proper authentication by the Grantor Trustee, the Certificates shall bind the
Trust.
The initial Certificates shall be dated as of the Startup Day and
delivered at the Closing to the parties specified in Section 4.02 hereof.
Subsequently issued Certificates will be dated as of the issuance of the
Certificate.
No Certificate shall be valid until executed and authenticated as set
forth above.
Section 5.04 REGISTRATION AND TRANSFER OF CERTIFICATES.
(a) The Grantor Trustee shall cause to be kept a register (the
"Register") in which, subject to such reasonable regulations as it may
prescribe, the Grantor Trustee shall provide for the registration of
Certificates and the registration of transfer of Certificates. The Grantor
Trustee is hereby initially appointed Registrar for the purpose of registering
Certificates and transfers of Certificates as herein provided. The Owners, the
Certificate Insurer and the Grantor Trustee shall have the right to inspect the
Register during the Grantor Trustee's normal hours and to obtain copies thereof,
and the Grantor Trustee shall have the right to rely upon a certificate executed
on behalf of the Registrar by an Authorized Officer thereof as to the names and
addresses of the Owners of the Certificates and the principal amounts and
numbers of such Certificates.
If a Person other than the Grantor Trustee is appointed as Registrar
by the Owners of a majority of the aggregate Percentage Interests represented by
the Certificates then Outstanding with the consent of the Certificate Insurer,
the Grantor Trustee will give the Owners and the Certificate Insurer prompt
written notice of the appointment of such Registrar and of the location, and any
change in the location, of the Register. In connection with any such appointment
the annual fees of the bank then serving as Grantor Trustee and Registrar shall
thenceforth be reduced by the amount to be agreed upon by the Grantor Trustee
and the Depositor at such time and the reasonable fees of the Registrar shall be
paid, as expenses of the Trust, pursuant to Section 7.05 hereof.
(b) Subject to the provisions of Section 5.08 hereof, upon surrender
for registration of transfer of any Certificate at the office designated as the
location of the Register, upon the direction of the Registrar the Depositor
shall execute and the Grantor Trustee shall 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 amount or percentage interest 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 and
tenor and a like aggregate original principal amount or percentage interest 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, upon the
direction of the Registrar, the Depositor and the Grantor Trustee shall execute,
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 Registrar 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 Registrar or Grantor 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 Certificates be registered so as to
participate in a global book entry system with the Depository, as set forth
herein. The Certificates shall, except as otherwise provided in Subsection (h),
be initially issued in the form of a single fully registered Certificate of such
Class. Upon initial issuance, the ownership of each such Certificate shall be
registered in the Register in the name of Cede & Co., or any successor thereto,
as nominee for the Depository.
On the Startup Day, the Offered Certificates shall be issued in
denominations of no less than $1,000 and integral multiples thereof.
The Depositor and the Grantor Trustee are hereby authorized to execute
and deliver the Representation Letter with the Depository.
With respect to the Certificates registered in the Register in the
name of Cede & Co., as nominee of the Depository, the Depositor, the Servicer,
the Certificate Insurer and the Grantor Trustee shall have no responsibility or
obligation to Direct or Indirect Participants or beneficial owners for which the
Depository holds Offered Certificates from time to time as a Depository. Without
limiting the immediately preceding sentence, the Depositor, the Servicer, the
Certificate Insurer and the Grantor 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 Certificates, (ii) the delivery to any Direct or Indirect
Participant or any other Person, other than a registered Owner of a Certificate
as shown in the Register, of any notice with respect to the Certificates or
(iii) the payment to any Direct or Indirect Participant or any other Person,
other than a registered Owner of a Certificate as shown in the Register, of any
amount with respect to any distribution of principal or interest on the
Certificates. No Person other than a registered Owner of a Certificate as shown
in the Register shall receive a certificate evidencing such Certificate.
Upon delivery by the Depository to the Grantor 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 Certificates appearing as registered Owners in the
registration books maintained by the Grantor 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 Depositor advises the
Grantor 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 Certificates and the Depositor or the Grantor Trustee is unable to locate
a qualified successor or (ii) the Depositor at its sole option elects to
terminate the book-entry system through the Depository, the Certificates 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
Depositor may determine that the Certificates shall be registered in the name of
and deposited with a successor depository operating a global book-entry system,
as may be acceptable to the Depositor and at the Depositor's expense, or such
depository's agent or designee but, if the Depositor does not select such
alternative global book-entry system, then the Offered Certificates may be
registered in whatever name or names registered Owners of the Certificates
transferring the Certificates shall designate, in accordance with the provisions
hereof.
(i) Notwithstanding any other provision of this Agreement to the
contrary, so long as any of the Certificates is registered in the name of Cede &
Co., as nominee of the Depository, all distributions of principal or interest on
such Offered Certificates and all notices with respect to such Offered
Certificates shall be made and given, respectively, in the manner provided in
the Representation Letter.
Section 5.05 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.
If (i) any mutilated Certificate is surrendered to the Grantor
Trustee, or the Grantor 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 Grantor Trustee, and in the case of any destroyed, lost or stolen
Certificate, there shall be first delivered to the Grantor Trustee such security
or indemnity as may be reasonably required by it to hold the Grantor Trustee and
the Certificate Insurer harmless, then, in the absence of notice to the Grantor
Trustee or the Registrar that such Certificate has been acquired by a bona fide
purchaser, the Depositor shall execute and the Grantor Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like Class, tenor
and aggregate principal amount, bearing a number not contemporaneously
outstanding.
Upon the issuance of any new Certificate under this Section, the
Registrar or Grantor 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 expenses in connection with such issuance shall be an expense
of the Trust.
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 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 5.06 PERSONS DEEMED OWNERS.
The Grantor Trustee and the Certificate Insurer and any agent of the
Grantor Trustee 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 the
Grantor Trustee and the Certificate Insurer or any agent of the Grantor Trustee
shall not be affected by notice to the contrary.
Section 5.07 CANCELLATION.
All Certificates surrendered for registration of transfer or exchange
shall, if surrendered to any Person other than the Grantor Trustee, be delivered
to the Grantor Trustee and shall be promptly canceled by it. No Certificate
shall be authenticated in lieu of or in exchange for any Certificate canceled as
provided in this Section, except as expressly permitted by this Agreement. All
canceled Certificates may be held by the Grantor Trustee in accordance with its
standard retention policy.
Section 5.08 LIMITATION ON TRANSFER OF OWNERSHIP RIGHTS.
(a) No sale or other transfer of any Offered Certificate may be made
to the Depositor or the Servicer.
Section 5.09 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 5.04 and Section 5.08 hereof.
END OF ARTICLE V
ARTICLE VI
COVENANTS
Section 6.01 DISTRIBUTIONS.
On each Payment Date, the Grantor Trustee will withdraw amounts from
the Grantor Trust Account and make the distributions with respect to the
Certificates and the Swap Agreement in accordance with the terms of the
Certificates, the Swap Agreement and this Agreement. Such distributions shall be
made (i) by check or draft mailed on each Payment Date or (ii) if requested by
any Owner of (A) Certificate in writing not later than one Business Day prior to
the applicable Record Date (which request does not have to be repeated unless it
has been withdrawn), to such Owner by wire transfer to an account within the
United States designated no later than five Business Days prior to the related
Record Date, made on each Payment Date, in each case to each Owner of record on
the immediately preceding Record Date.
Section 6.02 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 Grantor Trust
Account, shall be made by and on behalf of the Grantor Trustee, and no amounts
so withdrawn from the Grantor Trust Account, for payments of Certificates and
under the Swap Agreement except as provided in this Section.
(b) Whenever the Depositor has appointed one or more Paying Agents
pursuant to Section 11.15 hereof, the Grantor Trustee will, on the Business Day
immediately preceding each Payment Date, deposit with such Paying Agents in
immediately available funds an aggregate sum sufficient to pay the amounts then
becoming due (to the extent funds are then available for such purpose in the
Certificate Account for the Class to which such amounts are due) such sum to be
held in trust for the benefit of the Owners entitled thereto.
(c) The Depositor may at any time direct any Paying Agent to pay to
the Grantor Trustee all sums held in trust by such Paying Agent, such sums to be
held by the Grantor Trustee upon the same trusts as those upon which the sums
were held by such Paying Agent; and upon such payment by any Paying Agent to the
Grantor Trustee, such Paying Agent shall be released from all further liability
with respect to such money.
(d) The Depositor shall require each Paying Agent, including the
Grantor Trustee on behalf of the Trust to 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.
(e) Any money held by the Grantor Trustee or any Paying Agent in trust
for the payment of any amount due with respect to any Certificate and remaining
unclaimed by the Owner of such Certificate for the period then specified in the
escheat laws of the State of New York after such amount has become due and
payable shall be discharged from such trust and paid to the Servicer; and the
Owner of such Certificate shall thereafter, as an unsecured general creditor,
look only to Servicer for payment thereof and all liability of the Grantor
Trustee or such Paying Agent with respect to such trust money shall thereupon
cease; PROVIDED, HOWEVER, that the Grantor Trustee or such Paying Agent before
being required to make any such payment, may, at the expense of the Trust, 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. The
Grantor Trustee shall, at the direction of the Depositor, also adopt and employ,
at the expense of the Trust, 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 Registrar, the Grantor Trustee or any
Paying Agent, at the last address of record for each such Owner).
Section 6.03 PROTECTION OF TRUST ESTATE.
(a) The Grantor Trustee will hold the Trust Estate in trust for the
benefit of the Owners and the Certificate Insurer and, upon request of the
Certificate Insurer or, with the consent of the Certificate Insurer at the
request of the Depositor, will from time to time execute and deliver all such
supplements and amendments hereto pursuant to Section 11.14 hereof and all
instruments of further assurance and other instruments, and will take such other
action upon such request from the Depositor or the Certificate Insurer, to:
(i) more effectively hold in trust all or any portion of the
Trust Estate;
(ii) perfect, publish notice of, or protect the validity of
any grant made or to be made by this Agreement;
(iii) enforce the Class A-2 Fixed Certificate;
(iv) enforce the Swap Agreement; or
(v) preserve and defend title to the Trust Estate and the
rights of the Grantor Trustee, and the ownership interests of the
Owners represented thereby, in such Trust Estate against the claims of
all Persons and parties.
The Grantor Trustee shall send copies of any request received from the
Depositor or the Certificate Insurer to take any action pursuant to this Section
6.03 to the other parties hereto.
(b) The Grantor Trustee shall have the power to enforce, and shall
enforce the obligations and rights of the other parties to this Agreement, the
obligations of the ContiMortgage Home Equity Loan Trust 1997-5 under the Class
A-2 Fixed Certificate, the obligations of the Swap Counterparty under the Swap
Agreement and the obligations of the Certificate Insurer under the Certificate
Insurance Policy; in addition, the Certificate Insurer or the Owners, by action,
suit or proceeding at law or equity and shall also have the power to enjoin, by
action or suit in equity, and acts or occurrences which may be unlawful or in
violation of the rights of the Certificate Insurer and/or the Owners as such
rights are set forth in this Agreement, PROVIDED, HOWEVER, that nothing in this
Section shall require any action by the Grantor Trustee unless the Grantor
Trustee shall first (i) have been furnished indemnity satisfactory to it and
(ii) when required by this Agreement, have been requested by the Certificate
Insurer or Owners of a majority of the Percentage Interests represented by the
Certificates then Outstanding with the consent of the Certificate Insurer;
PROVIDED, FURTHER, HOWEVER, that if there is a dispute with respect to payments
under a Certificate Insurance Policy, the Grantor Trustee's sole responsibility
is to the Owners.
(c) The Grantor Trustee shall execute any instrument required pursuant
to this Section so long as such instrument does not conflict with this Agreement
or with the Grantor Trustee's fiduciary duties, or adversely affect its rights
and immunities hereunder.
Section 6.04 PERFORMANCE OF OBLIGATIONS.
The Grantor Trustee will not take any action that would release any
Person from any of such Person's covenants or obligations under any instrument
or document relating to 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 as
expressly provided in this Agreement or such other instrument or document.
The Grantor Trustee may contract with other Persons to assist it in
performing its duties hereunder pursuant to Section 10.03(g).
Section 6.05 NEGATIVE COVENANTS.
The Grantor Trustee will not permit the Trust to:
(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 any indebtedness of any
Person except pursuant to this Agreement;
(iv) dissolve or liquidate in whole or in part, except
pursuant to Article IX hereof; or
(v) (A) permit the validity or effectiveness of this
Agreement to be impaired, or permit any Person to be released 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) permit any lien, charge, adverse claim,
security interest, mortgage or other encumbrance to be created on or
extend to or otherwise arise upon or burden the Trust Estate or any
part thereof or any interest therein or the proceeds thereof.
Section 6.06 NO OTHER POWERS.
The Grantor Trustee will not permit the Trust to engage in any
business activity or transaction other than those activities permitted by
Section 2.03 hereof.
Section 6.07 LIMITATION OF SUITS.
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to this Agreement, the Insurance Agreement, the Swap
Agreement, the Certificate Insurance Policies or for the appointment of a
receiver or Grantor Trustee of the Trust, or for any other remedy with respect
to an event of default hereunder, unless:
(1) such Owner has previously given written notice to the
Depositor, the Certificate Insurer and the Grantor Trustee of
such Owner's intention to institute such proceeding;
(2) the Owners of not less than 25% of the Percentage Interests
represented by the Offered Certificates then Outstanding,
shall have made written request to the Grantor Trustee to
institute such proceeding in its own name as Grantor Trustee
establishing the Trust;
(3) such Owner or Owners have offered to the Grantor Trustee
reasonable indemnity against the costs, expenses and
liabilities to be incurred in compliance with such request;
(4) the Grantor Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to
institute such proceeding;
(5) as long as any Certificates are Outstanding or any
Reimbursement Amount (as defined in the Insurance Agreement)
remains unpaid, the Certificate Insurer consented in writing
thereto (unless the Certificate Insurer is the party against
whom the proceeding is directed); and
(6) no direction inconsistent with such written request has been
given to the Grantor Trustee during such 60-day period by the
Owners of a majority of the Percentage Interests represented
by the Certificates or;
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 Grantor 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 and
each conforming to paragraphs (1)-(5) of this Section 6.07, the Certificate
Insurer in its sole discretion may determine what action, if any, shall be
taken, notwithstanding any other provision of this Agreement (unless the
Certificate Insurer is the party against whom the proceeding is directed).
Section 6.08 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 6.09 RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided herein, no right or remedy herein
conferred upon or reserved to the Grantor Trustee, the Certificate Insurer or
the Owners 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 Grantor Trustee, the Certificate Insurer or any Owner
of any Certificate to exercise any right or remedy under this Agreement with
respect to any event described in Section 8.20(a) or (b) shall impair any such
right or remedy or constitute a waiver of any such event or an acquiescence
therein. Every right and remedy given by this Article VI or by law to the
Grantor Trustee, the Certificate Insurer or the Owners may be exercised from
time to time, and as often as may be deemed expedient, by the Grantor Trustee,
the Certificate Insurer or the Owners, as the case may be.
Section 6.11 CONTROL BY OWNERS.
The Certificate Insurer or the Owners of a majority of the Percentage
Interests represented by the Certificates then Outstanding with the consent of
the Certificate Insurer may direct the time, method and place of conducting any
proceeding for any remedy available to the Grantor Trustee with respect to the
Certificates or exercising any trust or power conferred on the Grantor Trustee
with respect to the Certificates or the Trust Estate, including, but not limited
to, those powers set forth in Section 6.03, PROVIDED THAT:
(1) such direction shall not be in conflict with any rule of law
or with this Agreement;
(2) the Grantor Trustee shall have been provided with indemnity
satisfactory to it; and
(3) the Grantor Trustee may take any other action deemed proper
by the Grantor Trustee, as the case may be, which is not
inconsistent with such direction; PROVIDED, HOWEVER, that
the Grantor Trustee need take any action which it determines
might involve it in liability or may be unjustly prejudicial
to the Owners not so directing.
Section 6.12 INDEMNIFICATION.
The Depositor agrees to indemnify and hold the Grantor Trustee, the
Certificate Insurer and each Owner harmless against any and all claims, losses,
penalties, fines, forfeitures, legal fees and related costs, judgments, and any
other costs, fees and expenses that the Grantor Trustee, the Certificate Insurer
and any Owner may sustain in any way related to the failure of the Depositor to
perform its duties in compliance with the terms of this Agreement. The Depositor
shall immediately notify the Grantor Trustee, the Certificate Insurer and each
Owner if such a claim is made by a third party with respect to this Agreement,
and the Depositor shall assume (with the consent of the Grantor Trustee) the
defense of any such claim and pay all expenses in connection therewith,
including reasonable counsel fees, and promptly pay, discharge and satisfy any
judgment or decree which may be entered against the Servicer, either of the
Sellers, the Grantor Trustee, the Certificate Insurer and/or any Owner in
respect of such claim. The provisions of this Section 6.12 shall survive the
termination of this Agreement and the payment of the outstanding Certificates.
Section 6.13 ACCESS TO OWNERS OF CERTIFICATES' NAMES AND ADDRESSES.
(a) If any Owner (for purposes of this Section 6.13, an "Applicant")
applies in writing to the Grantor Trustee, and such application states that the
Applicant desires to communicate with other Owners with respect to their rights
under this Agreement or under the Certificates and is accompanied by a copy of
the communication which such Applicant proposes to transmit, then the Grantor
Trustee shall, at the expense of such Applicant, within ten (10) Business Days
after the receipt of such application, furnish or cause to be furnished to such
Applicant a list of the names and addresses of the Owners of record as of the
most recent Payment Date.
(b) Every Owner, by receiving and holding such list, agrees with the
Grantor Trustee that the Grantor Trustee shall not be held accountable in any
way by reason of the disclosure of any information as to the names and addresses
of the Owners hereunder, regardless of the source from which such information
was derived.
END OF ARTICLE VI
ARTICLE VII ACCOUNTS, DISBURSEMENTS AND RELEASES
ACCOUNTS, DISBURSEMENTS AND RELEASES
Section 7.01 COLLECTION OF MONEY.
Except as otherwise expressly provided herein, the Grantor Trustee
shall demand payment or delivery of all money and other property payable to or
receivable by the Grantor Trustee pursuant to this Agreement, the Swap
Agreement, the Class A-2 Fixed Certificate, or the Certificate Insurance Policy.
The Grantor Trustee shall hold all such money and property received by it, other
than pursuant to or as contemplated by Section 6.02(e) hereof, as part of the
Trust Estate and shall apply it as provided in this Agreement.
Section 7.02 ESTABLISHMENT OF ACCOUNTS.
The Depositor shall cause to be established on the Startup Day, and
the Grantor Trustee shall maintain, at the Corporate Trust Office, the Grantor
Trust Account, which is to be held by the Grantor Trustee on behalf of the
Owners of the Certificates, the Certificate Insurer and the Grantor Trustee.
Section 7.03 FLOW OF FUNDS.
(a) The Grantor Trustee shall deposit to the Grantor Trust Account,
without duplication, upon receipt, any payments received under the Swap
Agreement, any Insured Payments, the proceeds of any liquidation of the assets
of the Trust, all remittances made to the Grantor Trustee pursuant to Section
8.08(b) and the Monthly Remittance Amount received from the ContiMortgage Home
Equity Loan Trust 1997-5.
(b) On each Payment Date, the Grantor Trustee shall make the following
disbursements from the Interest Remittance Amount (including the interest
component of any Insured Payments which is available only for the payment of the
amount described in SECOND below), in the following order of priority, and each
such disbursement shall be treated as having occurred only after all preceding
disbursements have occurred:
(i) First, to the Swap Counterparty, any regularly scheduled
payment due to the Swap Counterparty under Section 2(a) of the
Swap Agreement;
(ii) Second, to the Owners of the Certificates, the Current
Interest plus the related Interest Carry Forward
Amount with respect the Certificates without any
priority among the Certificateholders; PROVIDED, that
if the Interest Amount Available plus the interest
component of any Insured Payment is not sufficient to
make a full distribution of interest with respect to
all Certificates, and the amount of the shortfall will
be carried forward as the Interest Carry Forward
Amount.
(iii) RESERVED
(c) RESERVED
(d) On each Payment Date, the Trustee shall make the following
disbursements from amounts relating to principal and each such disbursement
shall be treated as having occurred only after all preceding disbursements have
occurred: 100% of the Principal Distribution Amount to the Owners of the Class
A-2 Floating Certificates.
(e) RESERVED
(f) RESERVED
(g) RESERVED
(h) RESERVED
(i) RESERVED
(j) RESERVED
(k) Upon receipt of Insured Payments from the Certificate Insurer on
behalf of the Owners of the Certificates, the Grantor Trustee shall deposit such
Insured Payments in the Grantor Trust Account and shall distribute such Insured
Payments, or the proceeds thereof as provided in paragraphs (d) above.
(l) Anything herein to the contrary notwithstanding, any payment with
respect to interest on any of the Certificates which is made with moneys
received pursuant to the terms of the Certificate Insurance Policy shall not be
considered payment of such Certificates from the Trust and shall not result in
the payment of or the provision for the payment of the interest on such
Certificates within the meaning of Section 7.03. The Depositor, the Servicer and
the Grantor Trustee acknowledge, and each Owner by its acceptance of a
Certificate agrees, that without the need for any further action on the part of
the Certificate Insurer, the Depositor, the Servicer, the Grantor Trustee or the
Registrar (a) to the extent the Certificate Insurer makes payments, directly or
indirectly, on account of interest on any Certificates to the Owners of such
Certificates, the Certificate Insurer will be fully subrogated to the rights of
such Owners to receive such interest together with any interest thereon of the
applicable Pass-Through Rate from the Trust and (b) the Certificate Insurer
shall be paid such interest only from the sources and in the manner provided
herein for the payment of such interest.
It is understood and agreed that the intention of the parties is that
the Certificate Insurer shall not be entitled to reimbursement on any Payment
Date for amounts previously paid by it unless on such Payment Date the Owners of
the Certificates shall also have received the full amount of the Class A-2
Floating Distribution Amount for such Payment Date.
The Grantor Trustee or Paying Agent shall (i) receive as
attorney-in-fact of each Owner of Certificates any Insured Payment from the
Certificate Insurer and (ii) disburse the same to the Owners of the related
Certificates as set forth in Section 7.03(b). Insured Payments disbursed by the
Grantor Trustee or Paying Agent from proceeds of a Certificate Insurance Policy
shall not be considered payment by the Trust, nor shall such payments discharge
the obligation of the Trust with respect to such Certificates and the
Certificate Insurer shall be entitled to receive the related Reimbursement
Amount pursuant to the Pooling and Servicing Agreement.
The rights of the Owners to receive distributions from the proceeds of
the Trust Estate and all ownership interests of the Owners in such
distributions, shall be as set forth in this Agreement.
Section 7.04 [RESERVED]
Section 7.05 INVESTMENT OF ACCOUNTS.
(a) Consistent with any requirements of the Code, all or a portion of
any Account held by the Grantor Trustee for the benefit of the Owners and the
Certificate Insurer shall be invested and reinvested by the Grantor Trustee in
the name of the Grantor Trustee for the benefit of the Owners and the
Certificate Insurer, as directed in writing by the Depositor, in one or more
Eligible Investments bearing interest or sold at a discount. The bank serving as
Grantor Trustee or any affiliate thereof may be the obligor on any investment
which otherwise qualifies as an Eligible Investment. No investment in any
Account shall mature later than the Business Day immediately preceding the next
Payment Date.
(b) If any amounts are needed for disbursement from any Account held
by the Grantor Trustee and sufficient uninvested funds are not available to make
such disbursement, the Grantor Trustee shall cause to be sold or otherwise
converted to cash a sufficient amount of the investments in such Account. No
investments will be liquidated prior to maturity unless the proceeds thereof are
needed for disbursement.
(c) Subject to Section 10.01 hereof, the Grantor Trustee shall not in
any way be held liable by reason of any insufficiency in any Account held by the
Grantor Trustee resulting from any loss on any Eligible Investment included
therein (except to the extent that the bank serving as Grantor Trustee is the
obligor thereon).
(d) The Grantor Trustee shall invest and reinvest funds in the
Accounts held by the Grantor Trustee, in accordance with the written
instructions delivered to the Grantor Trustee on the Startup Day, but only in
one or more Eligible Investments bearing interest or sold at a discount.
If the Depositor shall have failed to give investment directions to
the Grantor Trustee then the Grantor Trustee shall invest in money market funds
described in Section 7.07(g); to be redeemable without penalty no later than the
Business Day immediately preceding the next Payment Date.
(e) All income or other gain from investments in any Account held by
the Grantor Trustee shall be for the account of the Servicer and shall be
distributed to the Servicer immediately prior to any distribution under Section
7.03 hereof on any Payment Date, and any loss resulting from such investments
shall be for the account of the Servicer and promptly upon the realization of
such loss the Servicer contribute funds in an amount equal to such loss to such
Account.
Section 7.06 PAYMENT OF TRUST EXPENSES.
(a) The Grantor Trustee shall make demand on ContiMortgage to pay the
amount of the expenses of the Trust (other than payments of premiums to the
Certificate Insurer and the Grantor Trustee's Fees) and ContiMortgage shall
promptly pay such expenses directly to the Persons to whom such amounts are due.
(b) The Depositor shall pay directly the reasonable fees and expenses
of counsel to the Grantor Trustee.
Section 7.07 ELIGIBLE INVESTMENTS.
The following are Eligible Investments:
(a) direct general obligations of, or obligations fully and
unconditionally guaranteed as to the timely payment of principal and interest
by, the United States or any agency or instrumentality thereof, provided such
obligations are backed by the full faith and credit of the United States;
(b) Federal Housing Administration debentures; FHLMC senior debt
obligations, and FannieMae senior debt obligations, but excluding any of such
securities whose terms do not provide for payment of a fixed dollar amount upon
maturity or call for redemption; and consolidated senior debt obligations of any
Federal Home Loan Banks; provided, that any such investment shall be rated in
one of the two highest ratings categories by each Rating Agency;
(c) Federal funds, certificates of deposit, time deposits, and bankers'
acceptances (having original maturities of not more than 365 days) of any
domestic bank, the short-term debt obligations of which have been rated F-1+ or
better by Fitch, A-1+ or better by Standard & Poor's and P-1 by Moody's;
(d) Deposits of any bank or savings and loan association (the
long-term deposit rating of which is Baa3 or better by Moody's and BBB by each
of Standard & Poor's and Fitch) which has combined capital, surplus and
undivided profits of at least $50,000,000 which deposits are insured by the FDIC
and held up to the limits insured by the FDIC;
(e) Investment agreements approved by the Certificate Insurer,
provided:
1. The agreement is with a bank or insurance company which has
unsecured, uninsured and unguaranteed senior debt obligations
rated Aa2 or better by Moody's and AA or better by each of
Standard & Poor's and Fitch, and
2. Moneys invested thereunder may be withdrawn without any
penalty, premium or charge upon not more than one day's notice
(provided such notice may be amended or canceled at any time
prior to the withdrawal date), and
3. The agreement is not subordinated to any other
obligations of such insurance company or bank, and
4. The same guaranteed interest rate will be paid on any
future deposits made pursuant to such agreement, and
5. The Grantor Trustee receives an opinion of counsel
that such agreement is an enforceable obligation of
such insurance company or bank;
(f) Repurchase agreements collateralized by securities described in
(a) above with any registered broker/dealer subject to the Securities Investors
Protection Corporation's jurisdiction and subject to applicable limits therein
promulgated by Securities Investors Protection Corporation or any commercial
bank, if such broker/dealer or bank has an uninsured, unsecured and unguaranteed
short-term or long-term obligation rated P-1 or Aa2, respectively, or better by
Moody's A-1+ or AA, respectively or better by Standard & Poor's and F- 1+ or AA,
respectively, or better by Fitch, provided:
a. A master repurchase agreement or specific written
repurchase agreement governs the transaction, and
b. The securities are held free and clear of any
lien by the Grantor Trustee or an independent
third party acting solely as agent for the
Grantor Trustee, and such third party is (a) a
Federal Reserve Bank or (b) a bank which is a
member of the FDIC and which has combined
capital, surplus and undivided profits of not
less than $125 million, or (c) a bank approved
in writing for such purpose by the Certificate
Insurer and the Grantor Trustee shall have
received written confirmation from such third
party that it holds such securities, free and
clear of any lien, as agent for the Grantor
Trustee, and
c. A perfected first security interest under the Uniform
Commercial Code, or book entry procedures prescribed
at 31 CFR 306.1 et seq. or 31 CFR 350.0 et seq., in
such securities is created for the benefit of the
Grantor Trustee, and
d. The repurchase agreement has a term of thirty days or
less and the Grantor Trustee will value the
collateral securities no less frequently than weekly
and will liquidate the collateral securities if any
deficiency in the required collateral percentage is
not restored within two business days of such
valuation, and
e. The fair market value of the collateral securities in
relation to the amount of the repurchase obligation,
including principal and interest, is equal to at
least 106% and such collateral securities must be
valued weekly and market-to-market at current market
price plus accrued interest.
(f) Commercial paper (having original maturities of not more than 270
days) rated in the highest short-term rating categories of each Rating Agency;
and
(g) Investments in no load money market funds registered under the
Investment Company Act of 1940 whose shares are registered under the Securities
Act and rated AAAm or AAAm-G by Standard & Poor's, Aaa by Moody's, and AAA, if
rated by Fitch;
provided that no instrument described above shall evidence either the right to
receive (a) only interest with respect to the obligations underlying such
instrument or (b) both principal and interest payments derived from obligations
underlying such instrument and the interest and principal payments with respect
to such instrument provided a yield to maturity at par greater than 120% of the
yield to maturity at par of the underlying obligations; and provided, further,
that all instruments described hereunder shall mature at par on or prior to the
next succeeding Payment Date unless otherwise provided in this Agreement and
that no instrument described hereunder 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.
Section 7.08 ACCOUNTING AND DIRECTIONS BY GRANTOR TRUSTEE.
(a) (i) The Grantor Trustee shall determine whether an Insured Payment
will be required to be made by the Certificate Insurer on the following Payment
Date and if so then no later than 12:00 noon on the second Business Day
immediately preceding the related Payment Date the Grantor Trustee shall furnish
the Certificate Insurer and the Depositor with a completed Notice in the form
set forth as Exhibit A to the Certificate Insurance Policy. The Notice shall
specify the amount of Insured Payment and shall constitute a claim for an
Insured Payment pursuant to the Certificate Insurance Policy.
(ii) The Grantor Trustee shall determine (a) the payment due
to the Grantor Trustee under the Swap Agreement (which shall equal Current
Interest for the related Payment Date on the Class A-2 Floating Certificates)
and (b) the payment due to the Swap Counterparty under the Swap Agreement (which
shall equal interest to be received on the related Payment Date on the Class A-2
Fixed Certificates) not later than 12:00 noon on the fourth Business Day
immediately preceding the related Payment Date and the Grantor Trustee shall
notify the Swap Counterparty and the Certificate Insurer of such amounts to be
received and to be paid under the Swap Agreement.
(b) By 12:00 noon New York time, on the Business Day preceding each
Payment Date (or such earlier period as shall be agreed by the Depositor and the
Grantor Trustee), the Grantor Trustee shall notify (subject to the terms of
Section 10.03(j) hereof, based solely on information provided to the Grantor
Trustee by the Servicer) the Depositor, the Certificate Insurer and each Owner
of the following information with respect to the next Payment Date (which
notification may be given by facsimile or by telephone promptly confirmed in
writing):
(1) The aggregate amount then on deposit in the Grantor
Trust Account;
(2) The Class A-2 Floating Distribution Amount, with respect to
the Class A-2 Floating Certificates, on the next Payment Date;
(3) The amount of any Insured Payment to be made by the
Certificate Insurer on such Payment Date;
(4) The application of the amounts described in clause (1)
preceding to the allocation and distribution of the related
Class A-2 Floating Distribution Amount, on such Payment Date
in accordance with Section 7.03 hereof;
(5) The Certificate Principal Balance of the Certificates, the
aggregate amount of the principal of each Class of
Certificates to be paid on such Payment Date and the remaining
Certificate Principal Balance of the Class A-2 Floating
Certificates following any such payment;
(6) The amount of any Swap Payment due to the Grantor Trustee on
the related Swap Payment Date; and
(7) The amount of any Swap Payment received by the Grantor Trustee
on the related Swap Payment Date.
Section 7.09 REPORTS BY GRANTOR TRUSTEE TO OWNERS AND THE CERTIFICATE
INSURER.
(a) On each Payment Date the Grantor Trustee shall report in writing
to the Depositor, each Owner, the Certificate Insurer, the Underwriters and the
Rating Agencies:
(i) the amount of the distribution with respect to such
Owners' Certificates (based on a Certificate in the original principal
amount of $1,000);
(ii) the amount of such Owner's distributions allocable to
principal;
(iii) the amount of such Owner's distributions allocable to
interest (based on a Certificate in the original principal amount of
$1,000;
(iv) the Interest Carry Forward Amount;
(v) the principal amount of the Certificates (based on a
Certificate in the original principal amount of $1,000 which will be
Outstanding after giving effect to any payment of principal on such
Payment Date;
(vi) based upon information furnished by the Depositor, such
information as may be required by Section 6049(d)(7)(C) of the Code and
the regulations promulgated thereunder to assist the Owners in
computing their market discount;
(vii) the amount of any Insured Payment included in the
distribution to Owners of Certificates;
(viii) the amount of the Swap Payment received from the Swap
Counterparty and the amount of the Swap Payment paid by the Grantor
Trustee to the Swap Counterparty on the applicable Swap Payment Date;
(ix) all information received by the Grantor Trust Owner of
the Class A-2 Fixed Certificate; and
(x) the Class A-2 Floating Pass-Through Rate.
The Servicer shall provide to the Grantor Trustee the information
described in Section 8.08(d)(iii) and in clause (b) below to enable the Grantor
Trustee to perform its reporting obligations under this Section, and such
obligations of the Grantor Trustee under this Section are conditioned upon such
information being received and the information provided in clauses (ix) shall be
based solely upon information contained in the monthly servicing report provided
by the Servicer to the Grantor Trustee pursuant to Section 8.01 hereof.
(b) The Servicer shall furnish to the Grantor Trustee and to the
Certificate Insurer during the term of this Agreement, such periodic, special,
or other reports or information not specifically provided for herein, as may be
necessary, reasonable, or appropriate with respect to the Grantor Trustee or the
Certificate Insurer, as the case may be, or otherwise with respect to the
purposes of this Agreement, all such reports or information to be provided by
and in accordance with such applicable instructions and directions as the
Grantor Trustee or the Certificate Insurer may reasonably require; provided,
that the Servicer shall be entitled to be reimbursed by the requesting party for
the fees and actual expenses associated with providing such reports, if such
reports are not generally produced in the ordinary course of business.
Section 7.10 REPORTS BY GRANTOR TRUSTEE.
(a) The Grantor Trustee shall report to the Depositor, each of the
Sellers, the Underwriters, the Certificate Insurer and each Owner, with respect
to the amount on deposit in the Grantor Trust Account and the identity of the
investments included therein, as the Depositor or the Certificate Insurer may
from time to time request. Without limiting the generality of the foregoing, the
Grantor Trustee shall, at the request of the Depositor or the Certificate
Insurer transmit promptly to the Depositor and the Certificate Insurer copies of
all accounting of receipts in respect of the Class A-2 Fixed Certificates
furnished to it by the Servicer and shall notify the Certificate Insurer if any
Monthly Remittance Amount has not been received by the Grantor Trustee when due.
(b) The Grantor Trustee shall report to the Certificate Insurer and
each Owner with respect to any written notices it may from time to time receive
which provide an Authorized Officer with actual knowledge that any of the
statements set forth in Section 3.04(b) hereof are inaccurate.
Section 7.11 PREFERENCE PAYMENTS.
The Certificate Insurer will pay any Insured Payment that is a
Preference Amount on the Business Day following receipt on a Business Day by the
Fiscal Agent of (i) a certified copy of the order requiring the return of such
Preference Amount, (ii) an opinion of counsel satisfactory to the Certificate
Insurer that such order is final and not subject to appeal, (iii) an assignment
in such form as is reasonably required by the Certificate Insurer, irrevocably
assigning to the Certificate Insurer all rights and claims of the Owners
relating to or arising under the Class A-2 Floating Certificates against the
debtor which made such preference payment or otherwise with respect to such
preference payment and (iv) appropriate instruments to effect the appointment of
the Certificate Insurer as agent for such Owner in any legal proceeding related
to such preference payment, such instruments being in a form satisfactory to the
Certificate Insurer, provided that if such documents are received after 12:00
noon New York City time on such Business Day, they will be deemed to be received
on the following Business Day. Such payment shall be disbursed to the receiver
or trustee in bankruptcy named in the final court order of the court exercising
jurisdiction on behalf of the Owner and not to any Owner directly unless such
Owner has returned principal or interest paid on the Class A-2 Floating
Certificates to such receiver or trustee in bankruptcy in which case payment
will be disbursed to the Owner.
Each Owner by its purchase of Class A-2 Floating Certificates, the
Servicer and the Grantor Trustee hereby agree that the Certificate Insurer 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, the direction of any appeal of any order relating to such preference
claim and the posting of any surety 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 Servicer, the Grantor Trustee and the
Owners of each 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.
END OF ARTICLE VII
ARTICLE VIII
SERVICING AND ADMINISTRATION
OF ASSETS
Section 8.01 SERVICER.
The Servicer shall give prompt notice to the Grantor Trustee and the
Certificate Insurer of any action, of which the Servicer has actual knowledge,
to (i) assert a claim against the Trust or (ii) assert jurisdiction over the
Trust.
Section 8.02 RESERVED.
Section 8.03 RESERVED.
Section 8.04 RESERVED.
Section 8.05 INDEMNIFICATION.
(a) RESERVED
(b) The Servicer (except Manufacturers and Traders Trust Company if it
is required to succeed the Servicer hereunder) agrees to indemnify and hold the
Grantor Trustee, the Certificate Insurer and each Owner harmless against any and
all claims, losses, penalties, fines, forfeitures, legal fees and related costs,
judgments, and any other costs, fees and expenses that the Grantor Trustee, the
Certificate Insurer and any Owner may sustain in any way related to the failure
of the Servicer to perform its duties and service the Class A-2 Fixed
Certificates in compliance with the terms of this Agreement. The Servicer shall
immediately notify the Grantor Trustee, the Certificate Insurer and each Owner
if a claim is made by a third party with respect to this Agreement, and the
Servicer shall assume (with the consent of the Grantor Trustee and the
Certificate Insurer) the defense of any such claim and pay all expenses in
connection therewith, including reasonable counsel fees, and promptly pay,
discharge and satisfy any judgment or decree which may be entered against the
Servicer, the Grantor Trustee, the Certificate Insurer and/or Owner in respect
of such claim. The provisions of this Section 8.05 shall survive the termination
of this Agreement and the payment of the outstanding Certificates.
Section 8.06 [RESERVED]
Section 8.07 [RESERVED]
Section 8.08 GRANTOR TRUST ACCOUNT.
(a) The Grantor Trustee shall establish and maintain at one or more
Designated Depository Institutions selected by the Servicer the Grantor Trust
Account to be held as a trust account. The Grantor Trust Account shall be
identified on the records of the Designated Depository Institution as follows:
"Manufacturers and Traders Trust Company, as Grantor Trustee under the Grantor
Trust Agreement dated as of December 1, 1997". If the institution at any time
holding the Grantor Trust Account ceases to be eligible as a Designated
Depository Institution hereunder, then the Servicer shall, within 30 days, be
required to name a successor institution meeting the requirements for a
Designated Depository Institution hereunder and notify the Grantor Trustee
thereof. If the Servicer fails to name such a successor institution, then the
Grantor Trust Account shall thenceforth be held as a trust account with a
qualifying Designated Depository Institution selected by the Grantor Trustee.
The Grantor Trustee shall notify the Certificate Insurer and the Owners if there
is a change in the name, account number or institution holding the Grantor Trust
Account.
(b) All funds in the Grantor Trust Account shall be held (i) uninvested (up
to the limits insured by the FDIC) or (ii) invested in Eligible Investments. Any
investments of funds in the Grantor Trust Account shall mature or be
withdrawable at par on or prior to the immediately succeeding Payment Date. The
Grantor Trust Account shall be held in trust in the name of the Grantor Trustee
for the benefit of the Owners and the Certificate Insurer. Any investment
earnings net of investment losses (which losses have not previously been
contributed by the Servicer) on funds held in the Grantor Trust Account shall be
for the account of the Servicer and shall be disbursed by the Grantor Trustee
from the Grantor Trust Account by the Servicer immediately prior to the
distributions under Section 7.03 hereof on any Payment Date. Any investment
losses on funds held in the Grantor Trust Account shall be for the account of
the Servicer and promptly upon the realization of such loss shall be contributed
by the Servicer to the Grantor Trust Account. Any references herein to amounts
on deposit in the Grantor Trust Account shall refer to amounts net of such
investment earnings.
(c) RESERVED.
(d) (i) The Trustee may make withdrawals for its own account from the
amounts on deposit in the Grantor Trust Account, with respect to the Class A-2
Fixed Certificates, for the following purposes:
(A) to make a disbursement to the Servicer on
each Payment Date immediately prior to the
disbursements under Section 7.03 hereof of
investment earnings (net of investment losses)
on amounts on deposit in the Grantor Trust Account;
(B) RESERVED;
(C) to withdraw amounts that have been deposited to the
Grantor Trust Account in error; and
(D) to clear and terminate the Grantor Trust Account
following the termination of the Trust pursuant to
Article IX.
(ii) On the Business Day preceding each Payment Date,
the Servicer shall deliver to the Grantor
Trustee and the Certificate Insurer, a monthly
servicing report with respect to the Class A-2
Fixed Certificates, containing the following
information: principal and interest to be
received on the related Payment Date with respect
to the Class A-2 Fixed Certificates, any Swap
Payments to be received by the Grantor Trustee or
to be made by the Grantor Trustee under the Swap
Agreement on the applicable Swap Payment Date,
the Class A-2 Floating Pass-Through Rate,
principal and interest to be paid on the related
Payment Date to the Owners of the Class A-2
Floating Certificates, the amount of the Insured
Payment, if any, to be received by the Grantor
Trustee with respect to the related Payment Date
and other similar information concerning the
Trust Estate.
(iii) The Servicer shall provide to the Grantor Trustee
the information described in Section 8.08(d)(ii)
and in Section 7.09(a) to enable the Grantor
Trustee to perform its reporting requirements
under Section 7.09 and the Grantor Trustee shall
forward such information to the Underwriters
within five Business Days of receipt thereof.
Section 8.09 RESERVED.
Section 8.10 SERVICING COMPENSATION.
The fee payable to the Servicer under the Pooling and Servicing
Agreement shall be, in part, compensation for the activities of the Servicer
hereunder and the Servicer shall not be entitled to any further compensation
other than earnings (net of losses) on investments in the Grantor Trust Account.
Section 8.11 ANNUAL STATEMENT AS TO COMPLIANCE.
The Servicer, at its own expense, will deliver to the Grantor Trustee,
the Depositor, the Certificate Insurer and the Rating Agencies, on or before
March 31 of each year, commencing in 1998, an Officer's Certificate stating, as
to each signer thereof, that (i) a review of the activities of the Servicer
during such preceding calendar year and of performance under this Agreement has
been made under such officers' supervision, and (ii) to the best of such
officers' knowledge, based on such review, the Servicer has fulfilled all its
obligations under this Agreement for such year, or, if there has been a default
in the fulfillment of all such obligations, specifying each such default known
to such officers and the nature and status thereof including the steps being
taken by the Servicer to remedy such default.
Section 8.12 RESERVED
Section 8.13 ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING
THE CLASS A-2 FIXED CERTIFICATES.
The Grantor Trustee shall provide to the Certificate Insurer, the FDIC
and the supervisory agents and examiners of each of the foregoing (which, in the
case of supervisory agents and examiners, may be required by applicable state
and federal regulations) access to the documentation regarding the Class A-2
Fixed Certificates, such access being afforded without charge but only upon
reasonable request and during normal business hours at the offices of the
Grantor Trustee designated by it.
Section 8.14 ASSIGNMENT OF AGREEMENT.
The Servicer may not assign its obligations under this Agreement, in
whole or in part, unless it shall have first obtained the written consent of the
Grantor Trustee and the Certificate Insurer, which consent shall not be
unreasonably withheld; provided, however, that any assignee must meet the
eligibility requirements set forth in Section 8.20(i) of the Pooling and
Servicing Agreement for a successor servicer.
Section 8.15. REMOVAL OF SERVICER; RESIGNATION OF Servicer.
(a) The removal or resignation pursuant to the Pooling and Servicing
Agreement of the Servicer as defined in the Pooling and Servicing Agreement
shall also constitute a removal or resignation of the Servicer hereunder. The
Certificate Insurer shall have the same rights concerning removal or resignation
of the Servicer hereunder as it does in the Pooling and Servicing Agreement.
(b) The successor servicer appointed pursuant to the Pooling and
Servicing Agreement shall become the successor servicer hereunder.
(c) No removal or resignation of the Servicer shall become effective
hereunder until the Trustee under the Pooling and Servicing Agreement or a
successor servicer shall have assumed the Servicer's responsibilities and
obligations in accordance with the Pooling and Servicing Agreement.
(d) The 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 other activities
of the Servicer so causing such a conflict being of a type and nature carried on
by the Servicer at the date of this Agreement. Any such determination permitting
the resignation of the Servicer shall be evidenced by an opinion of counsel to
such effect which shall be delivered to the Grantor Trustee and the Certificate
Insurer, which opinion shall be at the Servicer's expense.
(e) RESERVED.
(f) RESERVED.
(g) Upon removal or resignation of the Servicer, the Servicer at its
own expense also shall promptly deliver or cause to be delivered to a successor
servicer or the Grantor Trustee all the books and records (including, without
limitation, records kept in electronic form) that the Servicer has maintained
for the Class A-2 Fixed Certificates, including all tax bills, assessment
notices, insurance premium notices and all other documents as well as all
original documents then in the Servicer's possession.
(h) Any collections then being held by the Servicer prior to its
removal and any collections received by the Servicer after removal or
resignation shall be endorsed by it to the Grantor Trustee and remitted directly
and immediately to the Grantor Trustee or the successor Servicer.
(i) RESERVED
(j) RESERVED
(k) The Grantor Trustee and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession. The Servicer agrees to cooperate with the Grantor Trustee and any
successor Servicer in effecting the termination of the Servicer's servicing
responsibilities and rights hereunder and shall promptly provide the Grantor
Trustee or such successor Servicer, as applicable, all documents and records
reasonably requested by it to enable it to assume the Servicer's functions
hereunder and shall promptly also transfer to the Grantor Trustee or such
successor Servicer, as applicable, all amounts which then have been or should
have been deposited in the Principal and Interest Account by the Servicer or
which are thereafter received with respect to the Class A-2. Neither the Grantor
Trustee nor any other successor Servicer shall be held liable by reason of any
failure to make, or any delay in making, any distribution hereunder or any
portion thereof caused by (i) the failure of the Servicer to deliver, or any
delay in delivering, cash, documents or records to it, or (ii) restrictions
imposed by any regulatory authority having jurisdiction over the Servicer. If
the Servicer resigns or is replaced hereunder, the Servicer agrees to reimburse
the Trust, the Certificate Insurer and the Owners for the costs and expenses
associated with the transfer of servicing to the replacement Servicer.
(l) The Servicer which is being removed or is resigning shall give
notice to the, the Certificate Insurer and the Rating Agencies of the transfer
of the servicing to the successor Servicer.
(m) The Grantor Trustee shall give notice to the Owners, the Grantor
Trustee, the Certificate Insurer and the Rating Agencies of the occurrence of
any event described in paragraphs (a) or (b) above of which the Grantor Trustee
is aware.
Section 8.16 INSPECTIONS BY CERTIFICATE INSURER; ERRORS AND OMISSIONS
INSURANCE.
(a) At any reasonable time and from time to time upon reasonable
notice, the Grantor Trustee, the Certificate Insurer or any agents thereof may
inspect the Servicer's servicing operations and discuss the servicing operations
of the Servicer during the Servicer's normal business hours with any of its
officers or directors; provided, however, that the costs and expenses incurred
by the Servicer or its agents or representatives in connection with any such
examinations or discussions shall be paid by the Servicer;
(b) The Servicer agrees to maintain errors and omissions coverage and a
fidelity bond, each at least to the extent required by Section 305 of Part I of
the FannieMae Guide or any successor provision thereof; provided, however, that
if the Grantor Trustee shall become the Servicer, any customary insurance
coverage that the Grantor Trustee maintains shall be deemed sufficient
hereunder; provided, further, that in the event that the fidelity bond or the
errors and omissions coverage is no longer in effect, the Grantor Trustee shall
promptly give such notice to the Certificate Insurer and the Owners. Upon the
request of the Grantor Trustee or the Certificate Insurer, the Servicer shall
cause to be delivered to such requesting Person a certified true copy of such
fidelity bond or errors and omission policy.
END OF ARTICLE VIII
ARTICLE IX
TERMINATION OF TRUST
Section 9.01 TERMINATION OF TRUST.
The Trust created hereunder and all obligations created by this
Agreement will terminate upon 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 Grantor Trustee and required to be paid to such
Owners pursuant to this Agreement upon the latest to occur of (a) the final
payment or other liquidation (or any advance made with respect thereto) of the
Class A-2 Fixed Certificates in the Trust Estate and (b) the final payment to
the Certificate Insurer of all amounts then owing to it. 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 Court of
Saint ▇▇▇▇▇, living on the date hereof. The Grantor Trustee shall give written
notice of termination of the Agreement to each Owner in the manner set forth in
Section 11.05.
Section 9.02 [RESERVED]
Section 9.03 [RESERVED].
Section 9.04 DISPOSITION OF PROCEEDS.
The Grantor Trustee shall, upon receipt thereof, deposit the proceeds
of any liquidation of the Trust Estate pursuant to this Article IX to the
Certificate Account.
END OF ARTICLE IX
ARTICLE X
THE GRANTOR TRUSTEE
Section 10.01. CERTAIN DUTIES AND RESPONSIBILITIES.
(a) The Grantor Trustee (i) (A) 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 Grantor
Trustee and (B) the banking institution that is the Grantor Trustee shall serve
as the Grantor Trustee at all times under this Agreement, 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 Grantor Trustee, shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this Agreement.
(b) Notwithstanding the appointment of the Servicer hereunder, the
Grantor Trustee is hereby empowered to perform the duties of the Servicer it
being expressly understood, however, that the foregoing describes a power and
not an obligation of the Grantor Trustee, and that all parties hereto agree
that, prior to any termination of the Servicer, the Servicer and, thereafter,
the Grantor Trustee or any other successor servicer shall perform such duties.
(c) No provision of this Agreement shall be construed to relieve the
Grantor Trustee from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct, except that:
(1) this subsection shall not be construed to limit
the effect of subsection (a) of this Section;
(2) the Grantor Trustee shall not be personally liable
for any error of judgment made in good faith by an
Authorized Officer, unless it shall be proved that
the Grantor Trustee was negligent in ascertaining the
pertinent facts; and
(3) the Grantor Trustee shall not be liable with
respect to any action taken or omitted to be
taken by it in good faith in accordance with the
direction of the Certificate Insurer or the
Owners of a majority in Percentage Interest of
the Certificates of the affected Class or
Classes and the Certificate Insurer relating to
the time, method and place of conducting any
proceeding for any remedy available to the
Grantor Trustee, or exercising any trust or
power conferred upon the Grantor Trustee, under
this Agreement relating to such Certificates.
(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 Grantor Trustee shall be subject to the provisions
of this Section.
(e) No provision of this Agreement shall require the Grantor 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. None of the provisions contained in this Agreement
shall in any event require the Grantor Trustee to perform, or be responsible for
the manner of performance of, any of the obligations of the Servicer under this
Agreement, except during such time, if any, as the Grantor Trustee shall be the
successor to, and be vested with the rights, duties, powers and privileges of,
the Servicer in accordance with the terms of this Agreement.
(f) The permissive right of the Grantor Trustee to take actions
enumerated in this Agreement shall not be construed as a duty and the Grantor
Trustee shall not be answerable for other than its own negligence or willful
misconduct.
(g) The Grantor 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 satisfaction
against any and all costs and expenses, outlays and 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 10.02. REMOVAL OF GRANTOR TRUSTEE FOR CAUSE.
(a) The Grantor Trustee may be removed pursuant to paragraph (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 Grantor Trustee shall fail to distribute to
the Owners entitled hereto on any Payment Date
amounts available for distribution in accordance
with the terms hereof; (provided, however, that
any such failure which is due to circumstances
beyond the control of the Grantor Trustee shall
not be a cause for removal hereunder); or
(2) the Grantor Trustee shall fail in the performance
of, or breach, any covenant or agreement of the
Grantor Trustee in this Agreement, or if any
representation or warranty of the Grantor
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 Grantor Trustee by the Depositor, the
Certificate Insurer or by the Owners of at least
25% of the aggregate Percentage Interests in the
Trust Estate represented by the Certificates then
Outstanding, a written notice specifying such
failure or breach and requiring it to be
remedied; 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, marshaling of assets and liabilities or
similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been
entered against the Grantor Trustee, and such
decree or order shall have remained in force
undischarged or unstayed for a period of 75
days; or
(4) a conservator or receiver or liquidator or
sequestrator or custodian of the property of the
Grantor Trustee is appointed in any insolvency,
readjustment of debt, marshaling of assets and
liabilities or similar proceedings of or relating
to the Grantor Trustee or relating to all or
substantially all of its property; or
(5) the Grantor 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.
The Depositor shall give notice to the Certificate Insurer and the Rating
Agencies of the occurrence of any such event of which the Depositor is aware.
(b) if any event described in paragraph (a) occurs and is continuing,
then and in every such case (i) the Certificate Insurer or (ii) with the prior
written consent (which shall not be unreasonably withheld) of the Certificate
Insurer, the Depositor and the Owners of a majority of the Percentage Interests
represented by the Offered Certificates or if there are no Offered Certificates
then outstanding by such majority of the Percentage Interests represented by the
Retained Certificates, may, whether or not the Grantor Trustee resigns pursuant
to Section 10.09(b) hereof, immediately, concurrently with the giving of notice
to the Grantor Trustee, and without delaying the 30 days required for notice
therein, appoint a successor Grantor Trustee pursuant to the terms of Section
10.09 hereof.
(c) The Servicer shall not be liable for any costs relating to the
removal of the Grantor Trustee or the appointment of a new Grantor Trustee.
Section 10.03 CERTAIN RIGHTS OF THE GRANTOR TRUSTEE.
Except as otherwise provided in Section 10.01 hereof:
(a) the Grantor 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 Depositor, the Certificate Insurer
or the Owners of any Class of Certificates mentioned herein shall be
sufficiently evidenced in writing;
(c) whenever in the administration of this Agreement the Grantor
Trustee shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Grantor 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 Grantor Trustee may consult with counsel, and the written
advice of such counsel (selected in good faith by the Grantor Trustee) shall be
full and complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reasonable reliance
thereon;
(e) the Grantor 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 Grantor 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 Grantor 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 Grantor Trustee in its discretion may
make such further inquiry or investigation into such facts or matters as it may
see fit;
(g) the Grantor Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents, attorneys or custodians;
(h) the Grantor 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;
(i) the right of the Grantor Trustee to perform any discretionary act
enumerated in this Agreement shall not be construed as a duty, and the Grantor
Trustee shall not be answerable for other than its negligence or willful
misconduct in the performance of such act;
(j) pursuant to the terms of this Agreement, the Servicer is required
to furnish to the Grantor Trustee from time to time certain information and to
make various calculations which are relevant to the performance of the Grantor
Trustee's duties under this Agreement. The Grantor Trustee shall be entitled to
rely in good faith on any such information and calculations in the performance
of its duties hereunder, (i) unless and until an Authorized Officer of the
Grantor Trustee has actual knowledge, or is advised by any Owner of a
Certificate (either in writing or orally with prompt written or telecopies
confirmation), that such information or calculations is or are incorrect, or
(ii) unless there is a manifest error in any such information; and
(k) the Grantor Trustee shall not be required to give any bond or
surety in respect of the execution of the Trust Estate created hereby or the
powers granted hereunder.
Section 10.04 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
CERTIFICATES.
The recitals and representations contained herein and in the
Certificates, except any such recitals and representations relating to the
Grantor Trustee, shall be taken as the statements of the Depositor and the
Grantor Trustee assumes no responsibility for their correctness. The Grantor
Trustee makes no representation as to the validity or sufficiency of this
Agreement, of the Certificates, or the Trust Estate or document related thereto
other than as to validity and sufficiency of its authentication of the
Certificates. The Grantor Trustee shall not be accountable for the use or
application by the Depositor of any of the Certificates or of the proceeds of
such Certificates, or for the use or application of any funds paid to the
Depositor, in respect of the Class A-2 Fixed Certificates deposited into or
withdrawn from the Grantor Trust Account by the Servicer and shall have no
responsibility for filing any financing or continuation statement in any public
office at any time or otherwise to perfect or maintain the perfection of any
security interest or lien or to prepare or file any tax returns or Securities
and Exchange Commission filings for the Trust or to record this Agreement. The
Grantor Trustee shall not be required to take notice or be deemed to have notice
or knowledge of any default unless an Authorized Officer of the Grantor Trustee
shall have received written notice thereof or an Authorized Officer has actual
knowledge thereof. In the absence of receipt of such notice, the Grantor Trustee
may conclusively assume that no default has occurred.
Section 10.05 MAY HOLD CERTIFICATES.
The Grantor Trustee, any Paying Agent, Registrar 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 Grantor Trustee, any Paying Agent, Registrar
or such other agent.
Section 10.06 MONEY HELD IN TRUST.
Money held by the Grantor Trustee in trust hereunder need not be segregated
from other trust funds except to the extent required herein or required by law,
however such money shall be kept in a separate and segregated trust account in
accordance with Section 7.02 hereof. The Grantor 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 Grantor
Trustee in its commercial capacity.
Section 10.07 COMPENSATION AND REIMBURSEMENT; NO LIEN FOR FEES.
The Grantor Trustee shall receive compensation for fees and
reimbursement for expenses pursuant to Section 2.05 and Section 7.06 hereof. The
Grantor Trustee shall have no lien on the Trust Estate for the payment of such
fees and expenses.
Section 10.08 CORPORATE GRANTOR TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Grantor Trustee hereunder which shall be
a corporation or association 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
$50,000,000 subject to supervision or examination by the United States of
America, acceptable to the Certificate Insurer and having a deposit rating of at
least A2 by Moody's (or such lower rating as may be acceptable to Moody's), and
deposit rating of A- by Standard & Poor's (or such lower rating as may be
acceptable to Standard & Poor's) and, if rated by Fitch, having a rating of at
least A- from Fitch (or such lower rating as may be acceptable to Fitch). If
such Grantor 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 Grantor Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall, upon the request of
ContiMortgage with the consent of the Certificate Insurer (which consent shall
not be unreasonably withheld) or of the Certificate Insurer, resign immediately
in the manner and with the effect hereinafter specified in this Article X.
Section 10.09 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Grantor Trustee and no
appointment of a successor Grantor Trustee pursuant to this Article X shall
become effective until the acceptance of appointment by the successor Grantor
Trustee under Section 10.10 hereof.
(b) The Grantor Trustee, or any Grantor Trustee or Grantor Trustees
hereafter appointed, may resign at any time by giving written notice of
resignation to the Depositor and by mailing notice of resignation by first-class
mail, postage prepaid, to the Certificate Insurer and the Owners at their
addresses appearing on the Register; provided, that the Grantor Trustee cannot
resign solely for the failure to receive the Grantor Trustee Fee. A copy of such
notice shall be sent by the resigning Grantor Trustee to the Rating Agencies.
Upon receiving notice of resignation, the Depositor shall promptly appoint a
successor Grantor Trustee or Grantor Trustees acceptable to the Certificate
Insurer by written instrument, in duplicate, executed on behalf of the Trust by
an Authorized Officer of ContiMortgage, one copy of which instrument shall be
delivered to the Grantor Trustee so resigning and one copy to the successor
Grantor Trustee or Grantor Trustees. If no successor Grantor Trustee shall have
been appointed and have accepted appointment within 30 days after the giving of
such notice of resignation, the resigning Grantor Trustee may petition any court
of competent jurisdiction for the appointment of a successor Grantor Trustee, or
any Owner may, on behalf of himself and all others similarly situated, petition
any such court for the appointment of a successor Grantor Trustee. Such court
may thereupon, after such notice, if any, as it may deem proper and appropriate,
appoint a successor Grantor Trustee.
(c) If at any time the Grantor Trustee shall cease to be eligible
under Section 10.08 hereof and shall fail to resign after written request
therefor by the Depositor or the Certificate Insurer, the Certificate Insurer or
the Depositor with the consent of the Certificate Insurer may remove the Grantor
Trustee and appoint a successor Grantor Trustee acceptable to the Certificate
Insurer by written instrument, in duplicate, executed on behalf of the Trust by
an Authorized Officer of the Depositor, one copy of which instrument shall be
delivered to the Grantor Trustee so removed and one copy to the successor
Grantor Trustee.
(d) The Owners of a majority of the Percentage Interests represented
by the Class A-2 Floating Certificates with the consent of the Certificate
Insurer, may at any time remove the Grantor Trustee and appoint a successor
Grantor Trustee acceptable to the Certificate Insurer by delivering to the
Grantor Trustee to be removed, to the successor Grantor Trustee so appointed, to
the Depositor, to the Certificate Insurer and to the Servicer copies of the
record of the act taken by the Owners, as provided for in Section 11.03 hereof.
(e) If the Grantor Trustee fails to perform its duties in accordance
with the terms of this Agreement, or becomes ineligible pursuant to Section
10.08 to serve as Grantor Trustee, the Certificate Insurer may remove the
Grantor Trustee and appoint a successor Grantor Trustee by written instrument,
in triplicate, signed by the Certificate Insurer duly authorized, one complete
set of which instruments shall be delivered to the Depositor, one complete set
to the Grantor Trustee so removed and one complete set to the successor Grantor
Trustee so appointed.
(f) If the Grantor Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of the Grantor
Trustee for any cause, ContiMortgage shall promptly appoint a successor Grantor
Trustee acceptable to the Certificate Insurer. If within one year after such
resignation, removal or incapability or the occurrence of such vacancy, a
successor Grantor Trustee shall be appointed by act of the Certificate Insurer
or the Owners of a majority of the Percentage Interests represented by the
Certificates then Outstanding with the consent of the Certificate Insurer, the
successor Grantor Trustee so appointed shall forthwith upon its acceptance of
such appointment become the successor Grantor Trustee and supersede the
successor Grantor Trustee appointed by the Depositor. If no successor Grantor
Trustee shall have been so appointed by the Depositor or the Owners and shall
have accepted appointment in the manner hereinafter provided, any Owner may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Grantor Trustee. Such
court may thereupon, after such notice, if any, as it may deem proper and
prescribe, appoint a successor Grantor Trustee.
(g) The Depositor shall give notice of any removal of the Grantor
Trustee by mailing notice of such event by first-class mail, postage prepaid, to
the Certificate Insurer, the Rating Agencies and to the Owners as their names
and addresses appear in the Register. Each notice shall include the name of the
successor Grantor Trustee and the address of its corporate trust office.
Section 10.10 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR GRANTOR TRUSTEE.
Every successor Grantor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Depositor on behalf of the Trust and to its
predecessor Grantor Trustee an instrument accepting such appointment hereunder
and stating its eligibility to serve as Grantor Trustee hereunder, and thereupon
the resignation or removal of the predecessor Grantor Trustee shall become
effective and such successor Grantor 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 Depositor or
the successor Grantor Trustee, such predecessor Grantor Trustee shall, upon
payment of its charges then unpaid, execute and deliver an instrument
transferring to such successor Grantor Trustee all of the rights, powers and
trusts of the Grantor Trustee so ceasing to act, and shall duly assign, transfer
and deliver to such successor Grantor Trustee all property and money held by
such Grantor Trustee so ceasing to act hereunder. Upon request of any such
successor Grantor Trustee, the Depositor on behalf of the Trust shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Grantor Trustee all such rights, powers and trusts.
Upon acceptance of appointment by a successor Grantor Trustee as
provided in this Section, the Depositor shall mail notice thereof by first-class
mail, postage prepaid, to the Owners at their last addresses appearing upon the
Register. The Depositor shall send a copy of such notice to the Rating Agencies.
If the Depositor fails to mail such notice within ten days after acceptance of
appointment by the successor Grantor Trustee, the successor Grantor Trustee
shall cause such notice to be mailed at the expense of the Trust.
No successor Grantor Trustee shall accept its appointment unless at
the time of such acceptance such successor shall be qualified and eligible under
this Article X.
Section 10.11 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS OF THE GRANTOR TRUSTEE.
Any corporation or association into which the Grantor 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
Grantor Trustee shall be a party, or any corporation or association succeeding
to all or substantially all of the corporate trust business of the Grantor
Trustee, shall be the successor of the Grantor 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 X. In case any Certificates
have been executed, but not delivered, by the Grantor Trustee then in office,
any successor by merger, conversion or consolidation to such Grantor Trustee may
adopt such execution and deliver the Certificates so executed with the same
effect as if such successor Grantor Trustee had itself executed such
Certificates.
Section 10.12 TAX RETURNS AND REPORTS.
(a) The Grantor Trustee, upon request, will furnish the Servicer with
all such information as may be reasonably required in connection with the
Servicer's preparation of all Tax Returns of the Trust and, upon request within
five (5) Business Days after its receipt thereof, shall (i) sign on behalf of
the Trust any Tax Return that the Grantor Trustee is required to sign pursuant
to applicable federal, state or local tax laws, and (ii) cause such Tax Return
to have been returned to the Servicer for filing.
(b) The Servicer shall prepare and file or cause to be filed with the
Internal Revenue Service Federal tax information returns with respect to the
Trust and the Certificates containing such information and at the times and in
the manner as may be required by the Code or applicable Treasury regulations,
and shall furnish to each Owner of Certificates at any time during the calendar
year for which such returns or reports are made such statements or information
at the times and in the manner as may be required thereby. The Grantor Trustee
shall sign all tax information returns filed pursuant to this Section and any
other returns as may be required by the Code, and in doing so shall rely
entirely upon, and shall have no liability for information provided by, or
calculations provided by, the Servicer.
Section 10.13 LIABILITY OF THE GRANTOR TRUSTEE.
The Grantor Trustee shall be liable in accordance herewith only to the
extent of the obligations specifically imposed upon and undertaken by the
Grantor Trustee herein. Neither the Grantor Trustee nor any of the directors,
officers, employees or agents of the Grantor Trustee shall be under any
liability on any Certificate or otherwise to the Depositor, the Servicer, the
Certificate Insurer 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 Grantor
Trustee, its directors, officers, employees or agents or any such Person against
any liability which would otherwise be imposed by reason of negligent action,
negligent failure to act or willful misconduct in the performance of duties or
by reason of reckless disregard of obligations and duties hereunder. Subject to
the foregoing sentence, the Grantor Trustee shall not be liable for losses on
investments of amounts in the Certificate Account (except for any losses on
obligations on which the bank serving as Grantor Trustee is the obligor). In
addition, the Depositor and Servicer covenant and agree to indemnify the Grantor
Trustee, and when the Grantor Trustee is acting as Servicer, the Servicer, from,
and hold it harmless against, any and all losses, liabilities, damages, claims
or expenses (including legal fees and expenses) of whatsoever kind arising out
of or in connection with the performance of its duties hereunder other than
those resulting from the negligence or bad faith of the Grantor Trustee, and the
Depositor shall pay all amounts not otherwise paid pursuant to Sections 2.05 and
7.06 hereof. The Grantor Trustee and any director, officer, employee or agent of
the Grantor 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. The provisions of this Section
10.13 shall survive the termination of this Agreement and the payment of the
outstanding Certificates.
Section 10.14 APPOINTMENT OF CO-GRANTOR TRUSTEE OR SEPARATE GRANTOR
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 Property may at the time be located, the
Servicer and the Grantor Trustee acting jointly shall have the power and shall
execute and deliver all instruments to appoint one or more Persons approved by
the Grantor Trustee and reasonably acceptable to the Certificate Insurer to act
as co-Grantor Trustee or co-Grantor Trustees, jointly with the Grantor Trustee,
of all or any part of the Trust Estate or separate Grantor Trustee or separate
Grantor 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, such title to the
Trust Estate, or any part thereof, and, subject to the other provisions of this
Section 10.14, such powers, duties, obligations, rights and trusts as the
Servicer and the Grantor Trustee may consider necessary or desirable. If the
Servicer shall not have joined in such appointment within 15 days after the
receipt by it of a request so to do, or in the case any event indicated in
Section 8.20(a) shall have occurred and be continuing, the Grantor Trustee
subject to reasonable approval of the Certificate Insurer alone shall have the
power to make such appointment. No co-Grantor Trustee or separate Grantor
Trustee hereunder shall be required to meet the terms of eligibility as a
successor Grantor Trustee under Section 10.08 and no notice to Owners of the
appointment of any co-Grantor Trustee or separate Grantor Trustee shall be
required under Section 10.09.
Every separate Grantor Trustee and co-Grantor 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 Grantor Trustee shall be
conferred or imposed upon and exercised or performed
by the Grantor Trustee and such separate Grantor
Trustee or co-Grantor Trustee jointly (it being
understood that such separate Grantor Trustee or
co-Grantor Trustee is not authorized to act separately
without the Grantor 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 Grantor Trustee hereunder
or as successor to the Servicer hereunder), the
Grantor 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 Estate or any portion
thereof in any such jurisdiction) shall be exercised
and performed singly by such separate Grantor Trustee
or co- Grantor Trustee, but solely at the direction of
the Grantor Trustee;
(ii) No co-Grantor Trustee hereunder shall be held personally
liable by reason of any act or omission of any other
co-Grantor Trustee hereunder; and
(iii) The Servicer, the Certificate Insurer and the Grantor Trustee
acting jointly may at any time accept the resignation of or
remove any separate Grantor Trustee or co-Grantor Trustee.
Any notice, request or other writing given to the Grantor Trustee
shall be deemed to have been given to each of the then separate Grantor Trustees
and co-Grantor Trustees, as effectively as if given to each of them. Every
instrument appointing any separate Grantor Trustee or co-Grantor Trustee shall
refer to this Agreement and the conditions of this Section 10.14. Each separate
Grantor Trustee and co-Grantor 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 Grantor 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
Grantor Trustee. Every such instrument shall be filed with the Grantor Trustee
and a copy thereof given to the Servicer.
Any separate Grantor Trustee or co-Grantor Trustee may, at any time,
constitute the Grantor 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
Grantor Trustee or co- Grantor 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 Grantor Trustee, to the extent
permitted by law, without the appointment of a new or successor Grantor Trustee.
END OF ARTICLE X
ARTICLE XI
MISCELLANEOUS
Section 11.01 COMPLIANCE CERTIFICATES AND OPINIONS.
Upon any application or request by the Depositor, the Certificate
Insurer or the Owners to the Grantor Trustee to take any action under any
provision of this Agreement, the Depositor, the Certificate Insurer or the
Owners, as the case may be, shall furnish to the Grantor 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 such 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 (including one furnished pursuant to specific requirements of
this Agreement relating to a particular application or request) 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 11.02 FORM OF DOCUMENTS DELIVERED TO THE GRANTOR 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 or opinion of an Authorized Officer of the Grantor
Trustee may be based, insofar as it relates to legal matters, upon a certificate
or opinion of, or representations by, counsel, unless such Authorized Officer
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to the matters upon which his
certificate or opinion is based are erroneous. Any such certificate or opinion
of an Authorized Officer of the Grantor 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 Depositor, or
the Servicer, stating that the information with respect to such factual matters
is in the possession of the Depositor or the Servicer, 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 Grantor Trustee, stating that the information with
respect to such matters is in the possession of the Grantor 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 Grantor 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 11.03 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 Grantor Trustee. 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 Grantor 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.
(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 Grantor Trustee or the Trust in reliance thereon,
whether or not notation of such action is made upon such Certificates.
Section 11.04 NOTICES, ETC. TO GRANTOR 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 Grantor Trustee by any
Owner, the Depositor or the Certificate Insurer shall be sufficient for every
purpose hereunder if made, given, furnished or filed in writing to or with and
received by the Grantor Trustee at the Corporate Trust Office.
Section 11.05 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. Notwithstanding the foregoing, if the Servicer
is removed or resigns or the Trust is terminated, notice of any such events
shall be made by overnight courier, registered mail or telecopy followed by a
telephone call.
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 Grantor 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 shall be satisfactory to the Grantor Trustee shall be deemed to be a
sufficient giving of such notice.
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 11.06. RULES BY GRANTOR TRUSTEE.
The Grantor Trustee may make reasonable rules for any meeting of
Owners.
Section 11.07. 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 11.08 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 11.09 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 11.10 LEGAL HOLIDAYS.
In any case where the date of 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 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 11.11 GOVERNING LAW; SUBMISSION TO JURISDICTION.
(a) In view of the fact that Owners are expected to reside in many
states and outside the United States and the desire to establish with certainty
that this Agreement will be governed by and construed and interpreted in
accordance with the law of a state having a well-developed body of commercial
and financial law relevant to transactions of the type contemplated herein, 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, without giving effect to the conflicts of law
principles thereof.
(b) The parties hereto hereby irrevocably submit to the jurisdiction
of the United States District Court for the Southern District of New York and
any court in the State of New York located in the City and County of New York,
and any appellate court from any thereof, in any action, suit or proceeding
brought against it or in connection with this Agreement or any of the related
documents or the transactions contemplated hereunder or for recognition or
enforcement of any judgment, and the parties hereto hereby irrevocably and
unconditionally agree that all claims in respect of any such action or
proceeding may be heard or determined in such New York State court or, to the
extent permitted by law, in such federal court. The parties hereto agree that a
final judgment in any such action, suit or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. To the extent permitted by applicable law, the parties
hereto hereby waive and agree not to assert by way of motion, as a defense or
otherwise in any such suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of such courts, that the suit, action or
proceeding is brought in an inconvenient forum, that the venue of the suit,
action or proceeding is improper or that the related documents or the subject
matter thereof may not be litigated in or by such courts.
(c) Each of the Depositor and the Servicer hereby irrevocably appoints
and designates the Grantor Trustee as its true and lawful attorney and duly
authorized agent for acceptance of service of legal process with respect to any
action, suit or proceeding set forth in paragraph (b) hereof. The Servicer
agrees that service of such process upon the Grantor Trustee shall constitute
personal service of such process upon it.
(d) Nothing contained in this Agreement shall limit or affect the
right of the Depositor, the Certificate Insurer or the Servicer or any
third-party beneficiary hereunder, as the case may be, to serve process in any
other manner permitted by law or to start legal proceedings relating to the
Class A-2 Floating Certificate in the courts of any jurisdiction.
Section 11.12 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 11.13 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 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 on
the part of the Grantor Trustee acting on behalf of the Trust and the Owner
receiving such excess payment shall promptly, upon discovery of such error or
upon notice thereof from the Grantor 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 Grantor 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 11.14 AMENDMENT.
(a) The Grantor Trustee, the Depositor, and the Servicer may, at any
time and from time to time, and without notice to or the consent of the Owners
but with the consent of the Certificate Insurer amend this Agreement, subject to
the provisions of Section 11.17 and the Grantor Trustee shall consent to such
amendment, for the purpose of (i) curing any ambiguity, correcting or
supplementing any provision hereof which may be inconsistent with any other
provision hereof, or adding 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, removing the restriction on transfer set forth in Section
5.08(b) hereof or (iii) complying with the requirements of the Code and the
regulations proposed or promulgated thereunder or (iv) for any other purpose,
provided that in the case of this clause (iv) such amendment shall not adversely
affect in any material respect any Owner. Any such amendment shall be deemed not
to adversely affect in any material respect any Owner if there is delivered to
the Grantor Trustee written notification from each Rating Agency that such
amendment will not cause such Rating Agency to reduce its then current rating
assigned to the Certificates without regard to the Certificate Insurance Policy.
Notwithstanding anything to the contrary herein, 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) which affects in any manner the terms or provisions of the
Certificate Insurance Policy.
(b) Promptly after the execution of any such amendment, the Grantor
Trustee shall furnish written notification of the substance of such amendment to
the Certificate Insurer and each Owner in the manner set forth in Section 11.05,
and to the Rating Agencies.
(c) The Rating Agencies 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.
Section 11.15 PAYING AGENT; APPOINTMENT AND ACCEPTANCE OF DUTIES.
The Grantor Trustee is hereby appointed Paying Agent. The Depositor
may, subject to the eligibility requirements for the Grantor Trustee set forth
in Section 10.08 hereof, appoint one or more other Paying Agents or successor
Paying Agents.
Each Paying Agent, immediately upon such appointment, shall signify
its acceptance of the duties and obligations imposed upon it by this Agreement
by written instrument of acceptance deposited with the Grantor Trustee.
Each such Paying Agent other than the Grantor Trustee shall execute
and deliver to the Grantor Trustee an instrument in which such Paying Agent
shall agree with the Grantor Trustee, subject to the provisions of Section 6.02,
that such Paying Agent will:
(a) allocate all sums received for distribution to the Owners of
Certificates of each Class for which it is acting as Paying Agent on each
Payment Date among such Owners in the proportion specified by the Grantor
Trustee; and
(b) hold all sums held by it for the distribution of amounts due with
respect to the Certificates in trust for the benefit of the Owners entitled
thereto until such sums shall be paid to such Owners or otherwise disposed of as
herein provided and pay such sums to such Persons as herein provided.
Any Paying Agent other than the Grantor Trustee may at any time resign
and be discharged of the duties and obligations created by this Agreement by
giving at least sixty (60) days written notice to the Grantor Trustee. Any such
Paying Agent may be removed at any time by an instrument filed with such Paying
Agent and signed by the Grantor Trustee.
In the event of the resignation or removal of any Paying Agent other
than the Grantor Trustee such Paying Agent shall pay over, assign and deliver
any moneys held by it as Paying Agent to its successor, or if there be no
successor, to the Grantor Trustee.
Upon the appointment, removal or notice of resignation of any Paying
Agent, the Grantor Trustee shall notify the Certificate Insurer and the Owners
by mailing notice thereof at their addresses appearing on the Register.
Section 11.16 [RESERVED]
Section 11.17 ADDITIONAL LIMITATION ON ACTION AND IMPOSITION OF TAX.
Any provision of this Agreement to the contrary notwithstanding, the
Grantor Trustee shall not, without having obtained an opinion of counsel
experienced in federal income tax matters acceptable to the Certificate Insurer
to the effect that such transaction does not result in a tax imposed on the
Trust (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.
Section 11.18 [RESERVED]
Section 11.19 THE CERTIFICATE INSURER.
Any right conferred to the Certificate Insurer hereunder shall be
suspended and shall run to the benefit of the Owners during any period in which
the Certificate Insurer is in default in its payment obligations under the
Certificate Insurance Policy. At such time as the Certificates and any
Reimbursement Amounts are no longer Outstanding hereunder, the Certificate
Insurer's rights hereunder shall terminate.
Section 11.20. [RESERVED]
Section 11.21. THIRD PARTY RIGHTS.
The Grantor Trustee, the Depositor and the Owners agree that the
Certificate Insurer shall be deemed a third-party beneficiary of this Agreement
as if it were a party hereto.
Section 11.22. NOTICES.
All notices hereunder shall be given as follows, until any superseding
instructions are given to all other Persons listed below:
The Grantor Trustee: Manufacturers and Traders Trust Company ▇▇▇ ▇&▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ Tel: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Trust Administration
The Depositor: ContiSecurities Asset Funding Corp.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Chief Counsel
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
The Servicer: ContiMortgage Corporation
One ▇▇▇▇▇ Park
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Senior Vice President
and Chief Counsel
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax:
The Certificate
Insurer: MBIA Insurance Corporation
▇▇▇ ▇▇▇▇ ▇▇.
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Insured Portfolio
Management - SF (ContiMortgage
Grantor Trust 1997-A)
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Moody's: ▇▇▇▇▇'▇ Investors Service
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: The Home Equity
Monitoring Department
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Fitch: Fitch IBCA, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Standard & Poor's: Standard & Poor's
▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Manager of Structured
Finance Operations Group
Underwriters: Greenwich Capital Markets, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Bear, ▇▇▇▇▇▇▇ & Co.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
ContiFinancial Services Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Chief Counsel, Chief
Financial Officer and Chief
Operating Officer
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Credit Suisse First Boston
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Asset Finance
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ &
▇▇▇▇▇, Inc.
26th Floor
World Financial Center, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Nomura Securities International, Inc.
2 World Financial ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Owners: As set forth in the Register.
Others: Any notice to the Depositor or the
Servicer shall also be furnished
to:
ContiTrade Services L.L.C.
Chief Counsel
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
END OF ARTICLE XI
IN WITNESS WHEREOF, the Depositor, the Seller, the Servicer and the
Grantor 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.
CONTISECURITIES ASSET FUNDING CORP.,
as Depositor
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
Title: Authorized Signatory
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Authorized Signatory
CONTIMORTGAGE CORPORATION, as
Servicer
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Senior Vice President
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President
MANUFACTURERS AND TRADERS TRUST
COMPANY, as Grantor Trustee
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Assistant Vice President
STATE OF NEW YORK )
): ss.:
COUNTY OF NEW YORK )
On the 23rd day of December 1997, before me personally came ▇▇▇▇ ▇. ▇▇▇▇,
to me known, who, being by me duly sworn, did depose and say that he/she resides
at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇, ▇▇; that he/she is an Authorized Signatory of
ContiSecurities Asset Funding Corp., a Delaware Corporation; and that he/she
signed his/her name thereto by order of the respective Boards of Directors of
said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
NOTARIAL SEAL
STATE OF NEW YORK )
): ss.:
COUNTY OF NEW YORK )
On the 23rd day of December 1997, before me personally came ▇▇▇▇ ▇▇▇▇▇▇, to
me known, who, being by me duly sworn, did depose and say that he/she resides at
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇, ▇▇; that he/she is a Authorized Signatory of ContiSecurities
Asset Funding Corp., a Delaware Corporation; and that he/she signed his/her name
thereto by order of the respective Boards of Directors of said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and a affixed my official
seal the day and year in this certificate first above written.
NOTARIAL SEAL
STATE OF PENNSYLVANIA )
): ss
COUNTY OF ▇▇▇▇▇▇▇▇▇▇ )
On the 23rd day of December, 1997, before me personally came ▇▇▇▇▇▇ ▇.
▇▇▇▇, to me known, who, being by me duly sworn, did depose and say that he/she
resides at ▇▇▇▇▇▇▇▇▇▇ County; that he/she is a Senior Vice President of
ContiMortgage Corporation, a Delaware Corporation; and that he signed his name
thereto by order of the respective Boards of Directors of said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
NOTARIAL SEAL
STATE OF PENNSYLVANIA )
):ss
COUNTY OF ▇▇▇▇▇▇▇▇▇▇ )
On the 23rd day of December, 1997, before me personally came ▇▇▇▇▇ ▇▇▇▇▇▇▇,
to me known, who, being by me duly sworn, did depose and say that he/she resides
at ▇▇▇▇▇▇▇ County; that he/she is a Senior Vice President of ContiMortgage
Corporation, a Delaware Corporation; and that he signed his name thereto by
order of the respective Board of Directors of said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first written.
NOTARIAL SEAL
STATE OF NEW YORK )
): ss.:
COUNTY OF NEW YORK )
On the 23rd day of December, 1997, before me personally came ▇▇▇▇ ▇.
▇▇▇▇▇▇, to me known, who, being by me duly sworn did depose and say that he
resides at Clarence, New York; that he is an Assistant Vice President of
Manufacturers and Traders Trust Company, the New York banking corporation
described in and that executed the above instrument as Grantor Trustee; and that
he signed his name thereto by order of the Board of Directors of said New York
banking corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
NOTARIAL SEAL