Exhibit 4.1
POOLING AND SERVICING AGREEMENT
Dated as of February 28, ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
(Trustee)
and
THE MONEY STORE INC.
(Representative and Servicer)
and
THE ORIGINATORS LISTED HEREIN
The Money Store Home Equity Asset Backed Certificates, Series 1997-A
Class A-1, Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class A-4, Class A-5, Class A-6, Class
A-7, Class A-8, Class A-9, Class A-10, Class A-11,
Class A-12, Class X, Class R-1 and Class R-2
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS............................................I-1
ARTICLE II SALE AND CONVEYANCE OF THE TRUST FUND.................II-1
Section 2.01 Sale and Conveyance of Trust Fund;
Priority and Subordination of
Ownership Interests.............................II-1
Section 2.02 Possession of Mortgage Files....................II-1
Section 2.03 Books and Records...............................II-1
Section 2.04 Delivery of Mortgage Loan Documents.............II-1
Section 2.05 Acceptance by Trustee of the Trust Fund;
Certain Substitutions; Certification
by Trustee......................................II-3
Section 2.06 Designations under REMIC Provisions;
Designation of Startup Day......................II-5
Section 2.07 Authentication of Certificates..................II-6
Section 2.08 Fees and Expenses of the Trustee................II-6
Section 2.09 Sale and Conveyance of the Subsequent
Mortgage Loans..................................II-6
ARTICLE III REPRESENTATIONS AND WARRANTIES.......................III-1
Section 3.01 Representations of Representative, Servicer
and Originators................................III-1
Section 3.02 Individual Mortgage Loans......................III-6
Section 3.03 Purchase and Substitution.....................III-13
ARTICLE IV THE CERTIFICATES.....................................IV-1
Section 4.01 The Certificates...............................IV-1
Section 4.02 Registration of Transfer and Exchange
of Certificates................................IV-3
Section 4.03 Mutilated, Destroyed, Lost or Stolen
Certificates...................................IV-7
Section 4.04 Persons Deemed Owners..........................IV-7
ARTICLE V ADMINISTRATION AND SERVICING OF MORTGAGE LOANS........V-1
Section 5.01 Duties of the Servicer..........................V-1
Section 5.02 Liquidation of Mortgage Loans...................V-4
Section 5.03 Establishment of Principal and Interest
Accounts; Deposits in Principal and
Interest Accounts...............................V-4
Section 5.04 Permitted Withdrawals From the Principal
and Interest Accounts...........................V-5
Section 5.05 Payment of Taxes, Insurance and
Other Charges...................................V-7
Section 5.06 Transfer of Accounts............................V-7
Section 5.07 Maintenance of Hazard Insurance.................V-7
Section 5.08 Maintenance of Mortgage Impairment
Insurance Policy................................V-8
Section 5.09 Fidelity Bond...................................V-8
Section 5.10 Title, Management and Disposition of REO
Property........................................V-8
Section 5.11 Certain Tax Information.........................V-9
Section 5.12 Collection of Certain Mortgage Loan
Payments.......................................V-10
Section 5.13 Access to Certain Documentation
and Information Regarding the
Mortgage Loans.................................V-10
Section 5.14 Superior Liens.................................V-10
Section 5.15 [Reserved].....................................V-10
Section 5.16 [Reserved].....................................V-10
ARTICLE VI PAYMENTS TO THE CERTIFICATEHOLDERS...................VI-1
Section 6.01 Establishment of Certificate Accounts;
Deposits in Certificate Accounts;
Permitted Withdrawals from Certificate
Accounts.......................................VI-1
Section 6.02 Establishment of Pre-Funding Account and
Capitalized Interest Account; Deposits in
Pre-Funding Account and Capitalized
Interest Account; Permitted Withdrawals
from Pre-Funding Account and Capitalized
Interest Account...............................VI-2
Section 6.03 Establishment of Expense Accounts;
Deposits in Expense Accounts; Permitted
Withdrawals from Expense Accounts..............VI-3
Section 6.04 Establishment of Insurance Accounts;
Deposits in Insurance Accounts;
Permitted Withdrawals from Insurance
Accounts.......................................VI-4
Section 6.05 Establishment of Spread Account; Deposits in
Spread Account; Permitted Withdrawals
from Spread Account............................VI-5
Section 6.06 [Reserved].....................................VI-7
Section 6.07 Investment of Accounts.........................VI-7
Section 6.08 Priority and Subordination of Distributions....VI-8
Section 6.09 Allocation of Realized Losses.................VI-11
Section 6.10 Statements....................................VI-11
Section 6.11 Advances by the Servicer......................VI-15
Section 6.12 Compensating Interest.........................VI-15
Section 6.13 Reports of Foreclosure and Abandonment
of Mortgaged Property.........................VI-16
Section 6.14. Allocation of Total Monthly Excess Cashflow...VI-16
Section 6.15 Establishment of Servicing Accounts;
Collection of Taxes, Assessments and Similar
Items.........................................VI-17
ARTICLE VII GENERAL SERVICING PROCEDURE.........................VII-1
Section 7.01 Assumption Agreements.........................VII-1
Section 7.02 Satisfaction of Mortgages and Release
of Mortgage Files.............................VII-1
Section 7.03 Servicing Compensation and Contingency Fee....VII-2
Section 7.04 Annual Statement as to Compliance.............VII-3
Section 7.05 Annual Independent Public Accountants' Servicing
Report........................................VII-3
Section 7.06 Trustee's and Certificate Insurer's
Right to Examine Servicer Records and
Audit Operations..............................VII-3
Section 7.07 Reports to the Trustee and the Certificate
Insurer; Principal and Interest Account
Statements....................................VII-3
ARTICLE VIII REPORTS TO BE PROVIDED BY SERVICER.................VIII-1
Section 8.01 Financial Statements.........................VIII-1
ARTICLE IX THE SERVICER.........................................IX-1
Section 9.01 Indemnification; Third Party Claims............IX-1
Section 9.02 Merger or Consolidation of the Representative
and the Servicer...............................IX-1
Section 9.03 Limitation on Liability of the Servicer
and Others.....................................IX-2
Section 9.04 Servicer Not to Resign.........................IX-2
Section 9.05 [Reserved......................................IX-2
Section 9.06 Right of Certificate Insurer to Replace
Servicer.......................................IX-2
ARTICLE X DEFAULT...............................................X-1
Section 10.01 Events of Default...............................X-1
Section 10.02 Trustee to Act; Appointment of Successor........X-2
Section 10.03 Waiver of Defaults..............................X-3
Section 10.04 Transfer of Tax Matters Person Residual
Interest........................................X-3
Section 10.05. Control by Majority Certificateholders..........X-4
ARTICLE XI TERMINATION..........................................XI-1
Section 11.01 Termination....................................XI-1
Section 11.02. Termination Upon Loss of REMIC Status..........XI-2
Section 11.03 Additional Termination Requirements............XI-3
Section 11.04 [Reserved].....................................XI-4
Section 11.05 Accounting Upon Termination of Servicer........XI-4
ARTICLE XII THE TRUSTEE.........................................XII-1
Section 12.01 Duties of Trustee.............................XII-1
Section 12.02 Certain Matters Affecting the Trustee.........XII-2
Section 12.03 Trustee Not Liable for Certificates
or Mortgage Loans.............................XII-3
Section 12.04 Trustee May Own Certificates..................XII-3
Section 12.05 Servicer To Pay Trustee's Fees and Expenses...XII-3
Section 12.06 Eligibility Requirements for Trustee..........XII-4
Section 12.07 Resignation and Removal of the Trustee........XII-4
Section 12.08 Successor Trustee.............................XII-5
Section 12.09 Merger or Consolidation of Trustee............XII-5
Section 12.10 Appointment of Co-Trustee or Separate
Trustee.......................................XII-5
Section 12.11 Authenticating Agent..........................XII-6
Section 12.12 Tax Returns and Reports.......................XII-7
Section 12.13 Appointment of Custodians.....................XII-8
Section 12.14. Protection of Trust Fund......................XII-8
Section 12.15. Calculation of LIBOR..........................XII-8
Section 12.16. Luxembourg Reports and Notices................XII-9
ARTICLE XIII MISCELLANEOUS PROVISIONS...........................XIII-1
Section 13.01 Acts of Certificateholders...................XIII-1
Section 13.02 Amendment....................................XIII-1
Section 13.03 Recordation of Agreement.....................XIII-1
Section 13.04 Duration of Agreement........................XIII-2
Section 13.05 Governing Law................................XIII-2
Section 13.06 Notices......................................XIII-2
Section 13.07 Severability of Provisions...................XIII-2
Section 13.08 No Partnership...............................XIII-2
Section 13.09 Counterparts.................................XIII-2
Section 13.10 Successors and Assigns.......................XIII-2
Section 13.11 Headings.....................................XIII-3
Section 13.12 The Certificate Insurer......................XIII-3
Section 13.13 Paying Agent.................................XIII-3
Section 13.14 Notification to Rating Agencies..............XIII-3
Section 13.15 Third Party Rights...........................XIII-4
SCHEDULE I Description of Certain Litigation
SCHEDULE II Auction Procedures
EXHIBIT A Contents of Mortgage File
EXHIBIT B Forms of Certificates
EXHIBIT C Principal and Interest Account Letter Agreement
EXHIBIT D Resale Certification
EXHIBIT E Assignment
EXHIBIT E(1) Wiring Instructions Form
EXHIBIT F Form of Trustee Initial Certification
EXHIBIT F-1 Form of Trustee Interim Certification
EXHIBIT G Form of Trustee Final Certification
EXHIBIT H Pool I Mortgage Loan Schedule
EXHIBIT H-1 Pool II Mortgage Loan Schedule
EXHIBIT H-2 Pool III Mortgage Loan Schedule
EXHIBIT I List of Originators
EXHIBIT J Request for Release of Documents
EXHIBIT K Transfer Affidavit
EXHIBIT L Form of Notice
EXHIBIT M Custodial Agreement
EXHIBIT N Form of Liquidation Report
EXHIBIT O Form of Delinquency Report
EXHIBIT P [Omitted]
EXHIBIT Q [Omitted]
EXHIBIT R Servicer's Monthly Computer Tape Format
EXHIBIT S Subservicing Agreement
EXHIBIT T Prices for Low Interest Mortgage Loans
Agreement dated as of February 28, 1997, among The Bank of New York, as
trustee (the "Trustee"), the entities listed on Exhibit I hereto (collectively,
the "Originators") and The Money Store Inc., as Representative (the
"Representative") and Servicer (the "Servicer"):
PRELIMINARY STATEMENT
In order to facilitate the servicing of certain Mortgage Loans by the
Servicer, the Representative, the Servicer and the Originators are entering into
this Agreement with the Trustee. The Originators are selling the Mortgage Loans
and amounts on deposit in the Pre-Funding Account to the Trustee for the benefit
of the Certificateholders, pursuant to which 15 classes of Certificates are
being issued, denominated on the face thereof as The Money Store Home Equity
Asset Backed Certificates 1997-A, Class A-1, Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class A-4,
Class A-5, Class A-6, Class A-7, Class A-8, Class A-9, Class A-10, Class A-11,
Class A-12, Class X, Class R-1 and Class R-2, respectively, representing in the
aggregate a 100% undivided ownership interest in the Mortgage Loans and amounts
on deposit in the Pre-Funding Account. The Initial Pool I, Initial Pool II and
Initial Pool III Mortgage Loans have an aggregate outstanding principal balance
of $349,608,381.20, $255,021,932.51 and $9,990,998.35, respectively (and an
aggregate outstanding Principal Balance of $614,621,312.06, which gives effect
to the discounts on the Low Interest Mortgage Loans of $0), as of February 28,
1997, except for those Initial Mortgage Loans originated after February 28, 1997
and delivered to the Trustee on the Closing Date as to which the aggregate
outstanding principal balance shall be as of the date of the related Mortgage
Note (the "Cut-Off Date"), after application of payments received by the
Originators on or before such date, and the original Pre-Funded Amount equals
$185,378,687.94. Except for the Low Interest Mortgage Loans in the related Pool,
if any, each Initial Mortgage Loan in such Pool has, and each Subsequent
Mortgage Loan in such Pool will have, a Mortgage Interest Rate in excess of the
Class Adjusted Mortgage Loan Remittance Rate of each Class of Certificates in
the related Pool. The Class R Certificates are subordinated to the Class X and
Class A Certificates, in each case to the extent described herein. As provided
herein, two separate real estate mortgage investment conduit ("REMIC") elections
will be made in connection with the assets constituting each of REMIC I and
REMIC II for federal income tax purposes. On the Startup Day, all the Classes of
REMIC II Regular Certificates will be designated "regular interests" in REMIC II
and the Class R-2 Certificates will be designated the single class of "residual
interests" in such REMIC for purposes of the REMIC Provisions (as defined
herein). On the Startup Day, all the Classes of Certificates except for the
Class R-1 and Class R-2 Certificates will be designated "regular interests" in
REMIC I and the Class R-1 Certificates will be designated the single class of
"residual interests" in such REMIC for purposes of the REMIC Provisions.
The parties hereto agree as follows: ARTICLE I
DEFINITIONS
Whenever used herein, the following words and phrases, unless the
context otherwise requires, shall have the following meanings. This Agreement
relates to a Trust Fund evidenced by The Money Store Home Equity Asset Backed
Certificates Series 1997-A Class A-1, Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class A-4, Class
A-5, Class A- 6, Class A-7, Class A-8, Class A-9, Class A-10, Class A-11, Class
A-12, Class X, Class R-1 and Class R-2. Unless otherwise provided, all
calculations of interest pursuant to this Agreement are based on a 360-day year
and twelve 30-day months.
ACCOUNT OR ACCOUNTS: The Certificate Accounts, Pre-Funding Account,
Expense Accounts, Capitalized Interest Account, Spread Account, Servicing
Account or Insurance Accounts (including any sub- accounts of any of the
foregoing) established and held in trust by the Trustee for the
Certificateholders. The obligation to establish and maintain the Accounts is not
delegable.
ADDITION NOTICE: With respect to the transfer of Subsequent Mortgage
Loans to the Trust Fund pursuant to Section 2.09 herein, notice, which shall be
given not later than five Business Days prior to the related Subsequent Transfer
Date, of the Representative's designation of Subsequent Mortgage Loans of the
related Pool to be sold to the Trust Fund and the aggregate Principal Balance of
such Subsequent Mortgage Loans.
ADJUSTABLE RATE CERTIFICATES: The Class A-10 Certificates.
ADJUSTED MORTGAGE INTEREST RATE: With respect to each Mortgage Loan, a
percentage per annum, equal to the related Mortgage Interest Rate less the per
annum rate used in calculating (i) the Annual Expense Escrow Amount, (ii) the
premiums payable to the Certificate Insurer as set forth in the Insurance
Agreement, (iii) the Servicing Fee, (iv) the Contingency Fee, and (v) with
respect to a Pool II Mortgage Loan, the Auction Agent fee.
AGGREGATE INITIAL SPREAD ACCOUNT DEPOSIT: With respect to any
Remittance Date, the sum of the Initial Pool Spread Account Deposits for each of
the Pools.
AGREEMENT: This Pooling and Servicing Agreement and all amendments
hereof and supplements hereto.
ANNUAL EXPENSE ESCROW AMOUNT: An amount equal to the product of (i)
.02% per annum and (ii) the aggregate Class Principal Balances of the Class A
Certificates, which is computed and payable on a monthly basis and represents
the estimated annual Trustee's fees and expenses of the Trust Fund.
APPROVED LUXEMBOURG NEWSPAPER: With respect to any notice or other
information required hereunder to be published in Luxembourg, the Luxembourger
Wort or another daily publication of comparable circulation in Luxembourg that
meets the requirements of the Luxembourg Stock Exchange for the publication of
such notice or other information.
ASSIGNMENT OF MORTGAGE: An assignment of the Mortgage, notice of
transfer or equivalent instrument sufficient under the laws of the jurisdiction
wherein the related Mortgaged Property is located to reflect of record the sale
of the Mortgage to the Trustee for the benefit of the Certificateholders.
AUCTION AGENT: The meaning set forth in the Auction Procedures.
AUCTION AGENT AGREEMENT: The meaning set forth in the Auction
Procedures.
AUCTION AGENT FEE: The meaning set forth in the Auction Agent
Agreement. The Auction Agent Fee includes the Broker-Dealer Fee payable to the
Broker-Dealer (each as defined in the Auction Procedures).
AUCTION PROCEDURES: The procedures set forth in Schedule II hereof by
which the Auction Rate is determined.
AUCTION RATE: The rate of interest per annum that results from
implementation of the Auction Procedures and is determined as described in
Section 2.1.1(c)(ii) thereof.
AUCTION RATE CERTIFICATES: The Class A-11 Certificates.
AUCTION REPORTING DATE: That day of each month which is the fifth
Business Day prior to the Remittance Date occurring in such month.
AUTHENTICATING AGENT: Initially, The Bank of New York, and thereafter,
any successor appointed pursuant to Section 12.11.
BIF: The Bank Insurance Fund, or any successor thereto.
BUSINESS DAY: Any day other than (i) a Saturday or Sunday, or (ii) a
day on which banking institutions in the States of New York or New Jersey are
authorized or obligated by law or executive order to be closed. When used with
respect to an Interest Determination Date, "Business Day" shall also mean a day
on which banks are open for dealing in foreign currency and exchange in London
and New York City.
CAPITALIZED INTEREST ACCOUNT: The account established in accordance
with Section 6.02 hereof and maintained by the Trustee.
CAPITALIZED INTEREST REQUIREMENT: With respect to each Pool and the
Remittance Dates in April, May and June 1997, the excess, if any, of (i) for
Pool I and Pool III, 30 days' interest calculated at the weighted average Class
Remittance Rates of the Classes of Certificates of such Pool, and for Pool II,
interest calculated on the actual number of days since the last Remittance Date
(or with respect to the Remittance Date in April 1997, the actual number of days
from March 15, 1997 to but not including such Remittance Date with respect to
the Adjustable Rate Certificates and the actual number of days from the Closing
Date to but not including such Remittance Date with respect to the Auction Rate
Certificates) to but not including the related Remittance Date at the weighted
average Class Remittance Rates of the Pool II Certificates of such Pool, on the
excess of (a) the Pool Principal Balance of such Pool for such Remittance Date
over (b) the aggregate Principal Balances of the Mortgage Loans of such Pool for
such Remittance Date over (ii) any Pool Pre-Funding Earnings for such Pool to be
transferred to the applicable Certificate Account on such Remittance Date
pursuant to Section 6.02(d). With respect to the Special Remittance Date, 27
days' interest (or, in the case of Pool II, 12 days' interest) calculated at the
weighted average Class Remittance Rates of the Classes of Certificates of such
Pool on the amount to be transferred on the Special Remittance Date from the
Pre-Funding Account to the Certificate Account relating to the Certificates of
such Pool pursuant to Section 6.02(c).
CERTIFICATE: Any Class A-1, Class A-2, Class A-3, Class A-4, Class A-5,
Class A-6, Class A-7, Class A-8, Class A-9, Class A-10, Class A-11, Class A-12,
Class X, Class R-1 or Class R-2 Certificate executed by the Servicer and
authenticated by the Trustee or the Authenticating Agent substantially in the
form annexed hereto as Exhibit ▇-▇, ▇-▇, ▇-▇ or B-4.
CERTIFICATE ACCOUNTS: As described in Section 6.01.
CERTIFICATEHOLDER or HOLDER: Each Person in whose name a Certificate is
registered in the Certificate Register, except that, solely for the purposes of
giving any consent, waiver, request or demand pursuant to this Agreement, any
Certificate registered in the name of the Representative, the Servicer, any
Subservicer or any Originator, or any affiliate of any of them, shall be deemed
not to be outstanding and the undivided Percentage Interest evidenced thereby
shall not be taken into account in determining whether the requisite percentage
of Certificates necessary to effect any such consent, waiver, request or demand
has been obtained. When used with respect to any Class or Pool of Certificates,
a Certificateholder or Holder of such Class or Pool of Certificates, as the case
may be.
CERTIFICATEHOLDERS' INTEREST CARRYOVER: For any Remittance Date on
which the Class A-10 or Class A-11 Remittance Rate is based upon the applicable
Net Funds Cap for Pool II, the excess of (i) the amount of interest the Class
A-10 or Class A-11 Certificates would be entitled to receive on such Remittance
Date had interest been calculated at a rate equal to LIBOR plus the applicable
Margin or the applicable Auction Rate, as the case may be (but in no event
exceeding 14% per annum), over (ii) the amount of interest such Class will
receive on such Remittance Date at the applicable Net Funds Cap for Pool II,
together with the unpaid portion of any such excess from prior Remittance Dates
(and interest thereon at the then applicable Class A-10 or Class A-11 Remittance
Rate, as the case may be, without giving effect to the Net Funds Cap, but in no
event exceeding 14% per annum). No Certificateholders' Interest Carryover shall
be paid on the Class A-10 or Class A-11 Certificates after the Class Principal
Balance of the respective Class is reduced to zero.
CERTIFICATE INSURANCE POLICIES: Collectively, the certificate guaranty
insurance policies relating to the Certificates of each Pool, each dated the
Closing Date, and each issued by the Certificate Insurer for the benefit of the
Holders of the Certificates of the related Pool, pursuant to which the
Certificate Insurer guarantees Insured Payments.
CERTIFICATE INSURER: MBIA Insurance Corporation, a New York stock
insurance corporation, or any successor thereof, as issuer of the Certificate
Insurance Policies.
CERTIFICATE REGISTER: As described in Section 4.02.
CERTIFICATE REGISTRAR: Initially, The Bank of New York, and thereafter,
any successor appointed pursuant to Section 4.02.
CHANGE DATE: The date on which the Mortgage Interest Rate of each Pool
II Mortgage Loan is subject to adjustment, which date is the Due Date set forth
in the related Mortgage Note and each first, third, sixth or twelfth Due Date
thereafter, as set forth in the related Mortgage Note.
CLASS: Collectively, Certificates having the same priority of payment
and bearing the same designation.
CLASS A CERTIFICATE: A Certificate denominated as a Class A-1, Class
A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class
A-9, Class A-10, Class A-11 or Class A-12 Certificate.
CLASS A CERTIFICATEHOLDER: A Holder of a Class A Certificate.
CLASS A PRINCIPAL BALANCE: The sum of the Class Principal Balances of
each Class of Class A Certificates.
CLASS ADJUSTED MORTGAGE LOAN REMITTANCE RATE: With respect to each
Mortgage Loan, a percentage per annum, being the sum of (i) (a) the Class A-1,
Class A-2, Class A-3, Class A-4, Class A- 5, Class A-6, Class A-7, Class A-8 or
then current Class A-9 Remittance Rate, as the case may be, with respect to a
Pool I Mortgage Loan, (b) the then current Class A-10 or Class A-11 Remittance
Rate with respect to a Pool II Mortgage Loan or (c) the then current Class A-12
Remittance Rate, as the case may be, with respect to a Pool III Mortgage Loan,
(ii) .02% per annum, relating to the Annual Expense Escrow Amount, (iii) the
applicable per annum rate relating to premiums payable to the Certificate
Insurer as set forth in the Insurance Agreement, and (iv) with respect to the
Pool II Mortgage Loans, for purposes of determining the Class Adjusted Mortgage
Loan Remittance Rate with respect to Class A-11, the Auction Agent Fee as set
forth in the Auction Agent Agreement.
CLASS CURRENT INTEREST REQUIREMENT: For each Class of Class A
Certificates and with respect to each Remittance Date, the amount equal to 30
days interest (or, in the case of the Pool II Certificates, the actual number of
days since the last Remittance Date for such Classes to but not including the
related Remittance Date) at the related Class Remittance Rate on the Class
Principal Balance for such Class outstanding immediately prior to such
Remittance Date; provided, however, that with respect to the April 1997
Remittance Date, interest on the Class A-10 Certificates shall accrue at the
applicable Class Remittance Rate from and including March 15, 1997 to but not
including the April 1997 Remittance Date and interest on the Class A-11
Certificates shall accrue at the applicable Class Remittance Rate from and
including the Closing Date to but not including the April 1997 Remittance Date.
If a principal prepayment is made to a Class of Class A Certificates on the
Special Remittance Date, the Current Interest Requirement for each such Class
for the July 1997 Remittance Date will be based on 30 days' interest (or, in the
case of the Pool II Certificates, the actual number of days since the June 1997
Remittance Date) on the Class Principal Balance for such Class on the Special
Remittance Date, after giving effect to such principal prepayment. The Class
A-10 and Class A-11 Current Interest Requirement shall not include any
Certificateholders' Interest Carryover.
CLASS POOL FACTOR: With respect to a Class of Class A Certificates, as
of any date of determination, the then Class Principal Balance for such Class
divided by the Original Principal Balance for such Class.
CLASS PRINCIPAL BALANCE: With respect to each Class of Class A
Certificates, as of any date of determination, the Original Principal Balance of
such Class less (i) the sum of all amounts (including that portion of Insured
Payments, if any, made in respect of principal) previously distributed to the
Certificateholders of such Class in respect of principal pursuant to Section
6.08(d) and (ii) the amount, if any, of Realized Losses previously allocated to
such Class pursuant to Section 6.09 other than a loss described in the last two
sentences of the definition of Realized Loss. For purposes of determining the
Class Principal Balance of each Class of Class A Certificates with respect to
any Remittance Date, no effect shall be given to any principal to be
distributed, or Realized Losses to be allocated, to each such Class on such
Remittance Date.
CLASS REMITTANCE RATE: With respect to a Class of Class A Certificates,
the annual rate of interest payable to the Certificateholders of such Class,
which rate is set forth, or determined as provided, under the definitions of the
Class A-1 through Class A-12 Remittance Rates.
CLASS A-1 CERTIFICATE: A Certificate denominated as a Class A-1
Certificate.
CLASS A-1 REMITTANCE RATE: The annual rate of interest payable to the
Class A-1 Certificateholders, which shall be equal to 6.510%.
CLASS A-2 CERTIFICATE: A Certificate denominated as a Class A-2
Certificate.
CLASS A-2 REMITTANCE RATE: The annual rate of interest payable to the
Class A-2 Certificateholders, which shall be equal to 6.565%.
CLASS A-3 CERTIFICATE: A Certificate denominated as a Class A-3
Certificate.
CLASS A-3 REMITTANCE RATE: The annual rate of interest payable to the
Class A-3 Certificateholders, which shall be equal to 6.675%.
CLASS A-4 CERTIFICATE: A Certificate denominated as a Class A-4
Certificate.
CLASS A-4 REMITTANCE RATE: The annual rate of interest payable to the
Class A-4 Certificateholders, which shall be equal to 6.890%.
CLASS A-5 CERTIFICATE: A Certificate denominated as a Class A-5
Certificate.
CLASS A-5 REMITTANCE RATE: The annual rate of interest payable to the
Class A-5 Certificateholders, which shall be equal to 7.060%.
CLASS A-6 CERTIFICATE: A Certificate denominated as a Class A-6
Certificate.
CLASS A-6 REMITTANCE RATE: The annual rate of interest payable to the
Class A-6 Certificateholders, which shall be equal to 7.210%
CLASS A-7 CERTIFICATE: A Certificate denominated as a Class A-7
Certificate.
CLASS A-7 REMITTANCE RATE: The annual rate of interest payable to the
Class A-7 Certificateholders, which shall be equal to 7.410%.
CLASS A-8 CERTIFICATE: A Certificate denominated as a Class A-8
Certificate.
CLASS A-8 REMITTANCE RATE: The annual rate of interest payable to the
Class A-8 Certificateholders, which shall be equal to 7.705%.
CLASS A-9 CERTIFICATE: A Certificate denominated as a Class A-9
Certificate.
CLASS A-9 PRINCIPAL DISTRIBUTION AMOUNT: For any Remittance Date, the
product of (i) the applicable Class A-9 Principal Percentage for such Remittance
Date and (ii) the Class A-9 Pro Rata Principal Distribution Amount for such
Remittance Date; provided, however, that in no event will the Class A-9
Principal Distribution Amount on any Remittance Date be greater than the Pool
Principal Distribution Amount for Pool I for such Remittance Date or the Class
Principal Balance of the Class A-9 Certificates.
CLASS A-9 PRINCIPAL PERCENTAGE: For each Remittance Date, the Class A-9
Principal Percentage shall be as follows:
Class A-9 Principal Remittance Dates Percentage
April 1997 - March 2000 0% April 2000 - March 2002 45% April 2002 -
March 2003 80% April 2003 - March 2004 100% April 2004 and thereafter
140%
CLASS A-9 PRO RATA PRINCIPAL DISTRIBUTION AMOUNT: For each Remittance
Date, an amount equal to the product of (x) a fraction, the numerator of which
is the Class Principal Balance of the Class A-9 Certificates immediately prior
to such Remittance Date and the denominator of which is the aggregate Class
Principal Balance of the Pool I Certificates immediately prior to such
Remittance Date and (y) the Pool Principal Distribution Amount for Pool I on
such Remittance Date.
CLASS A-9 REMITTANCE RATE: The annual rate of interest payable to the
Class A-9 Certificateholders, which shall be equal to 7.235%.
CLASS A-10 CERTIFICATE: A Certificate denominated as a Class A-10
Certificate.
CLASS A-10 REMITTANCE RATE: The annual rate of interest payable to the
Class A-10 Certificateholders shall be equal to 5.8175% for the first Remittance
Date. Thereafter, the Class A-10 Remittance Rate shall be equal to the lesser of
(i) LIBOR plus .13% and (ii) the Net Funds Cap for Pool II (but in no event
exceeding 14% per annum).
CLASS A-11 CERTIFICATE: A Certificate denominated as a Class A-11
Certificate.
CLASS A-11 REMITTANCE RATE: The annual rate of interest payable to the
Class A-11 Certificateholders shall be equal to 5.6675% for the first Remittance
Date. Thereafter, the Class A-11 Remittance Rate shall be equal to the annual
rate of interest determined according to the Auction Procedures set forth in
Schedule II, subject to the applicable Net Funds Cap (but in no event exceeding
14% per annum).
CLASS A-12 CERTIFICATE: A Certificate denominated as a Class A-12
Certificate.
CLASS A-12 REMITTANCE RATE: The annual rate of interest payable to the
Class A-12 Certificateholders, which shall be equal to 7.525%.
CLASS R-1 CERTIFICATE: A Certificate denominated as a Class R-1
Certificate.
CLASS R-2 CERTIFICATE: A Certificate denominated as a Class R-2
Certificate.
CLASS R CERTIFICATE: Collectively or singularly, the Class R-1 and/or
Class R-2 Certificates, as applicable.
CLASS R CERTIFICATEHOLDER: A Holder of a Class R Certificate.
CLASS X CERTIFICATE: A Certificate denominated as a Class X
Certificate.
CLASS X REMITTANCE AMOUNT: As of any Remittance Date, an amount equal
to the sum of (i) the Pool Remaining Amount Available for each Pool, and (ii)
the Remainder Excess Spread Amount, net of reimbursements to the Servicer or the
Representative of Reimbursable Amounts pursuant to Section 5.04(f).
CLOSING DATE: March 31, 1997.
CODE: The Internal Revenue Code of 1986, as amended, or any successor
legislation thereto.
COMPENSATING INTEREST: As defined in Section 6.12.
CONTINGENCY FEE: As to each Mortgage Loan, the annual fee which is, in
addition to the Servicing Fee, payable to the Servicer pursuant to Section 7.03
of this Agreement. Such fee shall be calculated and payable monthly only from
the amounts received in respect of interest on such Mortgage Loan, shall accrue
at the rate of .25% per annum and shall be computed on the basis of the same
principal amount and for the period respecting which any related interest
payment on a Mortgage Loan is computed. The Contingency Fee is payable solely
from the interest portion of related (i) Monthly Payments, (ii) Liquidation
Proceeds or (iii) Released Mortgaged Property Proceeds collected by the
Servicer, or as otherwise provided in Section 5.04.
CONTRACT OF INSURANCE: A Contract of Insurance under Title I.
CROSS-OVER DATE: The date on which the Maximum Subordinated Amount is
reduced to zero.
CUMULATIVE REALIZED LOSSES: As of any date of determination, the
aggregate amount of Realized Losses with respect to the applicable Pool of
Mortgage Loans since the Startup Day.
CURTAILMENT: With respect to a Mortgage Loan, any payment of principal
received during a Due Period as part of a payment that is in excess of five
times the amount of the Monthly Payment due for such Due Period and which is not
intended to satisfy the Mortgage Loan in full, nor is intended to cure a
delinquency.
CUT-OFF DATE: February 28, 1997; provided, however, that for purposes
of determining characteristics of the Initial Mortgage Loans as of the Cut-Off
Date, the Cut-Off Date for those Initial Mortgage Loans originated after
February 28, 1997 shall be deemed to be the date of the applicable Mortgage
Note.
DEFICIENCY AMOUNT: means with respect to any Remittance Date and any
Pool of Certificates, (i) the excess, if any, of (a) the Pool Current Interest
Requirement for the related Pool over (b) the sum of the Pool Available
Remittance Amount for such Pool (minus amounts withdrawn to pay required
premiums to the Certificate Insurer), and the Monthly Excess Spread and the
Subordination Reduction Amount applicable to such Pool, plus (ii) the
Subordination Deficit, if any, for such Pool with respect to such Remittance
Date.
DEFICIENT VALUATION: With respect to any Mortgage Loan, a valuation by
a court of competent jurisdiction of the Mortgaged Property in an amount less
than the then outstanding indebtedness under the Mortgage Loan, which valuation
results from a proceeding initiated under the United States Bankruptcy Code, as
amended from time to time (11 U.S.C.).
DELETED MORTGAGE LOAN: A Mortgage Loan replaced by a Qualified
Substitute Mortgage Loan.
DEPOSITORY: The Depository Trust Company and any successor Depository
hereafter named.
DESIGNATED DEPOSITORY INSTITUTION: With respect to each Principal and
Interest Account, an entity which is an institution whose deposits are insured
by either the BIF or SAIF administered by the FDIC, the unsecured and
uncollateralized long-term debt obligations of which shall be rated "A" or
better by S&P and A2 or better by Moody's, or one of the two highest short-term
ratings by S&P and the highest short term rating by Moody's, and which is either
(i) a federal savings association duly organized, validly existing and in good
standing under the federal banking laws, (ii) an institution duly organized,
validly existing and in good standing under the applicable banking laws of any
state, (iii) a national banking association duly organized, validly existing and
in good standing under the federal banking laws, or (iv) a principal subsidiary
of a bank holding company, in each case acting or designated by the Servicer as
the depository institution for a Principal and Interest Account.
DETERMINATION DATE: That day of each month which is the later of (i)
the third Business Day prior to the 15th day of such month and (ii) the seventh
Business Day of such month.
DIRECT PARTICIPANT: Any broker-dealer, bank or other financial
institution for which the Depository holds Class A Certificates from time to
time as a securities depository.
DUE DATE: The day of the month on which the Monthly Payment is due from
the Mortgagor on a Mortgage Loan.
DUE PERIOD: With respect to each Remittance Date, the calendar month
preceding the month in which such Remittance Date occurs.
EVENT OF DEFAULT: As described in Section 10.01.
EVENT OF EXCESSIVE POOL LOSS: means, with respect to Pool I, Pool II or
Pool III, (a) until the 36th Remittance Date, any event that causes Cumulative
Realized Losses with respect to such Pool to equal or exceed 1.25% of the Pool
Principal Balance of such Pool as of the Closing Date, (b) from the 36th until
the 42nd Remittance Dates, any event that causes Cumulative Realized Losses with
respect to such Pool to equal or exceed 1.75% of the Pool Principal Balance of
such Pool as of the Closing Date, (c) from the 42nd until the 48th Remittance
Dates, any event that causes Cumulative Realized Losses with respect to such
Pool to equal or exceed 2.25% of the Pool Principal Balance of such Pool as of
the Closing Date and (d) thereafter, any event that causes Cumulative Realized
Losses with respect to such Pool to equal or exceed 2.75% of the Pool Principal
Balance of such Pool as of the Closing Date.
EVENT OF NONPAYMENT: An event of nonpayment shall occur with respect to
any Remittance Date if the amounts remitted by the Servicer to the Trustee
pursuant to Sections 5.04(a), 6.07(e), 6.11 and 6.12 for deposit in the
Certificate Accounts (minus the amount to be withdrawn from the applicable
Certificate Account for deposit in the applicable Insurance Account pursuant to
Section 6.01(b)(i)), plus any amount transferred from the Spread Account to the
Certificate Account pursuant to Section 6.05(b)(ii) will not, taken together, be
sufficient to pay all of the Pool Remittance Amounts for each Pool (exclusive of
any Certificateholders' Interest Carryover and any Pool Carry-Forward Amounts
representing amounts previously paid to the Certificateholders of the applicable
Pool as Insured Payments and exclusive of any amount described in clause (X)(iv)
of the definition of Pool Principal Distribution Amounts which have not been
paid by the Originators) in respect of such Remittance Date.
EXCESS PAYMENTS: With respect to a Due Period, any amounts received on
a Mortgage Loan in excess of the Monthly Payment due on the Due Date relating to
such Due Period which does not constitute either a Curtailment or a Principal
Prepayment or payment with respect to an overdue amount. Excess Payments are
payments of principal for purposes of this Agreement.
EXCESS PROCEEDS: As of any Remittance Date, with respect to any
Liquidated Mortgage Loan, the excess, if any, of (a) the total Net Liquidation
Proceeds, over (b) the Principal Balance of such Mortgage Loan as of the date
such Mortgage Loan became a Liquidated Mortgage Loan plus 30 days interest
thereon at the weighted average Class Adjusted Mortgage Loan Remittance Rates
for Class A-1, Class A-2, Class A-3, Class A- 4, Class A-5, Class A-6, Class
A-7, Class A-8 and Class A-9 with respect to a Pool I Mortgage Loan, the
weighted average Class Adjusted Mortgage Loan Remittance Rates for Class A-10
and Class A-11 with respect to a Pool II Mortgage Loan or the Class Adjusted
Mortgage Loan Remittance Rate for Class A-12 with respect to a Pool III Mortgage
Loan; provided, however, that such excess shall be reduced by the amount by
which interest accrued on the advance, if any, made by the Servicer pursuant to
Section 5.14 at the related Mortgage Interest Rate exceeds interest accrued on
such advance at the applicable Class Remittance Rates.
EXCESS SPREAD: With respect to any Remittance Date and Pool of Mortgage
Loans, an amount equal to the excess of (A) the product of (i) the aggregate
Principal Balances of the applicable Pool of Mortgage Loans as of the first day
of the immediately preceding Due Period and (ii) one-twelfth of the weighted
average Mortgage Interest Rate for the applicable Pool of Mortgage Loans, as the
case may be, as of the first day of the related Due Period over (B) the sum of
(i) the Pool Current Interest Requirement for the applicable Pool of
Certificates for such Remittance Date, (ii) amounts to be deposited into the
applicable Expense Account and Insurance Account on such Remittance Date
pursuant to Sections 6.03(a)(i) and 6.04(a)(i), respectively, (iii) the
Servicing Fee and Contingency Fee for the applicable Pool of Mortgage Loans with
respect to such Remittance Date, (iv) and with respect to the Pool II Mortgage
Loans, the Auction Agent Fee for such Remittance Date. With respect to the
Remittance Dates in April, May and June 1997, the Excess Spread for each Pool of
Mortgage Loans also will include the sum of (i) all funds to be transferred to
the applicable Certificate Account from the Capitalized Interest Account for
such Remittance Date pursuant to Section 6.02(g) and (ii) the Pool Pre-Funding
Earnings for such Pool for the applicable Remittance Date.
EXCESS SUBORDINATED AMOUNT: With respect to any Pool of Mortgage Loans
and Remittance Date, the excess, if any, of (x) the Subordinated Amount that
would apply to such Pool on such Remittance Date after taking into account the
payment of the Pool Remittance Amount for such Pool on such Remittance Date
(except for any distributions of related Subordination Reduction Amounts on such
Remittance Date) over (y) the related Specified Subordinated Amount for such
Remittance Date.
EXPENSE ACCOUNTS: The expense accounts established and maintained by
the Trustee in accordance with Section 6.03 hereof.
FDIC: The Federal Deposit Insurance Corporation and any successor
thereto.
FHA: The Federal Housing Administration, and its successors in
interest.
FHLMC: The Federal Home Loan Mortgage Corporation and any successor
thereto.
FIDELITY BOND: As described in Section 5.09.
FNMA: The Federal National Mortgage Association and any successor
thereto.
FUNDING PERIOD: The period commencing on the Closing Date and ending on
the earliest to occur of (i) the date on which the amount on deposit in the
Pre-Funding Account is less than $200,000, (ii) the date on which an Event of
Default occurs and (iii) the close of business on June 26, 1997.
GLOBAL CERTIFICATES: The Class A-1 through Class A-6 Certificates and
Class A-10 Certificates.
GROSS MARGIN: With respect to each Pool II Mortgage Loan, the number of
basis points set forth in the related Mortgage Note which is added to the LIBOR
Index or the Treasury Index, as the case may be, to determine the Mortgage
Interest Rate on the related Change Date, subject to the applicable Periodic
Rate Cap and the applicable Lifetime Cap and Lifetime Floor.
HIGH-RISE CONDOMINIUM: A multiple dwelling unit of five stories or more
in which individual fee title is held to the interior space only and all other
elements of the structure and land are held in undivided common ownership.
INDEX: Either the LIBOR Index or the Treasury Index, as the case may
be.
INDIRECT PARTICIPANT: Any financial institution for whom any Direct
Participant holds an interest in any Class A Certificate.
INITIAL MORTGAGE LOANS: The Initial Pool I, Initial Pool II and Initial
Pool III Mortgage Loans.
INITIAL POOL SPREAD ACCOUNT DEPOSIT: As of any Remittance Date, (A)
with respect to Pool I, the amount deposited into the Spread Account and
allocated to Pool I pursuant to Section 6.05(a)(i) and (ii); (B) with respect to
Pool II, the amount deposited into the Spread Account and allocated to Pool II
pursuant to Section 6.05(a)(ii); and (C) with respect to Pool III, the amount
deposited into the Spread Account and allocated to Pool III pursuant to Section
6.05(a)(i) and (ii).
INITIAL POOL I MORTGAGE LOANS: The Pool I Mortgage Loans listed on
Exhibit H-1 delivered to the Trustee on the Closing Date.
INITIAL POOL II MORTGAGE LOANS: The Pool II Mortgage Loans listed on
Exhibit H-2 delivered to the Trustee on the Closing Date.
INITIAL POOL III MORTGAGE LOANS: The Pool III Mortgage Loans listed on
Exhibit H-3 delivered to the Trustee on the Closing Date.
INSURANCE ACCOUNTS: The insurance accounts established and maintained
by the Trustee in accordance with Section 6.04 hereof.
INSURANCE AGREEMENT: The agreement dated as of February 28, 1997 by and
among the Certificate Insurer, The Money Store Inc., the Originators listed in
Schedule I thereto and the Trustee, as amended from time to time by the parties
thereto.
INSURANCE PAYING AGENT: The Bank of New York or any successor as
appointed herein.
INSURANCE PROCEEDS: Proceeds paid (i) to the Trustee or the Servicer by
any insurer (other than the Certificate Insurer) pursuant to any insurance
policy covering a Mortgage Loan, Mortgaged Property, or REO Property, including
but not limited to title, hazard, life, health and/or accident insurance
policies, and/or (ii) by the Servicer pursuant to Section 5.08, in either case,
net of any expenses which are incurred by the Servicer in connection with the
collection of such proceeds and not otherwise reimbursed to the Servicer.
INSURED PAYMENT: means (i) as of any Remittance Date, any Deficiency
Amount and (ii) any Preference Amount.
INSURER REIMBURSABLE AMOUNTS: As described in Section 6.14(a)(iii).
INTEREST DETERMINATION DATE: With respect to the Adjustable Rate
Certificates, the second LIBOR Determination Date prior to any Remittance Date
while the Adjustable Rate Certificates are outstanding.
INTEREST PERIOD: (A) With respect to the Adjustable Rate Certificates
(i) initially, the period commencing March 15, 1997 and ending on the day
immediately preceding the Remittance Date in April 1997 and (ii) thereafter, the
period commencing on a Remittance Date and ending on the day immediately
preceding the next Remittance Date and (B) with respect to the Auction Rate
Certificates, the meaning set forth in the Auction Procedures attached hereto as
Schedule II.
LIBOR: The London Interbank Offered Rate for one-month U.S. dollar
deposits, determined on each Interest Determination Date as provided in Section
12.15 hereof.
LIBOR DETERMINATION DATE: A date which is both a Business Day and a
London Banking Day prior to the commencement of each related Interest Period.
LIBOR INDEX: The applicable London interbank offered rate for
one-month, six-month or one year U.S. dollar deposits, as specified in the
related Mortgage Note.
LIFETIME CAP: The provision in the Mortgage Note for each Pool II
Mortgage Loan which limits the maximum Mortgage Interest Rate over the life of
such Pool II Mortgage Loan to the rate set forth in the applicable Mortgage
Note.
LIFETIME FLOOR: The provision in the Mortgage Note for each Pool II
Mortgage Loan which limits the minimum Mortgage Interest Rate over the life of
such Pool II Mortgage Loan to the rate set forth in the applicable Mortgage
Note.
LIQUIDATED MORTGAGE LOAN: Any defaulted Mortgage Loan or REO Property
as to which the Servicer has determined that all amounts which it reasonably and
in good faith expects to recover have been recovered from or on account of such
Mortgage Loan.
LIQUIDATION PROCEEDS: Cash, including Insurance Proceeds, proceeds of
any REO Disposition, amounts required to be deposited in the applicable
Principal and Interest Account pursuant to Section 5.10 hereof, and any other
amounts received in connection with the liquidation of defaulted Mortgage Loans,
whether through trustee's sale, foreclosure sale or otherwise.
LISTING AGENT: Kredietbank S.A. Luxembourgeoise, whose address is ▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇-▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, or any successor thereto.
LOAN-TO-VALUE RATIO OR LTV: With respect to any Mortgage Loan, (i) the
sum of (a) the original principal balance of such Mortgage Loan plus (b) the
remaining balance of any Prior Lien, if any, at the time of origination of such
Mortgage Loan, less (c) that portion of the principal balance equal to the
amount of the premium for credit life insurance collected by the Originators,
divided by (ii) the value of the related Mortgaged Property, based upon the
appraisal (or, in the case of certain Mortgage Loans with original principal
balances of less than $15,000, such other method of valuation acceptable to the
related Originator) made at the time of origination of the Mortgage Loan.
LONDON BANKING DAY: Any Business Day on which dealings in deposits in
United States dollars are transacted in the London interbank market.
LOW INTEREST MORTGAGE LOAN: A Low Interest Pool I Mortgage Loan or a
Low Interest Pool III Mortgage Loan.
LOW INTEREST POOL I MORTGAGE LOAN: [RESERVED]
LOW INTEREST POOL III MORTGAGE LOAN: [RESERVED]
LOW-RISE CONDOMINIUM: A multiple dwelling unit of four stories or less
in which individual fee title is held to the interior space only and all other
elements of the structure and land are held in undivided common ownership.
MAJORITY CERTIFICATEHOLDERS: The Holder or Holders of Class A
Certificates evidencing in excess of 50% of the aggregate Class Principal
Balances of the Class A Certificates; provided, however, that with respect to
any action or event affecting fewer than all Classes of Class A Certificates,
"Majority Certificateholders" shall mean the Holder or Holders of Certificates
evidencing in excess of 50% of the aggregate Class Principal Balances of such
Classes of Class A Certificates.
MARGIN: With respect to the Class A-10 Certificates, the rate per annum
of .13% that is added to LIBOR to determine the Class A-10 Remittance Rate, for
each Remittance Date.
MAXIMUM SUBORDINATED AMOUNT: The initial Maximum Subordinated Amount
shall be $96,000,000 which amount equals 12% of the sum of the original Pool
Principal Balances of each Pool. On any Remittance Date, the Maximum
Subordinated Amount shall equal the initial Maximum Subordinated Amount less
Cumulative Realized Losses through the last day of the month preceding such
Remittance Date. The Maximum Subordinated Amount on any date other than a
Remittance Date shall be equal to the Maximum Subordinated Amount as of the
immediately preceding Remittance Date (or, prior to the first Remittance Date,
the initial Maximum Subordinated Amount), provided, however, that the Maximum
Subordinated Amount shall never be less than zero.
MIXED USE BUILDING: A building containing both residential dwelling
units and commercial use units, e.g., retail stores or office space.
MONTHLY ADVANCE: An advance made by the Servicer pursuant to Section
6.11 hereof.
MONTHLY EXCESS SPREAD: As of any Remittance Date and for any Pool of
Mortgage Loans, an amount equal to the sum of (A) the product of (i) the amount
calculated pursuant to the first sentence of the definition of Excess Spread
with respect to such Remittance Date for such Pool of Mortgage Loans and (ii)
the then applicable Monthly Excess Spread Percentage and (B) with respect to the
Remittance Dates in April, May and June 1997, the amount calculated pursuant to
the second sentence of the definition of Excess Spread with respect to such
Remittance Date.
MONTHLY EXCESS SPREAD PERCENTAGE: As to any Remittance Date, 100%.
MONTHLY PAYMENT: The scheduled monthly payment of principal and/or
interest required to be made by a Mortgagor on the related Mortgage Loan, as set
forth in the related Mortgage Note.
MONTHLY PREMIUM: With respect to each Pool, the monthly premium payable
to the Certificate Insurer equal to the product of (i) the applicable percentage
set forth in the Insurance Agreement and (ii) the applicable then outstanding
Pool Principal Balance, rounded to the nearest thousand dollars.
MOODY'S: ▇▇▇▇▇'▇ Investors Service, or any successor thereto.
MORTGAGE: The mortgage, deed of trust or other instrument creating a
lien on the Mortgaged Property.
MORTGAGE FILE: As described in Exhibit A.
MORTGAGE IMPAIRMENT INSURANCE POLICY: As described in Section 5.08.
MORTGAGE INTEREST RATE: The fixed or adjustable rate of interest borne
by a Mortgage Note, as shown on the applicable Mortgage Loan Schedule.
MORTGAGE LOAN: An individual mortgage loan which is transferred to the
Trustee pursuant to this Agreement, including any Subsequent Mortgage Loan,
together with the rights and obligations of a holder thereof and payments
thereon and proceeds therefrom, the Mortgage Loans originally subject to this
Agreement being identified on the Pool I, Pool II and Pool III Mortgage Loan
Schedules delivered to the Trustee as Exhibits H, H-1 and H-2, respectively. Any
mortgage loan which, although intended by the parties hereto to have been, and
which purportedly was, sold to the Trust Fund by the applicable Originator (as
indicated by Exhibits H, H-1 and H-2), in fact was not sold or otherwise
transferred and assigned to the Trust Fund for any reason whatsoever, including,
without limitation, the incorrectness of the statement set forth in Section
3.02(i) hereof with respect to such mortgage loan, shall nevertheless be
considered a "Mortgage Loan" for all purposes of this Agreement.
MORTGAGE LOAN SCHEDULE: The separate schedules of Pool I, Pool II and
Pool III Mortgage Loans delivered to the Trustee as Exhibits H, H-1 and H-2,
respectively, such schedules identifying each Mortgage Loan by address of the
Mortgaged Property and the name of the Mortgagor and setting forth as to each
Mortgage Loan the following information: (i) the Principal Balance as of the
close of business on the Cut-Off Date, (ii) the account number, (iii) the
original principal amount, (iv) the LTV as of the date of the origination of the
related Mortgage Loan, (v) the Due Date, (vi) the Mortgage Interest Rate, (vii)
the first Due Date, (viii) the Monthly Payment, (ix) the maturity date of the
Mortgage Note, (x) the remaining number of months to maturity as of the Cut-Off
Date and additionally, (xi) with respect to Exhibit H-1, the Periodic Rate Cap,
Lifetime Cap and Lifetime Floor.
MORTGAGE NOTE: The note or other evidence of indebtedness evidencing
the indebtedness of a Mortgagor under a Mortgage Loan.
MORTGAGED PROPERTY: The underlying property securing a Mortgage Loan,
consisting of a fee simple estate in a single contiguous parcel of land improved
by a Residential Dwelling.
MORTGAGED PROPERTY STATES: The States of Alabama, Alaska, Arizona,
Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii,
Iowa, Idaho, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maine, Maryland,
Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska,
Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North
Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina,
South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West
Virginia, Wisconsin, Wyoming and the District of Columbia, where the Mortgaged
Properties are located.
MORTGAGOR: The obligor on a Mortgage Note.
MULTIFAMILY LOANS: Mortgage Loans secured by Multifamily Properties.
MULTIFAMILY PROPERTY: A residential or mixed-use property, such as
rental apartment buildings or projects containing five or more units.
NET FUNDS CAP: As to any Remittance Date, a percentage equal to the
difference between (A) the weighted average Mortgage Interest Rate on the Pool
II Mortgage Loans, and (B) the sum of (i) the percentages used in determining
the Servicing Fee, the Contingency Fee, the fee due the Trustee and the premium
due the Certificate Insurer, (ii) commencing with the Remittance Date in April
1998, 0.50% and (iii) with respect to the Auction Rate Certificates, the
percentage used in determining the Auction Agent Fee.
NET FUNDS CAP SHORTFALL: With respect to the Class A-10 and Class A-11
Certificates, as to any Remittance Date, the excess, if any, of (i) the amount
of interest accrued on such Class of Certificates for such Remittance Date
calculated at the Class Remittance Rate for such Class, without giving effect to
the applicable Net Funds Cap (but in no event exceeding 14% per annum), over
(ii) the amount of interest accrued on such Class of Certificates for such
Remittance Date calculated at the Class Remittance Rate for such Class, after
giving effect to, and limited by, the applicable Net Funds Cap for such
Remittance Date (but in no event exceeding 14% per annum).
NET LIQUIDATION PROCEEDS: Liquidation Proceeds net of (i) any
reimbursements to the Servicer made therefrom pursuant to Section 5.04(b) and
(ii) amounts required to be released to the related Mortgagor pursuant to
applicable law.
NET MONTHLY EXCESS CASHFLOW: As defined in Section 6.14(b) hereof.
1933 ACT: The Securities Act of 1993, as amended.
OFFICER'S CERTIFICATE: A certificate delivered to the Trustee signed by
the Chairman of the Board, the President, a Vice President or Assistant Vice
President, the Treasurer, the Secretary, or one of the Assistant Secretaries of
the Representative, an Originator or the Servicer, as required by this
Agreement.
OPINION OF COUNSEL: A written opinion of counsel, who may, without
limitation, be counsel for the Representative or the Servicer, reasonably
acceptable to the Trustee and the Certificate Insurer and experienced in matters
relating thereto; except that any opinion of counsel relating to (a) the
qualification of the Trust Fund as a REMIC or (b) compliance with the REMIC
Provisions, must be an opinion of counsel who (i) is in fact independent of the
Representative or the Servicer, (ii) does not have any direct financial interest
or any material indirect financial interest in the Representative or the
Servicer or in an affiliate thereof and (iii) is not connected with the
Representative or the Servicer as an officer, employee, director or person
performing similar functions.
OPTIONAL SERVICER TERMINATION DATE: As defined in Section 11.01 hereof.
ORIGINAL CLASS A-1 PRINCIPAL BALANCE: $ 94,300,000.
ORIGINAL CLASS A-2 PRINCIPAL BALANCE: $ 63,100,000.
ORIGINAL CLASS A-3 PRINCIPAL BALANCE: $ 75,800,000.
ORIGINAL CLASS A-4 PRINCIPAL BALANCE: $ 61,100,000.
ORIGINAL CLASS A-5 PRINCIPAL BALANCE: $ 31,100,000.
ORIGINAL CLASS A-6 PRINCIPAL BALANCE: $ 45,000,000.
ORIGINAL CLASS A-7 PRINCIPAL BALANCE: $ 30,600,000.
ORIGINAL CLASS A-8 PRINCIPAL BALANCE: $ 32,000,000.
ORIGINAL CLASS A-9 PRINCIPAL BALANCE: $ 37,000,000.
ORIGINAL CLASS A-10 PRINCIPAL BALANCE: $ 260,000,000.
ORIGINAL CLASS A-11 PRINCIPAL BALANCE: $ 60,000,000.
ORIGINAL CLASS A-12 PRINCIPAL BALANCE: $ 10,000,000.
ORIGINAL PRE-FUNDED AMOUNT: $185,378,687.94, representing the amount
deposited in the Pre- Funding Account on the Closing Date, $120,391,618.80 of
which relates to Pool I, $64,978,067.49 of which relates to Pool II and
$9,001.65 of which relates to Pool III.
ORIGINAL PRINCIPAL BALANCE: With respect to each Class of Class A
Certificates, the amount set forth for such Class under the definitions of
Original Class A-1 through Original Class A-12 Principal Balances.
ORIGINATOR: Any of the entities listed on Exhibit I hereto, each of
which is a direct or indirect wholly-owned subsidiary of the Representative, and
each of which is a Subservicer as of the date hereof.
OVERFUNDED INTEREST AMOUNT: With respect to each Subsequent Transfer
Date occurring in April 1997, the sum, if any, of (w) with respect to Pool I,
the difference between (i) three-months' interest on the aggregate Principal
Balances of the Subsequent Pool I Mortgage Loans acquired by the Trust Fund on
such Subsequent Transfer Date, calculated at the weighted average Class A-1,
Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8 and
Class A-9 Remittance Rates and (ii) three-months' interest on the aggregate
Principal Balances of the Subsequent Pool I Mortgage Loans acquired by the Trust
Fund on such Subsequent Transfer Date, calculated at the rate at which
Pre-Funding Account moneys are invested as of such Subsequent Transfer Date; (x)
with respect to Pool II, the difference between (i) three months' interest on
the aggregate Principal Balances of the Subsequent Pool II Mortgage Loans
acquired by the Trust Fund on such Subsequent Transfer Date, calculated at the
weighted average Class A-10 and Class A-11 Remittance Rate and (ii)
three-months' interest on the aggregate Principal Balances of the Subsequent
Pool II Mortgage Loans acquired by the Trust Fund on such Subsequent Transfer
Date, calculated at the rate at which Pre-Funding Account moneys are invested as
of such Subsequent Transfer Date; and (y) with respect to Pool III, the
difference between (i) three-months' interest on the aggregate Principal
Balances of the Subsequent Pool III Mortgage Loans acquired by the Trust Fund on
such Subsequent Transfer Date, calculated at the Class A-12 Remittance Rate and
(ii) three-months' interest on the aggregate Principal Balances of the
Subsequent Pool III Mortgage Loans acquired by the Trust Fund on such Subsequent
Transfer Date, calculated at the rate at which Pre-Funding Account moneys are
invested as of such Subsequent Transfer Date.
With respect to each Subsequent Transfer Date occurring in May 1997,
the sum, if any, of (w) with respect to Pool I, the difference between (i)
two-months' interest on the aggregate Principal Balances of the Subsequent Pool
I Mortgage Loans acquired by the Trust Fund on such Subsequent Transfer Date,
calculated at the weighted average Class A-1, Class A-2, Class A-3, Class A-4,
Class A-5, Class A-6, Class A-7, Class A-8 and Class A-9 Remittance Rates and
(ii) two-months' interest on the aggregate Principal Balances of the Subsequent
Pool I Mortgage Loans acquired by the Trust Fund on such Subsequent Transfer
Date, calculated at the rate at which Pre-Funding Account moneys are invested as
of such Subsequent Transfer Date; (x) with respect to Pool II, the difference
between (i) two-months' interest on the aggregate Principal Balances of the
Subsequent Pool II Mortgage Loans acquired by the Trust Fund on such Subsequent
Transfer Date, calculated at the weighted average Class A-10 and Class A-11
Remittance Rates and (ii) two-months' interest on the aggregate Principal
Balances of the Subsequent Pool II Mortgage Loans acquired by the Trust Fund on
such Subsequent Transfer Date, calculated at the rate at which Pre-Funding
Account moneys are invested as of such Subsequent Transfer Date; and (y) with
respect to Pool III, the difference between (i) two-months' interest on the
aggregate Principal Balances of the Subsequent Pool III Loans acquired by the
Trust Fund on such Subsequent Transfer Date, calculated at the Class A-12
Remittance Rate and (ii) two-months' interest on the aggregate Principal
Balances of the Subsequent Pool III Loans acquired by the Trust Fund on such
Subsequent Transfer Date, calculated at the rate at which Pre-Funding Account
moneys are invested as of such Subsequent Transfer Date.
With respect to each Subsequent Transfer Date occurring in June 1997,
the sum, if any, of (w) with respect to Pool I, the difference between (i)
one-month's interest on the aggregate Principal Balances of the Subsequent Pool
I Loans acquired by the Trust Fund on such Subsequent Transfer Date, calculated
at the weighted average Class A-1, Class A-2, Class A-3, Class A-4, Class A-5,
Class A-6, Class A-7, Class A-8 and Class A-9 Remittance Rates and (ii)
one-month's interest on the aggregate Principal Balances of the Subsequent Pool
I Loans acquired by the Trust Fund on such Subsequent Transfer Date, calculated
at the rate at which Pre- Funding Account moneys are invested as of such
Subsequent Transfer Date; (x) with respect to Pool II, the difference between
(i) one-month's interest on the aggregate Principal Balances of the Subsequent
Pool II Loans acquired by the Trust Fund on such Subsequent Transfer Date,
calculated at the weighted average Class A-10 and Class A-11 Remittance Rates
and (ii) one-month's interest on the aggregate Principal Balances of the
Subsequent Pool II Loans acquired by the Trust Fund on such Subsequent Transfer
Date, calculated at the rate at which Pre- Funding Account moneys are invested
as of such Subsequent Transfer Date; and (y) with respect to Pool III, the
difference between (i) one-month's interest on the aggregate Principal Balances
of the Subsequent Pool III Loans acquired by the Trust Fund on such Subsequent
Transfer Date, calculated at the Class A-12 Remittance Rate and (ii) one-month's
interest on the aggregate Principal Balances of the Subsequent Pool III Loans
acquired by the Trust Fund on such Subsequent Transfer Date, calculated at the
rate at which Pre-Funding Account moneys are invested as of such Subsequent
Transfer Date.
OWNER-OCCUPIED MORTGAGED PROPERTY: A Residential Dwelling as to which
the related Mortgagor represented at the time of the origination of the Mortgage
Loan an intent to occupy as such Mortgagor's primary, secondary or vacation
residence.
PAYING AGENT: Initially, the Trustee or any other Person that meets the
eligibility standards for the Paying Agent specified in Section 13.14 hereof and
is authorized by the Trustee to make payments on the Certificates on behalf of
the Trustee.
PERCENTAGE INTEREST: With respect to a Class A Certificate, the portion
of the respective Class evidenced by such Certificate, expressed as a
percentage, the numerator of which is the denomination represented by such
Certificate and the denominator of which is the Original Principal Balance of
such Class. With respect to the Class X Certificates, the portion of the Class
evidenced thereby, expressed as a percentage, which shall equal 100%. With
respect to the Class R Certificates, the portion of the Class evidenced thereby,
expressed as a percentage, as stated on the face of such Certificate, which
shall be either 99.99% or, but only with respect to the Class R Certificates
held by the Tax Matters Person, 0.01%. The Class A Certificates (other than the
Auction Rate Certificates) are issuable only in the minimum Percentage Interest
corresponding to a minimum denomination of $1,000 and integral multiples of
$1,000 in excess thereof, except that one Class A Certificate of each Class may
be issued in a different denomination. The Auction Rate Certificates are
issuable only in the minimum Percentage Interest corresponding to a minimum
denomination of $25,000 and integral multiples of $25,000 in excess thereof.
PERIODIC RATE CAP: The provision in the Mortgage Note for each Pool II
Loan which limits increases or decreases in the Mortgage Interest Rate on each
Change Date to the rate set forth in the applicable Mortgage Note.
PERMITTED INSTRUMENTS: As used herein, Permitted Instruments shall
include the following:
(i) 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, FHA debentures, FHLMC senior debt
obligations, Federal Home Loan Bank consolidated senior debt
obligations, and FNMA 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;
(ii) federal funds, certificates of deposit, time deposits and
banker's acceptances (having original maturities of not more than 365
days) of any bank or trust company incorporated under the laws of the
United States or any state thereof, provided that the short-term debt
obligations of such bank or trust company at the date of acquisition
thereof have been rated "A-1" or better by S&P and Prime-1 or better
by ▇▇▇▇▇'▇;
(iii) deposits of any bank or savings and loan association which
has combined capital, surplus and undivided profits of at least
$3,000,000 which deposits are held only up to the limits insured by
the BIF or SAIF administered by the FDIC, provided that the unsecured
long-term debt obligations of such bank or savings and loan
association have been rated "BBB" or better by S&P and Baa3 or better
by ▇▇▇▇▇'▇;
(iv) commercial paper (having original maturities of not more
than 365 days) rated "A-1" or better by S&P and Prime-1 or better by
▇▇▇▇▇'▇;
(v) debt obligations rated "AAA" by S&P and Aaa by ▇▇▇▇▇'▇ (other
than any such obligations that do not have a fixed par value and/or
whose terms do not promise a fixed dollar amount at maturity or call
date);
(vi) investments in money market funds rated "AAA" or better by
S&P or "Aaa" or better by ▇▇▇▇▇'▇ the assets of which are invested
solely in instruments described in clauses (i)-(v) above;
(vii) guaranteed investment contracts or surety bonds issued by
or reasonably acceptable to the Certificate Insurer providing for the
investment of funds in an account or insuring a minimum rate of return
on investments of such funds, which contract or surety bond shall:
(a) be an obligation of an insurance company or other
corporation whose debt obligations or insurance financial
strength or claims paying ability are rated "AAA" by S&P and
"Aaa" by ▇▇▇▇▇'▇; and
(b) provide that the Trustee may exercise all of the rights
of the Representative under such contract or surety bond without
the necessity of the taking of any action by the Representative;
(viii) A repurchase agreement that satisfies the following
criteria and is acceptable to the Certificate Insurer:
(a) Must be between the Trustee and a dealer bank or
securities firm described in 1. or 2. below:
1. Primary dealers on the Federal Reserve reporting
dealer list which are rated "A" or better by S&P and
▇▇▇▇▇'▇, or
2. Banks rated "A" or above by S&P and ▇▇▇▇▇'▇
(b) The written repurchase agreement must include the
following:
1. Securities which are acceptable for the transfer
are:
A. Direct U.S. governments, or
B. Federal Agencies backed by the full faith and
credit of the U.S. government (and FNMA & FHLMC)
2. the term of the repurchase agreement may be up to 60
days
3. the collateral must be delivered to the Trustee or
third party custodian acting as agent for the Trustee by
appropriate book entries and confirmation statements, with a
copy to the Certificate Insurer, must have been delivered
before or simultaneous with payment (perfection by
possession of certificated securities)
4. Valuation of collateral
A. The securities must be valued weekly,
marked-to-market at current market price plus accrued
interest
i. The value of the collateral must be equal
to at least 104% of the amount of cash transferred
by the Trustee or custodian for the Trustee to the
dealer bank or security firm under the repurchase
agreement plus accrued interest. If the value of
securities held as collateral slips below 104% of
the value of the cash transferred by the Trustee
plus accrued interest, then additional cash and/or
acceptable securities must be transferred. If,
however, the securities used as collateral are
FNMA or FHLMC, then the value of collateral must
equal at least 105%.
(ix) any other investment acceptable to the Certificate Insurer
and the Rating Agencies, written confirmation of which shall be
furnished by the Certificate Insurer to the Trustee.
PERMITTED TRANSFEREE: Any Person other than (i) the United States, any
State or political subdivision thereof, or any agency or instrumentality of any
of the foregoing, (ii) a foreign government, International Organization or any
agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in Code Section 521) which is
exempt from tax imposed by Chapter 1 of the Code (including the tax imposed by
Section 511 of the Code on unrelated business taxable income) on any excess
inclusions (as defined in Code section 860E(c)(1)) with respect to any Class R
Certificate, (iv) rural electric and telephone cooperatives described in Code
Section 1381(a)(2)(C), (v) a Person other than a "United States Person" as
defined in Code Section 7701(a)(30), unless the Servicer consents in writing to
the Transfer to such Person and (vi) any other Person so designated by the
Servicer based upon an Opinion of Counsel that the transfer of a Percentage
Interest in a Class R Certificate to such Person may cause the Trust Fund to
fail to qualify as a REMIC at any time that the Class A Certificates are
outstanding. The terms "United States," "State" and "International Organization"
shall have the meanings set forth in Code Section 7701 or successor provisions.
A corporation will not be treated as an instrumentality of the United States or
of any State or political subdivision thereof for these purposes if all of its
activities are subject to tax and, with the exception of FHLMC, a majority of
its board of directors is not selected by such governmental unit.
PERSON: Any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust, national
banking association, unincorporated organization or government or any agency or
political subdivision thereof.
POOL: With respect to the Class A Certificates, the Pool I, Pool II or
Pool III Certificates, as the case may be, and with respect to the Mortgage
Loans, the Pool I, Pool II or Pool III Mortgage Loans, as the case may be.
POOL AMORTIZED SUBORDINATED AMOUNT REQUIREMENT: With respect to Pool I,
Pool II and Pool III and as of any date of determination, the product of (x)
4.80%, 6.70%, and 50.00%, respectively, and (y) the aggregate Principal Balances
of all Mortgage Loans in the related Pool as of the close of business on the
last day of the Due Period immediately preceding such date; provided, however,
that for any period during which an Event of Excessive Loss relating to Pool I,
Pool II or Pool III exists, the Pool Amortized Subordinated Amount Requirement
for such Pool shall equal the product of 4.80%, 6.70% or 50.00%, respectively,
and the Pool Principal Balance of the respective Pool as of the date such Event
of Excessive Pool Loss for such Pool first existed.
POOL AVAILABLE AMOUNT: With respect to any Pool and each Remittance
Date, an amount equal to the sum of (i) the Pool Available Remittance Amount for
such Pool (minus the amounts withdrawn from the applicable Certificate Account
pursuant to Section [6.01(b)(i)] to deposit amounts related to required premiums
in the applicable Insurance Account, and, for Pool II, Section [6.01(b)(iii)] to
pay the Auction Agent Fee to the Auction Agent, (ii) any amount of Total Monthly
Excess Cashflow to be applied to the Certificates of such Pool on such
Remittance Date, and (iii) amounts transferred from the Spread Account, if any,
pursuant to Section 6.05(b)(ii) and Insured Payments, if any, made by the
Certificate Insurer with respect to such Pool.
POOL AVAILABLE REMITTANCE AMOUNT: With respect to any Pool and
Remittance Date, (i) the sum of all amounts relating to the Mortgage Loans of
such Pool described in clauses (i) through (viii), inclusive, of Section 5.03(b)
received by the Servicer or any Subservicer (including any amounts paid by the
Servicer and the Representative and excluding any Excess Spread and
Subordination Reduction Amounts relating to the Mortgage Loans of such Pool, any
amounts withdrawn by the Servicer with respect to the Mortgage Loans in such
Pool pursuant to Section 5.04(b), (c), (e) and (f)(i) as of the related
Determination Date and any amounts deposited into the Servicing Account with
respect to the Mortgage Loans in such Pool pursuant to Section 5.04(g) as of the
related Determination Date) during the related Due Period or, with respect to
Section 5.03(b)(vi), on the related Determination Date, and deposited into the
applicable Certificate Account as of the Determination Date, plus (ii) the
amount of any Monthly Advances and Compensating Interest payments relating to
the Mortgage Loans of such Pool, remitted by the Servicer for such Remittance
Date, plus (iii) amounts to be transferred to the applicable Certificate Account
from the Pre-Funding Account and the Capitalized Interest Account with respect
to the Remittance Dates in April, May and June 1997, less (iv) those amounts
withdrawable from the applicable Certificate Account pursuant to Section
6.01(b)(vi). The "Pool Available Remittance Amount" does not include (i) funds
in the applicable Principal and Interest Account and available to be withdrawn
pursuant to Section 5.04(d)(ii), (ii) funds in the applicable Certificate
Account and available to be withdrawn pursuant to Section 6.01(b)(v) and (iii)
funds in the applicable Certificate Account that cannot be distributed by the
Trustee on such Remittance Date as a result of a proceeding initiated under the
United States Bankruptcy Code, as amended from time to time (11 U.S.C.).
POOL AVAILABLE REMITTANCE AMOUNT SHORTFALL: With respect to any Pool
and Remittance Date, the excess, if any, of (i) the Pool Remittance Amount for
such Pool (net of amounts included in clauses (X) (vi) and (viii) and (Y) of the
definition of Pool Principal Distribution Amount) over (ii) the Pool Available
Remittance Amount for such Pool (net of the amount to be withdrawn from the
applicable Certificate Account pursuant to Section 6.01(b)(i) and one-twelfth of
the Annual Expense Escrow Amount with respect to such Pool and, with respect to
Pool II, the amount to be withdrawn from the applicable Certificate Account
pursuant to Section 6.01(b)(iii)).
POOL AVAILABLE REMITTANCE AMOUNT SURPLUS: With respect to any Pool and
Remittance Date, the excess, if any, of (i) the Pool Available Remittance Amount
for such Pool (net of the amount to be withdrawn from the applicable Certificate
Account pursuant to Section 6.01(b)(i) and one-twelfth of the Annual Expense
Escrow Amount with respect to such Pool and, with respect to Pool II, the amount
to be withdrawn from the applicable Certificate Account pursuant to Section
6.01(b)(iii)) over (ii) the Pool Remittance Amount for such Pool (net of amounts
included in clauses (X)(vi) and (viii) and (Y) of the definition of Pool
Principal Distribution Amount).
POOL CARRY-FORWARD AMOUNT: With respect to any Pool and Remittance
Date, the sum of (i) the amounts, if any, by which (x) the Pool Remittance
Amount for such Pool as of the immediately preceding Remittance Date exceeded
(y) the amount of the actual distribution to the Holders of the Certificates of
such Pool (including to the Certificate Insurer, as provided in Section 6.08),
pursuant to Section 6.08 on the immediately preceding Remittance Date, exclusive
of any Insured Payment to the Holders of the Certificates of such Pool made
pursuant to Section 6.08 hereof on such immediately preceding Remittance Date,
and (ii) interest on the amounts, if any, described in clause (i) above, at
one-twelfth of the weighted average Remittance Rates of the Certificates of such
Pool from such immediately preceding Remittance Date; provided, however, that
only the Certificate Insurer shall be entitled to interest on the principal
portion of the Pool Carry-Forward Amount.
POOL CURRENT INTEREST REQUIREMENT: For each Pool, the sum of the Class
Current Interest Requirements of the Certificates of such Pool.
POOL MAXIMUM COLLATERAL AMOUNT: For each Pool, the sum of (i) the
aggregate Principal Balances as of the Cut-Off Date of all Initial Mortgage
Loans in such Pool and (ii) the aggregate Principal Balances as of the related
Subsequent Cut-Off Dates of all Subsequent Mortgage Loans transferred to the
Trust Fund and assigned to such Pool.
POOL PRE-FUNDING EARNINGS: With respect to each Pool and the Remittance
Dates in April, May and June 1997, the actual investment earnings earned during
the period from the Closing Date through the Business Day immediately preceding
the Determination Date in April, May and June 1997 (inclusive) on that portion
of the Pre-Funding Account allocated to such Pool during such period as
calculated by the Representative pursuant to Section 2.09(f) hereof.
POOL PRINCIPAL BALANCE: With respect to any Pool, the sum of the Class
Principal Balances of the Certificates of such Pool. Notwithstanding the
foregoing, for purposes of determining the following definitions amounts on
deposit in the Certificate Account for Pool II allocated to the Holders of the
Auction Rate Certificates for a Remittance Date but not being distributed on
such Remittance Date pursuant to Section 6.08(f) shall be deemed to have been so
distributed on such Remittance Date and reduce the Pool Principal Balance of
Pool II accordingly: (i) Excess Subordinated Amount, (ii) Pool Amortized
Subordinated Amount Requirement, (iii) Pool Subordinated Amount, (iv)
Subordinated Deficiency Amount, (v) Subordination Deficit, (vi) Subordination
Increase Amount and (viii) Subordination Reduction Amount.
POOL PRINCIPAL DISTRIBUTION AMOUNT: For each Pool, on any Remittance
Date, the excess of:
(X) the sum, without duplication, of the following:
(i) each payment of principal received by the Servicer or any
Subservicer (exclusive of Curtailments, Principal Prepayments and
amounts described in clause (iii) hereof) during the related Due
Period with respect to the Mortgage Loans of the related Pool,
(ii) all Curtailments and all Principal Prepayments received by
the Servicer or any Subservicer during the related Due Period with
respect to the Mortgage Loans of the related Pool,
(iii) the principal portion of all Insurance Proceeds, Released
Mortgaged Property Proceeds and Net Liquidation Proceeds received by
the Servicer or any Subservicer during the related Due Period with
respect to the Mortgage Loans of the related Pool,
(iv) that portion of the purchase price (as indicated in Section
2.05(b)) for any repurchased Mortgage Loan from the related Pool which
represents principal and any Substitution Adjustments deposited in the
applicable Principal and Interest Account with respect to such
Mortgage Loans of the related Pool and transferred to the applicable
Certificate Account as of the related Determination Date,
(v) any proceeds representing principal on the Mortgage Loans of
the related Pool received by the Trustee in connection with the
liquidation of the Mortgage Loans of the related Pool or the
termination of the Trust,
(vi) the amount of any Subordination Deficit with respect to such
Pool for such Remittance Date,
(vii) any moneys released from the Pre-Funding Account on the
April, May and June 1997 Remittance Date as a prepayment of the
Certificates of the related Pool for such Remittance Date,
(viii) the amount of any Subordination Increase Amount with
respect to the related Pool for such Remittance Date, OVER
(Y) the amount of any Subordination Reduction Amount with respect to
the related Pool for such Remittance Date.
POOL PROJECTED NET MONTHLY EXCESS CASHFLOW: As of any date of
calculation, with respect to Pool I and Pool III, five times (or with respect to
Pool II, three times) Net Monthly Excess Cashflow relating to such Pool, as
calculated pursuant to Section 6.14(b) hereof on the Remittance Date immediately
preceding such date of calculation.
POOL REMAINING AMOUNT AVAILABLE: With respect to any Pool and as of any
Remittance Date the greater of (x) zero dollars and (y)(i) the Pool Available
Amount for the related Pool minus (ii) payments made with respect thereto
pursuant to Sections 6.08(d)(i) through (iv) and, in the case of Pool II,
amounts on deposit in the Certificate Account for Pool II allocated to the
Holders of the Auction Rate Certificates but not being distributed on such
Remittance Date pursuant to Section 6.08(f)).
POOL REMITTANCE AMOUNT: As to each Pool and any Remittance Date, the
amount required to be distributed on such Remittance Date to the Holders of the
Certificates of such Pool, such amount being equal to the sum of (i) the Pool
Current Interest Requirement for the related Pool, (ii) the Pool Principal
Distribution Amount for the related Pool, (iii) the Pool Carry-Forward Amount
for the related Pool and (iv) any amount received by the Trustee from the
Servicer or the Originator and paid to the Holders of the Certificates of the
related Pool that constitutes a Monthly Advance and that is recoverable and
sought to be recovered as a voidable preference by a trustee in bankruptcy
pursuant to the United States Bankruptcy Code, as amended from time to time (11
U.S.C.), in accordance with a final, nonappealable order of a court having
competent jurisdiction.
In the event that any amounts referenced in subclause (iv) above
constitute Insured Payments or any portion thereof, payment of such amounts
shall be disbursed to the trustee in bankruptcy named in the final order of the
court exercising jurisdiction and not directly to any Certificateholder of the
Certificates of such Pool unless such Certificateholder has returned principal
or interest paid on the Certificates of such Pool to such trustee in bankruptcy,
in which case payment shall be disbursed to such Certificateholder.
POOL SUBORDINATED AMOUNT: For each Pool, as of any Remittance Date, the
excess, if any, of (x) the sum of (i) the aggregate Principal Balances of the
Mortgage Loans of the related Pool as of the close of business on the last day
of the Due Period relating to such Remittance Date, (ii) any amount on deposit
in the Pre-Funding Account at such time and allocated to the related Pool and
(iii) the Spread Account Portion for the related Pool, over (y) the Pool
Principal Balance of the related Pool as of such Remittance Date (after taking
into account the payment of the Pool Remittance Amount of the related Pool on
such Remittance Date, net of amounts included in clauses (X)(vi) and (viii) and
(Y) of the definition of Pool Principal Distribution Amount).
POOL I CERTIFICATE: A Class A-1, Class A-2, Class A-3, Class A-4, Class
A-5, Class A-6, Class A-7, Class A-8 or Class A-9 Certificate.
POOL I INITIAL SPECIFIED SUBORDINATED AMOUNT: $11,280,000.
POOL I MORTGAGE LOAN: A Mortgage Loan listed on Exhibit H delivered to
the Trustee, as such Exhibit may be amended from time to time.
POOL I SPECIFIED SUBORDINATED AMOUNT: means (as such amount may be
changed in accordance with the provisions of Section 2.09(f) hereof) the greater
of (i) the Pool I Initial Specified Subordinated Amount or (ii) the difference
between (x) one-half of the aggregate Principal Balances of all Pool I Mortgage
Loans that are 90 or more days delinquent (including REO Properties) minus (y)
the Pool Projected Net Monthly Excess Cashflow for Pool I as of such date, until
the later of the date upon which principal in the amount of one-half of the Pool
Maximum Collateral Amount for Pool I has been received in respect of the Pool I
Mortgage Loans and the 30th Remittance Date following the Closing Date, and with
respect to each Remittance Date thereafter, the greatest of:
(a) the lesser of (i) the Pool I Initial Specified Subordinated Amount,
(ii) the Pool Amortized Subordinated Amount Requirement for Pool I or (iii) two
times the Pool I Initial Specified Subordinated Amount stated as a percentage of
the Pool Maximum Collateral Amount for Pool I times the then current outstanding
Pool Principal Balance for Pool I plus the then current outstanding Principal
Balance of the Pool I Mortgage Loans with an original term to stated maturity of
five years and a "balloon" payment due at such stated maturity;
(b) the difference between (i) one-half of the aggregate Principal
Balances of all Pool I Mortgage Loans that are 90 or more days delinquent
(including REO Properties) minus (ii) the Pool Projected Net Monthly Excess
Cashflow for Pool I as of such date;
(c) an amount equal to 0.5% of the Pool Maximum Collateral Amount for
Pool I plus 15.0% of the then current outstanding Principal Balance of the Pool
I Mortgage Loans with an original term to stated maturity of 15 years and a
"balloon" payment due at such stated maturity; or
(d) $500,000 times a fraction, the numerator of which is the Pool
Principal Balance of Pool I for such Remittance Date and the denominator of
which is the sum of the aggregate Pool Principal Balances of each Pool for such
Remittance Date.
POOL II CERTIFICATE: A Class A-10 or Class A-11 Certificate.
POOL II INITIAL SPECIFIED SUBORDINATED AMOUNT: $10,720,000.
POOL II MORTGAGE LOAN: A Mortgage Loan listed on Exhibit H-1 delivered
to the Trustee, as such Exhibit may be amended from time to time, which Mortgage
Loan has a Mortgage Interest Rate which adjusts on each Change Date by reference
to the LIBOR Index or the Treasury Index, as the case may be, subject to the
applicable Periodic Rate Cap and the applicable Lifetime Floor and Lifetime Cap.
POOL II SPECIFIED SUBORDINATED AMOUNT: means (as such amount may be
changed in accordance with the provisions of Section 2.09(f) hereof) the greater
of (i) the Pool II Initial Specified Subordinated Amount or (ii) two times the
difference between (x) one-half of the aggregate Principal Balances of all Pool
II Mortgage Loans that are 90 or more days delinquent (including REO Properties)
minus (y) the Pool Projected Net Monthly Excess Cashflow for Pool II as of such
date, until the later of the date upon which principal in the amount of one-half
of the Pool Maximum Collateral Amount for Pool II has been received in respect
of the Pool II Mortgage Loans and the 30th Remittance Date following the Closing
Date, and with respect to each Remittance Date thereafter, the greatest of:
(a) the lesser of (i) the Pool II Initial Specified Subordinated
Amount, (ii) the Pool Amortized Subordinated Amount Requirement for Pool II or
(iii) two times the Pool II Initial Specified Subordinated Amount stated as a
percentage of the Pool Maximum Collateral Amount for Pool II times the then
current outstanding Pool Principal Balance for Pool II plus the then current
outstanding Principal Balance of the Pool II Mortgage Loans with an original
term to stated maturity of five years and a "balloon" payment due at such stated
maturity;
(b) two times the difference between (i) one-half of the aggregate
Principal Balances of all Pool II Mortgage Loans that are 90 or more days
delinquent (including REO Properties) minus (ii) the Pool Projected Net Monthly
Excess Cashflow for Pool II as of such date;
(c) an amount equal to 0.5% of the Pool Maximum Collateral Amount for
Pool II plus 15.0% of the then current outstanding Principal Balance of the Pool
II Mortgage Loans with an original term to stated maturity of 15 years and a
"balloon" payment due at such stated maturity; or
(d) $500,000 times a fraction, the numerator of which is the Pool
Principal Balance of Pool II for such Remittance Date and the denominator of
which is the sum of the aggregate Pool Principal Balances of each Pool for such
Remittance Date.
POOL III CERTIFICATE: A Class A-12 Certificate.
POOL III INITIAL SPECIFIED SUBORDINATED AMOUNT: $2,500,000.
POOL III MORTGAGE LOAN: A Mortgage Loan listed on Exhibit H-3 delivered
to the Trustee, as such Exhibit may be amended from time to time.
POOL III SPECIFIED SUBORDINATED AMOUNT: means (as such amount may be
changed in accordance with the provisions of Section 2.09(f) hereof) the Pool
III Initial Specified Subordinated Amount until the later of the date upon which
principal in the amount of one-half of the Pool Maximum Collateral Amount for
Pool III has been received in respect of the Pool III Mortgage Loans and the
30th Remittance Date following the Closing Date, and with respect to each
Remittance Date thereafter, the greatest of:
(a) the lesser of (i) the Pool III Initial Specified Subordinated
Amount, (ii) the Pool Amortized Subordinated Amount Requirement for Pool III or
(iii) two times the Pool III Initial Specified Subordinated Amount stated as a
percentage of the Pool Maximum Collateral Amount for Pool III times the then
current outstanding Pool Principal Balance for Pool III plus the then current
outstanding Principal Balance of the Pool IV Mortgage Loans with an original
term to stated maturity of five years and a "balloon" payment due at such stated
maturity;
(b) two times the difference between (i) one-half of the aggregate
Principal Balances of all Pool III Mortgage Loans that are 90 or more days
delinquent (including REO Properties) minus (ii) the Pool Projected Net Monthly
Excess Cashflow for Pool III as of such date;
(c) an amount equal to 0.5% of the Pool Maximum Collateral Amount for
Pool III plus 15.0% of the then current outstanding Principal Balance of the
Pool III Mortgage Loans with an original term to stated maturity of 15 years and
a "balloon" payment due at such stated maturity;
(d) $500,000 times a fraction, the numerator of which is the Pool
Principal Balance for Pool III for such Remittance Date and the denominator of
which is the sum of the aggregate Pool Principal Balances of each Pool for such
Remittance Date; or
(e) the sum of the Principal Balances of the three largest Pool III
Mortgage Loans.
PREFERENCE AMOUNT: means any amount previously distributed to a holder
of the Certificates (other than the Trust Fund) that is recoverable and sought
to be recovered as a voidable preference by a trustee in bankruptcy pursuant to
the United States Bankruptcy Code (11 U.S.C.), as amended from time to time, in
accordance with a final nonappealable order of a court having competent
jurisdiction.
PRE-FUNDED AMOUNT: With respect to any date of determination, the
amount on deposit in the Pre-Funding Account.
PRE-FUNDING ACCOUNT: The Pre-Funding Account established in accordance
with Section 6.02 hereof and maintained by the Trustee.
PREMIUM DEPOSIT AMOUNT: As of any Remittance Date, an amount equal to
the Monthly Premium for such Remittance Date.
PRIME RATE: The lowest prime lending rate as published in The Wall
Street Journal on any date of determination, or if such rate is not published in
The Wall Street Journal on any date of determination, the lowest prime lending
rate as published in the most recently available edition of The Wall Street
Journal preceding such date of determination.
PRINCIPAL AND INTEREST ACCOUNT: The principal and interest account
established by the Servicer pursuant to Section 5.03 hereof.
PRINCIPAL BALANCE: With respect to any Mortgage Loan or related REO
Property, at any date of determination, (i) the principal balance of the
Mortgage Loan (or, with respect to a Low Interest Pool I Mortgage Loan, the
product of such principal balance and the percentage set forth on Exhibit T
attached hereto) outstanding as of the Cut-Off Date or as of the applicable
Subsequent Cut-Off Date relative to Subsequent Mortgage Loans or as of the
applicable substitution date relative to Qualified Substitute Mortgage Loans,
after application of principal payments received on or before such date, minus
(ii) the sum of (a) the principal portion of the Monthly Payments received
during each Due Period ending prior to the most recent Remittance Date, which
were distributed pursuant to Section 6.08 on any previous Remittance Date, and
(b) all Principal Prepayments, Curtailments, Excess Payments, all Insurance
Proceeds, Released Mortgaged Property Proceeds, Net Liquidation Proceeds and net
income from an REO Property (but not including the proceeds of any Insured
Payment) to the extent applied by the Servicer as recoveries of principal in
accordance with the provisions hereof, which were distributed pursuant to
Section 6.08 on any previous Remittance Date.
PRINCIPAL PREPAYMENT: Any payment or other recovery of principal on a
Mortgage Loan equal to the outstanding principal balance thereof, received in
advance of the final scheduled Due Date which is intended to satisfy a Mortgage
Loan in full.
PRIOR LIEN: With respect to any Mortgage Loan which is not a first
priority lien, each mortgage loan relating to the corresponding Mortgaged
Property having a higher priority lien.
PROHIBITED TRANSACTION: "Prohibited Transaction" shall have 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).
PROJECTED EXCESS SPREAD: As of any date of determination, the amount
calculated as such in accordance with the Insurance Agreement.
PUD AND DE MINIMIS PUD: A planned unit development in which individual
fee title is held to the interior and exterior of the units and underlying land
and common areas, recreational facilities and streets are held in undivided
common ownership.
QUALIFIED MORTGAGE: "Qualified mortgage" shall have the meaning set
forth from time to time in the definition thereof at Section 860G(a)(3) of the
Code (or any successor statute thereto).
QUALIFIED SUBSTITUTE MORTGAGE LOAN: A mortgage loan or mortgage loans
substituted for a Deleted Mortgage Loan pursuant to Section 2.05 or 3.03 hereof,
which (i) has or have a mortgage interest rate or rates (or, in the case of a
Pool II Mortgage Loan, a Gross Margin and Index) of not less than (and not more
than two percentage points more than) the Mortgage Interest Rate (or Gross
Margin and Index) for the Deleted Mortgage Loan, (ii) relates or relate to the
same type of Residential Dwelling or Multifamily Property, as the case may be,
as the Deleted Mortgage Loan, (iii) matures or mature no later than (and not
more than one year earlier than) the Deleted Mortgage Loan, (iv) has or have a
Loan-to-Value Ratio or Loan-to-Value Ratios at the time of such substitution no
higher than the Loan-to Value Ratio of the Deleted Mortgage Loan at such time,
(v) has or have a principal balance or principal balances (after application of
all payments received on or prior to the date of substitution) equal to or less
than the Principal Balance (prior to the occurrence of Realized Losses) of the
Deleted Mortgage Loan as of such date, (vi) with respect to each Deleted
Mortgage Loan that is a first mortgage loan, is a first mortgage loan, (vii)
satisfies or satisfy the criteria set forth from time to time in the definition
of a "qualified replacement mortgage" at Section 860G(a)(4) of the Code (or any
successor statute thereto), and (viii) complies or comply as of the date of
substitution with each representation and warranty set forth in Sections 3.01(b)
and 3.02.
RATING AGENCIES: ▇▇▇▇▇'▇ and S&P.
REALIZED LOSS: With respect to each Liquidated Mortgage Loan, an amount
(not less than zero or greater than the related outstanding principal balance as
of the date of the final liquidation) equal to the outstanding principal balance
of the Mortgage Loan as of the date of such liquidation, minus the Net
Liquidation Proceeds relating to such Liquidated Mortgage Loan (such Net
Liquidation Proceeds to be applied first to the principal balance of the
Liquidated Mortgage Loan and then to interest thereon). With respect to each
Mortgage Loan which has become the subject of a Deficient Valuation, the
Realized Loss shall be calculated as the difference between the principal
balance of the Mortgage Loan immediately prior to such Deficient Valuation and
the principal balance of the Mortgage Loan as reduced by the Deficient
Valuation. With respect to any Mortgage Loan made to a Mortgagor who has filed a
petition in bankruptcy under the United States Bankruptcy Code, as amended from
time to time (11 U.S.C.), a Realized Loss shall be deemed to have occurred
whenever a withdrawal is made from the Principal and Interest Account in respect
of such Mortgage Loan pursuant to Section 5.04(c), and shall be equal to the
amount of such withdrawal.
RECORD DATE: With respect to any Remittance Date, the close of business
on the last day of the month immediately preceding the month of the related
Remittance Date. With respect to the Special Remittance Date, February 28, 1997.
REFERENCE BANKS: Leading banks selected by the Trustee (or, with
respect to the Auction Rate Certificates, the Auction Agent) and engaged in
transactions in Eurodollar deposits in the international Eurocurrency market (i)
with an established place of business in London, (ii) which have been designated
by the Trustee (or, with respect to the Auction Rate Certificates, the Auction
Agent) to the Representative, the Servicer and the Certificate Insurer and (iii)
which are not affiliates of the Representative.
REGISTRATION STATEMENT: The registration statement (File No. 333-20817)
filed by the Representative with the Securities and Exchange Commission in
connection with the issuance and sale of the Class A Certificates, including the
Prospectus dated March 7, 1997 and the Prospectus Supplement dated March 25,
1997.
REIMBURSABLE AMOUNTS: As of any date of determination, an amount
payable to the Servicer and/or Representative with respect to (i) the payment of
any tax reimbursable pursuant to Section 5.01(h), (ii) the Monthly Advances and
Servicing Advances reimbursable pursuant to Section 5.04(b), (iii) any advances
reimbursable pursuant to Section 9.01 and not previously reimbursed pursuant to
Section 6.03(c)(i), and (iv) any other amounts reimbursable to the Servicer or
the Representative prior to a distribution to the Class R Certificateholders
pursuant to this Agreement.
RELEASED MORTGAGED PROPERTY PROCEEDS: As to any Mortgage Loan, proceeds
received by the Servicer in connection with (a) a taking of an entire Mortgaged
Property by exercise of the power of eminent domain or condemnation or (b) any
release of part of the Mortgaged Property from the lien of the related Mortgage,
whether by partial condemnation, sale or otherwise, which are not released to
the Mortgagor in accordance with applicable law, the Servicer's customary second
mortgage servicing procedures and this Agreement.
REMAINDER EXCESS SPREAD AMOUNT: As of any Remittance Date, the amount
equal to the excess of the related Excess Spread over the related Monthly Excess
Spread.
REMIC: A "real estate mortgage investment conduit" within the meaning
of Section 860D of the Code.
REMIC CHANGE OF LAW: Any proposed, temporary or final regulation,
revenue ruling, revenue procedure or other official announcement or
interpretation relating to the REMIC and the REMIC Provisions issued after the
Closing Date.
REMIC PROVISIONS: Provisions of the federal income tax law relating to
real estate mortgage investment conduits, which appear at Section 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
regulations promulgated thereunder, as the foregoing may be in effect from time
to time.
REMIC I: The assets constituting the Trust Fund consisting of the REMIC
II Regular Certificates.
REMIC II: The assets constituting the Trust Fund other than the
Pre-Funding Account, the Spread Account and the Capitalized Interest Account.
Expenses and fees of the Trust Fund shall be paid by REMIC II.
REMIC II CERTIFICATES: The REMIC II Regular Certificates and the Class
R-2 Certificates.
REMIC II REGULAR CERTIFICATES: As designated in Section 4.1.
REMITTANCE DATE: The 15th day of any month or if such 15th day is not a
Business Day, the first Business Day immediately following, commencing April
1997; provided, however, that in no event shall the Remittance Date occur less
than three Business Days following the Determination Date.
REO DISPOSITION: The final sale by the Servicer of a Mortgaged Property
acquired by the Servicer in foreclosure or by deed in lieu of foreclosure. The
proceeds of any REO Disposition constitute part of the definition of Liquidation
Proceeds.
REO PROPERTY: As described in Section 5.10.
REPRESENTATIVE: The Money Store Inc., a New Jersey corporation, and its
successors and assigns as Representative hereunder.
RESIDENTIAL DWELLING: Any one or more of the following, (i) Single
Family Detached House, (ii) Row House, (iii) Two-Family House, (iv) Low-Rise
Condominium, (v) PUD and De minimis PUD, (vi) Three- or Four-Family House, (vii)
High-Rise Condominium, (viii) Mixed Use Building or (ix) manufactured home (as
defined in FNMA/FHLMC Seller-Servicers' Guide) to the extent that it constitutes
real property in the state in which it is located.
RESPONSIBLE OFFICER: When used with respect to the Trustee, any officer
assigned to the Corporate Trust Department, including any Vice President,
Assistant Vice President, any Assistant Secretary, any trust officer or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also, with respect to a
particular matter, any other officer to whom such matter is referred because of
such officer's knowledge of and familiarity with the particular subject. When
used with respect to the Representative, an Originator or any other person, any
Vice President, Assistant Vice President, the Treasurer, or any Secretary or
Assistant Secretary.
ROW HOUSE: A single family dwelling unit attached to another dwelling
unit by common walls.
SAIF: The Savings Association Insurance Fund, or any successor thereto.
SCHEDULE OF MORTGAGE LOANS: The schedule of Mortgage Loans attached to
the related Subsequent Transfer Agreement.
SERIES: 1997-A.
SERVICER: The Money Store Inc., a New Jersey corporation, and its
successors and assigns as Servicer hereunder.
SERVICER'S CERTIFICATE: The certificate as defined in Section 6.10.
SERVICING ACCOUNT: The Servicing Account established and maintained by
the Servicer in accordance with Section 6.15 hereof. The Servicing Account, and
amounts deposited therein, shall not constitute part of the Trust Fund and
Certificateholders shall have no rights thereto.
SERVICING ADVANCES: All reasonable and customary "out of pocket" costs
and expenses incurred in the performance by the Servicer of its servicing
obligations, including, but not limited to, the cost of (i) the preservation,
restoration and protection of the Mortgaged Property, (ii) any enforcement or
judicial proceedings, including foreclosures, (iii) the management and
liquidation of the REO Property, (iv) compliance with the obligations under
clause (vi) of Section 5.01(a) and Sections 5.02, 5.05 and 5.07, which Servicing
Advances are reimbursable to the Servicer to the extent provided in Section
5.04(b), and (e) in connection with the liquidation of a Mortgage Loan,
expenditures relating to the purchase or maintenance of any Prior Lien pursuant
to Section 5.14, for all of which costs and expenses the Servicer is entitled to
reimbursement with interest thereon up to a maximum rate per annum equal to the
related Mortgage Interest Rate, except that any amount of such interest accrued
at a rate in excess of the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class A-3, Class A-4, Class
A-5, Class A-6, Class A-7, Class A-8 or Class A-9 Remittance Rate, as the case
may be, for a Pool I Mortgage Loan, the Class A-10 or Class A-11 Remittance Rate
for a Pool II Mortgage Loan and the Class A-12 Remittance Rate for a Pool III
Mortgage Loan, with respect to the Remittance Date on which the Net Liquidation
Proceeds will be distributed shall be reimbursable only from Excess Proceeds.
SERVICING DELINQUENCY TRIGGER: Will be deemed to have occurred on any
date of determination (i) on or prior to February 28, 2001, if the Total
Expected Losses (as defined below) of the Pool I, Pool II and Pool III Mortgage
Loans exceed 9.0% of the aggregate Principal Balances of the Pool I, Pool II and
Pool III Mortgage Loans as of the end of the first Due Period immediately
following the Funding Period and (ii) after February 28, 2001, but on or prior
to February 28, 2006, if the Total Expected Losses of the Pool I, Pool II and
Pool III Mortgage Loans exceed 13.5% of the aggregate Principal Balances of the
Pool I, Pool II and Pool III Mortgage Loans as of the end of the first Due
Period immediately following the Funding Period.
For purposes of the foregoing definition, the "Total Expected Losses"
of the Pool I, Pool II and Pool III Mortgage Loans on any date of determination
shall equal the sum of (i) the cumulative Realized Losses on the Pool I, Pool II
and Pool III Mortgage Loans from the Closing Date through and including such
date of determination and (ii) the Delinquency Calculation (as defined below).
For purposes of the foregoing definition, the "Delinquency Calculation"
on any date of determination shall equal the sum of:
(i) the Principal Balance of all Mortgage Loans 30-59 days
delinquent multiplied by 10.75%;
(ii) the Principal Balance of all Mortgage Loans 60-89 days
delinquent multiplied by 21.50%; and
(iii) the Principal Balance of all Mortgage Loans 90 days or more
delinquent multiplied by 43.00%.
SERVICING FEE: As to each Mortgage Loan, the annual fee payable to the
Servicer. Such fee shall be calculated and payable monthly only from the amounts
received in respect of interest on such Mortgage Loan, shall accrue at the rate
of .25% per annum and shall be computed on the basis of the same principal
amount and for the period respecting which any related interest payment on a
Mortgage Loan is computed. The Servicing Fee is payable solely from the interest
portion of related (i) Monthly Payments, (ii) Liquidation Proceeds or (iii)
Released Mortgaged Property Proceeds collected by the Servicer, or as otherwise
provided in Section 5.04. The Servicing Fee includes any servicing fees owed or
payable to any Subservicer.
SERVICING OFFICER: Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and signature appears on a list of servicing officers furnished to the
Trustee by the Servicer, as such list may from time to time be amended.
SINGLE FAMILY DETACHED HOUSE: A single family dwelling unit not
attached in any way to any other unit.
SINGLE FAMILY LOANS: Mortgage Loans secured by Mortgaged Property
consisting of one-to-four family units.
S&P: Standard & Poor's Rating Services, a division of The ▇▇▇▇▇▇-▇▇▇▇
Companies, or any successor thereto.
SPECIAL HOLDINGS: TMS Special Holdings Inc., a Delaware corporation.
SPECIAL REMITTANCE DATE: June 27, 1997.
SPECIFIED SUBORDINATED AMOUNT: As applicable, the Pool I Specified
Subordinated Amount, the Pool II Specified Subordinated Amount the Pool III
Specified Subordinated Amount.
SPREAD ACCOUNT: The Spread Account that may be established and
maintained with the Trustee in accordance with Section 6.05 hereof.
SPREAD ACCOUNT PORTION: With respect to each Pool and any Remittance
Date, an amount equal to the product of (i) the amount on deposit in the Spread
Account immediately prior to such Remittance Date (other than amounts deposited
therein pursuant to Section 6.14(b)(iii)) and (ii) a fraction, the numerator of
which is the Initial Pool Spread Account Deposit for such Pool and the
denominator of which is the Aggregate Initial Spread Account Deposit.
STARTUP DAY: The day designated as such pursuant to Section 2.06
hereof.
SUBORDINATED AMOUNT: For each Pool, the Pool Subordinated Amount for
such Pool.
SUBORDINATED DEFICIENCY AMOUNT: With respect to any Pool and Remittance
Date, the difference, if any, between (i) the Specified Subordinated Amount
applicable to such Pool and Remittance Date and (ii) the Subordinated Amount
applicable to such Pool and Remittance Date prior to taking into account the
payment of any amounts calculated pursuant to clauses (X)(vi) and (viii) and (Y)
of the definition of Pool Principal Distribution Amount with respect to such
Remittance Date.
SUBORDINATION DEFICIT: With respect to any Pool and any Remittance
Date, the amount, if any, by which (x) the Pool Principal Balance with respect
to such Pool after taking into account the payment of the Pool Remittance Amount
for such Pool on such Remittance Date in the manner described herein (other than
amounts payable with respect to clause (X)(vi) of the definition of Pool
Principal Distribution Amount) exceeds (y) the sum of (i) the aggregate
Principal Balances of the Mortgage Loans of the related Pool as of the close of
business on the last day of the Due Period relating to such Remittance Date and
(ii) any Pre- Funding Account moneys allocable to the Mortgage Loans of such
Pool as of the close of business on the last day of the related Due Period.
SUBORDINATION INCREASE AMOUNT: With respect to any Pool and any
Remittance Date, the lesser of (i) the Subordinated Deficiency Amount as of such
Payment Date (after taking into account the payment of the Pool Remittance
Amount for such Pool on such Remittance Date (except for any Subordination
Increase Amount)) and (ii) the aggregate amount of Net Monthly Excess Cashflow
to be allocated to such Pool pursuant to Section 6.14(b)(i) on such Remittance
Date.
SUBORDINATION REDUCTION AMOUNT: With respect to any Pool and any
Remittance Date, an amount equal to the lesser of (x) the Excess Subordinated
Amount for such Pool and Remittance Date and (y) the sum of the amounts
calculated pursuant to clauses (X)(i) through (v), inclusive, and (vii) of the
definition of Pool Principal Distribution Amount with respect to such Pool and
Remittance Date.
SUBSEQUENT CUT-OFF DATE: The beginning of business on each date
specified in a Subsequent Transfer Agreement with respect to those Subsequent
Mortgage Loans which are transferred and assigned to the Trust Fund pursuant to
the related Subsequent Transfer Agreement.
SUBSEQUENT MORTGAGE LOANS: The Mortgage Loans sold to the Trust Fund
pursuant to Section 2.09, which shall be listed on the Schedule of Mortgage
Loans attached to the related Subsequent Transfer Agreement.
SUBSEQUENT POOL I MORTGAGE LOANS: Subsequent Mortgage Loans assigned to
Pool I.
SUBSEQUENT POOL II MORTGAGE LOANS: Subsequent Mortgage Loans assigned
to Pool II.
SUBSEQUENT POOL III MORTGAGE LOANS: Subsequent Mortgage Loans assigned
to Pool III.
SUBSEQUENT TRANSFER AGREEMENT: Each Subsequent Transfer Agreement dated
as of a Subsequent Transfer Date executed by the Trustee and the Representative,
by which Subsequent Mortgage Loans are sold and assigned to the Trust Fund.
SUBSEQUENT TRANSFER DATE: The date specified as such in each Subsequent
Transfer Agreement.
SUBSERVICER: Any Person with whom the Servicer has entered into a
Subservicing Agreement and who satisfies any requirements set forth in Section
5.01(b) hereof in respect of the qualification of a Subservicer.
SUBSERVICING AGREEMENT: Any agreement between the Servicer and any
Subservicer relating to subservicing and/or administration of certain Mortgage
Loans as provided in Section 5.01(b), a copy of which shall be delivered, along
with any modifications thereto, to the Trustee and the Certificate Insurer.
SUBSTITUTION ADJUSTMENT: As to any date on which a substitution occurs
pursuant to Sections 2.05 or 3.03, the sum of (i) the amount (if any) by which
the aggregate principal balances (after application of principal payments
received on or before the date of substitution) of any Qualified Substitute
Mortgage Loans as of the date of substitution are less than the aggregate of the
Principal Balance, prior to the occurrence of Realized Losses, of the related
Deleted Mortgage Loans, and (ii) the interest portion of any unreimbursed
Insured Payments made by the Certificate Insurer related to such Mortgage Loan.
TAX MATTERS PERSON: The Person or Persons designated from time to time
to act as the "tax matters person" (within the meaning of the REMIC Provisions)
of the Trust Fund.
TAX MATTERS PERSON RESIDUAL INTEREST: The interest in each Class of
Class R Certificates acquired by the Tax Matters Person pursuant to Section
2.06(d) hereof.
TAX RETURN: The federal income tax return on Internal Revenue Service
Form 1066, "U.S. Real Estate Mortgage Investment Conduit Income Tax Return,"
including Schedule Q thereto, Quarterly Notice to Residual Interest Holders of
REMIC Taxable Income or Net Loss Allocation, or any successor forms, to be filed
on behalf of the Trust Fund due to its classification as a REMIC under the REMIC
Provisions, together with any and all other information reports or returns that
may be required to be furnished to the Certificateholders or filed with the
Internal Revenue Service or any other governmental taxing authority under any
applicable provision of federal, state or local tax laws.
TELERATE PAGE 3750: The display page currently so designated on the Dow
▇▇▇▇▇ Telerate Service (or such other page as may replace that page on that
service for the purpose of displaying comparable rates or prices).
TERMINATION PRICE: The price defined in Section 11.01 hereof.
THREE- OR FOUR-FAMILY HOUSE: Three or four dwelling units under one
roof.
TOTAL MONTHLY EXCESS CASHFLOW: As defined in Section 6.14(a) hereof.
TREASURY INDEX: The applicable One-Year Constant Maturity Treasury
Index as published by the Federal Reserve Board in the applicable Federal
Reserve Board Statistical Release No. H.15.
TRUST FUND: The segregated pool of assets subject hereto, constituting
the trust created hereby and to be administered hereunder, consisting of: (i)
such Mortgage Loans as from time to time are subject to this Agreement, together
with the Mortgage Files relating thereto and all proceeds thereof, (ii) such
assets (including any Permitted Instruments) as from time to time are identified
as REO Property relating to Mortgage Loans or are deposited in or constitute the
Certificate Accounts, Principal and Interest Account, Expense Account,
Pre-Funding Account, Capitalized Interest Account, Spread Account and Insurance
Accounts, (iii) the Trustee's rights under all insurance policies with respect
to the Mortgage Loans required to be maintained pursuant to this Agreement and
any related Insurance Proceeds, (iv) the Certificate Insurance Policies, (v)
Liquidation Proceeds and (vi) Released Mortgaged Property Proceeds, including
all earnings thereon and proceeds thereof. The Mortgage Loans included from time
to time in the Trust Fund shall be divided into three separate sub-trusts, one
for the Pool I Mortgage Loans, one for the Pool II Mortgage Loans and one for
the Pool III Mortgage Loans.
TRUSTEE: The Bank of New York, or its successor in interest, or any
successor trustee appointed as herein provided.
TRUSTEE'S MORTGAGE FILE: The documents delivered to the Trustee
pursuant to Section 2.04.
TWO FAMILY HOUSE: Two dwelling units under one roof.
ARTICLE II
SALE AND CONVEYANCE OF THE TRUST FUND
Section 2.01 Sale and Conveyance of Trust Fund; Priority and
Subordination of Ownership Interests.
(a) The Originators do hereby sell, transfer, assign, set over and
convey to the Trustee without recourse and for the benefit of the
Certificateholders of the related Pool, subject to the terms of this Agreement,
all of the right, title and interest of the Originators in and to the Initial
Pool I, Initial Pool II and Initial Pool III Mortgage Loans and all other assets
included or to be included in the Trust Fund. The Mortgage Loans that from time
to time constitute part of the Trust Fund shall be divided into three separate
sub-trusts, one for the Pool I Mortgage Loans, one for the Pool II Mortgage
Loans and one for the Pool III Mortgage Loans.
(b) The rights of the Certificateholders to receive payments with
respect to the Mortgage Loans in respect of the Certificates, and all ownership
interests of the Certificateholders in such payments, shall be as set forth in
this Agreement. In this regard, all rights of the Class R Certificateholders to
receive payments in respect of the Class R Certificates and all ownership
interests of the Class R Certificateholders in and to such payments, are subject
and subordinate to the preferential rights of the Class A Certificateholders and
Class X Certificateholders, to receive payments in respect of the Class A
Certificates and Class X Certificates, respectively, and the ownership interests
of the Class A Certificateholders and Class X Certificateholders in such
payments, to the extent set forth herein. In accordance with the foregoing, the
ownership interest of the Class R Certificateholders in amounts deposited in the
Principal and Interest Account and any Account from time to time shall not vest
unless and until such amounts are distributed in respect of the Class R
Certificates in accordance with the terms of this Agreement.
Section 2.02 Possession of Mortgage Files.
(a) Upon the issuance of the Certificates, the ownership of each
Mortgage Note, the Mortgage and the contents of the related Mortgage File
relating to the Initial Mortgage Loans is, and upon each Subsequent Transfer
Date the ownership of each Mortgage Note, the Mortgage and the contents of the
related Mortgage File relating to the applicable Subsequent Mortgage Loans will
be, vested in the Trustee for the benefit of the Certificateholders of the
related Pool.
(b) Pursuant to Section 2.04, the Originators have delivered or caused
to be delivered each Trustee's Mortgage File relating to the Initial Mortgage
Loans to the Trustee and on each Subsequent Transfer Date the Originators will
deliver or cause to be delivered each Trustee's Mortgage File relating to the
related Subsequent Mortgage Loans to the Trustee.
Section 2.03 Books and Records.
The sale of each Mortgage Loan shall be reflected on the Originator's
balance sheets and other financial statements as a sale of assets by each
Originator. The Originators shall be responsible for maintaining, and shall
maintain, a complete set of books and records for each Mortgage Loan which shall
be clearly marked to reflect the ownership of each Mortgage Loan by the Trustee
for the benefit of the Certificateholders.
Section 2.04 Delivery of Mortgage Loan Documents.
Each Originator, (i) contemporaneously with the delivery of this
Agreement, has delivered or caused to be delivered to the Trustee the
Certificate Insurance Policies and each of the following documents for each
Initial Mortgage Loan and (ii) on each Subsequent Transfer Date, will deliver or
cause to be delivered to the Trustee each of the following documents for each
Subsequent Mortgage Loan originated by such Originator:
(a) The original Mortgage Note, endorsed "Pay to the order of holder"
or "Pay to the order of __________________" and signed, by facsimile or manual
signature, in the name of the Person delivering the note by a Responsible
Officer, with all prior and intervening endorsements showing a complete chain of
endorsement from the originator to such Person;
(b) Either: (i) the original Mortgage, with evidence of recording
thereon, (ii) a copy of the Mortgage certified as a true copy by a Responsible
Officer where the original has been transmitted for recording until such time as
the original is returned by the public recording office or (iii) a copy of the
Mortgage certified by the public recording office in those instances where the
original recorded Mortgage has been lost;
(c) Either: (i) the original Assignment of Mortgage from the Person
delivering such Assignment to "The Bank of New York, as Trustee under the
Pooling and Servicing Agreement dated as of February 28, 1997, 1997-A" with
evidence of recording thereon (provided, however, that where permitted under the
laws of the jurisdiction wherein the Mortgaged Property is located, the
Assignment of Mortgage may be effected by one or more blanket assignments for
Mortgage Loans secured by Mortgaged Properties located in the same county), or
(ii) a copy of such Assignment of Mortgage certified as a true copy by a
Responsible Officer where the original has been transmitted for recording
(provided, however, that where the original Assignment of Mortgage is not being
delivered to the Trustee, each such Responsible Officer may complete one or more
blanket certificates attaching copies of one or more Assignments of Mortgage
relating to the Mortgages originated by the related Originator);
(d) (i) The original policy of title insurance or, if such policy has
not yet been delivered by the insurer, the commitment or binder to issue same,
or if the original principal balance of the Mortgage Loan was less than or equal
to $15,000 or the Mortgage Loan was not originated by the Originators, other
evidence of the status of title, which shall consist of an attorney's opinion of
title or certificate of title, a preliminary title report, a property search, a
title search, a lot book report, a property information report or a report
entitled "prelim" or "PIRT" (property information report), and (ii) proof of
hazard insurance in the form of a hazard insurance policy or hazard insurance
policy endorsement that names the related Originator, its successors and
assigns, as a mortgagee/loss payee, and, if such endorsement does not show the
amount insured by the related hazard insurance policy, some evidence of such
amount;
(e) Either: (i) originals of all intervening assignments, if any,
showing a complete chain of title from the originator to the Person delivering
such assignment, including warehousing assignments, with evidence of recording
thereon if such assignments were recorded, (ii) copies of any assignments
certified as true copies by a Responsible Officer where the originals have been
submitted for recording until such time as the originals are returned by the
public recording officer, or (iii) copies of any assignments certified by the
public recording office in any instances where the original recorded assignments
have been lost;
(f) Originals of all assumption and modification agreements, if any;
and
(g) Except with respect to certain Mortgage Loans with original
principal balances of less than $15,000, the appraisal made in connection with
the origination of the related Mortgage Loan with photographs of the subject
property and of comparable properties (if available), constituting evidence
sufficient to indicate that the Mortgaged Property relates to a Residential
Dwelling (or, with respect to Multifamily Loans, a Multifamily Property) and
identifying the type thereof.
The Originator shall, within five Business Days after the receipt
thereof, and in any event, within one year of the Closing Date (or with respect
to the Subsequent Mortgage Loans, within one year of the related Subsequent
Transfer Date), deliver or cause to be delivered to the Trustee: (a) the
original recorded Mortgage in those instances where a copy thereof certified by
a Responsible Officer was delivered to the Trustee; (b) the original recorded
Assignment of Mortgage to the Trustee, which, together with any intervening
assignments of Mortgage, evidences a complete chain of title from the originator
to the Trustee in those instances where copies thereof certified by a
Responsible Officer were delivered to the Trustee; (c) any intervening
assignments of Mortgage in those instances where copies thereof certified by a
Responsible Officer were delivered to the Trustee; and (d) the title insurance
policy, or, where no such policy is required to be provided, the other evidence
of title and hazard insurance required in clause (d) above. Notwithstanding
anything to the contrary contained in this Section 2.04, in those instances
where the public recording office retains the original Mortgage, Assignment of
Mortgage or the intervening assignments of the Mortgage after it has been
recorded, the Originator shall be deemed to have satisfied its obligations
hereunder upon delivery to the Trustee of a copy of such Mortgage, Assignment of
Mortgage or assignments of Mortgage certified by the public recording office to
be a true copy of the recorded original thereof. From time to time the
Originator may forward or cause to be forwarded to the Trustee additional
original documents evidencing an assumption or modification of a Mortgage Loan.
All Mortgage Loan documents held by the Trustee as to each Mortgage Loan are
referred to herein as the "Trustee's Mortgage File."
All recording required pursuant to this Section 2.04 shall be
accomplished by and at the expense of the Servicer.
Section 2.05 Acceptance by Trustee of the Trust Fund; Certain
Substitutions; Certification by Trustee.
(a) The Trustee agrees to execute and deliver on the Closing Date with
respect to the Initial Mortgage Loans, and on each Subsequent Transfer Date with
respect to the related Subsequent Mortgage Loans, an acknowledgment of receipt
of, for each Mortgage Loan, an Assignment of Mortgage or certified copy thereof,
and a Mortgage Note, in the form attached as Exhibit F hereto, and declares that
it will hold such documents and any amendments, replacements or supplements
thereto, as well as any other assets included in the definition of the Trust
Fund and delivered to the Trustee, as Trustee in trust upon and subject to the
conditions set forth herein for the benefit of the Certificateholders. The
Trustee agrees, for the benefit of the Certificateholders, to review each
Trustee's Mortgage File relating to the Initial Mortgage Loans delivered to it
within 60 days after the Closing Date and each Trustee's Mortgage File relating
to the Subsequent Mortgage Loans delivered to it within 60 days after the
related Subsequent Transfer Date (or, with respect to any Qualified Substitute
Mortgage Loan, within 45 days after the assignment thereof) and, on each such
date, to deliver to the Representative, the Servicer and the Certificate Insurer
a certification in the form attached hereto as Exhibit F-1 to the effect that,
as to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Mortgage Loan paid in full or any Mortgage Loan specifically identified in such
certification as not covered by such certification), with such exceptions, if
any, as identified therein (i) all documents required to be delivered to it
pursuant to this Agreement are in its possession (other than items listed in
Section 2.04(d)(ii)), (ii) such documents (other than items listed in Section
2.04(d)(ii)) have been reviewed by it and have not been mutilated, damaged, torn
or otherwise physically altered and relate to such Mortgage Loan, (iii) based on
its examination and only as to the foregoing documents, the information set
forth on the Mortgage Loan Schedule accurately reflects the information set
forth in the Trustee's Mortgage File, and (iv) each Mortgage Note has been
endorsed as provided in Section 2.04 of this Agreement. Further, for each
Mortgage Loan with an original principal balance in excess of $15,000 for which
the documents in the possession of the Trustee indicate that the related
Originator conducted a drive-by appraisal pursuant to FHLMC Form 704 or
alternative FNMA Form in connection with originating such Mortgage Loan, the
Trustee shall verify whether the Trustee's Mortgage File shows that such
Mortgage Loan, (A) had an original principal balance not in excess of $35,000,
and (B) has a Loan-to Value Ratio less than 50% (based solely on the LTV
included on the Mortgage Loan Schedule) and/or an appraisal on FNMA/FHLMC Form
1004 was performed by the related Originator within one year prior to the
origination of such Mortgage Loan. The Trustee shall be under no duty or
obligation to inspect, review or examine any such documents, instruments,
certificates or other papers to determine that they are genuine, enforceable, or
appropriate for the represented purpose or that they are other than what they
purport to be on their face. Within 375 days after the Closing Date, the Trustee
shall deliver to the Servicer, the Representative, the Certificate Insurer and
any Certificateholder who requests a copy from the Trustee a final certification
in the form attached hereto as Exhibit G evidencing, if such be the case, the
completeness of the Trustee's Mortgage Files (other than items listed in Section
2.04(d)(ii)).
(b) If the Certificate Insurer or the Trustee during the process of
reviewing the Trustee's Mortgage Files finds any document constituting a part of
a Trustee's Mortgage File which is not properly executed, has not been received,
is unrelated to a Mortgage Loan identified in the Mortgage Loan Schedule, or
does not conform in a material respect to the requirements of Section 2.04 or
the description thereof as set forth in the Mortgage Loan Schedule, the
Certificate Insurer or the Trustee shall promptly so notify the Servicer, the
Representative and the Trustee or the Certificate Insurer, respectively. In
performing any such review, the Trustee may conclusively rely on the related
Originator as to the purported genuineness of any such document and any
signature thereon. It is understood that the scope of the Trustee's review of
the Mortgage Files is limited solely to confirming that the documents listed in
Section 2.04 (other than the items listed in Section 2.04(d)(ii)) appear on
their face to have been executed and received and to relate to the Mortgage
Loans identified in the Mortgage Loan Schedule, and to verify that each
Mortgaged Property appears from the information contained in the Trustee's
Mortgage File to be a Residential Dwelling (or, with respect to the Multifamily
Loans, a Multifamily Property). The Representative agrees to use reasonable
efforts to remedy a material defect in a document constituting part of a
Mortgage File of which it is so notified by the Certificate Insurer or the
Trustee. If, however, within 60 days after the Trustee's notice to it respecting
such defect the Representative has not remedied the defect and the defect
materially and adversely affects the interest of the Certificateholders in the
related Mortgage Loan or the interests of the Certificate Insurer, the
Representative will (i) substitute in lieu of such Mortgage Loan a Qualified
Substitute Mortgage Loan in the manner and subject to the conditions set forth
in Section 3.03 or (ii) purchase such Mortgage Loan at a purchase price equal to
the Principal Balance of the Mortgage Loan as of the date of purchase, before
the occurrence of Realized Losses, if any, plus 30 days' interest (or, in the
case of a Pool II Mortgage Loan, the actual number of days during the related
interest period for the Pool II Certificates) on such Principal Balance,
computed at the weighted average Class Adjusted Mortgage Loan Remittance Rates
for the Pool I Certificates with respect to a Pool I Mortgage Loan, the weighted
average Class Adjusted Mortgage Loan Remittance Rates for the Pool II
Certificates, with respect to a Pool II Mortgage Loan or the Class Adjusted
Mortgage Loan Remittance Rate for the Pool III Certificates with respect to a
Pool III Mortgage Loan, as the case may be, as of the next succeeding
Determination Date, plus any accrued unpaid Servicing Fees, Contingency Fees,
Monthly Advances and Servicing Advances reimbursable to the Servicer, plus the
interest portion of any unreimbursed Insured Payments made by the Certificate
Insurer related to such Mortgage Loan, which purchase price shall be deposited
in the applicable Principal and Interest Account on the next succeeding
Determination Date except for the amount described above relating to
unreimbursed Insured Payments, which shall be paid directly by the
Representative to the Certificate Insurer.
(c) Upon receipt by the Trustee of a certification of a Servicing
Officer of the Servicer of such substitution or purchase and the deposit of the
amounts described above in the applicable Principal and Interest Account (which
certification shall be in the form of Exhibit J hereto), the Trustee shall
release to the Servicer for release to the Representative the related Trustee's
Mortgage File and the Trustee shall execute, without recourse, and deliver such
instruments of transfer necessary to transfer such Mortgage Loan to the
Representative. All costs of any such transfer shall be borne by the Servicer.
If requested by either the Representative, the Servicer or the
Certificate Insurer, on the Remittance Date in June of each year, commencing
1997, the Trustee shall deliver to the Representative, the Servicer and the
Certificate Insurer a certification detailing all transactions with respect to
the Mortgage Loans for which the Trustee holds a Trustee's Mortgage File
pursuant to this Agreement during the prior calendar year. Such certification
shall list all Trustee's Mortgage Files which were released by or returned to
the Trustee during the prior calendar year, the date of such release or return,
the reason for such release or return, and the person to whom the Trustee's
Mortgage File was released or the person who returned the Trustee's Mortgage
File.
Section 2.06 Designations
under REMIC Provisions; Designation
of Startup Day.
(a) As of the Startup Day, all Classes of Certificates except for the
Class R-1 and Class R-2 Certificates are hereby designated as the "regular
interests" in REMIC I and the Class R-1 Certificates are designated the single
class of "residual interests" in REMIC I for the purposes of the REMIC
Provisions. As of the Startup Day, the REMIC II Regular Certificates are hereby
designated as the "regular interests" in REMIC II and the Class R-2 Certificates
are designated the single class of "residual interests" in REMIC II for the
purposes of the REMIC Provisions.
(b) The Closing Date is hereby designated as the "Startup Day" of each
REMIC within the meaning of Section 860G(a)(9) of the Code. The latest possible
maturity date of the REMIC II Regular Certificates is April 15, 2028.
(c) The latest possible maturity dates of the Class A Certificates are
as follows:
Class Latest Possible Maturity Date
Class A-1 December 15, 2005
Class A-2 December 15, 2009
Class A-3 April 15, 2012
Class A-4 March 15, 2016
Class A-5 January 15, 2018
Class A-6 October 15, 2021
Class A-7 November 15, 2024
Class A-8 May 15, 2028
Class A-9 May 15, 2028
Class A-10 May 15, 2025
Class A-11 April 15, 2028
Class ▇-▇▇ ▇▇▇▇▇ ▇▇, ▇▇▇▇
(▇) The Servicer, at the direction of the Originators, shall acquire
and retain a .01% Percentage Interest in each Class of Class R Certificates so
long as it shall act as Tax Matters Person of the Trust Fund, except that, when
the Trustee is acting as successor Servicer, the Representative will hold the
Tax Matters Person Residual Interest until an entity is appointed to succeed the
Trustee as Servicer.
(e) Any inconsistencies or ambiguities in this Agreement or in the
administration of the Trust Fund shall be resolved in a manner that preserves
the validity of the election that each of REMIC I and REMIC II be treated as a
REMIC.
Section 2.07 Authentication of Certificates.
The Trustee acknowledges the assignment to it of the Mortgage Loans and
the delivery to it of the Trustee's Mortgage Files relating to the Initial
Mortgage Loans, and, concurrently with such delivery, the Trustee has
authenticated or caused to be authenticated and delivered to or upon the order
of the Representative on behalf of the Originators, in exchange for the Initial
Mortgage Loans, the Certificate Insurance Policies, the Trustee's Mortgage Files
and the other assets included in the definition of the Trust Fund, Certificates
duly authenticated by the Trustee in authorized denominations evidencing the
entire ownership of the Trust Fund.
Section 2.08 Fees and Expenses of the Trustee.
The fees and expenses of the Trustee including (i) the annual fees of
the Trustee, payable annually in advance, and subject to rebate to the Servicer
as additional servicing compensation hereunder for any fraction of a year in
which this Agreement terminates, (ii) any other fees and expenses to which the
Trustee is entitled, and (iii) reimbursements to the Servicer for any advances
made by the Servicer to the applicable Expense Accounts pursuant to Section 6.03
hereof, shall be paid from the Expense Accounts in the manner set forth in
Section 6.03 hereof; provided, however, that the Representative shall be liable
for any expenses of the Trust Fund incurred prior to the Closing Date. The
Servicer and the Trustee hereby covenant with the Certificateholders that every
material contract or other material agreement entered into by the Trustee or the
Servicer, acting as attorney-in- fact for the Trustee, on behalf of the Trust
Fund shall expressly state therein that no Certificateholder shall be personally
liable in its capacity as such in connection with such contract or agreement.
Section 2.09 Sale and Conveyance of the Subsequent Mortgage Loans.
(a) Subject to the conditions set forth in paragraph (b) below, in
consideration of the Trustee's delivery on the related Subsequent Transfer Dates
to or upon the order of the Representative of all or a portion of the balance of
funds in the Pre-Funding Account, the Originators shall on any Subsequent
Transfer Date sell, transfer, assign, set over and otherwise convey without
recourse, to the Trustee all right, title and interest of the applicable
Originators in and to each Subsequent Mortgage Loan listed on the Mortgage Loan
Schedule delivered by the Representative on such Subsequent Transfer Date, all
their right, title and interest in and to principal collected and interest
accruing on each such Subsequent Mortgage Loan on and after the related
Subsequent Cut- Off Date and all their right, title and interest in and to all
Insurance Policies; provided, however, that the Originators reserve and retain
all their right, title and interest in and to principal (including Principal
Prepayments) collected and interest accruing on each such Subsequent Mortgage
Loan prior to the related Subsequent Cut-Off Date. The transfer by the
Originators of the Subsequent Mortgage Loans set forth on the Mortgage Loan
Schedule to the Trustee shall be absolute and shall be intended by all parties
hereto to be treated as a sale by the Originators.
The amount released from the Pre-Funding Account shall be one-hundred
percent (100%) of the aggregate principal balances as of the related Subsequent
Cut-Off Dates of the Subsequent Mortgage Loans so transferred; provided,
however, that the amount released from the Pre-Funding Account for a Low
Interest Mortgage Loan shall be the percentage set forth on Exhibit T attached
hereto of the aggregate principal balance thereof as of the related Subsequent
Cut-Off Date.
(b) The Originators shall transfer to the Trustee the Subsequent
Mortgage Loans and the other property and rights related thereto described in
paragraph (a) above only upon the satisfaction of each of the following
conditions on or prior to the related Subsequent Transfer Date:
(i) The Representative shall have provided the Trustee and the
Certificate Insurer with a timely Addition Notice and shall have
provided any information reasonably requested by any of the foregoing
with respect to the Subsequent Mortgage Loans;
(ii) the Originators shall have delivered to the Trustee a duly
executed written assignment (including an acceptance by the Trustee)
that shall indicate whether such Subsequent Mortgage Loan is a
Subsequent Pool I Mortgage Loan, a Subsequent Pool II Mortgage Loan or
a Subsequent Pool III Mortgage Loan and which shall include Mortgage
Loan Schedules, listing the Subsequent Mortgage Loans and any other
exhibits listed thereon;
(iii) the Originators shall have deposited in the Principal and
Interest Account all collections in respect of the Subsequent Mortgage
Loans received on or after the related Subsequent Cut-Off Date;
(iv) as of each Subsequent Transfer Date, none of the related
Originator, the Servicer or the Representative was insolvent nor will
any of them have been made insolvent by such transfer nor is any of
them aware of any pending insolvency;
(v) such addition will not result in a material adverse tax
consequence to the Trust Fund or the Holders of the Certificates;
(vi) the Pre-Funding Period shall not have terminated;
(vii) the Representative shall have delivered to the Trustee an
Officer's Certificate confirming the satisfaction of each condition
precedent specified in this paragraph (b) and in the related
Subsequent Transfer Agreement;
(viii) the Representative shall have delivered to the Certificate
Insurer, the Rating Agencies and the Trustee Opinions of Counsel with
respect to the transfer of the Subsequent Mortgage Loans substantially
in the form of the Opinions of Counsel delivered to the Certificate
Insurer and the Trustee on the Startup Day (bankruptcy, corporate and
tax opinions); and
(ix) the Representative shall have deposited into the Spread
Account the amount, if any, required by the Certificate Insurer.
(c) The obligation of the Trust Fund to purchase a Subsequent Pool I
Mortgage Loan, a Subsequent Pool II Mortgage Loan or a Subsequent Pool III
Mortgage Loan, as the case may be, on any Subsequent Transfer Date is subject to
the requirement, as evidenced by a certificate from a Responsible Officer of the
Representative, that such Subsequent Pool I Mortgage Loan, Subsequent Pool II
Mortgage Loan or Subsequent Pool III Mortgage Loan, as the case may be, conforms
in all material respects to the representations and warranties concerning the
individual Initial Pool I Mortgage Loans, Initial Pool II Mortgage Loans or
Initial Pool III Mortgage Loans, as the case may be, set forth in Sections 3.01
and 3.02 (except that any reference therein to the Cut-Off Date shall be deemed
a reference to the applicable Subsequent Cut-Off Date) and that the inclusion of
all Subsequent Pool I Mortgage Loans, Subsequent Pool II Mortgage Loans or
Subsequent Pool III Mortgage Loans, as the case may be, being transferred to the
Trust Fund on such Subsequent Transfer Date will not change, in any material
respect, the characteristics of the Initial Pool I Mortgage Loans, Initial Pool
II Mortgage Loans or Initial Pool III Mortgage Loans, as the case may be, in the
aggregate, set forth in Sections 3.01 and 3.02 or in the Prospectus Supplement
dated March 25, 1997 forming a part of the Registration Statement under the
headings "Summary of Terms -- The Pools -- Pool I and Pool II" and "-- Pool III"
and "The Loan Pools -- Home Equity Loans" and "-- Multifamily Loans."
(d) In connection with the transfer and assignment of the Subsequent
Mortgage Loans, the Representative agrees to satisfy the conditions set forth in
Sections 2.01, 2.02, 2.03, 2.04 and 2.05.
(e) In connection with each Subsequent Transfer Date, on the Remittance
Dates in April, May and June 1997 and the Special Remittance Date, the
Representative shall determine, and the Trustee shall cooperate with the
Representative in determining (i) the amount and correct dispositions of the
Capitalized Interest Requirement for each Pool, the Overfunded Interest Amounts
for each Pool, the Pool Pre-Funding Earnings for each Pool, the amounts of
Pre-Funding Account moneys allocated to each Pool and (ii) any other necessary
matters in connection with the administration of the Pre-Funding Account and of
the Capitalized Interest Account. If any amounts are incorrectly released to the
Holders of the Class R Certificates from the Pre-Funding Account or from the
Capitalized Interest Account, such Holders or the Representative shall
immediately repay such amounts to the Trustee.
(f) In connection with the transfer of any Subsequent Mortgage Loans to
the Trust Fund, the Representative, the Servicer and the Trustee may, with the
prior written consent of the Certificate Insurer, amend the definition of
"Specified Subordinated Amount" (or any component of the definition thereof)
with respect to the related Pool for the purpose of changing the related
Specified Subordinated Amount (or any component of the definition thereof).
Based upon the results of any additional due diligence procedures performed by
the Certificate Insurer after the Closing Date to determine compliance with the
Underwriting Guidelines dated August 10, 1995, the Certificate Insurer may
require the Representative, the Servicer and the Trustee to amend the definition
of "Specified Subordinated Amount" (or any component of the definition thereof)
with respect to the Pool for the purpose of changing the related Specified
Subordinated Amount (or any component of the definition thereof). Provided,
however, that any amendment of the definition of "Specified Subordinated Amount"
with respect to the related Pool, other than an amendment increasing the Pool I,
Pool II or Pool III Initial Specified Subordinated Amount (or any component of
the definition thereof), as the case may be, and accompanied by a cash deposit
into the Spread Account pursuant to Section 6.05, must comply with the
provisions of Section 13.02 hereof.
(g) Each Subsequent Mortgage Loan shall have been originated and
identified by the applicable Originator on or prior to the Closing Date;
provided, however, that if a mortgage loan that was identified as a Subsequent
Mortgage Loan does not satisfy the representations and warranties referenced in
Subsection (c) above, the applicable Originator may substitute for such loan
another Loan that satisfies the representations and warranties referenced in
Subsection (c) above.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01 Representations of Representative, Servicer and
Originators.
(a) The Representative and the Servicer (for the purposes of this
Section 3.01(a), "The Money Store Inc.") hereby represent and warrant to the
Trustee and the Certificateholders as of the Closing Date:
(i) The Money Store Inc. is a corporation duly organized, validly
existing, and in good standing under the laws of the jurisdiction of
its incorporation and has all licenses necessary to carry on its
business as now being conducted and is licensed, qualified and in good
standing in each Mortgaged Property State if the laws of such state
require licensing or qualification in order to conduct business of the
type conducted by The Money Store Inc. and perform its obligations
hereunder; The Money Store Inc. has corporate power and authority to
execute and deliver this Agreement and each Subservicing Agreement and
to perform in accordance herewith and therewith; the execution,
delivery and performance of this Agreement and each Subservicing
Agreement (including all instruments of transfer to be delivered
pursuant to this Agreement and each Subservicing Agreement) by The
Money Store Inc. and the consummation of the transactions contemplated
hereby and thereby have been duly and validly authorized by all
necessary corporate action; this Agreement and each Subservicing
Agreement evidences the valid, binding and enforceable obligation of
The Money Store Inc.; The Money Store Inc. is a Permitted Transferee;
and all requisite corporate action has been taken by The Money Store
Inc. to make this Agreement and each Subservicing Agreement valid,
binding and enforceable upon The Money Store Inc. in accordance with
the respective terms of each, subject to the effect of bankruptcy,
insolvency, reorganization, moratorium and other similar laws relating
to or affecting creditors' rights generally or the application of
equitable principles in any proceeding, whether at law or in equity,
none of which will affect the ownership of the Mortgage Loans by the
Trustee, as trustee;
(ii) 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 Money Store Inc. 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 Money
Store Inc. of the 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 each Subservicing
Agreement and the other documents on the part of The Money Store Inc.
and the performance by The Money Store Inc. of its obligations under
this Agreement and each Subservicing Agreement and such of the other
documents to which it is a party;
(iii) The consummation of the transactions contemplated by this
Agreement and each Subservicing Agreement will not result in the
breach of any terms or provisions of the certificate of incorporation
or by-laws of The Money Store Inc. or result in the breach of any term
or provision of, or conflict with or constitute a default under or
result in the acceleration of any obligation under, any material
agreement, indenture or loan or credit agreement or other material
instrument to which The Money Store Inc. or its property is subject,
or result in the violation of any law, rule, regulation, order,
judgment or decree to which The Money Store Inc. or its property is
subject;
(iv) Neither this Agreement or any Subservicing Agreement nor any
statement, report or other document furnished or to be furnished
pursuant to this Agreement and each Subservicing Agreement or in
connection with the transactions contemplated hereby and thereby
contains any untrue statement of material fact or omits to state a
material fact necessary to make the statements contained herein or
therein not misleading;
(v) The Money Store Inc. does not believe, nor does it have any
reason or cause to believe, that it cannot perform each and every
covenant contained in this Agreement;
(vi) Except as set forth on Schedule I, there is no action, suit,
proceeding or investigation pending or, to the best of The Money Store
Inc.'s knowledge, threatened against The Money Store Inc. which,
either in any one instance or in the aggregate, may result in any
material adverse change in the business, operations, financial
condition, properties or assets of The Money Store Inc. or in any
material impairment of the right or ability of The Money Store Inc. to
carry on its business substantially as now conducted, or in any
material liability on the part of The Money Store Inc. or which would
draw into question the validity of this Agreement and each
Subservicing Agreement or the Mortgage Loans or of any action taken or
to be taken in connection with the obligations of The Money Store Inc.
contemplated herein, or which would be likely to impair materially the
ability of The Money Store Inc. to perform under the terms of this
Agreement and each Subservicing Agreement;
(vii) The Trust Fund will not constitute an "investment company"
within the meaning of the Investment Company Act of 1940, as amended;
(viii) The Money Store Inc. 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 other) or operations of The Money Store Inc.
or its properties or might have consequences that would materially and
adversely affect its performance hereunder or under any Subservicing
Agreement;
(ix) The statements contained in the Registration Statement which
describe The Money Store Inc. or matters or activities for which The
Money Store Inc. is responsible in accordance with the Registration
Statement, this Agreement and all documents referred to therein or
delivered in connection therewith, or which are attributable to The
Money Store Inc. 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 Money Store Inc. and
does not omit to state a material fact necessary to make the
statements contained therein with respect to The Money Store Inc. not
misleading. The Money Store Inc. is not aware that the Registration
Statement contains any untrue statement of a material fact or omits to
state any material fact necessary to make the statements contained
therein not misleading. There is no fact peculiar to The Money Store
Inc. or the Mortgage Loans and known to The Money Store Inc. that
materially adversely affects or in the future may (so far as The Money
Store Inc. can now reasonably foresee) materially adversely affect The
Money Store Inc. or the Mortgage Loans or the ownership interests
therein represented by the Certificates that has not been set forth in
the Registration Statement;
(x) Each Originator received fair consideration and reasonably
equivalent value in exchange for the sale of the interest in the
Initial Mortgage Loans, and will receive fair consideration and
reasonably equivalent value in exchange for the sale of the interest
in the Subsequent Mortgage Loans, evidenced by the Certificates;
(xi) No Originator sold any interest in any Initial Mortgage
Loan, and no Originator will sell any interest in any Subsequent
Mortgage Loan, evidenced by the Certificates, as provided in the
Agreements, with any intent to hinder, delay or defraud any of its
respective creditors;
(xii) The Originators are solvent and the Originators will not be
rendered insolvent as a result of the sale of the Mortgage Loans to
the Trust Fund or the sale of the Certificates; and
(xiii) No Certificateholder is subject to state licensing
requirements solely by virtue of holding the Certificates.
(b) Each Originator hereby represents and warrants to the
Certificateholders and the Trustee as of the Closing Date:
(i) Such Originator is a corporation duly organized, validly
existing, and in good standing under the laws of the jurisdiction of
its incorporation and, except as set forth below, has all licenses
necessary to carry on its business as now being conducted and is
licensed, qualified and in good standing in each Mortgaged Property
State if the laws of such state require licensing or qualification in
order to conduct business of the type conducted by such Originator and
perform its obligations hereunder; such Originator has corporate power
and authority to execute and deliver this Agreement and the
Subservicing Agreement to which it is a party and to perform in
accordance herewith and therewith; the execution, delivery and
performance of this Agreement and the Subservicing Agreement to which
it is a party (including all instruments of transfer to be delivered
pursuant to this Agreement and the Subservicing Agreement to which it
is a party) by such Originator and the consummation of the
transactions contemplated hereby and thereby have been duly and
validly authorized by all necessary corporate action; this Agreement
and the Subservicing Agreement to which it is a party evidences the
valid, binding and enforceable obligation of such Originator; such
Originator is a Permitted Transferee; and all requisite corporate
action has been taken by such Originator to make this Agreement and
the Subservicing Agreement to which it is a party valid, binding and
enforceable upon such Originator in accordance with the respective
terms of each such agreement, subject to the effect of bankruptcy,
insolvency, reorganization, moratorium and other similar laws relating
to or affecting creditors' rights generally or the application of
equitable principles in any proceeding, whether at law or in equity,
none of which will affect the ownership of the Mortgage Loans by the
Trustee, as trustee, or the Co-Trustee, as the case may be.
(ii) No approval of the transactions contemplated by this
Agreement and the Subservicing Agreement to which it is a party from
any state or federal regulatory authority having jurisdiction over
such Originator is required or, if required, such approval has been or
will, prior to the Closing Date, be obtained;
(iii) The consummation of the transactions contemplated by this
Agreement and the Subservicing Agreement to which it is a party will
not result in the breach of any terms or provisions of the certificate
of incorporation or by-laws of such Originator or result in the breach
of any term or provision of, or conflict with or constitute a default
under or result in the acceleration of any obligation under, any
material agreement, indenture or loan or credit agreement or other
material instrument to which such Originator or its property is
subject, or result in the violation of any law, rule, regulation,
order, judgment or decree to which such Originator or its property is
subject;
(iv) Such Originator 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 other) or operations of such Originator or its
properties or might have consequences that would materially and
adversely affect its performance hereunder or under the Subservicing
Agreement to which it is a party;
(v) Except as set forth on Schedule I, there is no action, suit,
proceeding or investigation pending or, to the best of such
Originator's knowledge, threatened against such Originator which,
either in any one instance or in the aggregate, may result in any
material adverse change in the business, operations, condition
(financial or other), properties or assets of such Originator or in
any material impairment of the right or properties or assets of such
Originator to carry on its business substantially as now conducted, or
in any material liability on the part of such Originator or which
would draw into question the validity of this Agreement or the
Subservicing Agreement to which it is a party or the Mortgage Loans or
of any action taken or to be taken in connection with the obligations
of such Originator contemplated herein, or which would be likely to
impair materially the ability of such Originator to perform under the
terms of this Agreement or the Subservicing Agreement to which it is a
party;
(vi) Neither this Agreement or the Subservicing Agreement to
which it is a party nor any statement, report or other document
furnished or to be furnished pursuant to this Agreement or the
Subservicing Agreement to which it is a party or in connection with
the transactions contemplated hereby or thereby contains any untrue
statement of a material fact or omits to state any material fact
necessary to make the statements contained herein or therein not
misleading;
(vii) The statements contained in the Registration Statement
which describe such Originator or matters or activities for which such
Originator is responsible in accordance with the Registration
Statement, this Agreement and all documents referred to therein or
delivered in connection therewith, or which are attributable to such
Originator 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 such Originator or the Mortgage Loans
and does not omit to state a material fact necessary to make the
statements contained therein with respect to such Originator or the
Mortgage Loans not misleading. Such Originator is not aware that the
Registration Statement contains any untrue statement of a material
fact or omits to state any material fact necessary to make the
statements contained therein not misleading. There is no fact peculiar
to such Originator or the Mortgage Loans and known to such Originator
that materially and adversely affects or in the future may (so far as
such Originator can now reasonably foresee) materially and adversely
affect such Originator or the Mortgage Loans or the ownership
interests therein represented by the Certificates that has not been
set forth in the Registration Statement;
(viii) Upon the receipt of each Trustee's Mortgage File by the
Trustee under this Agreement, the Trustee will have good and
marketable title on behalf of the related Trust Fund to each Mortgage
Loan and such other items comprising the corpus of the related Trust
Fund free and clear of any lien (other than liens which will be
simultaneously released);
(ix) All actions, approvals, consents, waivers, exemptions,
variances, franchises, orders, permits, authorizations, rights and
licenses required to be taken, given or obtained, as the case may be,
by or from any federal, state or other governmental authority or
agency (other than any such actions, approvals, etc. under any state
securities laws, real estate syndication or "Blue Sky" statutes, as to
which such Originator 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 such Originator of
the 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 Subservicing
Agreement to which it is a party and the other documents on the part
of such Originator and the performance by such Originator of its
obligations under this Agreement and the Subservicing Agreement to
which it is a party and such of the other documents to which it is a
party;
(x) The transfer, assignment and conveyance of the Mortgage Notes
and the Mortgages by the Originators pursuant to this Agreement are
not or, with respect to the Subsequent Mortgage Loans, will not be,
subject to the bulk transfer laws or any similar statutory provisions
in effect in any applicable jurisdiction;
(xi) The origination and collection practices used by each
Originator and the primary servicer with respect to each Mortgage Note
and Mortgage relating to the Initial Mortgage Loans have been, and the
origination and collection practices to be used by each Originator and
the primary servicer with respect to each Mortgage Note and Mortgage
relating to the Subsequent Mortgage Loans will be, in all material
respects legal, proper, prudent and customary in the mortgage
origination and servicing business;
(xii) Each Initial Mortgage Loan was selected, and each
Subsequent Mortgage Loan will be selected, from among the existing
Mortgage Loans in the respective Originator's portfolio at the date
hereof or, in the case of the Subsequent Mortgage Loans, at the
related Subsequent Cut-off Date, in a manner not designed to adversely
affect the Certificateholders;
(xiii) Such Originator does not believe, nor does it have any
reason or cause to believe, that it cannot perform each and every
covenant contained in this Agreement and the Subservicing Agreement to
which it is a party;
(xiv) Such Originator received fair consideration and reasonably
equivalent value or, in the case of the Subsequent Mortgage Loans,
will receive fair consideration and reasonably equivalent value, in
exchange for the sale of the interest in the Mortgage Loans evidenced
by the Certificates;
(xv) Such Originator did not sell or, in the case of the
Subsequent Mortgage Loans, will not sell, any interest in any Mortgage
Loan evidenced by the Certificates with any intent to hinder, delay or
defraud any of its respective creditors;
(xvi) Such Originator is solvent, and such Originator will not be
rendered insolvent as a result of the sale of the Mortgage Loans to
the Trust Fund or the sale of the Certificates;
(xvii) No Certificateholder is subject to state licensing
requirements solely by virtue of holding the Certificates; and
(xviii) The Subservicing Agreement to which the Originator is a
party conforms to the requirements for a Subservicing Agreement
contained in this Agreement.
Section 3.02 Individual Mortgage Loans.
Each Originator hereby represents and warrants to the Trustee and the
Certificateholders, with respect to each Initial Mortgage Loan, as of the
Closing Date and, with respect to each Subsequent Mortgage Loan, as of the
related Subsequent Transfer Date:
(a) The information with respect to each Mortgage Loan set forth in the
Mortgage Loan Schedule is true and correct;
(b) All of the original or certified documentation set forth in Section
2.04 (including all material documents related thereto) has been or will be
delivered to the Trustee on the Closing Date or, with respect to the Subsequent
Mortgage Loans, on the related Subsequent Transfer Date, or as otherwise
provided in Section 2.04;
(c) Each Initial Mortgage Loan being transferred to the Trust Fund is,
and each Subsequent Mortgage Loan to be transferred will be, a Qualified
Mortgage;
(d) Each Mortgaged Property (other than the Multifamily Properties) is
improved by a Residential Dwelling, which, to the best of the Originator's
knowledge, does not include mobile homes attached to a foundation or otherwise
and does not constitute other than real property under state law; provided,
however, that no more than 5% of Mortgage Loans in each of Pool I and Pool II
may be secured by Mortgaged Properties that are manufactured homes.
(e) Each Initial Mortgage Loan has been, and each Subsequent Mortgage
Loan will be, originated and underwritten, or purchased and re-underwritten, by
an Originator in accordance with the Representative's underwriting criteria set
forth in the Registration Statement and the Underwriting Guidelines dated August
10, 1995 (which Underwriting Guidelines are consistent with the underwriting
criteria set forth in the Registration Statement) and is being, or with respect
to the Subsequent Mortgage Loans, will be, serviced by the Servicer or one or
more Subservicers and, with respect to each Initial Mortgage Loan originated by
an Originator, there is, and with respect to each Subsequent Mortgage Loan,
there will be, only one originally executed Mortgage Note not stamped as a
duplicate copy with respect to each such Mortgage Loan;
(f) The Mortgage Note with respect to each Initial Mortgage Loan bears,
and with respect to each Subsequent Mortgage Loan will bear, a fixed Mortgage
Interest Rate with respect to the Initial Pool I Mortgage Loans and Initial Pool
III Mortgage Loans and an adjustable rate with respect to the Initial Pool II
Mortgage Loans, which rate shall at least equal the sum of (i) the Class
Adjusted Mortgage Loan Remittance Rate for Class A-8 in the case of the Initial
Pool I Mortgage Loans, the initial Class Adjusted Mortgage Loan Remittance Rate
for Class A-10 in the case of the Initial Pool II Mortgage Loans, the Class
Adjusted Mortgage Loan Remittance Rate for Class A-12 in the case of the Initial
Pool III Mortgage Loans, (ii) the rate used in calculating the Servicing Fee and
(iii) the rate used in calculating the Contingency Fee; provided, however, that
(A) up to $0 aggregate principal amount of the Initial Pool I Mortgage Loans may
be Low Interest Pool I Mortgage Loans and (B) up to $0 aggregate principal
amount of the Initial Pool III Mortgage Loans may be Low Interest Pool III
Mortgage Loans;
(g) (i) Except with respect to 12% of the Initial Pool I Mortgage Loans
and approximately 15% of the Subsequent Pool I Mortgage Loans, each Mortgage
Note relating to the Pool I Mortgage Loans will provide for a schedule of
substantially level and equal Monthly Payments which are, if timely paid,
sufficient to fully amortize the principal balance of such Mortgage Note on or
before its maturity date, (ii) except with respect to 0% of the Initial Pool II
Mortgage Loans and approximately 0% of the Subsequent Pool II Mortgage Loans,
each Mortgage Note relating to the Pool II Mortgage Loans will provide for a
schedule of Monthly Payments which are, if timely paid as adjusted, sufficient
to fully amortize the principal balance of such Mortgage Note on or before its
maturity date and (iii) each Mortgage Note relating to the Pool III Mortgage
Loans will provide for a schedule of substantially level and equal Monthly
Payments which are, if timely paid, sufficient to fully amortize the principal
balance of such Mortgage Note on or before its maturity date.
(h) Each Mortgage is, with respect to the Initial Mortgage Loans, and
will be with respect to the Subsequent Mortgage Loans, a valid and subsisting
first or second lien of record on the Mortgaged Property, subject, in the case
of any second or more junior Mortgage Loan, only to any applicable Prior Liens
on such Mortgaged Property and subject in all cases to the exceptions to title
set forth in the title insurance policy or the other evidence of title
enumerated in Section 2.04(d), with respect to the related Mortgage Loan, which
exceptions are generally acceptable to banking institutions in connection with
their regular mortgage lending activities, and such other exceptions to which
similar properties are commonly subject and which do not individually, or in the
aggregate, materially and adversely affect the benefits of the security intended
to be provided by such Mortgage;
(i) Immediately prior to the transfer and assignment herein
contemplated, the Originator held good and indefeasible title to, and was the
sole owner of, each Mortgage Loan conveyed by the Originator subject to no
liens, charges, mortgages, encumbrances or rights of others except as set forth
in Section 3.02(h) or other liens which will be released simultaneously with
such transfer and assignment; and immediately upon the transfer and assignment
herein contemplated, the Trustee will hold good and indefeasible title, to, and
be the sole owner of, each Mortgage Loan subject to no liens, charges,
mortgages, encumbrances or rights of others except as set forth in Section
3.02(h) or other liens which will be released simultaneously with such transfer
and assignment;
(j) As of the Cut-Off Date, no Initial Mortgage Loan is 59 days or more
delinquent in payment and, except as provided in the next sentence, no Initial
Mortgage Loan has been delinquent 59 days or more as measured at the end of any
month during the 12 months immediately preceding the Cut-Off Date. As of the
related Subsequent Cut-Off Date, no Subsequent Mortgage Loan shall be 59 or more
days delinquent;
(k) To the best of the Originator's knowledge, there is no delinquent
tax or assessment lien on any Mortgaged Property, and each Mortgaged Property is
free of material damage and is in good repair;
(l) The Mortgage Loan is not subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury, nor will the
operation of any of the terms of the Mortgage Note or the Mortgage, or the
exercise of any right thereunder, render either the Mortgage Note or the
Mortgage unenforceable in whole or in part, or subject to any right of
rescission, set-off, counterclaim or defense, including the defense of usury,
and no such right of rescission, set-off, counterclaim or defense has been
asserted with respect thereto;
(m) There is no mechanics' lien or claim for work, labor or material
affecting any Mortgaged Property which is or may be a lien prior to, or equal
with, the lien of such Mortgage except those which are insured against by the
title insurance policy referred to in Section 3.02(o) below;
(n) Each Mortgage Loan at the time it was made complied in all material
respects with applicable state and federal laws and regulations, including,
without limitation, usury, equal credit opportunity, disclosure and recording
laws;
(o) With respect to each Mortgage Loan with an original principal
balance greater than $15,000 other than any Initial Mortgage Loan which was not
originated by an Originator, a lender's title insurance policy, issued in
standard American Land Title Association, California Land Title Association, New
York Board of Title Underwriters form, or other form acceptable in a particular
jurisdiction, by a title insurance company authorized to transact business in
the state in which the related Mortgaged Property is situated, together with a
condominium endorsement, if applicable, in an amount at least equal to the
original principal balance of such Mortgage Loan insuring the mortgagee's
interest under the related Mortgage Loan as the holder of a valid first or
second mortgage lien of record on the real property described in the Mortgage,
subject only to exceptions of the character referred to in Section 3.02(h)
above, or, with respect to any Mortgage Loan with an original principal balance
less than or equal to $15,000 or any Mortgage Loan which was not originated by
an Originator, some other evidence of the status of title, or other evidence of
title as enumerated in Section 2.04(d), was effective on the date of the
origination of such Mortgage Loan, and, as of the Closing Date, such policy will
be valid and thereafter such policy shall continue in full force and effect;
(p) The improvements upon each Mortgaged Property are covered by a
valid and existing hazard insurance policy with a generally acceptable carrier
that provides for fire and extended coverage representing coverage described in
Sections 5.07 and 5.08;
(q) If the Mortgaged Property is in an area identified in the Federal
Register by the Federal Emergency Management Agency as having special flood
hazards, a flood insurance policy is in effect with respect to such Mortgaged
Property with a generally acceptable carrier in an amount representing coverage
described in Sections 5.07 and 5.08;
(r) Each Mortgage and Mortgage Note is the legal, valid and binding
obligation of the maker thereof and is enforceable in accordance with its terms,
except only as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity (whether
considered in a proceeding or action in equity or at law), none of which will
prevent the ultimate realization of the security provided by the Mortgage, and
all parties to each Mortgage Loan had full legal capacity to execute all
Mortgage Loan documents and convey the estate therein purported to be conveyed;
(s) The Servicer, at the direction of the related Originator, has
caused and will cause to be performed any and all acts required to be performed
to preserve the rights and remedies of the Trustee in any insurance policies
applicable to the Mortgage Loans including, without limitation, any necessary
notifications of insurers, assignments of policies or interests therein, and
establishments of co-insured, joint loss payee and mortgagee rights in favor of
the Trustee;
(t) No more than approximately 1.0%, 1.0%, and 9.0% of the Principal
Balances of the Initial Pool I, Pool II or Pool III Mortgage Loans,
respectively, are secured by Mortgaged Properties located within any single zip
code area;
(u) Each original Mortgage was recorded, and all subsequent assignments
of the original Mortgage have been recorded in the appropriate jurisdictions
wherein such recordation is necessary to perfect the lien thereof as against
creditors of the Originator (or, subject to Section 2.04 hereof, are in the
process of being recorded);
(v) Each Mortgage Loan conforms, and all such Mortgage Loans in the
aggregate conform, to the description thereof set forth in the Registration
Statement;
(w) [Reserved]
(x) [Reserved]
(y) All of the Initial Pool I and Initial Pool II Mortgage Loans are
Single-Family Loans (provided, however, that no more than approximately 5% of
the Initial Pool I, measured by Pool Principal Balances of the Cut-Off Date, may
be Multifamily Loans); and, when measured by outstanding principal balance as of
the Closing Date, no more than approximately 9%, 6% of the Initial Pool I and
Initial Pool II Mortgage Loans, respectively, are secured by vacation homes,
secondary residences, or investment properties, no more than approximately 4%
and 4% of the Initial Pool I and Initial Pool II Mortgage Loans, respectively,
are secured by individual units in Low-Rise Condominiums, no more than
approximately 10% and 10% of the Initial Pool I and Initial Pool II Mortgage
Loans, respectively, are secured by Two-, Three- or Four-Family Houses, and none
of the Initial Pool I, Initial Pool II and Initial Pool III Mortgage Loans are
secured by individual units of other types including High-Rise Condominiums. No
Initial Mortgage Loan is secured by a mobile home or co-op;
(x) Each Pool III Mortgage Loan is a Multifamily Loan with respect to
which no less than approximately 90% of the related Mortgaged Property, measured
by square footage, number of units and projected rent, being allocated to
residential units;
(aa) The terms of the Mortgage Note and the Mortgage have not been
impaired, altered or modified in any respect, except by a written instrument
which has been recorded, if necessary, to protect the interest of the
Certificateholders and which has been delivered to the Trustee. The substance of
any such alteration or modification is reflected on the Mortgage Loan Schedule
and has been approved by the primary mortgage guaranty insurer, if any;
(bb) No instrument of release or waiver has been executed in connection
with the Mortgage Loan, and no Mortgagor has been released, in whole or in part,
except in connection with an assumption agreement which has been approved by the
primary mortgage guaranty insurer, if any, and which has been delivered to the
Trustee;
(cc) There are no defaults in complying with the terms of the Mortgage,
and all taxes, governmental assessments, insurance premiums, water, sewer and
municipal charges, leasehold payments or ground rents which previously became
due and owing have been paid, or an escrow of funds has been established in an
amount sufficient to pay for every such item which remains unpaid and which has
been assessed but is not yet due and payable. The Servicer has not advanced
funds, or induced, solicited or knowingly received any advance of funds by a
party other than the Mortgagor, directly or indirectly, for the payment of any
amount required by the Mortgage, except for interest accruing from the date of
the Mortgage Note or date of disbursement of the Mortgage Loan proceeds,
whichever is greater, to the day which precedes by one month the Due Date of the
first installment of principal and interest;
(dd) There is no proceeding pending or threatened for the total or
partial condemnation of the Mortgaged Property, nor is such a proceeding
currently occurring, and such property is undamaged by waste, fire, earthquake
or earth movement, windstorm, flood, tornado or other casualty, so as to affect
adversely the value of the Mortgaged Property as security for the Mortgage Loan
or the use for which the premises were intended;
(ee) All of the improvements which were included for the purpose of
determining the appraised value of the Mortgaged Property lie wholly within the
boundaries and building restriction lines of such property, and no improvements
on adjoining properties encroach upon the Mortgaged Property unless any such
improvements are (except with respect to those Mortgage Loans with original
principal balances which were less than $15,000 or not originated by a
Originator) stated in the title insurance policy and affirmatively insured;
(ff) To the best of the Originator's knowledge there do not exist any
circumstances or conditions with respect to the Mortgage, the Mortgaged
Property, the Mortgagor or the Mortgagor's credit standing that can be
reasonably expected to cause private institutional investors to regard the
Mortgage Loan as an unacceptable investment, cause the Mortgage Loan to become
delinquent or adversely affect the value or marketability of the Mortgage Loan;
(gg) No improvement located on or being part of the Mortgaged Property
is in violation of any applicable zoning law or regulation. All inspections,
licenses and certificates required to be made or issued with respect to all
occupied portions of the Mortgaged Property and, with respect to the use and
occupancy of the same, including but not limited to certificates of occupancy
and fire underwriting certificates, have been made or obtained from the
appropriate authorities and the Mortgaged Property is lawfully occupied under
applicable law;
(hh) The proceeds of the Mortgage Loan have been fully disbursed, and
there is no obligation on the part of the mortgagee to make future advances
thereunder. Any and all requirements as to completion of any on- site or
off-site improvements and as to disbursements of any escrow funds therefor have
been complied with. All costs, fees and expenses incurred in making or closing
or recording the Mortgage Loans were paid;
(ii) The related Mortgage Note is not and has not been secured by any
collateral, pledged account or other security except the lien of the
corresponding Mortgage;
(jj) No Initial Mortgage Loan was, and no Subsequent Mortgage Loan will
be, originated under a buydown plan;
(kk) There is no obligation on the part of the Originator or any other
party to make payments in addition to those made by the Mortgagor;
(ll) No statement, report or other document signed by the Originator
constituting a part of the Mortgage File contains any untrue statement of fact
or omits to state a fact necessary to make the statements contained therein not
misleading;
(mm) The origination and collection practices used by the Originator
with respect to the Mortgage Note and Mortgage have been in all respects legal,
proper, prudent and customary in the mortgage lending and servicing business;
(nn) With respect to each Mortgage constituting a deed of trust, a
trustee, duly qualified under applicable law to serve as such, has been properly
designated and currently so serves and is named in such Mortgage, and no fees or
expenses are or will become payable by the Certificateholders to the trustee
under the deed of trust, except in connection with a trustee's sale after
default by the Mortgagor;
(oo) No Initial Mortgage Loan has, and no Subsequent Mortgage Loan will
have, a shared appreciation feature, or other contingent interest feature;
(pp) With respect to each Mortgage Loan that is not a first mortgage
loan, the related Prior Lien requires equal monthly payments, or if it bears an
adjustable interest rate, the monthly payments for the related Prior Lien may be
adjusted no more frequently than monthly; at the time of the origination of the
Mortgage Loan, the related Prior Lien was not 30 or more days delinquent;
(qq) With respect to each Mortgage Loan that is not a first mortgage
loan, either (i) no consent for the Mortgage Loan is required by the holder of
the related Prior Lien or (ii) such consent has been obtained and is contained
in the Mortgage File;
(rr) With respect to each Mortgage Loan that is not a first mortgage
loan, to the best of the Originator's knowledge, the related Prior Lien does not
provide for negative amortization;
(ss) With respect to each Mortgage Loan that is not a first mortgage
loan, the maturity date of the Mortgage Loan is prior to the maturity date of
the related Prior Lien if such Prior Lien provides for a balloon payment;
(tt) The Mortgaged Property is located in the State identified in the
Mortgage Loan Schedule and consists of a single parcel of real property with a
Residential Dwelling erected thereon (or, with respect to any Multifamily Loans,
a Multifamily Property erected thereon);
(uu) All parties which have had any interest in the Mortgage Loan,
whether as mortgagee, assignee, pledgee or otherwise, are (or, during the period
in which they held and disposed of such interest, were) (1) in compliance with
any and all applicable licensing requirements of the laws of the state wherein
the Mortgaged Property is located, and (2)(A) organized under the laws of such
state, or (B) qualified to do business in such state, or (C) federal savings and
loan associations or national banks having principal offices in such state, or
(D) not doing business in such state;
(vv) The Mortgage contains an enforceable provision for the
acceleration of the payment of the unpaid principal balance of the Mortgage Loan
in the event the related Mortgaged Property is sold without the prior consent of
the mortgagee thereunder;
(ww) Any future advances made prior to the Cut-Off Date have been
consolidated with the outstanding principal amount secured by the Mortgage, and
the secured principal amount, as consolidated, bears a single interest rate and
single repayment term reflected on the Mortgage Loan Schedule. The consolidated
principal amount does not exceed the original principal amount of the Mortgage
Loan. The Mortgage Note does not permit or obligate the Servicer to make future
advances to the Mortgagor at the option of the Mortgagor;
(xx) The related Mortgage contains customary and enforceable provisions
which render the rights and remedies of the holder thereof adequate for the
realization against the Mortgaged Property of the benefits of the security,
including, (i) in the case of a Mortgage designated as a deed of trust, by
trustee's sale, and (ii) otherwise by judicial foreclosure. There is no
homestead or other exemption available to the Mortgagor which would materially
interfere with the right to sell the Mortgaged Property at a trustee's sale or
the right to foreclose the Mortgage;
(yy) There is no default, breach, violation or event of acceleration
existing under the Mortgage or the related Mortgage Note and no event which,
with the passage of time or with notice and the expiration of any grace or cure
period, would constitute a default, breach, violation or event of acceleration;
and neither the Servicer nor the Originator has waived any default, breach,
violation or event of acceleration;
(zz) All parties to the Mortgage Note and the Mortgage had legal
capacity to execute the Mortgage Note and the Mortgage and each Mortgage Note
and Mortgage have been duly and properly executed by such parties;
(aaa) The Initial Mortgage Loan was not, and the Subsequent Mortgage
Loan will not be, selected for inclusion under this Agreement from its portfolio
of comparable loans on any basis which would have a material adverse effect on a
Certificateholder;
(bbb) All amounts received after the Cut-Off Date with respect to the
Initial Mortgage Loans have been deposited and all amounts received after the
Subsequent Cut-off Date with respect to the Subsequent Mortgage Loans will be
deposited into the applicable Principal and Interest Account and are, as of the
Closing Date with respect to the Initial Mortgage Loans, in the applicable
Principal and Interest Account;
(ccc) With respect to each Mortgage Loan originated by an Originator
with an original principal balance in excess of $15,000 for which the Originator
conducted a drive-by appraisal pursuant to FHLMC Form 704 or alternative FNMA
Form in connection with the origination thereof, such deposited Mortgage Loan
(i) had an original principal balance not in excess of $35,000, and (ii) has a
Loan-to-Value Ratio less than 50% and/or an appraisal on FNMA/FHLMC Form 1004
was performed by the related Originator within one year prior to the origination
of such Mortgage Loan; and
(ddd) At the applicable dates of origination of the Mortgage Loans,
none of the Pool I, Pool II or Pool III Mortgage Loans, had a Loan-to-Value
Ratio which exceeded 100%, 100% and 70%, respectively;
(eee) No more than approximately 20% and 23% of the Initial Pool I and
Initial Pool II Mortgage Loans, respectively (measured by outstanding principal
balance as of the Closing Date), had a Debt-to-Income Ratio exceeding 44%.
"Debt-to-Income Ratio" is that ratio, stated as a percentage, which results from
dividing a Mortgagor's monthly debt by his gross monthly income. "Monthly debt"
includes (i) the monthly payment under the Prior Liens (which generally includes
an escrow for real estate taxes), (ii) the related Mortgage Loan Monthly Payment
(which, with respect to the Initial Pool II Mortgage Loans, is calculated with
interest based on a rate equal to the Lifetime Cap), (iii) other installment
debt service payments, including, in respect of revolving credit debt, the
required monthly payment thereon, or, if no such payment is specified, 5.0% of
the balance as of the date of calculation. "Monthly debt" does not include any
of the debt (other than revolving credit debt) described above that matures
within less than 10 months from the date of the calculation. No more than
approximately .50% of the Initial Pool I Mortgage Loans were originated without
verifying the Mortgagor's income;
(fff) At the applicable dates of origination, each Mortgage Loan had an
original term to maturity of no greater than 30 years;
(ggg) Each Subsequent Mortgage Loan will comply with the
representations and warranties respecting Subsequent Mortgage Loans set forth in
Section 3.01(d) of the Insurance Agreement, which representations and warranties
are incorporated herein;
(hhh) Each Initial Pool I and Initial Pool III Mortgage Loan bears, and
each Subsequent Pool I and Subsequent Pool III Mortgage Loan will bear, a fixed
rate of interest and each Initial Pool II Mortgage Loan bears, and each
Subsequent Pool II Mortgage Loan will bear, an adjustable rate of interest;
(iii) As of the Cut-off Date, for each Pool II Mortgage Loan, the
Lifetime Cap is not lower than approximately 14.00% per annum, the Lifetime
Floor is not lower than approximately 9.00% per annum, the Gross Margin is not
less than approximately 5.00%, the related Mortgage Note does not provide for
negative amortization, limits in the amount of monthly payments or a conversion
feature, the Mortgage Interest Rate is subject to adjustment on each Change Date
to equal the sum of the LIBOR Index, or Treasury Index, as the case may be, plus
the applicable Gross Margin, subject to rounding, the Periodic Rate Cap, the
applicable Lifetime Floor and the applicable Lifetime Cap on each Change Date,
the Mortgagor's new monthly payment will be adjusted to an amount equal to the
payment which, when paid in substantially equal installments during the then
remaining term of the Pool II Mortgage Loan, would amortize fully the unpaid
principal balance of such Pool II Mortgage Loan at the then applicable Mortgage
Interest Rate without extension of the original maturity date which maturity
date is not more than 360 months after the original Due Date therefor;
(jjj) With respect to each Initial Pool II Mortgage Loan, all of the
terms of the Mortgage and Mortgage Note pertaining to interest rate adjustments,
payment adjustments and adjustments of the outstanding principal balance are
enforceable, such adjustments will not affect the priority of the Mortgage lien,
and all of the interest rate calculations have been properly calculated,
recorded, reported and applied in accordance with the Mortgage and Mortgage
Note;
(kkk) Each Subsequent Mortgage Loan will have been identified,
originated and funded on or prior to the Closing Date;
(lll) [Reserved]
(mmm) [Reserved]
(nnn) [Reserved]
(ooo) [Reserved]
(ppp) Each Subsequent Mortgage Loan will have been identified,
originated and funded on or prior to the Closing Date.
(qqq) A portion of the Mortgage Loans may be governed by the FTC holder
regulation provided in 16 C.F.R. Part 433.
(rrr) [Reserved]
(sss) [Reserved]
(ttt) As of the Cut-Off Date, none of the Mortgage Loans are
"mortgages" as such terms is defined in 15 U.S.C. 1602(aa)(1).
Section 3.03 Purchase and Substitution.
It is understood and agreed that the representations and warranties set
forth in Sections 3.01 and 3.02 shall survive delivery of the Certificates to
the Certificateholders. Upon discovery by the Representative, the Servicer, any
Subservicer, the Trustee or the Certificate Insurer of a breach of any of such
representations and warranties (or, in the case of any Subsequent Mortgage Loan,
any additional representation or warranty set forth in Section 2.01(d) of the
Insurance Agreement) which materially and adversely affects the value of the
Mortgage Loans or the interest of the Certificateholders, or which materially
and adversely affects the interests of the Certificate Insurer, or the
Certificateholders in the related Mortgage Loan in the case of a representation
and warranty relating to a particular Mortgage Loan (notwithstanding that such
representation and warranty was made to the Representative's or Originators'
best knowledge), the party discovering such breach shall give prompt written
notice to the others. Within 60 days of the earlier of its discovery or its
receipt of notice of any breach of a representation or warranty, the
Representative shall (a) promptly cure such breach in all material respects, (b)
purchase such Mortgage Loan by depositing in the applicable Principal and
Interest Account, on the next succeeding Determination Date, an amount in the
manner specified in Section 2.05(b), or (c) remove such Mortgage Loan from the
Trust Fund (in which case it shall become a Deleted Mortgage Loan) and
substitute one or more Qualified Substitute Mortgage Loans, provided such
substitution is effected not later than the date which is two years after the
Startup Day or at such later date, if the Trustee and the Certificate Insurer
receive an Opinion of Counsel that such substitution would not constitute a
Prohibited Transaction or cause the Trust Fund to fail to qualify as a REMIC at
any time any Certificates are outstanding.
As to any Deleted Mortgage Loan for which the Representative
substitutes a Qualified Substitute Mortgage Loan or Loans, the Servicer shall
effect such substitution by delivering to the Trustee a certification in the
form attached hereto as Exhibit J, executed by a Servicing Officer and the
documents constituting the Trustee's Mortgage File for such Qualified Substitute
Mortgage Loan or Loans.
The Servicer shall deposit in the applicable Principal and Interest
Account all payments received in connection with such Qualified Substitute
Mortgage Loan or Loans after the date of such substitution. Monthly Payments
received with respect to Qualified Substitute Mortgage Loans on or before the
date of substitution will be retained by the Representative on behalf of the
related Originator. The Trust Fund will own all payments received on the Deleted
Mortgage Loan on or before the date of substitution, and the Representative on
behalf of the Originators shall thereafter be entitled to retain all amounts
subsequently received in respect of such Deleted Mortgage Loan. The Servicer
shall give written notice to the Trustee, the Representative and the Certificate
Insurer that such substitution has taken place and shall amend the applicable
Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage Loan from
the terms of this Agreement and the substitution of the Qualified Substitute
Mortgage Loan. Upon such substitution, such Qualified Substitute Mortgage Loan
or Loans shall be subject to the terms of this Agreement in all respects,
including Sections 2.04 and 2.05, and the Representative and the Originator
shall be deemed to have made with respect to such Qualified Substitute Mortgage
Loan or Loans, as of the date of substitution, the covenants, representations
and warranties set forth in Sections 3.01 and 3.02. On the date of such
substitution, the Representative will remit to the Servicer, and the Servicer
will deposit into the applicable Principal and Interest Account an amount equal
to the Substitution Adjustment.
In addition to the cure, purchase and substitution obligation in
Section 2.05 and this Section 3.03, the Representative shall indemnify and hold
harmless the Trust Fund, the Trustee, the Certificateholders and the Certificate
Insurer against any loss, damages, penalties, fines, forfeitures, reasonable
legal fees and related costs, judgments and other costs and expenses resulting
from any claim, demand, defense or assertion based on or grounded upon, or
resulting from, a breach of the Representative's or any Originator's
representations and warranties contained in this Agreement. Except as provided
in Section 2.02(f) of the Insurance Agreement, it is understood and agreed that
the obligations of the Representative or any Originator set forth in Sections
2.05 and 3.03 to cure, purchase or substitute for a defective Mortgage Loan and
to indemnify the Certificateholders, the Trustee and the Certificate Insurer as
provided in Sections 2.05 and 3.03 constitute the sole remedies of the Trustee,
the Certificate Insurer and the Certificateholders respecting a breach of the
foregoing representations and warranties.
Any cause of action against any Originator, the Servicer or the
Representative relating to or arising out of the breach of any representations
and warranties made in Sections 2.05, 3.01 or 3.02 shall accrue as to any
Mortgage Loan upon (i) discovery of such breach by any party and notice thereof
to the Representative or notice thereof by the Representative to the Trustee,
(ii) failure by the Representative to cure such breach or purchase or substitute
such Mortgage Loan as specified above, and (iii) demand upon the Representative
by the Trustee for all amounts payable in respect of such Mortgage Loan.
For as long as the Trust Fund shall exist, the Servicer and the Trustee
shall act in accordance herewith to assure continuing treatment of each of REMIC
I and REMIC II as a REMIC. In particular, the Trustee shall not (a) sell or
permit the sale of all or any portion of the Mortgage Loans or of any Permitted
Instrument unless such sale is as a result of a repurchase of the Mortgage Loans
pursuant to this Agreement or the Trustee has received an Opinion of Counsel to
the effect that such sale (i) is in accordance with a qualified liquidation as
defined in Section 860F(a)(4) of the Code and as described in Section 11.01
hereof, or (ii) would not be treated as a prohibited transaction within the
meaning of Section 860F(a)(2) of the Code; and (b) except for the cash deposits
into the Spread Account pursuant to Section 6.05, accept any contribution to the
Trust Fund after the Startup Day without an Opinion of Counsel that such
contribution is included within the exceptions provided in Section 860G(d)(2) of
the Code and therefore will not be subject to the tax imposed by Section
860G(d)(1) of the Code.
ARTICLE IV
THE CERTIFICATES
Section 4.01 The Certificates.
(a) The Certificates shall be substantially in the forms annexed hereto
as Exhibits ▇-▇, ▇-▇ and B-3 and shall, upon original issue, be executed and
delivered by the Servicer to the Trustee for authentication and redelivery to or
upon the order of the Representative, on behalf of the Originators, upon receipt
by the Trustee of the documents specified in Section 2.04. All Certificates
shall be executed on behalf of the Servicer by its President, one of its
Executive Vice Presidents or Vice Presidents, or by its Treasurer, in the
denominations specified in the definition of Percentage Interest, and shall be
authenticated on behalf of the Trustee by one of its authorized signatories.
Certificates bearing the signatures of individuals who were at the time of the
execution or authentication of the Certificates the proper officers of the
Servicer or an authorized signatory of the Trustee, as the case may be, shall
bind the Servicer or the Trustee, as the case may be, notwithstanding that such
individuals or any of them have ceased to hold such offices prior to the
delivery of such Certificates or did not hold such offices at the date of such
Certificates. All Certificates issued hereunder shall be dated the date of their
authentication.
(b) The REMIC II will be evidenced by (x) the Class II-A, Class II-A-1,
Class II-A-2, Class II-A- 3, Class II-A-4, Class II-A-5, Class II-A-6, Class
II-A-7, Class II-A-8, Class II-A-9, Class II-A-10, Class II-A- 11, Class II-A-12
and Class II-M Certificates (the "REMIC II Regular Certificates"), which will be
uncertificated and non-transferable and are hereby designated as the "regular
interests" in the REMIC II and (y) the Class R-2 Certificates, which are hereby
designated as the single "residual interest" in the REMIC II (the REMIC II
Regular Certificates, together with the Class R-2 Certificates, the "REMIC II
Certificates").
Any Net Monthly Excess Cashflow applied pursuant to Section 6.14(b)(i)
and (ii) (the "Turbo Amount") that is payable from interest on the Mortgage
Loans will not be paid to the REMIC II Regular Interests, but a portion of the
interest payable with respect to the Class II-M Certificate which equals 1% of
the Turbo Amount will be payable as a reduction of the principal balances of the
Class II-A-1, Class II-A-2, Class II-A-3, Class II-A-4, Class II-A-5, Class
II-A-6, Class II-A-7, Class II-A-8, Class II-A-9, Class II-A-10, Class II- A-11,
and Class II-A-12 Certificates in the same manner in which the Turbo Amount is
allocated among the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class A-3, Class A-4, Class A-5, Class
A-6, Class A-7, Class A-8, Class A-9, Class A-10, Class A-11 and Class A-12
Certificates, respectively (and will be accrued and added to principal on the
Class II- M Certificate). Principal payments on the Mortgage Loans shall be
allocated 98% to the Class II-A Certificate, 1% to the Class II-M Certificate,
and 1% to the Class II-A-1, Class II-A-2, Class II-A-3, Class II-A-4, Class II-
A-5, Class II-A-6, Class II-A-7, Class II-A-8, Class II-A-9, Class II-A-10,
Class II-A-11, and Class II-A-12 Certificates. The aggregate amount of principal
allocated to the Class II-A-1, Class II-A-2, Class II-A-3, Class II-A-4, Class
II-A-5, Class II-A-6, Class II-A-7, Class II-A-8, Class II-A-9, Class II-A-10,
Class II-A-11, and Class II-A-12 Certificates shall be apportioned among such
Classes in the same manner in which principal is payable with respect to the
Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7,
Class A-8, Class A-9, Class A-10, Class A-11 and Class A-12 Certificates,
respectively. Notwithstanding the above, 98% and 2% of any principal payments on
the Mortgage Loans that are attributable to a Subordination Reduction Amount
shall be allocated to the Class II-A and Class II-M Certificates, respectively.
Similarly, 98% and 2% of any realized losses with respect to principal on the
Mortgages Loans shall be allocated to the Class II-A and Class II-M
Certificates, respectively, except that to the extent such realized losses
create a Subordination Deficit that is not paid from interest on the Mortgage
Loans (but is payable by the Certificate Insurer), such losses shall be
allocated 98% to the Class II-A Certificate, 1% to the Class II-M Certificate
and 1% to the Class II-A-1, Class II-A-2, Class II-A-3, Class II-A-4, Class
II-A-5, Class II-A-6, Class II-A-7, Class II-A-8, Class II-A-9, Class II-A-10,
Class II-A-11, and Class II-A-12 Certificates, apportioned among such Class
II-A-1, Class II-A-2, Class II-A-3, Class II-A-4, Class II-A-5, Class II-A-6,
Class II-A-7, Class II-A-8, Class II-A-9, Class II-A-10, Class II-A-11, and
Class II-A-12 Certificates in the same manner in which the Subordination Deficit
is payable with respect to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class A-3, Class A-4, Class
A-5, Class A-6, Class A-7, Class A-8, Class A-9, Class A-10, Class A-11 and
Class A-12 Certificates, respectively. The REMIC II Certificates will have the
following designations and pass-through rates, and distributions of principal
and interest thereon shall be allocated to the Class A Certificates in the
following manner:
Pass- Allocation Allocation
REMIC II Initial Through of of
Certificates Balance Rate Principal(1) Interest (1)
II-A $602,328,885.82(7) (2) (3) (4),(5)
II-A-1 $943,000 (2) (3) (4),(5)
II-A-2 $631,000 (2) (3) (4),(5)
II-A-3 $758,000 (2) (3) (4),(5)
II-A-4 $611,000 (2) (3) (4),(5)
II-A-5 $311,000 (2) (3) (4),(5)
II-A-6 $450,000 (2) (3) (4),(5)
II-A-7 $306,000 (2) (3) (4),(5)
II-A-8 $320,000 (2) (3) (4),(5)
II-A-9 $370,000 (2) (3) (4),(5)
II-A-10 $260,000 (2) (3) (4),(5)
II-A-11 $600,000 (2) (3) (4),(5)
II-A-12 $100,000 (2) (3) (4),(5)
II-M $594,328,885.82 (7) (2) (3) (4),(5)
R-2 $0 0% N/A N/A (6)
-----------------
(1) Except as otherwise indicated, the amount of principal and interest
allocable from a REMIC II Certificate to the Class A Certificates on any
Remittance Date shall be 100%.
(2) The pass-through rate on these REMIC II Regular Interests shall at
any time of determination equal the weighted average of the Net Mortgage
Interest Rates for each of the Mortgage Loans. Any shortfalls in interest on the
REMIC II Regular Certificates that result from prepayments of principal on any
Mortgage Loans during the related Due Period, after accounting for any
Compensating Interest paid under Section 6.12 shall proportionately reduce the
interest accrued on the REMIC II Regular Interests.
(3) Principal will be allocated to and apportioned among the Class A-1,
Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8,
Class A-9, Class A-10, Class ▇- ▇▇, Class A-12 Certificates in the same
proportion as principal is payable with respect to such Certificates, except
that a portion of such principal in an amount equal to the Subordination
Reduction Amount shall first be allocated to the Class X Certificates, and all
principal will be allocated to the Class X Certificates after the Class A
Principal Balance has been reduced to zero.
(4) Except as provided in footnote (5), interest will be allocated
among the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class A-3, Class A-4, Class A-5, Class A-6,
Class A-7, Class A-8, Class A-9, Class A-10, Class A-11 and Class A-12
Certificates in the same proportion as interest is payable on such Certificates.
(5) Any interest with respect to this REMIC II Certificate in excess of
the product of (i) two times the weighted average coupon of the Class II-A,
Class II-A-1, Class II-A-2, Class II- A-3, Class II-A-4, Class II-A-5, Class
II-A-6, Class II-A-7, Class II-A-8, Class II-A-9, Class II-A-10, Class II-A-11,
Class II-A-12 and Class II-M Certificates, where each of such Classes, other
than the Class II-M Certificate, is first subject to a cap and floor equal to
the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7,
Class A-8, Class A-9, Class A-10, Class A-11 or Class A-12 Remittance Rate (in
the case of the Class A-10 and Class A-11 Remittance Rate, such rate adjusted in
any period to reflect payments of Certificateholders' Interest Carryovers in
such period), respectively, and the Class II-M Certificate is subject to a cap
equal to 0%, and (ii) the principal balance of this REMIC II Certificate, shall
not be allocated to the Class A Certificates but will be allocated to the Class
X Certificates as a separate component.
(6) On each Distribution Date, available funds, if any, remaining in
the REMIC II after payments of interest and principal, as designated above, as
well as expenses and fees of the Trust Fund, will be distributed to the Class
R-2 Certificate.
(7) The principal balances of the Class II-A and Class II-M
Certificates shall be increased by 98% and 2%, respectively, of the principal
balance of each Subsequent Mortgage Loan as of the related Subsequent Cut-Off
Date.
Section 4.02 Registration of Transfer and Exchange of Certificates.
(a) The Trustee shall cause to be kept at its office, or at the office
of its designated agent, a Certificate Register in which, subject to such
reasonable regulations as it may prescribe, it shall provide for the
registration of Certificates and of transfers and exchanges of Certificates as
herein provided. The Certificate Register shall contain the name, remittance
instructions, Class and Percentage Interest of each Certificateholder. The Bank
of New York is initially appointed Certificate Registrar for the purpose of
registering Certificates and transfer and exchanges of Certificates as herein
provided (the "Certificate Registrar").
(b) It is intended that the Class A Certificates be registered so as to
participate in a global book-entry system with the Depository, as set forth
herein. Each Class of Class A Certificates shall initially be issued in the form
of a single fully registered Certificate of such Class. The Class A Certificates
shall have an aggregate denomination equal to the following:
CLASS DENOMINATION
Class A-1 $ 94,300,000
Class A-2 63,100,000
Class A-3 75,800,000
Class A-4 61,100,000
Class A-5 31,100,000
Class A-6 45,000,000
Class A-7 30,600,000
Class A-8 32,000,000
Class A-9 37,000,000
Class A-10 260,000,000
Class A-11 60,000,000
Class A-12 10,000,000
Upon initial issuance, the ownership of such Class A Certificates shall be
registered in the Register in the name of Cede & Co., or any successor thereto,
as nominee for the Depository.
The Representative and the Trustee are hereby authorized to execute and
deliver the Representation Letter with the Depository.
(c) With respect to Class A Certificates registered in the Register in
the name of Cede & Co., as nominee of the Depository, the Representative and the
Trustee shall have no responsibility or obligation to Direct or Indirect
Participants or beneficial owners for which the Depository holds Class A
Certificates from time to time as a Depository. Without limiting the immediately
preceding sentence, the Representative and the Trustee shall have no
responsibility or obligation with respect to (a) the accuracy of the records of
the Depository, Cede & Co., or any Direct or Indirect Participant with respect
to the ownership interest in the Class A Certificates, (b) the delivery to any
Direct or Indirect Participant or any other Person, other than a registered
Holder of a Class A Certificate or (c) the payment to any Direct or Indirect
Participant or any other Person, other than a registered Holder of a Class A
Certificate as shown in the Register, of any amount with respect to any
distribution of principal or interest on the Class A Certificates. No Person
other than a registered Holder of a Class A Certificate as shown in the Register
shall receive a certificate evidencing such Class A Certificate.
(d) Upon delivery by the Depository to the Trustee of written notice to
the effect that the Depository has determined to substitute a new nominee in
place of Cede & Co., and subject to the provisions hereof with respect to the
payment of distributions by the mailing of checks or drafts to the registered
Holders of Class A Certificates appearing as registered Owners in the
Certificate Register on a Record Date, the name "Cede & Co." in this Agreement
shall refer to such new nominee of the Depository.
(e) In the event that (i) the Depository or the Representative advises
the Trustee in writing that the Depository is no longer willing or able to
discharge properly its responsibilities as nominee and depository with respect
to the Class A Certificates and the Representative is unable to locate a
qualified successor or (ii) the Representative at its sole option elects to
terminate the book-entry system through the Depository, the Class A 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 Representative may determine that the Class A Certificates shall be
registered in the name of and deposited with a successor depository operating a
global book-entry system, as may be acceptable to the Representative, or such
depository's agent or designee but, if the Representative does not select such
alternative global book-entry system, then the Class A Certificates may be
registered in whatever name or names registered Holders of Class A Certificates
transferring Class A Certificates shall designate, in accordance with the
provisions hereof.
(f) Notwithstanding any other provision of this Agreement to the
contrary, so long as any Class A Certificates are registered in the name of Cede
& Co., as nominee of the Depository, all distributions of principal and interest
on such Class A Certificates and all notices with respect to such Class A
Certificates shall be made and given, respectively, in the manner provided in
the Representation Letter.
(g) The Class R Certificates and Class X Certificates have not been
registered or qualified under the 1933 Act, or any state securities law. No
transfer, sale, pledge or other disposition of any Class R or Class X
Certificate shall be made unless such disposition is made pursuant to an
effective registration statement under the 1933 Act and effective registration
or qualification under applicable state securities laws, or is made in a
transaction which does not require such registration or qualification. In the
event that a transfer is to be made in reliance upon an exemption from the 1933
Act, the Trustee or the Certificate Registrar may require, in order to assure
compliance with the 1933 Act, that the Class R or Class X Certificateholder
desiring to effect such disposition and such Class R or Class X
Certificateholder's prospective transferee each certify to the Trustee or the
Certificate Registrar in writing the facts surrounding such disposition. Unless
the Trustee requests otherwise, such certification shall be substantially in the
form of Exhibit D hereto. In the event that such certification of facts does not
on its face establish the availability of an exemption under Rule 144A of the
1933 Act or under Section 4(2) or a comparable provision of the 1933 Act, the
Trustee shall require an Opinion of Counsel satisfactory to it that such
transfer may be made pursuant to an exemption from the 1933 Act, which Opinion
of Counsel shall not be an expense of the Trustee or of the Trust Fund. The
Representative is not obligated under this Agreement to register the Class R
Certificates under the 1933 Act or any other securities law or to take any
action not otherwise required under this Agreement to permit the transfer of
Class R or Class X Certificates without such registration or qualification.
(h) Each Person who has or who acquires any Percentage Interest in a
Class R or Class X Certificate shall be deemed by the acceptance or acquisition
of such Percentage Interest to have agreed to be bound by the following
provisions and to have irrevocably appointed the Representative or its designee
as its attorney-in-fact to negotiate the terms of any mandatory sale under
clause (v) below and to execute all instruments of transfer and to do all other
things necessary in connection with any such sale, and the rights of each Person
acquiring any Percentage Interest in a Class R or Class X Certificate are
expressly subject to the following provisions:
(i) Each Person holding or acquiring any Percentage Interest in a Class
R or Class X Certificate shall be a Permitted Transferee and shall promptly
notify the Representative of any change or impending change in its status as a
Permitted Transferee.
(ii) No Percentage Interest in a Class R or Class X Certificate may be
transferred (including the sale to the initial holder) and the Trustee shall not
register the transfer of a Class R or Class X Certificate unless the Trustee and
the Representative shall have been furnished with (A) an affidavit (a "Transfer
Affidavit") of the proposed transferee in the form attached as Exhibit K (and if
required by the Transfer Affidavit, the opinion of counsel, as therein
referenced) and (B) a certificate (a "Transfer Certificate") of the transferor
to the effect that such transferor has no actual knowledge that the proposed
transferee is not a Permitted Transferee.
(iii) Each Person holding or acquiring any Percentage Interest in a
Class R or Class X Certificate shall agree (A) to require a Transfer Affidavit
from any other Person to whom such Person attempts to transfer its Percentage
Interest in a Class R Certificate, (B) to require a Transfer Affidavit from any
Person for whom such Person is acting as nominee, trustee or agent in connection
with any transfer of a Class R or Class X Certificate, (C) to deliver a Transfer
Certificate to the Trustee and the Representative in connection with any such
attempted transfer and (D) not to transfer its Percentage Interest in a Class R
or Class X Certificate or to cause the transfer of a Percentage Interest in a
Class R or Class X Certificate to any other Person if it has actual knowledge
that such Person is not a Permitted Transferee.
(iv) Any attempted or purported transfer of any Percentage Interest in
a Class R or Class X Certificate in violation of the provisions of this Section
4.02 shall be absolutely null and void and shall vest no rights in the purported
transferee. If any purported transferee shall become a Holder of a Class R or
Class X Certificate in violation of the provisions of this Section 4.02, then
the last preceding Permitted Transferee shall be restored to all rights as
Holder thereof retroactive to the date of registration of transfer of such Class
R or Class X Certificate. The Trustee shall notify the Representative upon
knowledge of a Responsible Officer that the registration of transfer of a Class
R or Class X Certificate was not in fact permitted by this Section 4.02. The
Trustee shall be under no liability to any Person for any registration of
transfer of a Class R or Class X Certificate that is in fact not permitted by
this Section 4.02 or for making any payments due on such Certificate to the
Holder thereof or taking any other action with respect to such Holder under the
provisions of this Agreement so long as the transfer was registered after
receipt of the related Transfer Affidavit and Transfer Certificate. The Trustee
shall be entitled but not obligated to recover from any Holder of a Class R or
Class X Certificate that was in fact not a Permitted Transferee at the time it
became a Holder or, at such subsequent time as it became other than a Permitted
Transferee, all payments made on such Class R or Class X Certificate at and
after either such time. Any such payments so recovered by the Trustee shall be
paid and delivered by the Trustee to the last preceding Holder of such
Certificate.
(v) If any purported transferee shall become a Holder of a Class R or
Class X Certificate in violation of the restrictions in this Section 4.02, then
the Representative or its designee shall, without notice to the Holder or any
prior Holder of such Class R or Class X Certificate, as the case may be, sell
such Class R or Class X Certificate to a purchaser selected by the
Representative or its designee on such reasonable terms as the Representative or
its designee may choose. Such purchaser may be the Representative itself or any
affiliate of the Representative. The proceeds of such sale, net of commissions,
expenses and taxes due, if any, will be remitted by the Representative to the
last preceding purported transferee of such Class R or Class X Certificate,
except that in the event that the Representative determines that the Holder or
any prior Holder of such Class R or Class X Certificate may be liable for any
amount due under this Section 4.02 or any other provision of this Agreement, the
Representative may withhold a corresponding amount from such remittance as
security for such claim. The terms and conditions of any sale under this clause
(v) shall be determined in the sole discretion of the Representative or its
designee, and it shall not be liable to any Person having a Percentage Interest
in a Class R or Class X Certificate, as applicable, as a result of its exercise
of such discretion.
No Class R or Class X Certificate or Certificates or any interest
therein shall be acquired by or on behalf of a "benefit plan investor" described
in or subject to the plan asset regulations set forth at 29 C.F.R. 2510.3-101,
unless an Opinion of Counsel is provided to the Representative and the Trustee
which establishes to their satisfaction that the transfer and/or the holding of
such Class R or Class X Certificates, as applicable, will not result in the
assets of the Trust Fund being deemed to be "plan assets" within the meaning of
Department of Labor Regulations 2510.3-101; subject the Trustee, the
Representative or the underwriter of the Class A Certificates, or any of their
affiliates, to the prohibited transaction rules under ERISA or excise taxes
under Section 4975 of the Code; or cause the fiduciary investment standards of
ERISA to apply to the assets of the Trust Fund.
Subject to the preceding paragraphs, upon surrender for registration of
transfer of any Certificate at such office, the Representative shall execute in
the name of the designated transferee or transferees, a new Certificate of the
same Class and Percentage Interest and dated the date of authentication by the
Trustee. The Certificate Registrar shall notify the Representative and the
Trustee of any such transfer.
At the option of the Certificateholders, Certificates may be exchanged
for other Certificates of the same Class in authorized denominations of a like
aggregate Percentage Interest, upon surrender of the Certificates to be
exchanged at such office. Whenever any Certificates are so surrendered for
exchange, the Servicer shall execute, and the Trustee shall authenticate, the
Certificates which the Certificateholder making the exchange is entitled to
receive.
(i) No service charge shall be made for any transfer or exchange of
Certificates, but the Certificate Registrar may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates. All Certificates
surrendered for transfer and exchange shall be marked canceled by the Trustee.
Section 4.03 Mutilated, Destroyed, Lost or Stolen Certificates.
If (i) any mutilated Certificate is surrendered to the Certificate
Registrar, or the Trustee and the Certificate Registrar receives evidence to its
satisfaction of the destruction, loss or theft of any Certificate, and (ii)
there is delivered to the Servicer, the Trustee and the Certificate Registrar
such security or indemnity (which may include a letter of indemnity delivered by
an insurance company) as may be required by each of them to save each of them
harmless, then, in the absence of notice to the Servicer, the Trustee and the
Certificate Registrar that such Certificate has been acquired by a bona fide
purchaser, the Servicer shall execute and deliver, and the Trustee shall
authenticate, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Certificate, a new Certificate of like Class, tenor and Percentage
Interest, but bearing a number not contemporaneously outstanding. Upon the
issuance of any new Certificate under this Section 4.03, the Servicer and the
Trustee may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses connected therewith. Any duplicate Certificate issued pursuant to this
Section 4.03 shall constitute complete and indefeasible evidence of ownership in
the applicable Trust Fund, as if originally issued, whether or not the
mutilated, destroyed, lost or stolen Certificate shall be found at any time.
Section 4.04 Persons Deemed Owners.
Prior to due presentation of a Certificate for registration of
transfer, the Servicer, the Representative, the Trustee, the Certificate Insurer
and the Certificate Registrar may treat the Person in whose name any Certificate
is registered as the owner of such Certificate for the purpose of receiving
remittances pursuant to Section 6.07 and for all other purposes whatsoever, and
the Representative, the Servicer, the Trustee, the Certificate Insurer and the
Certificate Registrar shall not be affected by notice to the contrary.
ARTICLE V
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 5.01 Duties of the Servicer.
(a) It is intended that each of REMIC I and REMIC II hereunder shall
constitute, and that the affairs of each of REMIC I and REMIC II shall be
conducted so as to qualify as a "real estate mortgage investment conduit" as
defined in and in accordance with the REMIC Provisions. In furtherance of such
intention, the Servicer covenants and agrees that it shall act as agent (and the
Servicer is hereby appointed to act as agent) on behalf of REMIC I and REMIC II
and as Tax Matters Person on behalf of REMIC I and REMIC II, and that in such
capacities it shall: (i) prepare and file, or cause to be prepared and filed, in
a timely manner, a U.S. Real Estate Mortgage Investment Conduit Income Tax
Return (Form 1066) and any other Tax Return required to be filed by REMIC I and
REMIC II using a calendar year as the taxable year for each of REMIC I and REMIC
II and using the accrual method of accounting, including, without limitation,
information reports relating to "original issue discount," as defined in the
Code, based upon the Prepayment Assumption and calculated by using the issue
price of the Certificates; (ii) make, or cause to be made, an election, on
behalf of each of REMIC I and REMIC II, to be treated as a REMIC on the federal
tax return of each of REMIC I and REMIC II for their first taxable year; (iii)
prepare and forward, or cause to be prepared and forwarded, to the Trustee, the
Certificateholders and to the Internal Revenue Service and any other relevant
governmental taxing authority all information returns or reports as and when
required to be provided to them in accordance with the REMIC Provisions and any
other provision of federal, state or local income tax laws; (iv) to the extent
that the affairs of REMIC I or REMIC II are within its control, conduct such
affairs at all times that any Certificates are outstanding so as to maintain the
status of each of REMIC I and REMIC II as a REMIC under the REMIC Provisions and
any other applicable federal, state and local laws; (v) not knowingly or
intentionally take any action or omit to take any action that would cause the
termination of the REMIC status of either REMIC I or REMIC II or that would
cause the imposition of a prohibited transaction tax or a tax on contributions
to REMIC I or REMIC II; (vi) pay the amount of any and all federal, state, and
local taxes, including, without limitation, prohibited transaction taxes as
defined in Section 860F of the Code imposed on each of REMIC I and REMIC II when
and as the same shall be due and payable (but such obligation shall not prevent
the Servicer or any other appropriate Person from contesting any such tax in
appropriate proceedings and shall not prevent the Servicer from withholding
payment of such tax, if permitted by law, pending the outcome of such
proceedings); (vii) ensure that any such returns or reports filed on behalf of
REMIC I and REMIC II are properly executed by the appropriate person; (viii)
represent REMIC I and REMIC II in any administrative or judicial proceedings
relating to an examination or audit by any governmental taxing authority,
request an administrative adjustment as to any taxable year of REMIC I and REMIC
II, enter into settlement agreements with any governmental taxing agency, extend
any statute of limitations relating to any item of REMIC I or REMIC II and
otherwise act on behalf of REMIC I and REMIC II in relation to any tax matter
involving either REMIC I and REMIC II; and (ix) as provided in Section 5.11
hereof, make available information necessary for the computation of any tax
imposed (1) on transferors of residual interests to transferees that are not
Permitted Transferees or (2) on pass-through entities, any interest in which is
held by an entity which is not a Permitted Transferee. The Trustee will
cooperate with the Servicer in the foregoing matters and will sign, as Trustee,
any and all Tax Returns required to be filed by the REMIC I and REMIC II.
Notwithstanding the foregoing, at such time as the Trustee becomes the successor
Servicer, the Representative shall serve as Tax Matters Person and as such shall
perform the duties described in this Section 5.01(a) until such time as an
entity is appointed to succeed the Trustee as Servicer. The Servicer shall
indemnify the Trustee and REMIC I or REMIC II, as applicable, for any liability
it may incur in connection with this Section 5.01(a) including reimbursement to
the Certificate Insurer for any Insured Payments made by the Certificate Insurer
in connection with such liability, if any, which indemnification shall survive
the termination of REMIC I and REMIC II; provided, however, that the Servicer
shall not indemnify the Trustee for its negligence or wilful misconduct.
With respect to any Mortgage Note released by the Trustee to the
Servicer or to any Subservicer in accordance with the terms of this Agreement,
other than a release or satisfaction pursuant to Section 7.02, prior to such
release, the Trustee shall (a) complete all endorsements in blank so that the
endorsement reads "Pay to the order of The Bank of New York, as Trustee under
the Pooling and Servicing Agreement dated as of February 28, 1997, Home Equity
Asset Backed Certificate 1997-A and (b) complete a restrictive endorsement that
reads "The Bank of New York is the holder of the mortgage note for the benefit
of the Certificateholders under the Pooling and Servicing Agreement dated as of
February 28, 1997, Home Equity 1997-A with respect to those Mortgage Notes
currently endorsed "Pay to the order of holder."
(b) The Servicer, as independent contract servicer, shall service and
administer the Mortgage Loans and shall have full power and authority, acting
alone, to do any and all things in connection with such servicing and
administration which the Servicer may deem necessary or desirable and consistent
with the terms of this Agreement. The Servicer may enter into Subservicing
Agreements for any servicing and administration of Mortgage Loans with any
institution which is in compliance with the laws of each state necessary to
enable it to perform its obligations under such Subservicing Agreement and (x)
has (i) been designated an approved Seller-Servicer by FHLMC or FNMA for first
and second mortgage loans and (ii) has a net worth of at least $5,000,000 or (y)
is an Originator or another affiliate of the Servicer. The Servicer shall give
notice to the Certificate Insurer of the appointment of any Subservicer. Any
such Subservicing Agreement shall be consistent with and not violate the
provisions of this Agreement. The Servicer shall be entitled to terminate any
Subservicing Agreement in accordance with the terms and conditions of such
Subservicing Agreement and to either itself directly service the related
Mortgage Loans or enter into a Subservicing Agreement with a successor
subservicer which qualifies hereunder.
(c) Notwithstanding any Subservicing Agreement, any of the provisions
of this Agreement relating to agreements or arrangements between the Servicer
and Subservicer or reference to actions taken through a Subservicer or
otherwise, the Servicer shall remain obligated and primarily liable to the
Trustee, the Certificateholders and the Certificate Insurer for the servicing
and administering of the Mortgage Loans in accordance with the provisions of
this Agreement without diminution of such obligation or liability by virtue of
such Subservicing Agreements or arrangements or by virtue of indemnification
from the Subservicer and to the same extent and under the same terms and
conditions as if the Servicer alone were servicing and administering the
Mortgage Loans. For purposes of this Agreement, the Servicer shall be deemed to
have received payments on Mortgage Loans when any Subservicer has received such
payments. The Servicer shall be entitled to enter into any agreement with a
Subservicer for indemnification of the Servicer by such Subservicer, and nothing
contained in this Agreement shall be deemed to limit or modify such
indemnification.
(d) Any Subservicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Subservicer
in its capacity as such and not as an originator shall be deemed to be between
the Subservicer and the Servicer alone, and the Trustee and Certificateholders
shall not be deemed parties thereto and shall have no claims, rights,
obligations, duties or liabilities with respect to the Subservicer except as set
forth in Section 5.01(e).
(e) In the event the Servicer shall for any reason no longer be the
Servicer (including by reason of an Event of Default), the Trustee or its
designee shall, subject to Section 10.02 hereof, thereupon assume all of the
rights and obligations of the Servicer under each Subservicing Agreement that
the Servicer may have entered into, unless the Trustee is then permitted and
elects to terminate any Subservicing Agreement in accordance with its terms. The
Trustee, its designee or the successor servicer for the Trustee shall be deemed
to have assumed all of the Servicer's interest therein and to have replaced the
Servicer as a party to each Subservicing Agreement to the same extent as if the
Subservicing Agreements had been assigned to the assuming party, except that the
Servicer shall not thereby be relieved of any liability or obligations under the
Subservicing Agreements. The Servicer at its expense and without right of
reimbursement therefor, shall, upon request of the Trustee, deliver to the
assuming party all documents and records relating to each Subservicing Agreement
and the Mortgage Loans then being serviced and an accounting of amounts
collected and held by it and otherwise use its best efforts to effect the
orderly and efficient transfer of the Subservicing Agreements to the assuming
party.
(f) Consistent with the terms of this Agreement, the Servicer may
waive, modify or vary any term of any Mortgage Loan or consent to the
postponement of strict compliance with any such term or in any manner grant
indulgence to any Mortgagor if in the Servicer's determination such waiver,
modification, postponement or indulgence is not materially adverse to the
interests of the Class A Certificateholders or the Certificate Insurer,
provided, however, that (unless (x) the Mortgagor is in default with respect to
the Mortgage Loan, or such default is, in the judgment of the Servicer, imminent
and the Servicer obtains written consent of the Certificate Insurer and (y) the
Servicer determines that any modification would not be considered a new mortgage
loan for federal income tax purposes) the Servicer may not permit any
modification with respect to any Mortgage Loan that would change the Mortgage
Interest Rate, defer (subject to Section 5.12), or forgive the payment of any
principal or interest (unless in connection with the liquidation of the related
Mortgage Loan), or extend the final maturity date on such Mortgage Loan. No
costs incurred by the Servicer or any Subservicer in respect of Servicing
Advances shall for the purposes of distributions to Certificateholders be added
to the amount owing under the related Mortgage Loan. Without limiting the
generality of the foregoing, and subject to the consent of the Certificate
Insurer, the Servicer shall continue, and is hereby authorized and empowered, to
execute and deliver on behalf of the Trustee and each Certificateholder, all
instruments of satisfaction or cancellation, or of partial or full release,
discharge and all other comparable instruments, with respect to the Mortgage
Loans and with respect to the Mortgaged Properties. If reasonably required by
the Servicer, the Trustee shall furnish the Servicer with any powers of attorney
and other documents necessary or appropriate to enable the Servicer to carry out
its servicing and administrative duties under this Agreement.
The Servicer, in servicing and administering the Mortgage Loans, shall
employ or cause to be employed procedures (including collection, foreclosure and
REO Property management procedures) and exercise the same care that it
customarily employs and exercises in servicing and administering mortgage loans
for its own account, in accordance with accepted second mortgage servicing
practices (or, in the case of Multifamily Loans, in accordance with accepted
multifamily loan servicing practices) of prudent lending institutions and giving
due consideration to the Certificate Insurer's and the Certificateholders'
reliance on the Servicer.
(g) On and after such time as the Trustee receives the resignation of,
or notice of the removal of, the Servicer from its rights and obligations under
this Agreement, and with respect to resignation pursuant to Section 9.04, after
receipt of the Opinion of Counsel required pursuant to Section 9.04, the Trustee
or its designee shall assume all of the rights and obligations of the Servicer,
subject to Section 10.02 hereof. The Servicer shall, upon request of the Trustee
but at the expense of the Servicer, deliver to the Trustee all documents and
records (including computer tapes and diskettes) relating to the Mortgage Loans
and an accounting of amounts collected and held by the Servicer and otherwise
use its best efforts to effect the orderly and efficient transfer of servicing
rights and obligations to the assuming party.
(h) In the event that any tax is imposed on REMIC I or REMIC II, such
tax shall be charged against amounts otherwise distributable to the Holders of
the Class R-1 or Class R-2 Certificates, respectively. Notwithstanding anything
to the contrary contained herein, the Servicer is hereby authorized to retain
from the Pool Remaining Amount Available for the respective Pool sufficient
funds to reimburse the Servicer for the payment of such tax (to the extent that
the Servicer has paid any such tax and has not been previously reimbursed or
indemnified therefor). The Servicer agrees to first seek indemnification for any
such tax payment from any indemnifying parties before reimbursing itself from
amounts otherwise distributable to the Holders of the Class R-1 or Class R-2
Certificates.
(i) [Reserved]
Section 5.02 Liquidation of Mortgage Loans.
In the event that any payment due under any Mortgage Loan and not
postponed pursuant to Section 5.01 is not paid when the same becomes due and
payable, or in the event the Mortgagor fails to perform any other covenant or
obligation under the Mortgage Loan and such failure continues beyond any
applicable grace period, the Servicer shall take such action as it shall deem to
be in the best interests of the Certificate Insurer and the Certificateholders,
as the case may be. The Servicer shall foreclose upon or otherwise comparably
effect the ownership in the name of the Trustee for the benefit of the
Certificateholders, as the case may be, of Mortgaged Properties relating to
defaulted Mortgage Loans as to which no satisfactory arrangements can be made
for collection of delinquent payments in accordance with the provisions of
Section 5.10. In connection with such foreclosure or other conversion, the
Servicer shall exercise collection and foreclosure procedures with the same
degree of care and skill in its exercise or use as it would exercise or use
under the circumstances in the conduct of its own affairs. The Servicer shall
take into account the existence of any hazardous substances, hazardous wastes or
solid wastes, as such terms are defined in the Comprehensive Environmental
Response Compensation and Liability Act, the Resource Conservation and Recovery
Act of 1976, or other federal, state or local environmental legislation, on a
Mortgaged Property in determining whether to foreclose upon or otherwise
comparably convert the ownership of a Mortgaged Property. Any amounts advanced
in connection with such foreclosure or other action shall constitute "Servicing
Advances."
After a Mortgage Loan has become a Liquidated Mortgage Loan, the
Servicer shall promptly prepare and forward to the Trustee, the Certificate
Insurer and, upon request, any Certificateholder, a Liquidation Report, in the
form attached hereto as Exhibit N, detailing the Liquidation Proceeds received
from the Liquidated Mortgage Loan, expenses incurred with respect thereto, and
any Realized Loss incurred in connection therewith.
Section 5.03 Establishment of Principal and Interest Accounts; Deposits
in Principal and Interest Accounts.
(a) The Servicer shall cause to be established and maintained one or
more Principal and Interest Accounts for the Trust Fund, in one or more
Designated Depository Institutions, in the form of time deposit or demand
accounts, which may be interest-bearing or such accounts may be trust accounts
wherein the moneys therein are invested in Permitted Instruments, titled "The
Money Store Inc., in trust for the registered holders of The Money Store Home
Equity Asset Backed Certificates, 1997-A, Class A, Class X, Class R and various
Mortgagors." Each such Principal and Interest Account shall be insured by the
BIF or SAIF administered by the FDIC to the maximum extent provided by law. The
creation of any Principal and Interest Account shall be evidenced by a letter
agreement in the form of Exhibit C hereto.
A copy of such letter agreement shall be furnished to the Trustee, the
Certificate Insurer and, upon request, any Certificateholder.
(b) The Servicer and each Subservicer shall deposit without duplication
(within 24 hours of receipt thereof) in the applicable Principal and Interest
Account and retain therein:
(i) all payments received after the Cut-Off Date on account of
principal on the Pool I, Pool II or Pool III Mortgage Loans, as the case may be,
including all Excess Payments, Principal Prepayments and Curtailments received
after the Cut-Off Date;
(ii) all payments received after the Cut-Off Date on account of
interest on the Pool I, Pool II or Pool III Mortgage Loans, as the case may be;
(iii) all Net Liquidation Proceeds received with respect to the Pool I,
Pool II or Pool III Mortgage Loans, as the case may be;
(iv) all Insurance Proceeds received with respect to the Pool I, Pool
II or Pool III Mortgage Loans, as the case may be (other than amounts to be
applied to the restoration or repair of the related Mortgaged Property, or to be
released to the Mortgagor in accordance with customary second mortgage servicing
procedures);
(v) all Released Mortgaged Property Proceeds received with respect to
the Pool I, Pool II or Pool III Mortgage Loans, as the case may be;
(vi) any amounts paid in connection with the purchase of any Pool I,
Pool II or Pool III Mortgage Loan, as the case may be, and the amount of any
Substitution Adjustment received with respect to the Pool I, Pool II or Pool III
Mortgage Loans, as the case may be, paid pursuant to Sections 2.05 and 3.03;
(vii) any amount required to be deposited in the applicable Principal
and Interest Account pursuant to Section 5.04, 5.08, 5.10 or 5.15(c); and
(viii) the amount of any credit life insurance premium refund which is
not due to the related Mortgagor.
Also, for each Mortgage Loan delivered to the Trustee on the Closing
Date that was originated on or after March 1, 1997 the Servicer shall deposit in
the applicable Principal and Interest Account 30 days' interest on the original
principal balance of each such Mortgage Loan calculated at the applicable
Mortgage Interest Rate.
(c) The foregoing requirements for deposit in the Principal and
Interest Account shall be exclusive, it being understood and agreed that,
without limiting the generality of the foregoing, the Servicing Fee and the
Contingency Fee with respect to each Mortgage Loan, and payments in the nature
of prepayment penalties or premiums, late payment charges and assumption fees,
to the extent received and permitted by Sections 7.01 and 7.03, together with
the difference between any Liquidation Proceeds and the related Net Liquidation
Proceeds, need not be deposited by the Servicer in the Principal and Interest
Account.
(d) Any interest earnings on funds held in the Principal and Interest
Account paid by a Designated Depository Institution shall be for the account of
the Servicer and may only be withdrawn from the applicable Principal and
Interest Account by the Servicer immediately following its monthly remittance of
the Pool Available Remittance Amounts for the related Pool to the Trustee. Any
reference herein to amounts on deposit in the Principal and Interest Account
shall refer to amounts net of such investment earnings.
Section 5.04 Permitted Withdrawals From the Principal and Interest
Accounts.
The Servicer shall withdraw funds from the Principal and Interest
Accounts for the following purposes:
(a) to effect the remittance to the Trustee on each Determination Date
as follows: the portion of the Excess Spread relating to the Mortgage Loans of
the related Pool and the portion of the Pool Available Remittance Amounts of the
related Pool, that are net of Compensating Interest and Monthly Advances for the
related Remittance Date to the Trustee for deposit in the Certificate Account.
For the purposes of this Section 5.04(a), the calculation of the Pool Available
Remittance Amounts shall be made without reference to the actual deposit of
funds in the respective Certificate Accounts;
(b) to reimburse itself for any accrued unpaid Servicing Fees, unpaid
Contingency Fees, unreimbursed Monthly Advances and for unreimbursed Servicing
Advances to the extent that funds relating to such amount have been deposited in
the applicable Principal and Interest Account (and not netted from Monthly
Payments received). The Servicer's right to reimbursement for unpaid Servicing
Fees, unpaid Contingency Fees and, except as provided in the following sentence,
Servicing Advances and Monthly Advances shall be limited to Liquidation
Proceeds, Released Mortgaged Property Proceeds, Insurance Proceeds and such
other amounts as may be collected by the Servicer from the Mortgagor or
otherwise relating to the Mortgage Loan in respect of which such unreimbursed
amounts are owed. The Servicer's right to reimbursement for Servicing Advances
and Monthly Advances in excess of such amounts shall be limited to any late
collections of interest received on the related Pool of Mortgage Loans,
generally, including Liquidation Proceeds, Released Mortgaged Property Proceeds
and Insurance Proceeds and any other amounts which would otherwise be
distributed to the Class X or Class R Certificateholders; provided, however,
that the Servicer's right to such reimbursement pursuant hereto shall be
subordinate to the rights of the applicable Class A Certificateholders and the
right of the Certificate Insurer to receive the Pool Carry-Forward Amount of the
related Pool;
(c) to withdraw any amount received from a Mortgagor that is
recoverable and sought to be recovered as a voidable preference by a trustee in
bankruptcy pursuant to the United States Bankruptcy Code in accordance with a
final, nonappealable order of a court having competent jurisdiction;
(d) (i) to make investments in Permitted Instruments and (ii) to pay to
itself, as permitted by Section 5.03(d), interest paid in respect of Permitted
Instruments or by a Designated Depository Institution on funds deposited in the
applicable Principal and Interest Account;
(e) to withdraw any funds deposited in the applicable Principal and
Interest Account that were not required to be deposited therein or were
deposited therein in error;
(f) (i) to pay itself servicing compensation pursuant to Section 7.03
hereof or interest as permitted under the definition of Excess Proceeds or (ii)
to pay the Remainder Excess Spread Amount with respect to any Remittance Date to
itself and/or the Representative for any Reimbursable Amounts and the remainder
to the Trustee for remittance to the Class X Certificateholders, as the case may
be;
(g) to withdraw amounts required to be deposited into the Servicing
Account pursuant to Section 6.15(b).
(h) to clear and terminate each Principal and Interest Account upon the
termination of the related Trust Fund.
So long as no default or Event of Default shall have occurred and be
continuing, and consistent with any requirements of the Code, the Principal and
Interest Account shall either be maintained as an interest-bearing accounts
meeting the requirements set forth in Section 5.03(a), or the funds held therein
may be invested by the Servicer (to the extent practicable) in Permitted
Instruments. In either case, funds in the Principal and Interest Account must be
available for withdrawal without penalty, and any Permitted Instruments must
mature not later than the Business Day immediately preceding the Determination
Date next following the date of such investment (except that if such Permitted
Instrument is an obligation of the institution that maintains such account, then
such Permitted Instrument shall mature not later than such Determination Date)
and shall not be sold or disposed of prior to its maturity. All Permitted
Instruments must be held by or registered in the name of "The Money Store Inc.
in trust for the registered holders of The Money Store Home Equity Asset Backed
Certificates, Series 1997-A." All interest or other earnings from funds on
deposit in the Principal and Interest Account (or any Permitted Instruments
thereof) shall be the exclusive property of the Servicer, and may be withdrawn
from either Principal and Interest Account pursuant to clause (d)(ii) above. The
amount of any losses incurred in connection with the investment of funds in the
applicable Principal and Interest Account in Permitted Instruments shall be
deposited in the applicable Principal and Interest Account by the Servicer from
its own funds immediately as realized without reimbursement therefor.
Section 5.05 Payment of Taxes, Insurance and Other Charges.
With respect to each Mortgage Loan, the Servicer shall maintain
accurate records reflecting fire and hazard insurance coverage.
With respect to each Mortgage Loan which is a first Mortgage Loan, or
as to which the Servicer has advanced the outstanding principal balance of any
Prior Lien pursuant to Section 5.14 or as to which the Servicer maintains escrow
accounts, the Servicer shall maintain accurate records reflecting the status of
ground rents, taxes, assessments, water rates and other charges which are or may
become a lien upon the Mortgaged Property and the status of primary mortgage
guaranty insurance premiums, if any, and fire and hazard insurance coverage and
shall obtain, from time to time, all bills for the payment of such charges
(including renewal premiums) and shall effect payment thereof prior to the
applicable penalty or termination date and at a time appropriate for securing
maximum discounts allowable, employing for such purpose deposits of the
Mortgagor in any escrow account which shall have been estimated and accumulated
by the Servicer in amounts sufficient for such purposes, as allowed under the
terms of the Mortgage (provided, however, that to the extent the Servicer
advances its own funds, such advances shall constitute "Servicing Advances"). To
the extent that a Mortgage does not provide for escrow payments, the Servicer
shall determine that any such payments are made by the Mortgagor at the time
they first become due. Notwithstanding anything contained herein to the
contrary, the Servicer may choose not to make the payments described above on a
timely basis, provided that collections on the related Mortgage Loan that are
required to be remitted to the Trust Fund would not be reduced, as a result of
such failure to timely pay, from the amount that would otherwise be remitted to
the Trust Fund; provided further, however, that this provision shall not have
the effect of permitting the Servicer to take, or fail to take, any action in
respect of the payments described herein that would adversely affect the
interest of the Trust Fund in any Mortgaged Property.
Section 5.06 Transfer of Accounts.
The Servicer may, upon written prior notice to the Trustee and the
Certificate Insurer, transfer the Principal and Interest Account to a different
Designated Depository Institution.
Section 5.07 Maintenance of Hazard Insurance.
The Servicer shall cause to be maintained, subject to the provisions of
Section 5.08 hereof, fire and hazard insurance with extended coverage customary
in the area where the Mortgaged Property is located, in an amount which is at
least equal to the least of (a) the outstanding principal balance owing on the
Mortgage Loan and any Prior Lien, (b) the full insurable value of the premises
securing the Mortgage Loan and (c) the minimum amount required to compensate for
damage or loss on a replacement cost basis. If the Mortgaged Property is in an
area identified in the Federal Register by the Flood Emergency Management Agency
as having special flood hazards (and such flood insurance has been made
available) the Servicer will cause to be purchased a flood insurance policy with
a generally acceptable insurance carrier, in an amount representing coverage not
less than the least of (i) the outstanding principal balance of the Mortgage
Loan and any Prior Lien, (ii) the full insurable value of the Mortgaged
Property, or (iii) the maximum amount of insurance available under the National
Flood Insurance Act of 1968, as amended. The Servicer shall also maintain, to
the extent such insurance is available, on REO Property, fire and hazard
insurance in the amounts described above, liability insurance and, to the extent
required and available under the National Flood Insurance Act of 1968, as
amended, flood insurance in an amount equal to that required above. Any amounts
collected by the Servicer under any such policies (other than amounts to be
applied to the restoration or repair of the Mortgaged Property, or to be
released to the Mortgagor in accordance with customary second mortgage servicing
procedures) shall be deposited in the applicable Principal and Interest Account,
subject to withdrawal pursuant to Section 5.04. It is understood and agreed that
no earthquake or other additional insurance need be required by the Servicer of
any Mortgagor or maintained on REO Property, other than pursuant to such
applicable laws and regulations as shall at any time be in force and as shall
require such additional insurance. All policies required hereunder shall be
endorsed with standard mortgagee clauses with losses payable to the Servicer.
Section 5.08 Maintenance of Mortgage Impairment Insurance Policy.
In the event that the Servicer shall obtain and maintain a blanket
policy insuring against fire and hazards of extended coverage on all of the
Mortgage Loans, then, to the extent such policy names the Trustee on behalf of
the Certificateholders as loss payee and provides coverage in an amount equal to
the aggregate unpaid principal balance on the Mortgage Loans without co-
insurance, and otherwise complies with the requirements of Section 5.07, the
Servicer shall be deemed conclusively to have satisfied its obligations with
respect to fire and hazard insurance coverage under Section 5.07, it being
understood and agreed that such blanket policy may contain a deductible clause,
in which case the Servicer shall, in the event that there shall not have been
maintained on the related Mortgaged Property a policy complying with Section
5.07, and there shall have been a loss which would have been covered by such
policy, deposit in the applicable Principal and Interest Account from the
Servicer's own funds the difference, if any, between the amount that would have
been payable under a policy complying with Section 5.07 and the amount paid
under such blanket policy. Upon the request of the Certificate Insurer, the
Trustee or any Certificateholder, the Servicer shall cause to be delivered to
the Trustee or such Certificateholder, as the case may be, a certified true copy
of such policy. The current issuer of such policy is Lloyds of London.
Section 5.09 Fidelity Bond.
The Servicer shall maintain with a responsible company, and at its own
expense, a blanket fidelity bond and an errors and omissions insurance policy,
in a minimum amount equal to $1,500,000, and a maximum deductible of $100,000,
if commercially available, with coverage on all employees acting in any capacity
requiring them to handle funds, money, documents or papers relating to the
Mortgage Loans ("Servicer Employees"). The fidelity bond shall insure the
Trustee and its respective officers, and employees, against losses resulting
from forgery, theft, embezzlement or fraud, by such Servicer Employees. The
errors and omissions policy shall insure against losses resulting from the
errors, omissions and negligent acts of such Servicer Employees. No provision of
this Section 5.09 requiring such fidelity bond and errors and omissions
insurance shall relieve the Servicer from its duties as set forth in this
Agreement. Upon the request of the Trustee, the Certificate Insurer or any
Certificateholder, the Servicer shall cause to be delivered to the Trustee, the
Certificate Insurer or such Certificateholder a certified true copy of such
fidelity bond and insurance policy. The current issuer of such fidelity bond and
insurance policy is National Union Fire Insurance Company of Pittsburgh,
Pennsylvania.
Section 5.10 Title, Management and Disposition of REO Property.
In the event that title to the Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure (an "REO Property"), the deed or
certificate of sale shall be taken in the name of the Trustee for the benefit of
the Class A Certificateholders.
The Servicer shall manage, conserve, protect and operate each REO
Property for the Certificateholders and the Certificate Insurer solely for the
purpose of its prudent and prompt disposition and sale. The Servicer shall,
either itself or through an agent selected by the Servicer, manage, conserve,
protect and operate the REO Property in the same manner that it manages,
conserves, protects and operates other foreclosed property for its own account,
and in the same manner that similar property in the same locality as the REO
Property is managed. The Servicer shall attempt to sell the same (and may
temporarily rent the same) on such terms and conditions as the Servicer deems to
be in the best interest of the Certificate Insurer and the Pool I, Pool II or
Pool III Certificateholders, as the case may be.
The Servicer shall cause to be deposited in the applicable Principal
and Interest Account, no later than five Business Days after the receipt
thereof, all revenues received with respect to the conservation and disposition
of the related REO Property net of funds necessary for the proper operation,
management and maintenance of the REO Property and the fees of any managing
agent acting on behalf of the Servicer.
The disposition of REO Property shall be carried out by the Servicer at
such price, and upon such terms and conditions, as the Servicer deems to be in
the best interest of the Pool I, Pool II or Pool III Certificateholders, as the
case may be and the Certificate Insurer. The proceeds of sale of the REO
Property shall be promptly deposited in the Principal and Interest Account as
received from time to time and, as soon as practicable thereafter, the expenses
of such sale shall be paid, the Servicer shall, subject to Section 5.04,
reimburse itself for any related unreimbursed Servicing Advances, unpaid
Servicing Fees, unpaid Contingency Fees and unreimbursed Monthly Advances, and
the Servicer shall deposit in the Principal and Interest Account the net cash
proceeds of such sale to be distributed to the Pool I, Pool II or Pool III
Certificateholders, as the case may be, in accordance with Section 6.08 hereof.
In the event any Mortgaged Property is acquired as aforesaid or
otherwise in connection with a default or imminent default on a Mortgage Loan,
the Servicer shall dispose of such Mortgaged Property within two years after its
acquisition unless the Servicer shall have received an Opinion of Counsel also
addressed to the Certificate Insurer to the effect that the holding of such
Mortgaged Property subsequent to two years after its acquisition will not result
in the imposition of taxes on "prohibited transactions" as defined in section
860F of the Code or cause the Trust Fund to fail to qualify as a REMIC at any
time that any Class A Certificates are outstanding. Notwithstanding any other
provision of this Agreement, no Mortgaged Property acquired by the Servicer
pursuant to this Section shall be rented (or allowed to continue to be rented)
or otherwise used for the production of income by or on behalf of the Trust
Fund, and no construction shall take place on such Mortgaged Property, in such a
manner or pursuant to any terms that would cause such Mortgaged Property to fail
to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of
the Code or result in the receipt by the Trust Fund of any "income from
non-permitted assets" which is subject to taxation within the meaning of
Sections 860G(c) and 857(b)(4)(B) of the Code. If a period greater than two
years is permitted under this Agreement and is necessary to sell any REO
Property, the Servicer shall give appropriate notice to the Trustee and the
Certificate Insurer and shall report monthly to the Trustee as to the progress
being made in selling such REO Property.
Section 5.11 Certain Tax Information.
The Servicer shall furnish (a) any information which may be required
under the Code including the computation of the present value of the "excess
inclusions" (as defined in Section 860E of the Code) with respect to any
transfer of a Class R Certificate, and, upon request, shall provide such
information to any Holder of a Class R Certificate and to the Internal Revenue
Service within 60 days of such request for a reasonable fee and (b) the
information required to be furnished pursuant to Sections 1.860F-4 and 1.6049-7
of the Regulations.
Section 5.12 Collection of Certain Mortgage Loan Payments.
The Servicer shall make reasonable efforts to collect all payments
called for under the terms and provisions of the Mortgage Loans, and shall, to
the extent such procedures shall be consistent with this Agreement, comply with
the terms and provisions of any applicable hazard insurance policy. Consistent
with the foregoing, the Servicer may in its discretion waive or permit to be
waived any late payment charge, prepayment charge, assumption fee or any penalty
interest in connection with the prepayment of a Mortgage Loan or any other fee
or charge which the Servicer would be entitled to retain hereunder as servicing
compensation and extend the due date for payments due on a Mortgage Note for a
period (with respect to each payment as to which the due date is extended) not
greater than 125 days after the initially scheduled due date for such payment
provided that the Servicer determines such extension would not be considered a
new mortgage loan for federal income tax purposes. In the event the Servicer
shall consent to the deferment of the due dates for payments due on a Mortgage
Note, the Servicer shall nonetheless make payment of any required Monthly
Advance with respect to the payments so extended to the same extent as if such
installment were due, owing and delinquent and had not been deferred, and shall
be entitled to reimbursement therefor in accordance with Section 5.04(b) hereof.
Section 5.13 Access to Certain Documentation and Information Regarding
the Mortgage Loans.
The Servicer shall provide to the Trustee, the Certificateholders, the
Certificate Insurer, the FDIC, the Office of Thrift Supervision and the
supervisory agents and examiners of each of the foregoing access to the
documentation
regarding the Mortgage Loans required by applicable local, state and federal
regulations, such access being afforded without charge but only upon reasonable
request and during normal business hours at the offices of the Servicer
designated by it.
Section 5.14 Superior Liens.
The Servicer shall file of record a request for notice of any action by
a superior lienholder under a Prior Lien for the protection of the Trustee's
interest, where permitted by local law and whenever applicable state law does
not require that a junior lienholder be named as a party defendant in
foreclosure proceedings in order to foreclose such junior lienholder's equity of
redemption. The Servicer must also notify any superior lienholder in writing of
the existence of the Mortgage Loan and request notification of any action (as
described below) to be taken against the Mortgagor or the Mortgaged Property by
the superior lienholder.
If the Servicer is notified that any superior lienholder has
accelerated or intends to accelerate the obligations secured by any Prior Lien,
or has declared or intends to declare a default under the mortgage or the
promissory note secured thereby, or has filed or intends to file an election to
have the Mortgaged Property sold or foreclosed, the Servicer shall take, on
behalf of the Trust Fund, whatever actions are necessary to protect the
interests of the related Certificateholders and the Certificate Insurer, and/or
to preserve the security of the related Mortgage Loan, subject to the
application of the REMIC Provisions. The Servicer shall immediately notify the
Trustee and the Certificate Insurer of any such action or circumstances. The
Servicer will advance the necessary funds to cure the default or reinstate the
superior lien, if such advance is in the best interests of the Certificate
Insurer and the related Certificateholders. The Servicer shall thereafter take
such action as is necessary to recover the amount so advanced.
Section 5.15 [Reserved]
Section 5.16 [Reserved]
ARTICLE VI
PAYMENTS TO THE CERTIFICATEHOLDERS
Section 6.01 Establishment of Certificate Accounts; Deposits in
Certificate Accounts; Permitted Withdrawals from Certificate Accounts.
(a) No later than the Closing Date, the Trustee will establish and
maintain with itself in its trust department three separate trust accounts,
which shall not be interest-bearing, titled "TMS Home Equity Certificate Account
1997-A-I," "TMS Home Equity Certificate Account 1997-A-II" and "TMS Home Equity
Certificate Account 1997-A-III" (each a "Certificate Account" and together, the
"Certificate Accounts"). The Trustee shall, promptly upon receipt, deposit in
the applicable Certificate Account and retain therein:
(i) the Pool Available Remittance Amount of the related Pool (net of
the amount of Monthly Advances and Compensating Interest deposited pursuant to
subclause (ii), below, but including the Excess Spread and any Subordination
Reduction Amounts with respect to the Mortgage Loans of the related Pool)
remitted by the Servicer;
(ii) the Compensating Interest and the portion of the Monthly Advance
allocable to the Class Adjusted Mortgage Loan Remittance Rates for Class A-1
through Class A-9, in the case of Pool I, the Class Adjusted Mortgage Loan
Remittance Rate for Class A-10 and Class A-11, in the case of Pool II, and the
Class Adjusted Mortgage Loan Remittance Rate for Class A-12, in the case of Pool
III, remitted to the Trustee by the Servicer;
(iii) amounts transferred from the Spread Account pursuant to Section
6.05(b)(ii) and Insured Payments received by the Trustee after a claim pursuant
to Section 6.08(c);
(iv) amounts required to be paid by the Servicer pursuant to Section
6.07(e) in connection with losses on investments of amounts in the applicable
Certificate Account; and
(v) amounts transferred from the Pre-Funding Account and the
Capitalized Interest Account on the Special Remittance Date pursuant to Sections
6.02(c) and (h), respectively.
(b) Amounts on deposit in each Certificate Account shall be withdrawn
on each Remittance Date by the following parties in the following order of
priority (provided that only amounts on deposit in the Certificate Account
relating to Pool II shall be withdrawn pursuant to subclause (iii) below):
(i) by the Trustee, to make deposits in the applicable Insurance
Account pursuant to Section 6.04(a)(i);
(ii) [Reserved]
(iii) by the Trustee, to pay the Auction Agent the required Auction
Agent Fee pursuant to the terms of the Auction Agent Agreement;
(iv) by the Trustee, or the Paying Agent on its behalf, to effect the
applicable distributions described in Section 6.08(d);
and also, in no particular order of priority:
(v) by the Trustee, to invest amounts on deposit in the applicable
Certificate Account in Permitted Instruments pursuant to Section 6.07;
(vi) by the Trustee, to pay on a monthly basis to the Servicer as
additional servicing compensation interest paid and earnings realized on
Permitted Instruments; (vii) by the Trustee, to withdraw any amount not required
to be deposited in the applicable Certificate Account or deposited therein in
error; and
(viii) by the Trustee, to clear and terminate the applicable
Certificate Account upon the termination of the related Trust Fund in accordance
with the terms of Section 11.01 hereof.
Section 6.02 Establishment of Pre-Funding Account and Capitalized
Interest Account; Deposits in Pre-Funding Account and Capitalized Interest
Account; Permitted Withdrawals from Pre-Funding Account and Capitalized Interest
Account.
(a) No later than the Closing Date, the Representative shall establish
and maintain with the Trustee in its trust department a trust account, which
shall not be interest-bearing, titled "TMS Home Equity Pre-Funding Account
1997-A" (the "Pre-Funding Account"). The Pre- Funding Account shall constitute
part of the Trust Fund but shall not be an asset of the REMIC I or REMIC II. It
is an outside reserve fund, the owners of which are the Class R-1
Certificateholders and for Federal tax purposes, amounts, if any, transferred by
REMIC I to the Pre-Funding Account are treated as distributed by REMIC I to the
Class R-1 Certificateholders. The Trustee shall, promptly upon receipt, deposit
into the Pre-Funding Account and retain therein the Original Pre-Funded Amount
in an amount equal to the sum of (i) $120,391,618.80 from the proceeds of the
sale of the Pool I Certificates, (ii) $64,978,067.49 from the proceeds of the
sale of the Pool II Certificates, and (iii) $9,001.65 from the proceeds of the
sale of the Pool III Certificates.
(b) On each Subsequent Transfer Date, the Representative shall instruct
the Trustee to withdraw from the Pre-Funding Account an amount equal to 100% of
the aggregate Principal Balances of the Subsequent Mortgage Loans (or, with
respect to the Low Interest Mortgage Loans, an amount equal to the product of
the percentage set forth on Exhibit T attached hereto determined by referring to
the columns entitled "Coupon" and "Remaining Term" and the aggregate Principal
Balances of such Subsequent Mortgage Loans) sold to the Trust Fund on such
Subsequent Transfer Date and pay such amount to or upon the order of the
Representative with respect to such transfer; in connection with such
instruction, the Representative shall additionally inform the Trustee whether
such Subsequent Mortgage Loans are being transferred in respect of Pool I, Pool
II or Pool III. In no event shall the Representative be permitted to instruct
the Trustee to release from the Pre-Funding Account with respect to subsequent
Mortgage Loans to be transferred to Pool I, Pool II or Pool III an amount in
excess of $120,391,618.80, $64,978,067.49, and $9,001.65, respectively.
(c) If at the end of the Funding Period amounts still remain in the
Pre-Funding Account, the Servicer shall instruct the Trustee to withdraw from
the Pre-Funding Account on the immediately following Remittance Date and deposit
in the appropriate Certificate Account any Pre-Funded Amount relating to the
Pool I, Pool II and Pool III Mortgage Loans, as the case may be, then remaining
in the Pre-Funding Account. However, if at the close of business on June 26,
1997, amounts still remain in the Pre-Funding Account, the Servicer shall
instruct the Trustee to withdraw from the Pre-Funding Account on the Special
Remittance Date and deposit in the applicable Certificate Account any Pre-Funded
Amount then remaining in the Pre-Funding Account.
(d) On the Remittance Dates occurring in April, May and June 1997, the
Trustee shall transfer from the Pre-Funding Account to the appropriate
Certificate Account the Pool Pre- Funding Earnings for the related Pool, if any,
applicable to each such Remittance Date.
(e) No later than the Closing Date, the Representative shall establish
and maintain with the Trustee in its trust department a trust account, which
shall not be interest-bearing, titled "TMS Home Equity Capitalized Interest
Account 1997-A" (the "Capitalized Interest Account"). The Capitalized Interest
Account shall constitute part of the Trust Fund but not a part of REMIC I or
REMIC II. It is an outside reserve fund, the owners of which are the Class R-1
Certificateholders and for Federal tax purposes amounts, if any, transferred by
REMIC I to the Capitalized Interest Account are treated as distributed by REMIC
I to the Class R-1 Certificateholders. The Trustee shall, promptly upon receipt,
deposit into the Capitalized Interest Account $2,053,259.12. If prior to the end
of the Funding Period the funds on deposit in the Pre-Funding Account are
invested in a guaranteed investment contract, repurchase agreement or other
arrangement acceptable to the Certificate Insurer, that constitutes a Permitted
Instrument, the Trustee shall, within one Business Day of its receipt of written
notification from the Certificate Insurer, withdraw from the Capitalized
Interest Account and pay to the Owners of the Class R-1 Certificates the amount
set forth in such written notification.
(f) On each Subsequent Transfer Date the Representative may instruct
the Trustee to withdraw from the Capitalized Interest Account and pay on such
Subsequent Transfer Date to the Owners of the Class R-1 Certificates the
Overfunded Interest Amount for such Subsequent Transfer Date, as calculated by
the Representative pursuant to Section 2.09(h) hereof.
(g) On the Remittance Dates occurring in April, May and June 1997, the
Trustee shall transfer from the Capitalized Interest Account to the appropriate
Certificate Account the Pool Capitalized Interest Requirement for the related
Pool, if any, for such Remittance Dates.
(h) On the Special Remittance Date, the Trustee shall transfer from the
Capitalized Interest Account to the Certificate Account the Capitalized Interest
Requirement, if any, for such Special Remittance Date. Any amounts remaining in
the Capitalized Interest Account after taking into account such transfer shall
be paid on such Special Remittance Date to the Holders of the Class R-1
Certificates, and the Capitalized Interest Account shall be closed.
Section 6.03 Establishment of Expense Accounts; Deposits in Expense
Accounts; Permitted Withdrawals from Expense Accounts.
(a) No later than the Closing Date, the Trustee will establish with
itself in its trust department three separate trust accounts, which shall not be
interest-bearing, titled "TMS Home Equity Expense Account 1997-A-I," "TMS Home
Equity Expense Account 1997-A-II," and "TMS Home Equity Expense Account
1997-A-III" (each, an "Expense Account" and together the "Expense Accounts").
The Trustee shall deposit into the applicable Expense Account:
(i) on each Remittance Date from the amounts on deposit in the
applicable Certificate Account an amount equal to one-twelfth of that portion of
the Annual Expense Escrow Amount relating to the Pool I, Pool II or Pool III
Mortgage Loans, as the case may be, subject to the provisions of Section
6.08(d); and
(ii) upon receipt, amounts required to be paid by the Servicer pursuant
to Section 6.07(e) in connection with losses on investments of amounts in the
applicable Expense Account.
If, at any time the aggregate amount then on deposit in the Expense Accounts
shall be insufficient to pay in full the fees and expenses of the Trustee then
due with respect to the Trust Fund, the Trustee shall make demand on the
Servicer to advance the amount of such insufficiency, and the Servicer shall
promptly advance such amount to the Trustee for deposit in the Expense Accounts,
pro rata in accordance with the amounts then on deposit in each such Expense
Account. Thereafter, the Servicer shall be entitled to reimbursement from the
applicable Expense Account for the amount of any such advance from any excess
funds available pursuant to subclause (c)(ii) below. Without limiting the
obligation of the Servicer to advance such insufficiency, in the event the
Servicer does not advance the full amount of such insufficiency by the Business
Day immediately preceding the Determination Date, the amount of such
insufficiency shall be deposited into the applicable Expense Account for payment
to the Trustee, pursuant to Section 6.08(d)(ii), to the extent of available
funds in the applicable Certificate Account.
(b) The Trustee may invest amounts on deposit in each Expense Account
in Permitted Instruments pursuant to Section 6.07 hereof, and the Trustee shall
withdraw amounts on deposit in the applicable Expense Account to:
(i) pay the Trustee's fees and expenses with respect to the Trust Fund
as described in Section 2.08 hereof (amounts shall be withdrawn from each
Expense Account pro rata in accordance with the then aggregate Principal
Balances of the Pool I, Pool II and Pool III Mortgage Loans);
(ii) pay on a monthly basis to the Servicer as additional servicing
compensation interest paid and earnings realized on Permitted Instruments;
(iii) to withdraw any amounts not required to be deposited in the
applicable Expense Account or deposited therein in error; and
(iv) to clear and terminate the applicable Expense Account upon the
termination of the Trust Fund in accordance with Section 11.01 hereof.
(c) On the twelfth Remittance Date following the Closing Date, and on
each twelfth Remittance Date thereafter, the Trustee shall determine that all
payments required to be made during the prior twelve month period pursuant to
subclauses (b)(i), (b)(ii) and (b)(iii) above, have been made, and, if all such
payments have been made, from the amounts remaining in the applicable Expense
Account, the Trustee shall (in the following order of priority):
(i) reimburse the Servicer and/or the Representative, for reimbursable
advances made pursuant to Section 9.01;
(ii) reimburse the Servicer for advances made by it pursuant to the
last paragraph of subclause (a) above; and
(iii) remit to the Servicer as additional servicing compensation any
amounts remaining in either Expense Account after payments made pursuant to
subclauses (b)(i), (b)(ii), (b)(iii), (c)(i) and (c)(ii), above.
Section 6.04 Establishment of Insurance Accounts; Deposits in Insurance
Accounts; Permitted Withdrawals from Insurance Accounts.
(a) No later than the Closing Date, the Trustee will establish with
itself in its trust department three separate trust accounts for the benefit of
the Certificate Insurer, titled "TMS MBIA Home Equity Insurance Account
1997-A-I" "TMS MBIA Home Equity Insurance Account 1997-A-II," and "TMS MBIA Home
Equity Insurance Account 1997-A-III" (each an "Insurance Account, and together,
the "Insurance Accounts"). The Trustee shall deposit into the applicable
Insurance Account:
(i) on each Remittance Date, prior to making the remittances required
pursuant to Section 6.08(d), from the applicable Certificate Account an amount
equal to the Premium Deposit Amount relating to the Pool I, Pool II or Pool III
Certificates, as the case may be; and
(ii) upon receipt, amounts required to be paid by the Servicer pursuant
to Section 6.07(e) in connection with losses on investments of amounts in the
applicable Insurance Account.
If at any time that a Monthly Premium is due, the aggregate amount then on
deposit in the Insurance Accounts is insufficient to pay in full the Monthly
Premium then due with respect to the Pool I, Pool II and Pool III Certificates
pursuant to the terms of the Insurance Agreement, the Certificate Insurer shall
make demand on the Servicer to advance the amount of such insufficiency, and the
Servicer shall promptly advance such amount to the Trustee for deposit in the
Insurance Accounts, pro rata in accordance with the amounts then on deposit in
each such Insurance Account. Thereafter, the Servicer shall be entitled to
reimbursement from the applicable Insurance Account for the amount of any such
advance from moneys on deposit therein not related to the Premium Deposit Amount
necessary to make timely payment of the next Monthly Premium.
(b) The Trustee may invest amounts on deposit in each Insurance Account
in Permitted Instruments pursuant to Section 6.07, and the Trustee shall
withdraw amounts on deposit in the applicable Insurance Account to:
(i) remit on a monthly basis sufficient funds to the Insurance Paying
Agent to pay the Certificate Insurer the Monthly Premium with respect to the
Pool I, Pool II or Pool III Certificates, as the case may be, on each Remittance
Date commencing in January 1997 as required by the Insurance Agreement;
(ii) pay on a monthly basis to the Servicer as additional servicing
compensation interest paid and earnings realized on Permitted Instruments;
(iii) withdraw amounts not required to be deposited in the applicable
Insurance Account or deposited therein in error; and
(iv) reimburse the Servicer for advances made by it pursuant to the
last paragraph of subclause (a) above to the extent such funds are not needed to
pay the Monthly Premium.
If sufficient funds are available in the Insurance Account to timely
pay the Monthly Premium, the Trustee has received from the Servicer any
information necessary to determine the amount of the Monthly Premium and the
Trustee and the Insurance Paying Agent (if the Insurance Paying Agent and the
Trustee are the same party) fail to timely remit the Monthly Premium to the
Certificate Insurer from funds on deposit in the Insurance Account in accordance
with subsections (a) and (b) above, the Trustee shall, contemporaneous with the
payment of the Monthly Premium, pay to the Certificate Insurer from its own
funds, for which reimbursement shall not be available, interest on the Monthly
Premium at the Prime Rate published in the most recent Wall Street Journal plus
3.0% for each day that the Monthly Premium is not paid to the Certificate
Insurer.
Section 6.05 Establishment of Spread Account; Deposits in Spread
Account; Permitted Withdrawals from Spread Account.
(a) The Representative shall, no later than the Closing Date, establish
and maintain with the Trustee in its trust department a trust account, which
shall not be interest-bearing, titled "TMS Home Equity Spread Account 1997-A"
(the "Spread Account"). The Spread account shall constitute part of the Trust
Fund but shall not be an asset of either REMIC I or REMIC II. It is an outside
reserve fund, the owners of which are the Class X Certificateholders and for
federal tax purposes, amount, if any, transferred by REMIC I to the Spread
account are treated as distributed by REMIC I to the Class X Certificateholders.
If during or after the Funding Period the Certificate Insurer determines to
increase the Pool I, Pool II or Pool III Initial Specified Subordinated Amount
pursuant to the terms of the Insurance Agreement, the Representative shall give
the Trustee written notice thereof, which notice shall include the new Pool I,
Pool II or Pool III Initial Specified Subordinated Amount for the related Pool.
The Trustee shall, promptly upon receipt, deposit into the Spread Account:
(i) on the Closing Date, an amount equal to $600,000 (all of which will
be allocated to Pool III);
(ii) up to the difference, if any, between the revised Pool I, Pool II
or Pool III Initial Specified Subordinated Amount and the original Pool I, Pool
II or Pool III Initial Specified Subordinated Amount, as the case may be;
(iii) [Reserved]
(iv) amounts, if any, received pursuant to Section 6.05(d);
(v) amounts, if any, received pursuant to Section 2.09(b)(ix); and
(vi) amounts, if any, received pursuant to Section 6.14(b)(iii).
(b) The Trustee may invest amounts on deposit in the Spread Account in
Permitted Instruments pursuant to Section 6.07, and the Trustee shall withdraw
amounts on deposit in the Spread Account to:
(i) [Reserved]
(ii) deposit in the applicable Certificate Account on any Remittance
Date an amount equal to (x) the amount of any Insured Payment otherwise required
with respect to such Remittance Date and (y) the aggregate Subordinated
Deficiency Amounts for Pool I, Pool II and Pool III for such Remittance Date (to
be allocated pro rata based upon such amounts);
(iii) on any Remittance Date for which the Pool Subordinated Amount for
each Pool exceeds its respective Specified Subordinated Amount, including any
increases thereto during or after the Funding Period, and the amount deposited
into the Spread Account pursuant to Section 6.14(b)(iii) equals the full amount
required to be deposited pursuant thereto, distribute the excess, if any, of the
aggregate Pool Subordinated Amounts for each Pool for such Remittance Date over
the aggregate Pool I, Pool II and Pool III Specified Subordinated Amounts,
including any increases thereto after the Funding Period, for such Remittance
Date, to the Holders of the Class X Certificates, the remainder of such excess
(provided, however, that any such excess attributable to a Pool II Mortgage Loan
shall be applied first to the payment of any Certificateholders' Interest
Carryover, pro rata based upon the amount of Certificateholders' Interest
Carryover allocable to each Class of Pool II Certificates);
(iv) distribute to the Holders of the Class X Certificates such amounts
then on deposit in the Spread Account as the Certificate Insurer may consent to
in writing;
(v) withdraw any amounts not required to be deposited in the Spread
Account or deposited therein in error; and
(vi) subject to subsection (c) below, distribute to the Holders of the
Class X Certificates any amounts remaining in the Spread Account upon the
termination of this Agreement in accordance with Section 11.01 hereof.
(c) [Reserved]
(d) [Reserved]
(e) The Class X Certificateholders hereby consent to funds being
withdrawn from or deposited in the Spread Account at the direction of the
Certificate Insurer pursuant to subsections (c) and (d) above.
(f) The Class X Certificateholders are deemed to have directed the
Trustee to withdraw funds from the Spread Account pursuant to subsection (c)
above and to deposit such funds into the Spread Account pursuant to subsection
(d) above.
Section 6.06 [Reserved].
Section 6.07 Investment of Accounts.
(a) So long as no default or Event of Default shall have occurred and
be continuing, and consistent with any requirements of the Code, all or a
portion of any Account held by the Trustee shall be invested and reinvested by
the Trustee as directed in writing by the Servicer, in one or more Permitted
Instruments bearing interest or sold at a discount. No such investment in the
Certificate Accounts shall mature later than the Business Day immediately
preceding the next Remittance Date and no such investment in the Insurance
Accounts, Expense Accounts, Pre- Funding Account, Capitalized Interest Account
or Spread Account shall mature later than the Business Day immediately preceding
the date such funds will be needed to pay fees or premiums or be transferred to
the applicable Certificate Account, as the case may be; provided, however, the
Trustee or any affiliate thereof may be the obligor on any investment which
otherwise qualifies as a Permitted Instrument and any investment on which the
Trustee is the obligor may mature on such Remittance Date or date when needed,
as the case may be.
(b) If any amounts are needed for disbursement from any Account held by
the Trustee and sufficient uninvested funds are not available to make such
disbursement, the Trustee shall cause to be sold or otherwise converted to cash
a sufficient amount of the investments in such Account. The Trustee shall not be
liable for any investment loss or other charge resulting therefrom.
(c) Subject to Section 12.01 hereof, the Trustee shall not in any way
be held liable by reason of any insufficiency in any Account held by the Trustee
resulting from any investment loss on any Permitted Instrument included therein
(except to the extent that the Trustee is the obligor thereon).
(d) The Trustee shall invest and reinvest funds in the Accounts held by
the Trustee to the fullest extent practicable, in such manner as the Servicer
shall from time to time direct in writing, but only in one or more Permitted
Instruments.
(e) All income or other gain from investments in any Account held by
the Trustee shall be deposited in such Account, immediately on receipt, and the
Trustee shall notify the Servicer of any loss resulting from such investments.
The Servicer shall remit the amount of any such loss from its own funds, without
reimbursement therefor, to the Trustee for deposit in the Account from which the
related funds were withdrawn for investment by the next Determination Date
following receipt by the Servicer of such notice.
Section 6.08 Priority and Subordination of Distributions.
(a) The rights of the Certificateholders to receive distributions from
the proceeds of the Trust Fund, and all ownership interests of the
Certificateholders in such distributions, shall be as set forth in this
Agreement. In this regard, all rights of the Class X and Class R
Certificateholders to receive distributions in respect of the Class X and Class
R Certificates, respectively, and all ownership interests of the Class X and
Class R Certificateholders in and to such distributions, shall be subject and
subordinate to the preferential rights of the Class A Certificateholders, to
receive distributions in respect of the Class A Certificates, and the ownership
interests of the Class A Certificateholders in such distributions, as described
herein. In accordance with the foregoing, the ownership interests of the Class X
and Class R Certificateholders in amounts deposited in the applicable Principal
and Interest Account or in any Accounts from time to time shall not vest unless
and until such amounts are distributed in respect of the Class X and Class R
Certificates in accordance with the terms of this Agreement. Notwithstanding
anything contained in this Agreement to the contrary, the Class X and Class R
Certificateholders shall not be required to refund any amount properly
distributed on the Class X and Class R Certificates pursuant to Section
6.08(d)(v).
(b) [Reserved]
(c) As soon as possible, and in no event later than 10:00 a.m. New York
time on the Business Day immediately preceding each Remittance Date, the Trustee
shall furnish the Certificate Insurer and the Servicer with a completed notice
in the form set forth as Exhibit L (the "Notice") hereto, which will be based
upon the information set forth in the Servicer's Certificate, in the event that
an Event of Nonpayment will occur with respect to such Remittance Date. The
Notice shall specify the total amount of the Insured Payment to be paid on the
applicable Remittance Date, stated separately for each Class of Class A
Certificates, and shall constitute a claim for an Insured Payment pursuant to
the applicable Certificate Insurance Policy. The Certificate Insurer shall remit
or cause to be remitted to the Insurance Paying Agent the amount of the Insured
Payment. Upon receipt of such Insured Payment by the Insurance Paying Agent on
behalf of the Holders of the respective Class of Class A Certificates under the
applicable Certificate Insurance Policy, it shall remit such amounts to the
Trustee who shall deposit such Insured Payment in the applicable Certificate
Account and shall distribute such Insured Payment in accordance with Sections
6.08(d) and (e) hereof.
Notwithstanding the foregoing, if an Event of Nonpayment will occur
with respect to a Remittance Date and funds are on deposit in the Spread
Account, the amount of the Insured Payment shall be reduced up to the amount
then on deposit in the Spread Account. Pursuant to Section 6.05(b)(ii), the
Trustee shall, on such Remittance Date, transfer such amount to the applicable
Certificate Account from the Spread Account.
The Trustee shall serve as Insurance Paying Agent hereunder for so long
as a Certificate Insurance Policy shall remain in effect; provided, however,
that the Insurance Paying Agent may be located in another jurisdiction with the
written consent of the Certificate Insurer. The Insurance Paying Agent shall act
as the agent of the Trustee and shall (i) pay amounts required by Section
6.04(b)(i) hereof to the Certificate Insurer, (ii) pay Insured Payments received
from the Certificate Insurer as the Trustee shall direct and (iii) take such
other actions with respect to the Certificate Insurer and the Certificate
Insurance Policies as the Trustee shall direct. The Trustee shall act initially
as the Insurance Paying Agent.
The Trustee shall receive through the Insurance Paying Agent, as
attorney-in-fact of each Holder of Class A Certificates, any Insured Payment
from the Certificate Insurer and disburse the same to each Holder of Class A
Certificates in accordance with the provisions of this Section 6.08. Insured
Payments disbursed by the Trustee from proceeds of the Certificate Insurance
Policies shall not be considered payment by the Trust Fund nor shall such
payments discharge the obligation of the Trust Fund with respect to such Class A
Certificates, and the Certificate Insurer shall become the owner of such unpaid
amounts due from the Trust Fund in respect of Class A Certificates. The Trustee
hereby agrees on behalf of each Holder of Class A Certificates for the benefit
of the Certificate Insurer that it recognizes that to the extent the Certificate
Insurer makes Insured Payments, either directly or indirectly (as by paying
through the Insurance Paying Agent), to the Class A Certificateholders, the
Certificate Insurer will be subrogated to the rights of the Class A
Certificateholders with respect to such Insured Payment, shall be deemed to the
extent of the payments so made to be a registered Certificateholder of the
related Class, and shall receive the Pool Carry-Forward Amounts of the related
Pools in accordance with Sections 6.08(d) below until all such Insured Payments
by the Certificate Insurer have been fully reimbursed. To evidence such
subrogation, the Trustee shall, or shall cause the Certificate Registrar to,
note the Certificate Insurer's rights as subrogee on the registration books
maintained by the Trustee or the Certificate Registrar upon receipt from the
Certificate Insurer of proof of payment of any Insured Payment.
Each Class A Certificateholder shall promptly (i) notify the Trustee in
writing upon the receipt of a court order to the effect that any amounts
described in Clause (iv) of the definition of Pool Remittance Amount constitute
a voidable preference pursuant to the United States Bankruptcy Code and (ii)
shall enclose a certified copy of such order with such notice to the Trustee.
(d) On each Remittance Date, and after making the allocations set forth
in Section 6.14, the Trustee shall withdraw from the applicable Certificate
Account the sum of (i) the Pool Available Amount for each Pool and (ii) the
Remainder Excess Spread Amount for each Pool, net of reimbursements to the
Servicer or the Representative for Reimbursable Advances pursuant to Section
5.04(f), and make distributions thereof in the following order of priority:
(i) to the Certificateholders of each Pool, the lesser of the Pool
Available Amount for the related Pool and the Pool Remittance Amount for the
related Pool;
(ii) then to each Expense Account, an amount equal to one-twelfth of
the Annual Expense Escrow Amount with respect to the Mortgage Loans of the
related Pool, plus any amount required to be paid to the Trustee pursuant to
Section 6.03(a) resulting from insufficiencies in the applicable Expense
Account;
(iii) then to the Servicer and/or the Representative, an amount, if
any, equal to the Reimbursable Amounts with respect to the applicable Pool to
the extent the Servicer has not previously netted such amounts from Monthly
Payments;
(iv) then to the Pool II Certificateholders, any Certificateholders'
Interest Carryover (but only with respect to distributions relating to Pool II
Mortgage Loans), allocated pro rata among each Class of Pool II Certificates
based upon the amount of Certificateholders' Interest Carryover allocated to
each such Class;
(v) then to the Class X Certificateholders, the lesser of (i) the Class
X Remittance Amount and (ii) any interest accrued (and yet unpaid) with respect
to the Class X Certificates in accordance with footnote (5) iof Section 4.01(b)
hereof; and
(vi) then to the Class R Certificateholders, any remainder.
On each Remittance Date, the amount to be distributed to the Pool I
Certificates pursuant to clause (i) above will be allocated in the following
order of priority:
(A) first, concurrently to the Certificateholders of each Class of Pool
I Certificates, the applicable Class Current Interest Requirements for such
Remittance Date, pro rata in accordance with such amounts;
(B) second, to the Class A-9 Certificateholders, an amount equal to the
Class A-9 Principal Distribution Amount for such Remittance Date; and
(C) third, to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class A-3, Class A-4, Class
A-5, Class A-6, Class A-7, Class A-8 and Class A-9 Certificateholders,
sequentially in that order, the excess, if any, of the amount to be distributed
to the Pool I Certificates on such Remittance Date over the amount distributed
pursuant to (A) and (B) above, until the Class Principal Balance of each such
Class (in ascending order of numerical designation) is reduced to zero and such
Certificateholders have received an amount equal to the amount described in
clause (iv) of the definition of Pool Remittance Amount that is recovered from
such Certificateholders.
On each Remittance Date, the amount to be distributed to the Pool II
Certificates pursuant to clause (i) above will be allocated in the following
order of priority:
(A) first, concurrently to the Certificateholders of each Class of Pool
II Certificates, the applicable Class Current Interest Requirements for such
Remittance Date, pro rata in accordance with such amounts; and
(B) second, to the Class A-10 and Class A-11 Certificateholders,
sequentially in that order, the excess, if any, of the amount to be distributed
to the Pool II Certificates on such Remittance Date over the amount distributed
pursuant to (A) above, until the Class Principal Balance of such Class is
reduced to zero and such Certificateholders have recovered an amount equal to
the amount described in clause (iv) of the definition of Pool Remittance Amount
that is recovered from such Certificateholders.
On each Remittance Date, the amount to be distributed to the Pool III
Certificates pursuant to clause (i) above will be allocated in the following
order of priority:
(A) first, to the Class A-12 Certificateholders, the applicable Class
Current Interest Requirement for such Remittance Date; and
(B) second, to the Class A-12 Certificateholders, the excess, if any,
of the amount to be distributed to the Pool III Certificates on such Remittance
Date over the amount distributed pursuant to (A) above, until the Class
Principal Balance of such Class (in ascending order of numerical designation) is
reduced to zero and such Certificateholders have received an amount equal to the
amount described in clause (iv) of the definition of Pool Remittance Amount that
is recovered from such Certificateholders.
Additionally, on the Special Remittance Date, the Trustee shall
withdraw from the Certificate Account the amount, if any, deposited therein
pursuant to Section 6.01(a)(v) and make distributions thereof as follows: (i)
from amounts transferred from the Pre-Funding Account, distributions of
principal to the Classes of Class A Certificates then entitled to receive
distributions of principal in the priority and proportions set forth in this
Section 6.08(d) and (ii) from amounts transferred from the Capitalized Interest
Account, distributions of interest to such Classes of Class A Certificates equal
to the applicable Capitalized Interest Requirement. Notwithstanding the
foregoing, if on the Special Remittance Date the amount of principal allocated
to a Class of Auction Rate Certificates is not equal to $25,000 or an integral
multiple of $25,000 in excess thereof, the entire amount (if less than $25,000)
or the amount exceeding an integral multiple of $25,000 will, instead, be
distributed to the Adjustable Rate Certificates.
(e) All distributions made to the Certificateholders on each Remittance
Date and the Special Remittance Date will be made on a pro rata basis (except
with respect to payments of principal to the Auction Rate Certificateholders)
among the Certificateholders of the respective Class of record on the next
preceding Record Date based on the Percentage Interest represented by their
respective Certificates, and shall, except for the final payment on such
Certificates, be made by wire transfer of immediately available funds to the
account of such Certificateholder as shall appear on the Certificate Register
without the presentation or surrender of the Certificate or the making of any
notation thereon, at a bank or other entity having appropriate facilities
therefor, at the expense of each such Certificateholder unless such
Certificateholder shall own of record Certificates which have original principal
amounts aggregating (i) at least $5,000,000 or (ii) one of the two highest
outstanding amounts less than $5,000,000.
(f) Notwithstanding the foregoing, principal payments will be made to
each Class of Auction Rate Certificates only in amounts equal to $25,000 and
integral multiples in excess thereof. If the amount in the Certificate Account
for Pool II otherwise required to be applied as a payment of principal on the
Auction Rate Certificates either (i) is less than $25,000 or (ii) exceeds an
integral multiple of $25,000, then, in the case of (i), such entire amount or,
in the case of (ii), such excess amount, will not be paid as principal on the
upcoming Remittance Date, but will be retained in the Certificate Account for
Pool II until the amount therein available for payment of principal on the
Auction Rate Certificates equals $25,000 or any integral multiple thereof. In no
event, however, shall amounts remain in the Certificate Account for Pool II more
than 13 months after the related payments are deposited into the Trust Fund. The
amount being distributed to a Class of Auction Rate Certificates as principal
will be allocated to the specific Certificates of such Class selected no later
than 5 Business Days prior to the related Remittance Date by lot or such other
manner as may be determined, which allocations will be made only in amounts
equal to $25,000 and integral multiples of $25,000 in excess thereof.
Section 6.09 Allocation of Realized Losses.
Prior to each Determination Date, the Servicer shall determine the
total amount of Realized Losses, if any, that occurred in the related Due
Period. The amount of each Realized Loss shall be evidenced by an Officers'
Certificate, stated separately for each Pool of Mortgage Loans, and, to the
extent paid by the Certificate Insurer as an Insured Payment, shall constitute a
Pool Carry-Forward Amount for the related Pool. Any Realized Losses relating to
the Mortgage Loans of a Pool shall be allocated to each outstanding Class of
Certificates of such Pool pro rata in accordance with the respective Class
Principal Balances of each such Class, but only if and to the extent that the
Certificateholders of such Pool did not receive Insured Payments in connection
with the related Unrecovered Pool Portions on the Remittance Date on which a
Subordination Deficit occurs. Further, any allocation of Realized Losses among a
Class of Certificates shall be made on a pro rata basis among the
Certificateholders of record of such Class on the next preceding Record Date
based on the Percentage Interest represented by their respective Certificates by
reducing their respective Principal Balances by the amount so allocated, which
allocation shall be deemed to have occurred on the related Remittance Date.
Section 6.10 Statements.
Each month for so long as a Class of Auction Rate Certificates is
Outstanding, not later than 12:00 noon New York time on the Auction Reporting
Date, the Servicer shall deliver to the Certificate Insurer and the Trustee, by
telecopy, the receipt and legibility of which shall be confirmed telephonically,
with hard copy thereof to be delivered on the Business Day following the
Determination Date, a certificate signed by a Servicing Officer stating the date
(day, month and year), the Series number of the Certificates, the date of this
Agreement, and the amount to be distributed on the upcoming Remittance Date to
each Class of Auction Rate Certificates as a payment of principal.
Each month, not later than 12:00 noon New York time on the
Determination Date, the Servicer shall deliver to the Certificate Insurer and to
the Trustee, by telecopy, for distribution to the Certificateholders, the
receipt and legibility of which shall be confirmed telephonically, with hard
copy thereof and the Servicer's Monthly Computer Tape in the form attached
hereto as Exhibit R (both in hard copy and in computer tape form) to be
delivered on the Business Day following the Determination Date, a certificate
signed by a Servicing Officer (a "Servicer's Certificate") stating the date
(day, month and year), the Series number of the Certificates, the date of this
Agreement, and the following:
(i) the Pool Available Remittance Amounts for each Pool for the related
Remittance Date;
(ii) the Class Principal Balances for each Class of Class A
Certificates as reported in the prior Servicer's Certificate pursuant to
subclause (xv) below, or, in the case of the first Determination Date, the
Original Principal Balance for each Class of Class A Certificates;
(iii) the Pool Principal Distribution Amounts for each Pool for the
related Remittance Date, in the aggregate and listed separately for the portions
relating to each Class of Class A Certificates;
(iv) the total amount of any Insured Payments included in the Pool
Available Remittance Amount for each Pool for the related Remittance Date;
(v) the Subordinated Amount and Specified Subordinated Amount for the
related Remittance Date, listed separately for each Pool;
(vi) the number and Principal Balances of all Loans in each Pool which
were the subject of Principal Prepayments during the Due Period;
(vii) the amount of all Curtailments which were received during the Due
Period, stated separately for each Pool;
(viii) the aggregate amount of all Excess Payments and the amounts of
Monthly Payments in respect of principal received during the Due Period, stated
separately for each Pool;
(ix) the amount of interest received on the Mortgage Loans, stated
separately for each Pool;
(x) the amount of the Monthly Advances to be made on the Determination
Date, the portion of the Monthly Advances to be deposited in the Certificate
Accounts pursuant to Section 6.01(a)(ii), and the Compensating Interest payment
to be made on the Determination Date, in each case stated separately for each
Pool;
(xi) the delinquency and foreclosure information set forth in the form
attached hereto as Exhibit O, stated separately for each Pool;
(xii) the amount of any Realized Losses incurred during the related Due
Period, stated separately for each Pool;
(xiii) the Pool Remittance Amounts for each Pool for the Remittance
Date, in the aggregate and by component and listed separately for the portions
relating to each Class of Class A Certificates in the related Pool and, with
respect to the Auction Rate Certificates, the amount otherwise required to be
distributed thereon with respect to principal and retained in the Certificate
Account for Pool II pursuant to Section 6.08(f);
(xiv) the Reimbursable Amounts and the Class X Remittance Amount
payable pursuant to Section 6.08(d)(iii) and (v) with respect to the Remittance
Date; (xv) the Class Principal Balance for each Class of Class A Certificates
and the Pool Principal Balance for each Pool after giving effect to the
distribution to be made on the Remittance Date and after allocation of Realized
Losses made on such Remittance Date;
(xvi) the Monthly Excess Spread Percentage, the Excess Spread, and the
Remainder Excess Spread Amount allocable to Reimbursable Amounts and Class R
Certificateholders pursuant to Section 5.04(f) (in each case, in the aggregate
and stated separately for each Pool);
(xvii) the Cumulative Realized Losses, stated separately for each Pool,
with respect to the Remittance Date;
(xviii) the weighted average maturity and weighted average Interest
Rate, stated separately for each Pool;
(xix) the Servicing Fees, the Contingency Fees, the Auction Agent Fees
and amounts to be deposited to the Expense Accounts and the Insurance Accounts,
in each case, as applicable, stated separately for each Pool;
(xx) the amount of all payments and reimbursements to the Servicer
pursuant to Section 5.04(b), (c), (d)(ii), (e) and (f)(i), stated separately
with respect to each Pool;
(xxi) the Class Pool Factor for each Class determined using the
balances in subclause (xv) above;
(xxii) the weighted average Mortgage Interest Rate and Adjusted
Mortgage Interest Rate of the Mortgage Loans for each Pool and the weighted
average Class Adjusted Loan Remittance Rates for each Pool, in each case for the
related Remittance Date, and the weighted average Mortgage Interest Rate for the
prior three month period;
(xxiii) the Class A-10 and Class A-11 Remittance Rates with respect to
the Remittance Date and if either of the Class A-10 or Class A-11 Remittance
Rate was based on the Net Funds Cap, what it would have been if based on LIBOR
plus the applicable Margin or the Auction Rate, as the case may be;
(xxiv) the rate of LIBOR and the Auction Rate with respect to the
Remittance Date;
(xxv) the Net Funds Cap for Pool II applicable to each Class of Pool II
Certificates with respect to the Remittance Date;
(xxvi) if the Remittance Rate for a Class of Pool II Certificates for
such Remittance Date is based on the Net Funds Cap, the amount of any
Certificateholders' Interest Carryover for such Class for such Remittance Date;
(xxvii) the amount of the distribution, if any, allocable to
Certificateholders' Interest Carryover and the amount of any Certificateholders'
Interest Carryover for all prior Remittance Dates after giving effect to such
distribution (in each case, stated separately by Class and in the aggregate);
(xxviii) [Reserved]
(xxix) [Reserved]
(xxx) [Reserved]
(xxxi) [Reserved]
(xxxii)[Reserved]
(xxxiii)[Reserved]
(xxxiv) [Reserved]
(xxxv) Such other information as the Certificate Insurer and the
Certificateholders may reasonably require.
The Trustee shall forward such report to the Certificateholders and the
Certificate Insurer on the Remittance Date, together with a separate report
indicating the amount of funds deposited in each Certificate Account pursuant to
Section 6.01(a)(iv); and the amounts which are reimbursable to the Servicer or
the Representative, as appropriate, pursuant to Sections 6.03(c)(i),
6.03(c)(ii), 6.04(b)(iv) and 6.08(d)(iii) (all reports prepared by the Trustee
of such withdrawals and deposits will be based in whole or in part upon the
information provided to the Trustee by the Servicer).
To the extent that there are inconsistencies between the telecopy of
the Servicer's Certificate and the hard copy thereof, the Trustee shall be
entitled to rely upon the telecopy. In the case of information furnished
pursuant to subclauses (ii), (vi), (vii), (viii), (xiii), (xv) and (xxii),
above, the amounts shall be expressed in a separate section of the report as a
dollar amount for each Class per $1,000 (or, in the case of the Auction Rate
Certificates, per $25,000) original dollar amount as of the Cut-Off Date.
Additionally, on the Special Remittance Date the Trustee shall, based
upon information received from the Servicer, forward to the Certificateholders,
the Certificate Insurer and the Rating Agencies, a report setting forth the
amount of principal and interest, if any, being paid to each Class of Class A
Certificates on the Special Remittance Date.
(a) Within a reasonable period of time after the end of each calendar
year, the Servicer shall furnish to the Trustee for distribution to each Person
who at any time during the calendar year was a Class A Certificateholder such
information as is reasonably necessary to provide to such Person a statement
containing the information set forth in subclauses (ix), (xiii), (xix) and
(xxxv), above, aggregated for such calendar year or applicable portion thereof
during which such Person was a Certificateholder. Such obligation of the
Servicer shall be deemed to have been satisfied to the extent that substantially
comparable information shall be provided by the Servicer pursuant to any
requirements of the Code as from time to time are in force.
(b) On each Remittance Date and the Special Remittance Date, the
Trustee shall forward to the Class X and Class R Certificateholders a copy of
the report forwarded to the Certificateholders of each Pool in respect of such
Remittance Date or the Special Remittance Date, as the case may be, and a
statement setting forth the amounts actually distributed to the Class X and
Class R Certificateholders, on such Remittance Date together with such other
information as the Servicer provides and deems necessary or appropriate.
(c) Within a reasonable period of time after the end of each calendar
year, the Servicer shall furnish to the Trustee for distribution to each Person
who at any time during the calendar year was a Class X or Class R
Certificateholder such information as is reasonably necessary to provide to such
Person a statement containing the information provided pursuant to the previous
paragraph aggregated for such calendar year or applicable portion thereof during
which such Person was a Class X or R Certificateholder, as applicable. Such
obligation of the Servicer shall be deemed to have been satisfied to the extent
that substantially comparable information shall be provided by the Servicer
pursuant to any requirements of the Code as from time to time in force.
(d) Upon reasonable advance notice in writing, the Servicer will
provide to each Class A Certificateholder which is a savings and loan
association, bank or insurance company certain reports and access to information
and documentation regarding the Mortgage Loans sufficient to permit such Class A
Certificateholder to comply with applicable regulations of the Office of Thrift
Supervision or other regulatory authorities with respect to investment in the
Class A Certificates.
(e) The Servicer shall furnish to each Certificateholder and the
Certificate Insurer, during the term of this Agreement, such periodic, special,
or other reports or information, whether or not provided for herein, as shall be
necessary, reasonable, or appropriate with respect to the Certificateholder or
the Certificate Insurer, 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 Certificateholder or the
Certificate Insurer may reasonably require; provided, that the Servicer shall be
entitled to be reimbursed by such Certificateholder or the Certificate Insurer
for the Servicer's actual expenses incurred in providing such reports if such
reports are not producible in the ordinary course of the Servicer's business.
Section 6.11 Advances by the Servicer.
Not later than the close of business on each Determination Date, the
Servicer shall remit to the Trustee for deposit in the applicable Certificate
Account an amount (as indicated in the Servicer's Certificate prepared pursuant
to Section 6.10), to be distributed on the related Remittance Date pursuant to
Section 6.08, equal to the amount, if any, by which (a) the sum of (i) the
amount equal to 30 days' interest (or, with respect to the Pool II Certificates,
the actual number of days since the last Remittance Date or, in the case of the
April 1997 Remittance Date, from March 15, 1997 with respect to the Adjustable
Rate Certificates and from the Closing Date with respect to the Auction Rate
Certificates) at the weighted average Class Adjusted Mortgage Loan Remittance
Rates for the applicable Pool on the related Pool Principal Balance immediately
prior to the related Remittance Date plus (ii) the Monthly Excess Spread
relating to the Mortgage Loans of the related Pool with respect to such
Remittance Date exceeds (b) the amount received by the Servicer as of the
related Record Date in respect of interest on the Mortgage Loans of the related
Pool (and, with respect to the Remittance Dates in April, May and June 1997, the
sum of (i) all funds to be transferred to the applicable Certificate Account
from the Capitalized Interest Account for such Remittance Date pursuant to
Section 6.02(g) and (ii) the related Pool Pre- Funding Earnings for the
applicable Remittance Date). The sum of such excess calculated for each Pool is
defined herein as the "Monthly Advance." The Servicer may reimburse itself for
Monthly Advances made pursuant to Section 5.04.
Section 6.12 Compensating Interest.
The Certificateholders shall be entitled to a full month's interest for
each Mortgage Loan for any month during which a Principal Prepayment or
Curtailment is received on such Mortgage Loan. Not later than the close of
business on each Determination Date, with respect to each Mortgage Loan for
which a Principal Prepayment or Curtailment was received during the related Due
Period, the Servicer shall remit to the Trustee for deposit in the applicable
Certificate Account from amounts otherwise payable to it as servicing
compensation, an amount (such amount required to be delivered to the Trustee is
referred to herein as "Compensating Interest") (as indicated in the Servicer's
Certificate prepared pursuant to Section 6.10) equal to the difference between
(a) 30 days' interest (or, with respect to a Pool II Loan, the actual number of
days since the last Remittance Date to but not including the upcoming Remittance
Date or, with respect to the April 1997 Remittance Date, from March 15, 1997
with respect to the Adjustable Rate Certificates and from the Closing Date with
respect to the Auction Rate Certificates) at the then weighted average Class
Adjusted Mortgage Loan Remittance Rates for the applicable Pool on the Principal
Balance of each such Mortgage Loan and (b) the amount of interest actually
received on each such Mortgage Loan for such Due Period as of the beginning of
the Due Period applicable to the Remittance Date on which such amount will be
distributed.
Section 6.13 Reports of Foreclosure and Abandonment of Mortgaged
Property.
Each year the Trustee shall make the reports of foreclosures and
abandonments of any Mortgaged Property required by Section 6050J of the Code. In
order to facilitate this reporting process, the Servicer, on or before January
15th of each year, shall provide to the Trustee and the Certificate Insurer
reports relating to each instance occurring during the previous calendar year in
which the Servicer (i) on behalf of the Trust Fund acquires an interest in a
Mortgaged Property through foreclosure or other comparable conversion in full or
partial satisfaction of the Mortgage Loan, or (ii) knows or has reason to know
that a Mortgaged Property has been abandoned. The reports from the Servicer
shall be in form and substance sufficient to enable the Trustee to meet the
reporting requirements imposed by such Section 6050J. The Servicer will deliver
to the Trustee an aggregate summary of all information needed by the Trustee to
prepare such Section 6050J reports.
Section 6.14. Allocation of Total Monthly Excess Cashflow.
(a) On each Remittance Date, for each Pool of Mortgage Loans the
Trustee shall, based upon information provided in the related Servicer's
Certificate delivered pursuant to Section 6.10, allocate an amount equal to the
sum of (x) the Monthly Excess Spread with respect to each such Pool and
Remittance Date plus (y) any Subordination Reduction Amount with respect to each
such Pool and Remittance Date plus (z) any Pool Available Remittance Amount
Surplus with respect to each such Pool (such sum being the "Total Monthly Excess
Cashflow" with respect to such Pool and Remittance Date), in the following order
of priority:
(i) first, to the related Pool in an amount up to the Pool Available
Remittance Amount Shortfall for such Pool;
(ii) second, to the other Pools, any Pool Available Remittance Amount
Shortfall remaining after the application described in clause (i), allocated
among Pools pro rata, based upon the applicable Pool Available Remittance Amount
Shortfall remaining after the application described in clause (i) above;
(iii) third, to the Certificate Insurer in respect of amounts owed on
account of any Insured Payments theretofore made with respect to the related
Pool of Mortgage Loans (any such amount so owed to the Certificate Insurer and
not theretofore paid, together with accrued interest thereon, the "Insurer
Reimbursable Amount" with respect to the related Pool of Mortgage Loans); and
(iv) fourth, to the Certificate Insurer in respect of any Insurer
Reimbursable Amount with respect to any other Pool, allocated among Pools, pro
rata, based upon the applicable Insurer Reimbursable Amount remaining after the
applications described in clauses (i), (ii) and (iii) above.
Total Monthly Excess Cashflow allocable pursuant to clauses (ii) and
(iv) above shall be allocated first from Pool I and Pool III, pro rata based
upon the Total Monthly Excess Cashflow available from each such Pool, and second
from Pool II.
(b) The amount, if any, of the Total Monthly Excess Cashflow with
respect to a Pool of Mortgage Loans on a Remittance Date remaining after the
allocations described in (a) above is the "Net Monthly Excess Cashflow" with
respect to such Pool for such Remittance Date; such amount is required to be
applied in the following order of priority:
(i) first, to the related Pool, in an amount up to the Subordinated
Deficiency Amount for such Pool as of such Remittance Date;
(ii) second, to the other Pools, in an amount up to any Subordinated
Deficiency Amounts with respect to such other Pool remaining after the
allocation described in (i) above, allocated among Pools, pro rata, based upon
the applicable Subordinated Deficiency Amount after giving effect to all other
distributions to be made on such Remittance Date;
(iii) third, to the Spread Account until the sum of the amount
deposited therein pursuant to this Section 6.14(b)(iii) equals [$1,500,000], or
such lesser amount as may be consented to by the Certificate Insurer;
(iv) fourth, to the Servicer to the extent of any unreimbursed
Servicing Advances and accrued and unpaid Servicing Fees;
(v) fifth, to the Pool II Certificateholders to the extent of any
Certificateholders' Interest Carryover owing for such Remittance Date and all
prior Remittance Dates (to the extent such Net Monthly Excess Cashflow is
attributable to Pool II Mortgage Loans);
(vi) sixth, any excess to the Holders of the Class X Certificates, in
an amount up to the amount of interest accrued (and yet unpaid) with respect to
the Class X Certificates in accordance with ▇▇▇▇▇ (5) of Section 4.01(b) hereof;
and
(vii) seventh, the excess, if any, to the Holders of the Class R
Certificateholders.
Net Monthly Excess Cashflow allocable pursuant to clauses (ii), (iii)
and (iv) above shall be allocated first from Pool I and Pool III, pro rata based
upon the Net Monthly Excess Cashflow available from each such Pool, and second
from Pool II.
Section 6.15 Establishment of Servicing Accounts; Collection of Taxes,
Assessments and Similar Items.
(a) The Servicer shall establish and maintain, or cause to be
established and maintained, one or more Servicing Accounts. The Servicer will
deposit and retain, or cause to be deposited and retained, therein all
collections from the Mortgagors for the payment of taxes, assessments, insurance
premiums, or comparable items as agent of the Mortgagors.
(b) The deposits in the Servicing Accounts shall be held in a
Designated Depository Institution in an account designated as a "Mortgage Loan
Servicing Account," held in trust by the Servicer or a Subservicer acting on its
own behalf and as agent for holders of various pass- through securities and
other interests in mortgage loans sold by it. The amount at any time credited to
a Servicing Account must be fully insured by FDIC, or, to the extent that such
deposits exceed the limits of such insurance, such excess must be (i)
transferred to another fully insured account in another Designated Depository
Institution or (ii) if permitted by applicable law, invested in Permitted
Investments held in trust by the Servicer or a Subservicer. Withdrawals of
amounts from the Servicing Accounts may be made only to effect timely payment of
taxes, assessments, insurance premiums, or comparable items, to reimburse the
related Servicer or Subservicer for any advances made with respect to such
items, to refund to any Mortgagors any sums as may be determined to be overages,
to pay interest, if required, to Mortgagors on balances in the Servicing
Accounts, to pay the related Servicer or Subservicer the remainder of any income
on balances in the Servicing Accounts or to clear and terminate the Servicing
Accounts at or any time after the termination of this Agreement.
ARTICLE VII
GENERAL SERVICING PROCEDURE
Section 7.01 Assumption Agreements.
When a Mortgaged Property has been or is about to be conveyed by the
Mortgagor, the Servicer shall, to the extent it has knowledge of such conveyance
or prospective conveyance, exercise its rights to accelerate the maturity of the
related Mortgage Loan under any "due-on- sale" clause contained in the related
Mortgage or Mortgage Note; provided, however, that the Servicer shall not
exercise any such right if the "due-on-sale" clause, in the reasonable belief of
the Servicer, is not enforceable under applicable law or if such enforcement
would materially increase the risk of default or delinquency on, or materially
decrease the security for, such Mortgage Loan. In such event, the Servicer shall
enter into an assumption and modification agreement with the person to whom such
property has been or is about to be conveyed, pursuant to which such person
becomes liable under the Mortgage Note and, unless prohibited by applicable law
or the Mortgage, the Mortgagor remains liable thereon. The Servicer is also
authorized with the prior approval of the Certificate Insurer to enter into a
substitution of liability agreement with such person, pursuant to which the
original Mortgagor is released from liability and such person is substituted as
Mortgagor and becomes liable under the Mortgage Note. The Servicer shall notify
the Trustee and the Certificate Insurer that any such substitution or assumption
agreement has been completed by forwarding to the Trustee the original of such
substitution or assumption agreement and a duplicate thereof to the Certificate
Insurer, which original shall be added by the Trustee to the related Trustee's
Mortgage File and shall, for all purposes, be considered a part of such
Trustee's Mortgage File to the same extent as all other documents and
instruments constituting a part thereof. In connection with any assumption or
substitution agreement entered into pursuant to this Section 7.01, the Servicer
shall not change the Mortgage Interest Rate or the Monthly Payment, defer or
forgive the payment of principal or interest, reduce the outstanding principal
amount or extend the final maturity date on such Mortgage Loan. Any fee
collected by the Servicer for consenting to any such conveyance or entering into
an assumption or substitution agreement shall be retained by or paid to the
Servicer as additional servicing compensation. Notwithstanding the foregoing
paragraph or any other provision of this Agreement, the Servicer shall not be
deemed to be in default, breach or any other violation of its obligations
hereunder by reason of any assumption of a Mortgage Loan by operation of law or
any assumption which the Servicer may be restricted by law from preventing, for
any reason whatsoever.
Section 7.02 Satisfaction of Mortgages and Release of Mortgage Files.
The Servicer shall not grant a satisfaction or release of a Mortgage
without having obtained payment in full of the indebtedness secured by the
Mortgage or otherwise prejudice any right the Certificateholders may have under
the mortgage instruments, subject to Section 5.01 hereof. The Servicer shall
maintain the Fidelity Bond as provided for in Section 5.09 insuring the Servicer
against any loss it may sustain with respect to any Mortgage Loan not satisfied
in accordance with the procedures set forth herein.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Servicer will immediately notify the Trustee,
by an Officers' Certificate in the form of Exhibit J attached hereto (which
certification shall include a statement to the effect that all amounts received
or to be received in connection with such payment which are required to be
deposited in the applicable Principal and Interest Account pursuant to Section
5.03 have been or will be so deposited) of a Servicing Officer and shall request
delivery to it of the Trustee's Mortgage File. Upon receipt of such
certification and request, the Trustee shall promptly release the related
Trustee's Mortgage File to the Servicer. Expenses incurred in connection with
any instrument of satisfaction or deed of reconveyance shall be payable only
from and to the extent of servicing compensation and shall not be chargeable to
the Principal and Interest Account or the Certificate Accounts.
From time to time and as appropriate for the servicing or foreclosure
of any Mortgage Loan, including, for this purpose, collection under any primary
mortgage guaranty insurance policy, the Trustee shall, upon request of the
Servicer and delivery to the Trustee of a certification in the form of Exhibit J
attached hereto signed by a Servicing Officer, release the related Trustee's
Mortgage File to the Servicer, and the Trustee shall execute such documents as
shall be necessary to the prosecution of any such proceedings. Such servicing
receipt shall obligate the Servicer to return the Mortgage File to the Trustee
when the need therefor by the Servicer no longer exists, unless the Mortgage
Loan has been liquidated and the Liquidation Proceeds relating to the Mortgage
Loan have been deposited in the applicable Principal and Interest Account and
remitted to the Trustee for deposit in the applicable Certificate Account or the
Mortgage File or such document has been delivered to an attorney, or to a public
trustee or other public official as required by law, for purposes of initiating
or pursuing legal action or other proceedings for the foreclosure of the
Mortgaged Property either judicially or non- judicially, and the Servicer has
delivered to the Trustee a certificate of a Servicing Officer certifying as to
the name and address of the Person to which such Mortgage File or such document
was delivered and the purpose or purposes of such delivery. Upon receipt of a
certificate of a Servicing Officer stating that such Mortgage Loan was
liquidated, the servicing receipt shall be released by the Trustee to the
Servicer.
The Trustee shall execute and deliver to the Servicer any court
pleadings, requests for trustee's sale or other documents necessary to the
foreclosure or trustee's sale in respect of a Mortgaged Property or to any legal
action brought to obtain judgment against any Mortgagor on the Mortgage Note or
Mortgage or to obtain a deficiency judgment, or to enforce any other remedies or
rights provided by the Mortgage Note or Mortgage or otherwise available at law
or in equity. Together with such documents or pleadings, the Servicer shall
deliver to the Trustee a certificate of a Servicing Officer requesting that such
pleadings or documents be executed by the Trustee and certifying as to the
reason such documents or pleadings are required and that the execution and
delivery thereof by the Trustee will not invalidate or otherwise affect the lien
of the Mortgage, except for the termination of such a lien upon completion of
the foreclosure or trustee's sale. The Trustee shall, upon receipt of a written
request from a Servicing Officer, execute any document provided to the Trustee
by the Servicer or take any other action requested in such request, that is, in
the opinion of the Servicer as evidenced by such request, required by any state
or other jurisdiction to discharge the lien of a Mortgage upon the satisfaction
thereof and the Trustee will sign and post, but will not guarantee receipt of,
any such documents to the Servicer, or such other party as the Servicer may
direct, within five Business Days of the Trustee's receipt of such certificate
or documents. Such certificate or documents shall establish to the Trustee's
satisfaction that the related Mortgage Loan has been paid in full by or on
behalf of the Mortgagor and that such payment has been deposited in the
applicable Principal and Interest Account.
Section 7.03 Servicing Compensation and Contingency Fee.
(a) As compensation for its services hereunder, the Servicer shall be
entitled to withdraw from the applicable Principal and Interest Account or to
retain from interest payments on the Mortgage Loans the Servicer's Servicing
Fee. Additional servicing compensation in the form of assumption and other
administrative fees, prepayment penalties and premiums, interest paid on funds
on deposit in the Principal and Interest Account, interest paid and earnings
realized on Permitted Instruments, amounts remitted pursuant to Sections
6.03(c)(iii) and 6.04(b)(ii) and late payment charges shall be retained by or
remitted to the Servicer to the extent not required to be remitted to the
Trustee for deposit in the applicable Certificate Account. The Servicer shall be
required to pay all expenses incurred by it in connection with its servicing
activities hereunder and shall not be entitled to reimbursement therefor except
as specifically provided for herein.
(b) The Servicer shall be entitled to withdraw from the applicable
Principal and Interest Account or to retain from interest payments on the
Mortgage Loans the Contingency Fee. In the event that The Money Store Inc. is
terminated as Servicer pursuant to this Agreement, any duly appointed successor
to the Servicer shall also be entitled to withdraw from the applicable Principal
and Interest Account or to retain from interest payments on the Mortgage Loans
the successor Servicer's Contingency Fee.
Section 7.04 Annual Statement as to Compliance.
The Servicer will deliver to the Certificate Insurer, the Trustee, and
each of the Rating Agencies, on or before March 31 of each year beginning March
31, 1998, an Officers' Certificate stating that (i) the Servicer has fully
complied with the provisions of Articles V and VII, (ii) a review of the
activities of the Servicer during the preceding calendar year and of performance
under this Agreement has been made under such officers' supervision, and (iii)
to the best of such officers' knowledge, based on such review, the Servicer has
fulfilled all its obligations under this Agreement throughout such year, or, if
there has been a default in the fulfillment of any such obligation, specifying
each such default known to such officers and the nature and status thereof and
the action being taken by the Servicer to cure such default.
Section 7.05 Annual Independent Public Accountants' Servicing Report.
On or before March 31 of each year beginning March 31, 1998, the
Servicer, at its expense, shall cause a firm of independent public accountants
reasonably acceptable to the Trustee and the Certificate Insurer to furnish a
letter or letters to the Certificate Insurer, the Trustee and the Rating
Agencies to the effect that such firm has with respect to the Servicer's overall
servicing operations examined such operations in accordance with the
requirements of the Uniform Single Audit Program for Mortgage Bankers, and
stating such firm's conclusions relating thereto.
Section 7.06 Trustee's and Certificate Insurer's Right to Examine
Servicer Records and Audit Operations.
The Trustee and the Certificate Insurer shall have the right upon
reasonable prior notice, during normal business hours and as often as reasonably
required, to examine and audit any and all of the books, records or other
information of the Servicer, whether held by the Servicer or by another on
behalf of the Servicer, which may be relevant to the performance or observance
by the Servicer of the terms, covenants or conditions of this Agreement. The
Certificate Insurer shall have the right upon reasonable prior notice, during
normal business hours and as often as reasonably required to perform ongoing
diligence of the Servicer's operations through loans reviews, re-appraisals or
other reasonable review of Servicer operations. No amounts payable in respect of
the foregoing shall be paid from the Trust Fund.
Section 7.07 Reports to the Trustee and the Certificate Insurer;
Principal and Interest Account Statements.
Not later than 20 days after each Record Date, the Servicer shall
forward to the Trustee and the Certificate Insurer a statement, certified by a
Servicing Officer, setting forth the status of each Principal and Interest
Account as of the close of business on the preceding Record Date and showing,
for the period covered by such statement, the aggregate of deposits into each
Principal and Interest Account for each category of deposit specified in Section
5.03, the aggregate of withdrawals from each Principal and Interest Account for
each category of withdrawal specified in Section 5.04, the aggregate amount of
permitted withdrawals not made in the related Due Period, and the amount of any
Monthly Advances or payments of Compensating Interest, in each case, for the
related Due Period. In addition, the Servicer shall deliver to the Certificate
Insurer on a quarterly basis, beginning in June 1997, a computer diskette
containing a quarterly summary of the information provided in the statement
forwarded to the Trustee and the Certificate Insurer pursuant to the previous
sentence, and also containing information similar to the information provided in
the Mortgage Loan Schedule delivered to the Trustee as Exhibits H, H-1 and H-2.
ARTICLE VIII
REPORTS TO BE PROVIDED BY SERVICER
Section 8.01 Financial Statements.
The Servicer understands that, in connection with the transfer of the
Certificates, Certificateholders may request that the Servicer make available to
prospective Certificateholders annual audited financial statements of the
Servicer for one or more of the most recently completed five fiscal years for
which such statements are available, which request shall not be unreasonably
denied.
ARTICLE IX
THE SERVICER
Section 9.01 Indemnification; Third Party Claims.
(a) The Servicer agrees to indemnify and hold the Trustee, the
Certificate Insurer and each Certificateholder 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 Trustee, the
Certificate Insurer and any Certificateholder may sustain in any way related to
the failure of the Servicer to perform its duties and service the Mortgage Loans
in compliance with the terms of this Agreement. The Servicer shall immediately
notify the Trustee, the Certificate Insurer and each Certificateholder if a
claim is made by a third party with respect to this Agreement, and the Servicer
shall assume (with the consent of the 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, the Trustee, the Certificate Insurer and/or
Certificateholder in respect of such claim. The Trustee may reimburse the
Servicer from the related Expense Account pursuant to Section 6.03(c)(i), and,
if necessary, from amounts otherwise payable to the Holders of the Class X
Certificates from the Pool Remaining Amount Available with respect to each Pool
for all amounts advanced by it pursuant to the preceding sentence with respect
to the Trust Fund except when the Claim relates directly to the failure of the
Servicer to service and administer the Mortgages in compliance with the terms of
this Agreement.
(b) The Representative agrees to indemnify and hold the Trustee, the
Certificate Insurer and each Certificateholder 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 Trustee, the
Certificate Insurer and any Certificateholder may sustain in any way related to
the failure of the Servicer, if it is an affiliate thereof, or the failure of
the Representative to perform their respective duties in compliance with the
terms of this Agreement and in the best interests of the Certificate Insurer and
the Certificateholders. The Representative shall immediately notify the Trustee,
the Certificate Insurer and each Certificateholder if a claim is made by a third
party with respect to this Agreement, and the Representative shall assume (with
the consent of the 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, the Representative, the Trustee, the Certificate Insurer and/or
Certificateholder in respect of such claim. The Trustee may reimburse the
Representative from the related Expense Account pursuant to Section 6.03(c)(i),
and, if necessary, from amounts otherwise payable to the Holders of the Class X
Certificates from the Pool Remaining Amount Available with respect to each Pool
for all amounts advanced by it pursuant to the preceding sentence with respect
to the Trust Fund except when the claim relates directly to the Representative's
indemnification pursuant to Section 2.05 and Section 3.03 or to the failure of
the Servicer, if it is an affiliate of the Representative to perform its
obligations to service and administer the Mortgages in compliance with the terms
of this Agreement, or the failure of the Representative to perform its duties in
compliance with the terms of this Agreement and in the best interests of the
Certificate Insurer and the Certificateholders.
Section 9.02 Merger or Consolidation of the Representative and the
Servicer.
The Servicer and the Representative will each keep in full effect its
existence, rights and franchises as a corporation, and will obtain and preserve
its qualification to do business as a foreign corporation, in each jurisdiction
necessary to protect the validity and enforceability of this Agreement or any of
the Mortgage Loans and to perform its duties under this Agreement.
Any Person into which the Servicer or the Representative may be merged
or consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Servicer or the Representative shall be a party, or
any Person succeeding to the business of the Servicer or the Representative,
shall be an established mortgage loan servicing institution that has a net worth
of at least $15,000,000 and a valid Contract of Insurance and shall be the
successor of the Servicer or the Representative, as applicable, hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding. The
Servicer or the Representative shall send notice of any such merger or
consolidation to the Trustee and the Certificate Insurer.
Section 9.03 Limitation on Liability of the Servicer and Others.
The Servicer and any director, officer, employee or agent of the
Servicer may rely on any document of any kind which it in good faith reasonably
believes to be genuine and to have been adopted or signed by the proper
authorities respecting any matters arising hereunder. Subject to the terms of
Section 9.01 herein, the Servicer shall have no obligation to appear with
respect to, prosecute or defend any legal action which is not incidental to the
Servicer's duty to service the Mortgage Loans in accordance with this Agreement.
Section 9.04 Servicer Not to Resign.
The Servicer shall not assign this Agreement nor resign from the
obligations and duties hereby imposed on it except by mutual consent of the
Servicer, the Certificate Insurer, the Trustee and the Majority
Certificateholders, or upon the determination that the Servicer's duties
hereunder are no longer permissible under applicable law and such incapacity
cannot be cured by the Servicer. Any such determination permitting the
resignation of the Servicer shall be evidenced by a written Opinion of Counsel
(who may be counsel for the Servicer) to such effect delivered to the Trustee,
the Certificate Insurer and to each Certificateholder, which Opinion of Counsel
shall be in form and substance acceptable to the Trustee and the Certificate
Insurer. No such resignation shall become effective until a successor has
assumed the Servicer's responsibilities and obligations hereunder in accordance
with Section 10.02.
Section 9.05 [Reserved]
Section 9.06 Right of Certificate Insurer to Replace Servicer.
From and after the occurrence of a Servicing Delinquency Trigger, the
Certificate Insurer may, upon written notice to the Trustee and the Rating
Agencies, replace the Servicer with a successor. No such replacement shall
become effective until a successor has assumed the Servicer's responsibilities
and obligations hereunder in accordance with Section 10.02.
ARTICLE X
DEFAULT
Section 10.01 Events of Default.
(a) In case one or more of the following Events of Default shall occur
and be continuing, that is to say:
(i) (A) an Event of Nonpayment; (B) the failure by the Servicer to make
any required Servicing Advance, to the extent such failure materially and
adversely affects the interests of the Certificate Insurer or the
Certificateholders; (C) the failure by the Servicer to make any required Monthly
Advance; (D) the failure by the Servicer to remit any Compensating Interest; or
(E) any failure by the Servicer to remit to Certificateholders, or to the
Trustee for the benefit of the Certificateholders, any payment required to be
made under the terms of this Agreement which continues unremedied after the date
upon which written notice of such failure, requiring the same to be remedied,
shall have been given to the Servicer by the Trustee or to the Servicer and the
Trustee by any Certificateholder or the Certificate Insurer; or
(ii) failure by the Servicer or the Representative duly to observe or
perform, in any material respect, any other covenants, obligations or agreements
of the Servicer or the Representative as set forth in this Agreement, which
failure continues unremedied for a period of 60 days after the date on which
written notice of such failure, requiring the same to be remedied, shall have
been given to the Servicer or the Representative, as the case may be, by the
Trustee or to the Servicer or the Representative, as the case may be, and the
Trustee by any Certificateholder or the Certificate Insurer; or
(iii) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings, or for the winding-up or liquidation of its
affairs, shall have been entered against the Servicer and such decree or order
shall have remained in force, undischarged or unstayed for a period of 60 days;
or
(iv) the Servicer shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings of or relating to the Servicer or
of or relating to all or substantially all of the Servicer's property; or
(v) the Servicer shall admit in writing its inability to pay its debts
as they become due, file a petition to take advantage of any applicable
insolvency or reorganization statute, make an assignment for the benefit of its
creditors, or voluntarily suspend payment of its obligations;
(b) then, and in each and every such case, so long as an Event of
Default shall not have been remedied, and in the case of clause (i) above
(except for clause (i)(C)) if such Event of Default shall not have been remedied
within 30 days after the Servicer has received notice of such Event of Default,
(x) with respect solely to clause (i)(C) above, if such Monthly Advance is not
made earlier than 4:00 p.m. New York time on the Determination Date, the Trustee
shall give immediate telephonic notice of such failure to a Servicing Officer of
the Servicer and, unless such failure is cured, either by receipt of payment or
receipt of evidence satisfactory to the Certificate Insurer (e.g., a wire
reference number communicated by the sending bank) that such funds have been
sent, by 12:00 Noon New York time on the following Business Day, the Trustee
shall immediately assume, pursuant to Section 10.02 hereof, the duties of a
successor Servicer; and (y) in the case of clauses (i)(A), (i)(B), (i)(D),
(i)(E), (ii), (iii), (iv) and (v), the Certificate Insurer or the Majority
Certificateholders, subject to the prior written consent of the Certificate
Insurer, which consent may not be unreasonably withheld, by notice in writing to
the Servicer, may, in addition to whatever rights such Certificateholders or the
Certificate Insurer may have at law or equity including damages, injunctive
relief and specific performance, in each case commence termination of all the
rights and obligations of the Servicer under this Agreement and in and to the
Mortgage Loans and the proceeds thereof, as Servicer. Upon receipt by the
Servicer of a second written notice from the Certificate Insurer or the Majority
Certificateholders stating that they or it intend to terminate the Servicer as a
result of such Event of Default, all authority and power of the Servicer under
this Agreement, whether with respect to the Mortgage Loans or otherwise, shall,
subject to Section 10.02, pass to and be vested in the Trustee or its designee
and the Trustee is hereby authorized and empowered to execute and deliver, on
behalf of the Servicer, as attorney-in-fact or otherwise, any and all documents
and other instruments and do or cause to be done all other acts or things
necessary or appropriate to effect the purposes of such notice of termination,
including, but not limited to, the transfer and endorsement or assignment of the
Mortgage Loans and related documents. The Servicer agrees to cooperate with the
Trustee in effecting the termination of the Servicer's responsibilities and
rights hereunder, including, without limitation, the transfer to the Trustee or
its designee for administration by it of all amounts which shall at the time be
credited by the Servicer to each Principal and Interest Account or thereafter
received with respect to the Mortgage Loans.
Section 10.02 Trustee to Act; Appointment of Successor.
On and after the time the Servicer receives a notice of termination
pursuant to Section 10.01 or the Trustee receives the resignation of the
Servicer evidenced by an Opinion of Counsel pursuant to Section 9.04 or the
Servicer is removed as servicer pursuant to this Article X, the Trustee shall be
the successor in all respects to the Servicer in its capacity as servicer under
this Agreement and the transactions set forth or provided for herein and shall
be subject to all the responsibilities, duties and liabilities relating thereto
placed on the Servicer by the terms and provisions hereof, provided, however,
that the Trustee shall not be liable for any actions of any servicer prior to
it, and that the Trustee shall not be obligated to make advances or payments
pursuant to Sections 6.03, 6.04, 6.11, 6.12, 5.05, 5.10 or 5.14 but only to the
extent the Trustee determines reasonably and in good faith that such advances
would not be recoverable, such determination to be evidenced with respect to
each such advance by a certification of a Responsible Officer of the Trustee. As
compensation therefor, the Trustee shall be entitled to all funds relating to
the Mortgage Loans which the Servicer would have been entitled to receive from
the Principal and Interest Account pursuant to Section 5.04 if the Servicer had
continued to act as servicer hereunder, together with other servicing
compensation in the form of assumption fees, late payment charges, the
Contingency Fee or otherwise as provided in Sections 7.01 and 7.03.
Notwithstanding the above, the Trustee may, if it shall be unwilling to
so act, or shall, if it is unable to so act or if the Majority
Certificateholders or the Certificate Insurer so request in writing to the
Trustee, appoint, or petition a court of competent jurisdiction to appoint, any
established mortgage loan servicing institution acceptable to the Certificate
Insurer, which acceptance shall not be unreasonably withheld, that has a net
worth of not less than $15,000,000 and which is approved as a servicer by FNMA
and FHLMC as the successor to the Servicer hereunder in the assumption of all or
any part of the responsibilities, duties or liabilities of the Servicer
hereunder. Any collections received by the Servicer after removal or resignation
shall be endorsed by it to the Trustee and remitted directly to the Trustee or,
at the direction of the Trustee, to the successor servicer. The compensation of
any successor servicer (including, without limitation, the Trustee) so appointed
shall be the aggregate Servicing Fees, together with the Contingency Fee and
other servicing compensation in the form of assumption fees, late payment
charges or otherwise. In the event the Trustee is required to solicit bids as
provided herein, the Trustee shall solicit, by public announcement, bids from
housing and home finance institutions, banks and mortgage servicing institutions
meeting the qualifications set forth above. Such public announcement shall
specify that the successor servicer and claims administrator shall be entitled
to, with respect to the Mortgage Loans each would be servicing, the full amount
of the aggregate Servicing Fees and Contingency Fee relating to such Mortgage
Loans as servicing compensation, together with the other servicing compensation
in the form of assumption fees, late payment charges or otherwise. Within thirty
days after any such public announcement, the Trustee shall negotiate and effect
the sale, transfer and assignment of the servicing rights and responsibilities
hereunder to the qualified party submitting the highest qualifying bid. The
Trustee shall deduct from any sum received by the Trustee from the successor to
the Servicer in respect of such sale, transfer and assignment all costs and
expenses of any public announcement and of any sale, transfer and assignment of
the servicing rights and responsibilities hereunder and the amount of any
unreimbursed Servicing Advances and Monthly Advances. After such deductions, the
remainder of such sum shall be paid by the Trustee to the Servicer at the time
of such sale, transfer and assignment to the Servicer's successor. The 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 Trustee and any successor servicer in effecting the
termination of the Servicer's servicing responsibilities and rights hereunder
and shall promptly provide the 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 Trustee or such successor servicer, all amounts which then have been or
should have been deposited in the Principal and Interest Account or Spread
Account by the Servicer or which are thereafter received with respect to the
Mortgage Loans. Neither the 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 hereunder. No appointment of a successor to the Servicer
hereunder shall be effective until written notice of such proposed appointment
shall have been provided by the Trustee to each Certificateholder and the
Certificate Insurer, and the Trustee shall have consented thereto. The Trustee
shall not resign as servicer until a successor servicer reasonably acceptable to
the Certificate Insurer has been appointed.
Pending appointment of a successor to the Servicer hereunder, the
Trustee shall act in such capacity as hereinabove provided. In connection with
such appointment and assumption, the Trustee may make such arrangements for the
compensation of such successor out of payments on Mortgage Loans as it and such
successor shall agree; provided, however, that no such compensation shall be in
excess of that permitted the Servicer pursuant to Section 7.03 or otherwise as
provided in this Agreement. The Servicer, the Trustee, and such successor shall
take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession.
Section 10.03 Waiver of Defaults.
The Certificate Insurer or the Majority Certificateholders may, on
behalf of all Certificateholders, and subject to the consent of the Certificate
Insurer, which consent may not be unreasonably withheld, waive any events
permitting removal of the Servicer as servicer pursuant to this Article X,
provided, however, that the Majority Certificateholders or the Certificate
Insurer may not waive a default in making a required distribution on a
Certificate without the consent of the holder of such Certificate. Upon any
waiver of a past default, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been remedied for every
purpose of this Agreement. No such waiver shall extend to any subsequent or
other default or impair any right consequent thereto except to the extent
expressly so waived.
Section 10.04 Transfer of Tax Matters Person Residual Interest.
Upon any termination of, or appointment of any successor to, the
Servicer hereunder, the Servicer shall promptly upon the request of the Trustee
transfer all of the Tax Matters Person Residual Interest to the Representative,
for such time as the Trustee shall serve as successor Servicer and thereafter
the Representative shall transfer such Tax Matters Person Residual Interest to
the entity that is appointed to succeed the Trustee as Servicer.
Section 10.05. Control by Majority Certificateholders.
The Certificate Insurer or the Majority Certificateholders with the
consent of the Certificate Insurer, which consent may not be unreasonably
withheld, may direct the time, method and place of conducting any proceeding
relating to the Trust Fund or the Certificates or for any remedy available to
the Trustee with respect to the Certificates or exercising any trust or power
conferred on the Trustee with respect to the Certificates or the Trust Fund
provided that:
(i) such direction shall not be in conflict with any rule of law or
with this Agreement;
(ii) the Trustee shall have been provided with indemnity satisfactory
to it; and
(iii) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction; provided, however, that
the Trustee need not take any action which it determines might involve it in
liability or may be unjustly prejudicial to the Holders not so directing.
ARTICLE XI
TERMINATION
Section 11.01 Termination.
Subject to Section 11.03, this Agreement shall terminate upon notice to
the Trustee of either: (a) the latter of the final payment or other liquidation
of the last Mortgage Loan or the disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and the
remittance of all funds due thereunder, or (b) mutual consent of the Servicer,
the Certificate Insurer and all Certificateholders in writing; provided,
however, that in no event shall the Trust established by this Agreement
terminate later than twenty-one years after the death of the last surviving
lineal descendant of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, late Ambassador of the United States to
the Court of St. ▇▇▇▇▇, alive as of the date hereof.
Subject to Section 11.03, the Servicer may, at its option, and in the
absence of the exercise thereof by the Servicer, the Certificate Insurer may, at
its option, on any date on which the aggregate Principal Balance of the Mortgage
Loans is less than ten percent of the sum of (i) the aggregate Principal Balance
of the Initial Mortgage Loans as of the Cut-Off Date and (ii) the Original
Pre-Funded Amount (such date, the "Optional Servicer Termination Date"),
purchase on the next succeeding Remittance Date, all of the Mortgage Loans and
any related REO Properties at a price equal to the sum of (x) 100% of the
Principal Balances of the Mortgage Loans before the occurrence of Realized
Losses, and any related REO Property, (y) 30 days' interest thereon (or, with
respect to the Pool II Mortgage Loans, interest for the actual number of days
since the last Remittance Date to but not including the upcoming Remittance
Date) at the weighted average Class A-1, Class A-2, Class A-3, Class A-4, Class
A-5, Class A-6, Class A-7, Class A-8 and Class A-9 Remittance Rates in the case
of the Pool I Mortgage Loans, the weighted average Class A-10 and Class A-11
Remittance Rates in the case of the Pool II Mortgage Loans and the Class A-12
Remittance Rate in the case of the Pool III Mortgage Loans, and (z) the interest
portion of any unreimbursed Insured Payments made by the Certificate Insurer
(the "Termination Price").
On any Remittance Date on or after the Cross-Over Date when Mortgage
Loans with aggregate original Principal Balances that equal or exceed 25% of the
sum of (i) the aggregate Principal Balance of the Initial Mortgage Loans as of
the Cut-Off Date and (ii) the Original Pre- Funded Amount have become Liquidated
Mortgage Loans, the Certificate Insurer may determine to purchase and may cause
the purchase from the Trust Fund of all Mortgage Loans and REO Properties at a
price equal to the sum of the Termination Price with respect to the Trust Fund
and the outstanding and unpaid fees and expenses of the Trustee and the
Servicer. In connection with such purchase, the Servicer shall remit to the
Trustee all amounts then on deposit in the applicable Principal and Interest
Account for deposit to the applicable Certificate Account, which deposit shall
be deemed to have occurred immediately preceding such purchase.
In connection with any purchase pursuant to this Section 11.01, the
Certificate Insurer shall provide to the Trustee an opinion of counsel
experienced in federal income tax matters in form and substance satisfactory to
the Trustee to the effect that such purchase constitutes a "Qualified
Liquidation," as such term is defined in the REMIC Provisions.
Notice of any termination, specifying the Remittance Date upon which
the Trust Fund will terminate and the Certificateholders shall surrender their
Certificates to the Trustee for payment of the final distribution and
cancellation shall be given promptly by the Servicer or the Certificate Insurer
by letter to the Certificateholders mailed during the month of such final
distribution before the Determination Date in such month, specifying (i) the
Remittance Date upon which final payment of the Certificates will be made upon
presentation and surrender of such Certificates at the office of the Trustee
therein designated, (ii) the amount of any such final payment and (iii) that the
Record Date otherwise applicable to such Remittance Date is not applicable,
payments being made only upon presentation and surrender of such Certificates at
the office of the Trustee therein specified. The Servicer shall give such notice
to the Trustee therein specified. The Servicer shall give such notice to the
Trustee at the time such notice is given to Certificateholders. The obligations
of the Certificate Insurer hereunder with respect to the Trust Fund shall
terminate upon the deposit by the Servicer or the Certificate Insurer with the
Trustee of the Termination Price with respect to the Trust Fund. Any obligation
of the Servicer to pay amounts due to the Certificate Insurer and the Trustee
shall survive the termination of the Trust Fund.
In the event that all of the Certificateholders shall not surrender
their Certificates for cancellation within six months after the time specified
in the above-mentioned written notice, the Servicer shall give a second written
notice to such remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto and shall
at the expense of the Trust Fund cause to be published once, in the eastern
edition of The Wall Street Journal notice that such money remains unclaimed. If
within six months after the second notice all of such Certificates shall not
have been surrendered for cancellation, the Trustee may take appropriate steps,
or may appoint an agent to take appropriate steps, to contact the remaining
Certificateholders concerning surrender of their Certificates and the cost
thereof shall be paid out of the funds and other assets which remain subject
hereto. If within the period then specified in the escheat laws of the State of
New York after the second notice all the Certificates shall not have been
surrendered for cancellation, the Class R Certificateholders shall be entitled
to all unclaimed funds and other assets which remain subject hereto and the
Trustee upon transfer of such funds subject hereto and the Trustee upon transfer
of such funds shall be discharged of any responsibility for such funds and the
Certificateholders shall look to the Class R Certificateholders for payment.
Section 11.02. Termination Upon Loss of REMIC Status.
(a) Following a final determination by the Internal Revenue Service, or
by a court of competent jurisdiction, in either case, from which no appeal is
taken within the permitted time for such appeal, or if any appeal is taken,
following a final determination of such appeal from which no further appeal can
be taken, to the effect that either of REMIC I or REMIC II does not and will no
longer qualify as a REMIC pursuant to Section 860D of the Code (the "Final
Determination"), at any time on or after the date which is 30 calendar days
following such Final Determination, (i) the Majority Certificateholders may
direct the Trustee on behalf of REMIC I and REMIC II to adopt a "plan of
complete liquidation" (within the meaning of Section 860F(a)(4) of the Code) and
(ii) the Certificate Insurer may notify the Trustee of the Certificate Insurer's
determination to purchase from REMIC II all Mortgage Loans and all property
theretofore acquired by foreclosure, deed in lieu of foreclosure, or otherwise
in respect of any Mortgage Loan then remaining in REMIC II at a price equal to
the Termination Price for the REMIC II. Upon receipt of such direction by the
Majority Certificateholders or of such notice from the Certificate Insurer, the
Trustee shall notify the Class R Certificateholders of such election to
liquidate or such determination to purchase, as the case may be (the
"Termination Notice"). The Holders of a majority of the Percentage Interest of
the Class R Certificates then outstanding may, within 60 days from the date of
receipt of the Termination Notice (the "Purchase Option Period"), at their
option, purchase from REMIC II all Mortgage Loans and all property theretofore
acquired by foreclosure, deed in lieu of foreclosure, or otherwise in respect of
any Mortgage Loan then remaining in REMIC II at a purchase price equal to the
Termination Price for REMIC II.
(b) If, during the Purchase Option Period, the Class R
Certificateholders have not exercised the option described in the immediately
preceding paragraph, then upon the expiration of the Purchase Option Period (i)
in the event that the Majority Certificateholders have given the Trustee the
direction described in clause (a)(i) above, the Trustee shall sell the Mortgage
Loans and distribute the proceeds of the liquidation of REMIC II in accordance
with the plan of complete liquidation, such that, if so directed, the
liquidation of REMIC II, the distribution of the proceeds of the liquidation and
the termination of this Agreement occur no later than the close of the 60th day,
or such later day as the Class A Certificateholders shall permit or direct in
writing, after the expiration of the Purchase Option Period and (ii) in the
event that the Certificate Insurer has given the Trustee notice of the
Certificate Insurer's determination to purchase from REMIC II the assets
described in clause (a)(ii) preceding, the Certificate Insurer shall so purchase
such assets from REMIC II within 60 days after the expiration of the Purchase
Option Period. In connection with such purchase, the Servicer shall remit to the
Trustee all amounts then on deposit in the Principal and Interest Account for
deposit to the Certificate Account, which deposit shall be deemed to have
occurred immediately preceding such purchase.
(c) Following a Final Determination, the Holders of a majority of the
Percentage Interest of the Class R Certificates then outstanding may, at their
option and upon delivery to the Trustee and the Certificate Insurer of an
opinion of nationally recognized tax counsel selected by the Holders of the
Class R Certificates which opinion shall be reasonably satisfactory in form and
substance to the Majority Certificateholders and the Certificate Insurer to the
effect that the effect of the Final Determination is to increase substantially
the probability that the gross income of REMIC II will be subject to federal
taxation, purchase from REMIC II all Mortgage Loans and all property theretofore
acquired by foreclosure, deed in lieu of foreclosure, or otherwise in respect of
any Mortgage Loan then remaining in REMIC II at a purchase price equal to the
Termination Price for REMIC II. In connection with such purchase, the Servicer
shall remit to the Trustee all amounts then on deposit in the Principal and
Interest Account for deposit to the applicable Certificate Account, which
deposit shall be deemed to have occurred immediately preceding such purchase.
The foregoing opinion shall be deemed satisfactory unless the Majority
Certificateholders give the Holders of a majority of the Percentage Interest of
the Class R Certificates notice that such opinion is not satisfactory within
thirty days after receipt of such opinion.
Section 11.03 Additional Termination Requirements.
(a) In the event the Servicer or the Certificate Insurer exercises its
purchase option as provided in Section 11.01 or 11.02, each of REMIC I and REMIC
II shall be terminated in accordance with the following additional requirements,
unless the Trustee has been furnished with an Opinion of Counsel to the effect
that the failure of the Trust Fund to comply with the requirements of this
Section 11.03 will not (i) result in the imposition of taxes on "prohibited
transactions" on REMIC I or REMIC II as defined in Section 860F of the Code, or
(ii) cause REMIC I or REMIC II to fail to qualify as a REMIC at any time that
any Class A Certificates are outstanding:
(i) Within 90 days prior to the final Remittance Date, the holders of
the Class R-1 and Class R-2 Certificates shall adopt a plan of complete
liquidation of REMIC I and REMIC II, respectively, meeting the requirements of a
"Qualified Liquidation" under Section 860F of the Code and any regulations
thereunder;
(ii) At or after the time of adoption of such a plan of complete
liquidation and at or prior to the final Remittance Date, the Trustee shall sell
for cash all of the assets of REMIC I and REMIC II to the Servicer, the
Certificate Insurer or the Certificate Insurer's designee; and
(iii) At the time of the making of the final payment on the
Certificates, the Trustee shall (x) deposit into and withdraw from the
Certificate Accounts the amount of such final payment and shall distribute or
credit, or cause to be distributed or credited, to the Certificateholders of
each Class, the related Class Principal Balance, plus 30 days' interest thereon
(or, with respect to the Pool II Certificates, interest on the actual number of
days since the last Remittance Date up to but not including the upcoming
Remittance Date) at the related Class Remittance Rate, and (y) to the Class R-1
Certificateholders, distribute all cash on hand after such payment to the
respective Class A Certificateholders and REMIC I and REMIC II shall terminate
at such time.
(b) By their acceptance of the Class R Certificates the holders thereof
hereby (i) agree to adopt such a plan of complete liquidation upon the written
request of the Servicer or Certificate Insurer and to take such other action in
connection therewith as may be reasonably requested by the Servicer and (ii)
appoint the Servicer as their attorney-in-fact, with full power of substitution,
for purposes of adopting such a plan of complete liquidation.
Section 11.04 [Reserved].
Section 11.05 Accounting Upon Termination of Servicer.
Upon termination of the Servicer under Article X hereof, the Servicer
shall:
(a) deliver to its successor or, if none shall yet have been appointed,
to the Trustee the funds in any Principal and Interest Account;
(b) deliver to its successor or, if none shall yet have been appointed,
to the Trustee all Mortgage Files and related documents and statements held by
it hereunder and a Mortgage Loan portfolio computer tape;
(c) deliver to its successor or, if none shall yet have been appointed,
to the Trustee and, upon request, to the Certificateholders a full accounting of
all funds, including a statement showing the Monthly Payments collected by it
and a statement of monies held in trust by it for the payments or charges with
respect to the Mortgage Loans; and
(d) execute and deliver such instruments and perform all acts
reasonably requested in order to effect the orderly and efficient transfer of
servicing of the Mortgage Loans to its successor and to more fully and
definitively vest in such successor all rights, powers, duties,
responsibilities, obligations and liabilities of the Servicer under this
Agreement.
ARTICLE XII
THE TRUSTEE
Section 12.01 Duties of Trustee.
The Trustee, prior to the occurrence of an Event of Default and after
the curing of all Events of Default which may have occurred, undertakes to
perform such duties and only such duties as are specifically set forth in this
Agreement. If an Event of Default has occurred and has not been cured or waived,
the Trustee shall exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in its exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement, provided, however that the
Trustee shall not be responsible for the accuracy or content of any resolution,
certificate, statement, opinion, report, document, order or other instrument
furnished by the Servicer, the Representative, or any Originator hereunder. If
any such instrument is found not to conform to the requirements of this
Agreement in a material manner, the Trustee shall take action as it deems
appropriate to have the instrument corrected, and if the instrument is not
corrected to the Trustee's satisfaction, the Trustee will provide notice thereof
to the Certificateholders.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct; provided, however, that:
(i) Prior to the occurrence of an Event of Default, and after the
curing of all such Events of Default which may have occurred, the duties and
obligations of the Trustee shall be determined solely by the express provisions
of this Agreement, the Trustee shall not be liable except for the performance of
such duties and obligations as are specifically set forth in this Agreement, no
implied covenants or obligations shall be read into this Agreement against the
Trustee and, in the absence of bad faith on the part of the Trustee, the Trustee
may conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or opinions furnished to
the Trustee and conforming to the requirements of this Agreement;
(ii) The Trustee shall not be personally liable for an error of
judgment made in good faith by officers of the Trustee, unless it shall be
proved that the Trustee was negligent in ascertaining the pertinent facts;
(iii) The Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in accordance
with the direction of the Certificate Insurer or the Class A Certificateholders,
relating to the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred upon
the Trustee, under this Agreement;
(iv) In the absence of actual knowledge of an Event of Default other
than an Event of Nonpayment, the Trustee shall not be required to take notice or
be deemed to have notice or knowledge of any default or Event of Default unless
the Trustee shall be specifically notified in writing by the Servicer or the
Certificate Insurer or any of the Class A Certificateholders. In the absence of
actual knowledge or receipt of such notice, the Trustee may conclusively assume
that there is no default or Event of Default; and
(v) The Trustee shall not be required to expend or risk its own funds
or otherwise incur financial liability for the performance of any of its duties
hereunder or the exercise of any of its rights or powers if there is reasonable
ground for believing that the repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it.
Section 12.02 Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 12.01:
(i) The Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, Officers' Certificate, certificate of auditors
or any other certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond or other paper or document believed by
it to be genuine and to have been signed or presented by the proper party or
parties;
(ii) The Trustee may consult with counsel and any opinion of counsel
shall be full and complete authorization and protection in respect of any action
taken or suffered or omitted by it hereunder in good faith and in accordance
with such opinion of counsel;
(iii) The Trustee shall be under no obligation to exercise any of the
trusts or powers vested in it by this Agreement or to institute, conduct or
defend by litigation hereunder or in relation hereto at the request, order or
direction of the Certificate Insurer or any of the Certificateholders, pursuant
to the provisions of this Agreement, unless such Certificateholders or the
Certificate Insurer, as applicable, shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which may be
incurred therein or thereby; nothing contained herein shall, however, relieve
the Trustee of the obligation, upon the occurrence of an Event of Default (which
has not been cured), to exercise such of the rights and powers vested in it by
this Agreement, and to use the same degree of care and skill in its exercise as
a prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs;
(iv) The Trustee shall not be personally liable for any action taken,
suffered or omitted by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this Agreement;
(v) Prior to the occurrence of an Event of Default hereunder and after
the curing of all Events of Default which may have occurred, the Trustee shall
not be bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond or other paper or document, unless
requested in writing to do so by the Certificate Insurer, Holders of Class A
Certificates evidencing Percentage Interests aggregating not less than 25% of
each Class of Class A Certificates; provided, however, that if the payment
within a reasonable time to the Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in the
opinion of the Trustee, not reasonably assured to the Trustee by the security
afforded to it by the terms of this Agreement, the Trustee may require
reasonable indemnity against such expense or liability as a condition to taking
any such action. The reasonable expense of every such examination shall be paid
by the Servicer or, if paid by the Trustee, shall be repaid by the Servicer upon
demand from the Servicer's own funds;
(v) The right of the Trustee to perform any discretionary act
enumerated in this Agreement shall not be construed as a duty, and the Trustee
shall not be answerable for other than its negligence or willful misconduct in
the performance of such act;
(vi) The Trustee shall not be required to give any bond or surety in
respect of the execution of the trust created hereby or the powers granted
hereunder; and
(vii) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys.
(b) Following the Startup Day, except for deposits into the Spread
Account pursuant to Section 6.05, the Trustee shall not knowingly accept any
contribution of assets to the Trust Fund, unless the Trustee shall have received
an Opinion of Counsel to the effect that the inclusion of such assets in the
Trust Fund will not cause the Trust Fund to fail to qualify as a REMIC at any
time that any Certificates are outstanding or subject the Trust Fund to any tax
under the REMIC Provisions or other applicable provisions of federal, New York
State or New York City law or ordinances.
Section 12.03 Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates (other than the
certificate of authentication on the Certificates) shall be taken as the
statements of the Servicer, and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Agreement or of the Certificates or of any Mortgage Loan or
related document. The Trustee shall not be accountable for the use or
application by the Servicer of any of the Certificates or of the proceeds of
such Certificates, or for the use or application of any funds paid to the
Servicer in respect of the Mortgage Loans or deposited in or withdrawn from the
Principal and Interest Account by the Servicer. The Trustee shall not be
responsible for the legality or validity of the Agreement or the validity,
priority, perfection or sufficiency of the security for the Certificates issued
or intended to be issued hereunder.
Section 12.04 Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Certificates with the same rights it would have if it were
not Trustee, and may otherwise deal with the parties hereto.
Section 12.05 Servicer To Pay Trustee's Fees and Expenses.
The Servicer covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to, reasonable compensation (which shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust) for all services rendered by it in the execution of
the trusts hereby created and in the exercise and performance of any of the
powers and duties hereunder of the Trustee, and the Servicer will pay or
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any of the provisions of this Agreement (including the reasonable compensation
and the expenses and disbursements of its counsel and of all persons not
regularly in its employ) except any such expense, disbursement or advance as may
arise from its negligence or bad faith, provided that the Trustee shall have no
lien on the Trust Fund, other than the Expense Accounts, for the payment of its
fees and expenses. To the extent that actual fees and expenses of the Trustee
exceed the amount available for payment thereof on deposit in the Expense
Accounts as of the date such fees and expenses are due and payable, the Servicer
shall reimburse the Trustee for such shortfall out of its own funds without
reimbursement therefor, except as provided in Section 6.03. The Trustee and any
director, officer, employee or agent of the Trustee shall be indemnified by the
Servicer and held harmless against any loss, liability or expense (i) incurred
in connection with any legal action relating to this Agreement or the
Certificates, other than any loss, liability or expense incurred by reason of
willful misfeasance, bad faith or negligence in the performance of duties
hereunder or by reason of reckless disregard of obligations and duties
hereunder, and (ii) resulting from any error in any tax or information return
prepared by the Servicer. The obligations of the Servicer under this Section
12.05 shall survive payment of the Certificates, and shall extend to any
co-trustee appointed pursuant to this Article XII.
Section 12.06 Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be a banking association
organized and doing business under the laws of any state or the United States of
America, (i) authorized under such laws to exercise corporate trust powers, (ii)
having a combined capital and surplus of at least $30,000,000, (iii) except in
the case of The Bank of New York, whose unsecured and unguaranteed long-term
debt obligations shall be rated at least "A" by S&P, or such other rating as is
acceptable to the Certificate Insurer, (iv) subject to supervision or
examination by federal or state authority, and (v) is reasonably acceptable to
the Certificate Insurer. If such banking association 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 its combined capital and surplus shall be deemed to be as set forth in
its most recent report of condition so published. In case at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section, the Trustee shall resign, upon the request of the Certificate Insurer
or the Majority Certificateholders, in the manner and with the effect specified
in Section 12.07.
Section 12.07 Resignation and Removal of the Trustee.
The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice thereof to the Servicer, the Certificate
Insurer and to all Certificateholders. Upon receiving such notice of
resignation, the Servicer shall with the consent of the Certificate Insurer
promptly appoint a successor trustee by written instrument, in duplicate, which
instrument shall be delivered to the resigning Trustee and to the successor
trustee. A copy of such instrument shall be delivered to the Certificateholders
by the Servicer. Unless a successor trustee shall have been so appointed and
have accepted appointment within 60 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee. If the resigning
Trustee fails to petition an appropriate court, the Certificate Insurer may,
after such 60 day period, petition any court of competent jurisdiction for the
appointment of a successor trustee.
If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 12.06 and shall fail to resign after written
request therefor by the Servicer, or if at any time the Trustee shall become
incapable of acting, or shall be adjudged bankrupt or insolvent, or a receiver
of the Trustee or of its property shall be appointed, or any public officer
shall take charge or control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation, then the Servicer
may remove the Trustee and appoint, subject to the approval of the Certificate
Insurer, a successor trustee by written instrument, in duplicate, which
instrument shall be delivered to the Trustee so removed and to the successor
trustee. A copy of such instrument shall be delivered to the Certificateholders
by the Servicer.
The Majority Certificateholders with the consent of the Certificate
Insurer, which consent will not be unreasonably withheld, or the Certificate
Insurer may at any time remove the Trustee and appoint a successor trustee by
written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which instruments
shall be delivered to the Servicer, one complete set to the Trustee so removed
and one complete set to the successor Trustee so appointed.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall become
effective upon acceptance of appointment by the successor trustee as provided in
Section 12.08.
Section 12.08 Successor Trustee.
Any successor trustee appointed as provided in Section 12.07 shall
execute, acknowledge and deliver to the Servicer and to its predecessor trustee
an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor trustee shall become effective and
such successor trustee, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with the like effect as if originally named as trustee
herein. The predecessor trustee shall deliver to the successor trustee all
Mortgage Files and related documents and statements held by it hereunder, and
the Servicer and the predecessor trustee shall execute and deliver such
instruments and do such other things as may reasonably be required for more
fully and certainly vesting and confirming in the successor trustee all such
rights, powers, duties and obligations.
No successor trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor trustee shall be
eligible under the provisions of Section 12.06.
Upon acceptance of appointment by a successor trustee as provided in
this Section, the Servicer shall mail notice of the succession of such trustee
hereunder to all Holders of Certificates at their addresses as shown in the
Certificate Register. If the Servicer fails to mail such notice within 10 days
after acceptance of appointment by the successor trustee, the successor trustee
shall cause such notice to be mailed at the expense of the Servicer.
Section 12.09 Merger or Consolidation of Trustee.
Any Person into which the Trustee may be merged or converted or with
which it may be consolidated or any corporation or national banking association
resulting from any merger, conversion or consolidation to which the Trustee
shall be a party, or any corporation or national banking association succeeding
to the business of the trustee, shall be the successor of the Trustee hereunder,
provided such corporation or national banking association shall be eligible
under the provisions of Section 12.06, without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
Section 12.10 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions hereof, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust Fund or property securing the same may at the time be located, the
Servicer and the Trustee acting jointly shall have the power and shall execute
and deliver all instruments to appoint one or more Persons approved by the
Trustee, and the Certificate Insurer pursuant to the procedure set forth below,
to act as co- trustee or co-trustees, jointly with the Trustee, or separate
trustee or separate trustees, of all or any part of the Trust Fund, and to vest
in such Person or Persons, in such capacity, such title to the Trust Fund, or
any part thereof, and, subject to the other provisions of this Section 12.10,
such powers, duties, obligations, rights and trusts as the Servicer and the
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 case an Event of Default shall have occurred and be continuing,
the Trustee alone shall have the power to make such appointment. No co- trustee
or separate trustee hereunder shall be required to meet the terms of eligibility
as a successor trustee under Section 12.06 hereunder and no notice to Holders of
Certificates of the appointment of co-trustee(s) or separate trustee(s) shall be
required under Section 12.08 hereof. The Trustee shall notify the Certificate
Insurer prior to the appointment of any co-trustee(s) or separate trustee(s) and
the Certificate Insurer shall have four Business Days from its receipt of such
notice to notify the Trustee whether it, in its reasonable judgment, disapproves
of such co- trustee(s) or separate trustee(s). If the Certificate Insurer does
not notify the Trustee within such time frame, it will be deemed to have
approved such co-trustee(s) or separate trustee(s). If the Certificate Insurer
notifies the Trustee within such time frame that it, in its reasonable judgment,
disapproves of such co-trustee(s) or separate trustee(s) (which notice shall be
accompanied by the name(s) of the Certificate Insurer's alternative proposed
co-trustee(s) or separate trustee(s)), such appointments shall not be effective.
In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 12.10, all rights, powers, duties and obligations
conferred or imposed upon the trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed (whether as Trustee hereunder or as
successor to the Servicer hereunder), the Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the Trust Fund or any
portion thereof in any such jurisdiction) shall be exercised and performed by
such separate trustee or co-trustee at the direction of the Trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article XII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. The Trustee shall not be responsible
for any action or inaction of any such separate trustee or co-trustee. If any
separate trustee or co-trustee shall die, become incapable of acting, resign or
be removed, all of its estates, properties, rights, remedies and trusts shall
vest in and be exercised by the Trustee, to the extent permitted by law, without
the appointment of a new or successor trustee.
Section 12.11 Authenticating Agent.
Upon the request of the Servicer, the Trustee shall appoint an
Authenticating Agent, with power to act on the Trustee's behalf and subject to
its direction in the authentication and delivery of the Certificates in
connection with transfers and exchanges under Section 4.02, as fully to all
intents and purposes as though the Authenticating Agent had been expressly
authorized by that Section to authenticate and deliver Certificates. For all
purposes of this Agreement, the authentication and delivery of Certificates by
the Authenticating Agent pursuant to this Section shall be deemed to be the
authentication and delivery of Certificates by the Trustee. Such Authenticating
Agent shall at all times be a Person meeting the requirements for the Trustee
set forth in Section 12.06, other than Section 12.06(iv).
Any corporation or national banking association into which any
Authenticating Agent may be merged or converted or with which it may be
consolidated, or any corporation or national banking association resulting from
any merger, consolidation or conversion to which any Authenticating Agent shall
be a party, or any corporation or national banking association succeeding to the
corporate trust business of any Authenticating Agent, shall be the successor of
the Authenticating Agent hereunder, if such successor corporation or national
banking association is otherwise eligible under this Section, without the
execution or filing of any further act on the part of the parties hereto or the
Authenticating Agent or such successor corporation.
Any Authenticating Agent may at any time resign by giving notice of
resignation to the Trustee and the Servicer. The Trustee may at any time
terminate the agency of any Authenticating Agent by giving written notice of
termination to such Authenticating Agent and the Servicer. Upon receiving such a
notice of resignation or upon such a termination, or in case at any time any
Authenticating Agent shall cease to be eligible under this Section, the Trustee
shall promptly appoint a successor Authenticating Agent and shall give written
notice of such appointment to all Certificateholders as their names and
addresses appear on the Certificate Register. The Servicer agrees to pay to the
Authenticating Agent from time to time reasonable compensation for its services.
The provisions of Sections 4.04 and 12.03 shall be applicable to any
Authenticating Agent.
Section 12.12 Tax Returns and Reports.
The 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 REMIC I and REMIC II and, upon request within
five (5) Business Days after its receipt thereof, shall (i) sign on behalf of
REMIC I and REMIC II any Tax Return that the 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.
For Federal income tax purposes, the taxable year of the Trust Fund
shall be a calendar year and the Servicer shall maintain or cause the
maintenance of the books of REMIC I and REMIC II on the accrual method of
accounting.
The Servicer shall prepare and file or cause to be filed with the
Internal Revenue Service Federal tax information returns with respect to REMIC I
and REMIC II 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 Holder of Certificates at any time during
the calendar year for which such returns or reports are made such statements or
information at the times and in the manner as may be required thereby. In
connection with the foregoing, the Servicer shall provide the name, address and
telephone number of the person who can be contacted to obtain information
required to be reported to the holders of regular interests in REMIC I and REMIC
II (the "REMIC Reporting Agent") as required by IRS Form 8811. The Servicer
shall indicate the election to treat each of REMIC I and REMIC II as a REMIC
(which election shall apply to the taxable period ending December 31, 1996 and
each calendar year thereafter) in such manner as the Code or applicable Treasury
regulations may prescribe. The Trustee shall sign all tax 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. The
Representative is hereby designated as the Tax Matters Person (within the
meaning of Section 1.860F-4(d) of the Regulations) for each of REMIC I and REMIC
II. Any Holder of a Class R Certificate will by acceptance thereof so appoint
the Representative as agent and attorney-in-fact for the purpose of acting as
Tax Matters Person for the related REMIC. In the event that the Code or
applicable Treasury Regulations prohibit the Trustee from signing tax or
information returns or other statements, or the Representative from acting as
Tax Matters Person (as an agent or otherwise), the Trustee or the Representative
shall take whatever action that in its sole good faith judgment is necessary for
the proper filing of such information returns or for the provision of a tax
matters person, including designation of the Holder of a Class R Certificate to
sign such returns or act as tax matters person. Each Holder of a Class R
Certificate shall be bound by this Section.
The Trustee shall provide upon request such information as required in
Section 860D(a)(6)(B) of the Code to the Internal Revenue Service and any Person
purporting to transfer a Class R Certificate.
Section 12.13 Appointment of Custodians.
The Trustee may, with the consent of the Servicer, appoint one or more
Custodians to hold all or a portion of the Trustee's Mortgage Files as agent for
the Trustee, by entering into a Custodial Agreement. Subject to this Article
XII, the Trustee agrees to comply with the terms of each Custodial Agreement and
to enforce the terms and provisions thereof against the Custodian for the
benefit of the Certificateholders and the Certificate Insurer. The Trustee shall
be liable for the fees of any Custodian appointed hereunder. Each Custodian
shall be a depository institution subject to supervision by federal or state
authority, shall be qualified to do business in the jurisdiction in which it
holds any Mortgage File.
Section 12.14. Protection of Trust Fund.
(a) The Trustee will hold the Trust Fund in trust for the benefit of
the Holders and the Certificate Insurer and, upon request of the Certificate
Insurer, or, with the consent of the Certificate Insurer, at the request of the
Representative, will from time to time execute and deliver all such supplements
and amendments hereto pursuant to Section 13.02 hereof and all instruments of
further assurance and other instruments, and will take such other action upon
such request as it deems reasonably necessary or advisable, to:
(i) more effectively hold in trust all or any portion of the Trust
Fund;
(ii) perfect, publish notice of, or protect the validity of any grant
made or to be made by this Agreement;
(iii) enforce any of the Mortgage Loans; or
(iv) preserve and defend title to the Trust Fund and the rights of the
Trustee, and the ownership interests of the Owners represented thereby, in the
Trust Fund against the claims of all Persons and parties.
The Trustee shall send copies of any request received from the
Certificate Insurer or the Representative to take any action pursuant to this
Section 12.14 to the others.
(b) Subject to Article X hereof, the Trustee shall have the power to
enforce, and shall enforce the obligations of the other parties to this
Agreement and of the Certificate Insurer, by action, suit or proceeding at law
or equity, and shall also have the power to enjoin, by action or suit in equity,
any acts or occurrences which may be unlawful or in violation of the rights of
the Holders; provided, however, that nothing in this Section 12.14 shall require
any action by the Trustee unless the Trustee shall first (i) have been furnished
indemnity satisfactory to it and (ii) when required by this Agreement, have been
requested to take such action by the Majority Certificateholders, the
Certificate Insurer or the Representative in accordance with the terms of this
Agreement.
(c) The Trustee shall execute any instrument required pursuant to this
Section so long as such instrument does not conflict with this Agreement or with
the Trustee's fiduciary duties.
Section 12.15. Calculation of LIBOR.
(a) On each Interest Determination Date, the Trustee will determine
LIBOR based on the rate for one-month U.S. dollar deposits (the "One Month Index
Maturity") which appears on Telerate Page 3750 as of 11:00 a.m., London time, on
such date in determining the Class A-10 Remittance Rate for the Remittance Date
in the following month. If such LIBOR rate does not appear on Telerate Page
3750, the LIBOR rate for that day will be determined on the basis of the rates
at which deposits in United States dollars, having the One-Month Index Maturity
and in a principal amount of not less than U.S. $1,000,000, are offered at
approximately 11:00 a.m., London time, on that day to prime banks in the London
interbank market by the Reference Banks. The 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 day will be the
arithmetic mean of the quotations. If fewer than two quotations are provided,
the rate for that day will be the arithmetic mean of the rates quoted by major
banks in New York City, selected by the Trustee, at approximately 11:00 a.m.,
New York City time, on that day for loans in United States dollars to leading
European banks having a One-Month Index Maturity and in a principal amount equal
to an amount of not less than U.S. $1,000,000; provided that if the banks
selected as aforesaid are not quoting as mentioned in this sentence, LIBOR in
effect for the applicable Interest Period will be LIBOR in effect for the
previous Interest Period.
Neither the Representative, Servicer nor the Trustee shall have any
liability or responsibility to any Person for the selection of any Reference
Bank for the purpose of determining LIBOR. In determining LIBOR and the Class
A-10 Remittance Rate, the Trustee may conclusively rely and shall be protected
in relying upon the rates appearing on Telerate Page 3750 or the offered
quotations (whether written, oral or on Telerate Page 3750) from Reference
Banks, as appropriate, in effect from time to time. Neither of the
Representative, the Servicer, the Certificate Insurer nor the Trustee shall have
liability or responsibility to any Person for (i) the Trustee's selection of
Reference Banks for purposes of determining LIBOR or (ii) the Trustee's or the
Servicer's inability, as applicable, following a good-faith reasonable effort,
to obtain such quotations from Reference Banks or such New York City banks or to
determine such arithmetic mean, all as provided for in this Section 12.15.
The establishment of LIBOR and the Class A-10 Remittance Rate by the
Trustee shall (in the absence of manifest error) be final, conclusive and
binding upon each Holder of a Certificate, the Representative, the Servicer and
the Certificate Insurer.
The Trustee is not responsible for determining (or for the failure of
the Servicer to determine) the Net Funds Cap.
Section 12.16. Luxembourg Reports and Notices.
For so long as a Class of Global Certificates is Outstanding, the
Trustee will publish or will cause to be published following each Remittance
Date in an Approved Luxembourg Newspaper a notice to the effect that the
information set forth in the Servicer's Certificate delivered pursuant to
Section 6.10 will be available for review at the main office of the Listing
Agent for the Global Certificates in Luxembourg City, Luxembourg. The Trustee
also will send such statement directly to the Luxembourg Stock Exchange. The
main office of the Listing Agent is Kredietbank S.A. Luxembourgeois, ▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇-▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, or such other address as the representative
may advise the Trustee in writing.
In the event that definitive Global Certificates are issued, notices to
Global Certificateholders will also be given by the Trustee by mail to the
addresses of such holders as they appear in the Certificate Register.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.01 Acts of Certificateholders.
Except as otherwise specifically provided herein, whenever
Certificateholder action, consent or approval is required under this Agreement,
such action, consent or approval shall be deemed to have been taken or given on
behalf of, and shall be binding upon, all Certificateholders if the Majority
Certificateholders agree to take such action or give such consent or approval.
Section 13.02 Amendment.
(a) This Agreement may be amended from time to time by the Servicer and
the Trustee by written agreement, upon the prior written consent of the
Certificate Insurer, without the notice to or consent of the Certificateholders,
to cure any ambiguity, to correct or supplement any provisions herein, to comply
with any changes in the Code, or to make any other provisions with respect to
matters or questions arising under this Agreement which shall not be
inconsistent with the provisions of this Agreement, any Custodial Agreement or
the Insurance Agreement; provided, however, that such action shall not, as
evidenced by an Opinion of Counsel delivered to the Trustee, adversely affect
the interests of any Certificateholder in any material respect or any other
party and further provided that no such amendment shall reduce in any manner the
amount of, or delay the timing of, payments received on Mortgage Loans which are
required to be distributed on any Certificate without the consent of the Holder
of such Certificate, or change the rights or obligations of any other party
hereto without the consent of such party.
(b) This Agreement may be amended from time to time by the Originators,
the Representative, the Servicer and the Trustee, with the prior written consent
of the Certificate Insurer, the Majority Certificateholders and the Holders of
the majority of the Percentage Interest in each of the Class X, Class R-1 and
Class R-2 Certificates for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Holders; provided, however, that no
such amendment shall be made unless the Trustee receives an Opinion of Counsel,
at the expense of the party requesting the change, that such change will not
adversely affect the status of either REMIC I or REMIC II as a REMIC or cause a
tax to be imposed on REMIC I or REMIC II, and provided further, that no such
amendment shall reduce in any manner the amount of, or delay the timing of, any
amounts which are required to be distributed on any Certificate without the
consent of the Holder of such Certificate or reduce the percentage for each
Class the Holders of which are required to consent to any such amendment without
the consent of the Holders of 100% of each Class of Certificates affected
thereby.
(c) It shall not be necessary for the consent of Holders under this
Section to approve the particular form of any proposed amendment, but it shall
be sufficient if such consent shall approve the substance thereof.
Section 13.03 Recordation of Agreement.
To the extent permitted by applicable law, this Agreement is subject to
recordation in all appropriate public offices for real property records in all
of the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Servicer at the Certificateholders' expense on direction of the Majority
Certificateholders, but only when accompanied by an Opinion of Counsel to the
effect that such recordation materially and beneficially affects the interests
of the Certificateholders or is necessary for the administration or servicing of
the Mortgage Loans.
Section 13.04 Duration of Agreement.
This Agreement shall continue in existence and effect until terminated
as herein provided.
Section 13.05 Governing Law.
This Agreement shall be construed in accordance with the laws of the
State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws, without giving
effect to principles of conflicts of law.
Section 13.06 Notices.
All demands, notices and communications hereunder shall be in writing
and shall be deemed to have been duly given if personally delivered at or mailed
by overnight mail, certified mail or registered mail, postage prepaid, to (i) in
the case of the Representative, the Servicer and each Originator, The Money
Store Inc., ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Executive
Vice President, or such other addresses as may hereafter be furnished to the
Certificateholders in writing by the Representative and the Servicer, (ii) in
the case of the Trustee, The Bank of New York, 101 ▇▇▇▇▇▇▇ Street, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust MBS Administration,
(iii) in the case of the Certificateholders, as set forth in the Certificate
Register, (iv) in the case of Moody's, to ▇▇▇▇▇'▇ Investors Service, Home Equity
Group, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, and (v) in the
case of S&P, to Standard & Poor's Corporation, ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Residential Mortgages. Any such notices shall
be deemed to be effective with respect to any party hereto upon the receipt of
such notice by such party, except that notices to the Certificateholders shall
be effective upon mailing or personal delivery.
Section 13.07 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be held invalid for any reason whatsoever, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other covenants,
agreements, provisions or terms of this Agreement.
Section 13.08 No Partnership.
Nothing herein contained shall be deemed or construed to create a
co-partnership or joint venture between the parties hereto and the services of
the Servicer shall be rendered as an independent contractor and not as agent for
the Certificateholders.
Section 13.09 Counterparts.
This Agreement may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same agreement.
Section 13.10 Successors and Assigns.
This Agreement shall inure to the benefit of and be binding upon the
Representative, the Servicer, the Originators, the Trustee and the
Certificateholders and their respective successors and assigns.
Section 13.11 Headings.
The headings of the various sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed to be part of
this Agreement.
Section 13.12 The Certificate Insurer.
Any right conferred to the Certificate Insurer shall be suspended
during any period in which the Certificate Insurer is in default in its payment
obligations under a Certificate Insurance Policy. At such time as the
Certificates are no longer outstanding hereunder, and no amounts owed to the
Certificate Insurer hereunder remain unpaid, the Certificate Insurer's rights
hereunder shall terminate. The notice address of the Certificate Insurer is MBIA
Insurance Corporation, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Surveillance Department (The Money Store).
Section 13.13 Paying Agent.
The Trustee may, subject to the eligibility requirements for the
Trustee set forth in Section 12.06 hereof, other than Section 12.06(iv), appoint
one or more 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 Trustee.
Each such Paying Agent other than the Trustee shall execute and deliver
to the Trustee an instrument in which such Paying Agent shall agree with the
Trustee, subject to the provisions of Section 6.08, that such Paying Agent will:
(i) allocate all sums received for distribution to the Holders of
Certificates of each Class for which it is acting as Paying Agent on each
Remittance Date among such Holders in the proportion specified by the Trustee;
and
(ii) hold all sums held by it for the distribution of amounts due with
respect to the Certificates in trust for the benefit of the Holders entitled
thereto until such sums shall be paid to such Holders or otherwise disposed of
as herein provided and pay such sums to such Persons as herein provided.
Any Paying Agent other than the 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 Trustee. Any such Paying Agent may
be removed at any time by an instrument filed with such Paying Agent signed by
the Trustee.
In the event of the resignation or removal of any Paying Agent other
than the 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
Trustee.
Upon the appointment, removal or notice of resignation of any Paying
Agent, the Trustee shall notify the Certificate Insurer and the
Certificateholders by mailing notice thereof to their addresses appearing on the
Certificate Register.
Section 13.14 Notification to Rating Agencies.
The Trustee shall give prompt notice to the Rating Agencies of the
occurrence of any of the following events of which it has received notice: (1)
any modification or amendment to this Agreement, (2) any appointment of a
Custodian, (3) any change of the Trustee or the Servicer (4) any Event of
Default, and (5) the final payment of all the Certificates. The Servicer shall
promptly deliver to the Rating Agencies a copy of each of the Servicer's
Certificates. Further, the Representative shall give prompt notice to the Rating
Agencies if the Representative or any of its affiliates acquire any Class A
Certificates, which notice shall acknowledge that the Representative, or such
affiliate understands that such Class A Certificates so acquired will not be
entitled to the benefits of the Certificate Insurance Policy and, accordingly,
will not be rated by the Rating Agencies so long as such Class A Certificates
are owned by the Representative or any such affiliate.
Section 13.15 Third Party Rights.
The Trustee, the Representative, the Servicer and each of the
Originators listed herein agree that the Certificate Insurer shall be deemed a
third-party beneficiary of this Agreement entitled to all the rights and
benefits set forth herein as fully as if it were a party hereto.
IN WITNESS WHEREOF, the Representative, the Servicer, the Trustee and
each Originator have caused their names to be signed hereto by their respective
officers thereunto duly authorized as of the day and year first above written.
THE MONEY STORE INC., as Representative and Servicer
By:________________________________
Name: ▇▇▇▇▇▇ Dear
Title: Executive Vice President
THE BANK OF NEW YORK, as Trustee
By:________________________________
Name:
Title:
The Originators
The Money Store/Minnesota Inc.
The Money Store/D.C. Inc.
The Money Store/Kentucky Inc.
The Money Store Home Equity Corp.
TMS Mortgage Inc.
By:_______________________________
Name: ▇▇▇▇▇▇ Dear
Title: Executive Vice President
STATE OF NEW YORK )
):ss.:
COUNTY OF NEW York )
On the 31st day of March, 1997 before me, a Notary Public in and for
said State, personally appeared ____________________ known to me to be an
officer of The Bank of New York, a New York banking corporation that executed
the within instrument, and also known to me to be the person who executed it on
behalf of said New York banking corporation, and acknowledged to me that such
New York banking corporation, executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
Notary Public
My Commission expires
STATE OF NEW YORK )
):ss.:
COUNTY OF NEW YORK )
On the 31st day of March, 1997 before me, a Notary Public in and for
the State of New York, personally appeared ▇▇▇▇▇▇ Dear known to me to be the
Executive Vice President of The Money Store Inc., one of the corporations that
executed the within instrument and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
Notary Public
My Commission expires
STATE OF NEW YORK )
):ss.
COUNTY OF NEW YORK )
On the 31st day of March, 1997 before me, a Notary Public in and for
the State of New York, personally appeared ▇▇▇▇▇▇ Dear known to me to be the
Executive Vice President of each Originator listed on Exhibit I to the within
instrument, and also known to me to be the person who executed it on behalf of
each such corporation, and acknowledged to me that each such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
Notary Public
My Commission expires
SCHEDULE I
DESCRIPTION OF CERTAIN LITIGATION
None.
SCHEDULE II
AUCTION PROCEDURES
ARTICLE I
Except as otherwise specified herein, or as the context may require,
capitalized terms used but not not defined herein are defined in the Pooling and
Servicing Agreement dated as of February 28, 1997 (the "Pooling and Servicing
Agreement") among the Bank of New York, as trustee, The Money Store Inc., as
representative, servicer and claims administrator and the Originators listed
therein.
SECTION 1.1 Definitions.
"All Hold Rate" means ninety percent (90%) of One-Month LIBOR.
"Auction" means the implementation of the Auction Procedures on an
Auction Date.
"Auction Agent" means the Initial Auction Agent under the Initial
Auction Agent Agreement unless and until a Substitute Auction Agent Agreement
becomes effective, after which "Auction Agent" shall mean the Substitute Auction
Agent.
"Auction Agent Agreement" means the Initial Auction Agent Agreement
unless and until a Substitute Auction Agent Agreement is entered into, after
which "Auction Agent Agreement" shall mean such Substitute Auction Agent
Agreement.
"Auction Agent Fee" has the meaning set forth in the Auction Agent
Agreement.
"Auction Agent Fee Rate" has the meaning set forth in the Auction
Agent Agreement.
"Auction Date" means, initially, April 14, 1997, and thereafter, the
Business Day immediately preceding the first day of each Auction Period for each
Class of Auction Rate Certificates, other than:
a. each Auction Period commencing after the ownership of such Class
of Auction Rate Certificates is no longer maintained in
Book-Entry Form by the Depository;
b. each Auction Period commencing after and during the continuance
of a Certificate Insurer Default; or
c. each Auction Period commencing less than two Business Days after
the cure or waiver of a Certificate Insurer Default.
"Auction Period" means, with respect to each Class of Auction Rate
Certificates, the Interest Period applicable to such Class of Certificates
during which time the related Class Remittance Rate is determined pursuant to
Section 2.1.1 hereof, which Auction Period (after the Initial Period for such
Class) initially shall commence on each Remittance Date and shall continue
through the day immediately preceding the next Remittance Date.
"Auction Procedures" means the procedures set forth in Section 2.1.1
hereof by which the Auction Rate is determined.
"Auction Rate" means the rate of interest per annum that results from
implementation of the Auction Procedures and is determined as described in
Section 2.1.1(c)(ii) hereof.
"Auction Rate Certificates" means the Class A-11 Certificates.
"Authorized Denominations" means, with respect to the Auction Rate
Certificates, $25,000 and integral multiples of $25,000 in excess thereof.
"Available Auction Rate Certificates" has the meaning set forth in
Section 2.1.1(c)(i)(A) hereof.
"Bid" has the meaning set forth in Section 2.1.1(a)(i) hereof.
"Bid Auction Rate" has the meaning set forth in Section 2.1.1(c)(i)
hereof.
"Bidder" has the meaning set forth in Section 2.1.1(a)(i) hereof.
"Book-Entry Form" or "Book-Entry System" means a form or system under
which (i) the beneficial right to principal and interest may be transferred only
through a book entry, (ii) physical securities in registered form are issued
only to a Depository or its nominee as registered owner, with the securities
"immobilized" to the custody of the Depository, and (iii) the book entry is the
record that identifies the owners of beneficial interests in that principal and
interest.
"Broker-Dealer" means Prudential Securities Incorporated and ▇▇▇▇▇▇
Brothers Inc. or any other broker or dealer (each as defined in the Securities
Exchange Act of 1934, as amended), commercial bank or other entity permitted by
law to perform the functions required of a Broker-Dealer set forth in the
Auction Procedures that (a) is a Participant (or an affiliate of a Participant),
(b) has been appointed as such by the Representative pursuant to Section 2.1.6
hereof and (c) has entered into a Broker-Dealer Agreement that is in effect on
the date of reference.
"Broker-Dealer Agreement" means each agreement between the Auction
Agent and a Broker-Dealer, and approved by the Representative, pursuant to which
the Broker-Dealer agrees to participate in Auctions as set forth in the Auction
Procedures, as from time to time amended or supplemented. Each Broker-Dealer
Agreement shall be in substantially the form of the Broker-Dealer Agreement
dated as of March 31, 1997 between Bankers Trust Company, as Auction Agent, and
Prudential Securities Incorporated, as Broker-Dealer.
"Broker-Dealer Fee" has the meaning set forth in the Auction Agent
Agreement.
"Broker-Dealer Fee Rate" has the meaning set forth in the Auction
Agent Agreement.
"Certificate Insurer Default" means a payment default by the
Certificate Insurer under the Certificate Insurance Policy relating to the
Auction Rate Certificates.
"Class Initial Rate" means one month LIBOR minus .02% per annum.
"Class Initial Rate Adjustment Date" means, with respect to the
Auction Rate Certificates, April 15, 1997.
"Class Remittance Rate Limitation" means a per annum rate equal to
14%.
"Class Rate Adjustment Date" means the date on which a Class
Remittance Rate is effective, and means, with respect to the Auction Rate
Certificates, the date of commencement of each related Auction Period.
"Class Rate Determination Date" means, with respect to any Class of
Auction Rate Certificates, the related Auction Date, or if no Auction Date is
applicable to such Auction Rate Certificates, the Business Day immediately
preceding the date of commencement of the related Auction Period.
"Class Remittance Rate" means, with respect to the Initial Period, the
Class Initial Rate, and thereafter, each variable rate of interest per annum
borne by a Class of Auction Rate Certificates for each Interest Period and
determined in accordance with the provisions of Sections 1.2 and 2.1 hereof;
provided, however, that in the event of a Certificate Insurer Default, the Class
Remittance Rate shall equal the Non-Payment Rate; provided, further, however,
that such Class Remittance Date shall in no event exceed the Class Remittance
Rate Limitation.
"Existing Certificateholder" means (i) with respect to and for the
purpose of dealing with the Auction Agent in connection with an Auction, a
Person who is a Broker-Dealer listed in the Existing Certificateholder Registry
at the close of business on the Business Day immediately preceding such Auction
and (ii) with respect to and for the purpose of dealing with the Broker-Dealer
in connection with an Auction, a Person who is a beneficial owner of any Class
of Auction Rate Certificates.
"Existing Certificateholder Registry" means the registry of Persons
who are owners of the Auction Rate Certificates, maintained by the Auction Agent
as provided in the Auction Agent Agreement.
"Final Maturity Date" means April 15, 2028 with respect to the Auction
Rate Certificates.
"Hold Order" has the meaning set forth in Section 2.1.1(a)(i) hereof.
"Initial Auction Agent" means Bankers Trust Company, a New York
banking corporation, its successors and assigns.
"Initial Auction Agent Agreement" means the Auction Agent Agreement
dated as of March 31, 1997, by and among the Trustee and the Initial Auction
Agent, including any amendment thereof or supplement thereto.
"Initial Period" means, with respect to any Class of Auction Rate
Certificates, the period commencing on the Closing Date and continuing through
the day immediately preceding the Class Initial Rate Adjustment Date.
"Interest Period" means, with respect to a Class of Auction Rate
Certificates, the applicable Initial Period and each period commencing on a
Class Rate Adjustment Date for such Class and ending on the day before (i) the
next Class Rate Adjustment Date for such Class or (ii) the Final Maturity Date
of such Class, as applicable.
"LIBOR Determination Date" means, with respect to a Class of Auction
Rate Certificates, the date which is both a Business Day and a London Banking
Day prior to the commencement of each related Interest Period.
"London Banking Day" means any Business Day on which dealings in
deposits in United States dollars are transacted in the London interbank market.
"Market Agent" means Prudential Securities Incorporated, in such
capacity hereunder, or any successor to it in such capacity hereunder.
"Maximum Auction Rate" means, with respect to the Auction Rate
Certificates, either (A) One-Month LIBOR plus 0.60% (if both ratings assigned by
the Rating Agencies to the Auction Rate Certificates are "Aa3" or "AA-" or
better) or (B) One-Month LIBOR plus 1.00% (if any one of the ratings assigned by
the Rating Agencies to the Auction Rate Certificates is less than "Aa3" or
"AA-"). For purposes of the Auction Agent and the Auction Procedures, the
ratings referred to in this definition shall be the last ratings of which the
Auction Agent has been given notice pursuant to the Auction Agent Agreement.
"Minimum Auction Rate" means One-Month LIBOR less 0.20%.
"Non-Payment Rate" means One-Month LIBOR plus 0.60%.
"Notice of Fee Rate Change" means a notice of a change in the Auction
Agent Fee Rate or the Broker-Dealer Fee Rate substantially in the form of
Exhibit E to the Auction Agent Agreement.
"One-Month LIBOR" means the London interbank offered rate for deposits
in U.S. dollars having a maturity of one month commencing on the related LIBOR
Determination Date (the "Index Maturity") which appears on Telerate Page 3750 as
of 11:00 a.m., London time, on such LIBOR Determination Date. If such rate does
not appear on Telerate Page 3750, the rate for that day will be determined on
the basis of the rates at which deposits in U.S. dollars, having the Index
Maturity and in a principal amount of not less than U.S. $1,000,000, are offered
at approximately 11:00 a.m., London time, on such LIBOR Determination Date to
prime banks in the London interbank market by the Reference Banks. The Auction
Agent will request the principal London office of each of such Reference Banks
to provide a quotation of its rate. If at least two such quotations are
provided, the rate for that day will be the arithmetic mean of the quotations.
If fewer than two quotations are provided, the rate for that day will be the
arithmetic mean of the rates quoted by major banks in New York City, selected by
the Auction Agent, at approximately 11:00 a.m., New York City time, on such
LIBOR Determination Date for loans in U.S. dollars to leading European banks
having the Index Maturity and in a principal amount equal to an amount of not
less than U.S. $1,000,000; provided that if the banks selected as aforesaid are
not quoting as mentioned in this sentence, One-Month LIBOR in effect for the
applicable Interest Period will be One-Month LIBOR in effect for the previous
Interest Period.
"Order" has the meaning set forth in Section 2.1.1(a)(i) hereof.
"Outstanding" means, as of the date of determination, all Auction Rate
Certificates theretofore authenticated and delivered under the Pooling and
Servicing Agreement except:
(i) Auction Rate Certificates theretofore cancelled by the Note
Registrar or delivered to the Note Registrar for cancellation;
(ii) Auction Rate Certificates or portions thereof the payment
for which money in the necessary amount has been theretofore deposited
with the Trustee or any Paying Agent in trust for the
Certificateholders thereof; and
(iii) Auction Rate Certificates in exchange for or in lieu of
other Auction Rate Certificates which have been authenticated and
delivered pursuant to the Pooling and Servicing Agreement unless proof
satisfactory to the Trustee is presented that any such Certificates
are held by a bona fide purchaser.
"Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time the Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
"Potential Certificateholder" means any Person (including an Existing
Certificateholder that is (i) a Broker-Dealer when dealing with the Auction
Agent and (ii) a potential beneficial owner when dealing with a Broker-Dealer)
who may be interested in acquiring Auction Rate Certificates (or, in the case of
an Existing Certificateholder thereof, an additional principal amount of Auction
Rate Certificates).
"Reference Banks" means leading banks selected by the Auction Agent
and engaged in transactions in Eurodollar deposits in the international
Eurocurrency market.
"Sell Order" has the meaning set forth in Section 2.1.1(a)(i) hereof.
"Submission Deadline" means 12:30 p.m., eastern time, on any Auction
Date or such other time on any Auction Date by which Broker-Dealers are required
to submit Orders to the Auction Agent as specified by the Auction Agent from
time to time.
"Submitted Bid" has the meaning set forth in Section 2.1.1(c)(i)
hereof.
"Submitted Hold Order" has the meaning set forth in Section
2.1.1(c)(i) hereof.
"Submitted Order" has the meaning set forth in Section 2.1.1(c)(i)
hereof.
"Submitted Sell Order" has the meaning set forth in Section
2.1.1(c)(i) hereof.
"Substitute Auction Agent" means the Person with whom the Trustee
enters into a Substitute Auction Agent Agreement.
"Substitute Auction Agent Agreement" means an auction agent agreement
containing terms substantially similar to the terms of the Initial Auction Agent
Agreement, whereby a Person having the qualifications required by Section 2.1.5
of these Auction Procedures agrees with the Trustee and the Representative to
perform the duties of the Auction Agent under this Agreement.
"Sufficient Bids" has the meaning set forth in Section 2.1.1(c)(i)
hereof.
"Telerate Page 3750" means the display page so designated on the Dow
▇▇▇▇▇ Telerate Service (or such other page as may replace that page on that
service for the purpose of displaying comparable rates or prices).
SECTION 1.2 General Provisions.
During the Initial Period, the Auction Rate Certificates shall bear
interest at the Class Initial Rate. Thereafter, the Auction Rate Certificates
shall bear interest at a Class Remittance Rate, as determined pursuant to this
Section 1.2 and Section 2.1 hereof.
For the Initial Period and each Auction Period thereafter, interest at
the Class Remittance Rate shall accrue daily and shall be computed for the
actual number of days elapsed on the basis of a year consisting of 360 days.
The Class Remittance Rate to be borne by the Auction Rate Certificates
after such Initial Period for each Auction Period shall be determined as herein
described. Each such Auction Period shall commence on and include the first day
following the expiration of the immediately preceding Auction Period and
terminate on and include the day immediately preceding the next Remittance Day;
provided, however, that in the case of the Auction Period that immediately
follows the Initial Period for the Certificates, such Auction Period shall
commence on and include the Initial Rate Adjustment Date. The Class Remittance
Rate for each Auction Period shall be the lesser of the (i) applicable Net Funds
Cap in effect for such Auction Period and (ii) the Auction Rate in effect for
such Auction Period as determined in accordance with Section 2.1.1 hereof;
provided that if, on any Class Rate Determination Date, an Auction is not held
for any reason, then the Class Remittance Rate on the Auction Rate Certificates
for the next succeeding Auction Period shall be the lesser of (A) the Maximum
Auction Rate or (B) the Net Funds Cap applicable to the Auction Rate
Certificates, but in no event exceeding the Class Remittance Rate Limitation.
Notwithstanding the foregoing:
a) if the ownership of the Auction Rate Certificates is no longer
maintained in Book-Entry Form, the Class Remittance Rate for any Interest Period
commencing after the delivery of certificates representing such Certificates
shall equal the lesser of (i) the Maximum Auction Rate and (ii) the applicable
Net Funds Cap on the Business Day immediately preceding the first day of such
subsequent Interest Period; or
b) if a Certificate Insurer Default shall have occurred, the Class
Remittance Rate on the Auction Rate Certificates for the Interest Period
commencing on or immediately after such Certificate Insurer Default, and for the
Interest Period thereafter, to and including the Interest Period, if any, during
which, or commencing less than two Business Days after, such Certificate Insurer
Default is cured, shall equal the Non-Payment Rate on the first day of each such
Interest Period.
The Auction Agent shall promptly give written notice to the Trustee,
the Representative and the Certificate Insurer of the Class Remittance Rate
(unless the Class Remittance Rate is the Non-Payment Rate) and either the
Auction Rate or the Net Funds Cap, as the case may be, when such rate is not the
Class Remittance Rate. The Trustee shall notify the Certificateholders of the
Class Remittance Rate applicable to the Auction Rate Certificates for each
Auction Period on the second Business Day of such Auction Period.
Notwithstanding any other provision of the Auction Rate Certificates
or the Pooling and Servicing Agreement and except for the occurrence of a
Certificate Insurer Default, interest payable on the Auction Rate Certificates
for an Auction Period shall never exceed for such Auction Period the amount of
interest payable at the applicable Net Funds Cap (subject to the Class
Remittance Rate Limitation) in effect for such Auction Period.
If the Auction Rate for the Auction Rate Certificates is greater than
the applicable Net Funds Cap, then the Class Remittance Rate applicable to such
Class of Certificates for that Interest Period will be the Net Funds Cap
(subject to the Class Remittance Rate Limitation). If the Class Remittance Rate
applicable to such Class of Certificates for any Interest Period is the Net
Funds Cap, the Trustee shall determine the Certificateholders' Interest
Carryover, if any, with respect to such Certificates. Such Certificateholders'
Interest Carryover shall bear interest calculated at a rate equal to the then
applicable Class Remittance Rate, without giving effect to the Net Funds Cap,
but in no event exceeding the Class Remittance Rate Limitation, from the
Remittance Date for the Interest Period with respect to which such
Certificateholders' Interest Carryover was calculated, until paid. For purposes
of the Pooling and Servicing Agreement, any reference to "principal" or
"interest" herein shall not include within the meaning of such words
Certificateholders' Interest Carryover or any interest accrued on any such
Certificateholders' Interest Carryover.
In the event that the Auction Agent no longer determines, or fails to
determine, when required, the Class Remittance Rate with respect to the Auction
Rate Certificates, or, if for any reason such manner of determination shall be
held to be invalid or unenforceable, the Class Remittance Rate for the next
succeeding Interest Period for the Auction Rate Notes shall be the applicable
Net Funds Cap for such next succeeding Auction Period.
ARTICLE II
AUCTION PROCEDURES
SECTION 2.1. Class Remittance Rate.
SECTION 2.1.1. Determining the Class Remittance Rate for the Auction
Rate Certificates.
By purchasing Auction Rate Certificates, whether in an Auction or
otherwise, each purchaser of the Auction Rate Certificates, or its
Broker-Dealer, must agree and shall be deemed by such purchase to have agreed
(i) to participate in Auctions on the terms described herein, (ii) to have its
beneficial ownership of the Auction Rate Certificates maintained at all times in
Book-Entry Form for the account of its Participant, which in turn will maintain
records of such beneficial ownership and (iii) to authorize such Participant to
disclose to the Auction Agent such information with respect to such beneficial
ownership as the Auction Agent may request.
So long as the ownership of a Class of Auction Rate Certificates is
maintained in Book-Entry Form, an Existing Certificateholder may sell, transfer
or otherwise dispose of Auction Rate Certificates only pursuant to a Bid or Sell
Order placed in an Auction or otherwise sell, transfer or dispose of Auction
Rate Certificates through a Broker-Dealer, provided that, in the case of all
transfers other than pursuant to Auctions, such Existing Certificateholder, its
Broker-Dealer or its Participant advises the Auction Agent of such transfer.
Auctions shall be conducted on each Auction Date, if there is an Auction Agent
on such Auction Date, in the following manner:
(a) (i) Prior to the Submission Deadline on each Auction Date relating
to a Class of the Auction Rate Certificates:
(A) each Existing Certificateholder of the applicable
Class of Auction Rate Certificates may submit to a Broker-Dealer by
telephone or otherwise any information as to:
(1) the principal amount of Outstanding
Auction Rate Certificates of such Class, if any, owned by such
Existing Certificateholder which such Existing
Certificateholder desires to continue to own without regard to
the Class Remittance Rate for the next succeeding Auction
Period;
(2) the principal amount of Outstanding
Auction Rate Certificates of such Class, if any, which such
Existing Certificateholder offers to sell if the Class
Remittance Rate for the next succeeding Auction Period shall
be less than the rate per annum specified by such Existing
Certificateholder; and/or
(3) the principal amount of Outstanding
Auction Rate Certificates of such Class, if any, owned by such
Existing Certificateholder which such Existing
Certificateholder offers to sell without regard to the Class
Remittance Rate for the next succeeding Auction Period;
and
(B) one or more Broker-Dealers may contact Potential
Certificateholders to determine the principal amount of Auction Rate
Certificates of such Class which each Potential Certificateholder
offers to purchase, if the Class Remittance Rate for the next
succeeding Auction Period shall not be less than the rate per annum
specified by such Potential Certificateholder.
The statement of an Existing Certificateholder or a Potential
Certificateholder referred to in (A) or (B) of this paragraph (i) is herein
referred to as an "Order," and each Existing Certificateholder and each
Potential Certificateholder placing an Order is herein referred to as a
"Bidder"; an Order described in clause (A)(1) is herein referred to as a "Hold
Order"; an Order described in clauses (A)(2) and (B) is herein referred to as a
"Bid"; and an Order described in clause (A)(3) is herein referred to as a "Sell
Order."
(ii) (A) Subject to the provisions of Section 2.1.1(b) hereof, a Bid
by an Existing Certificateholder shall constitute an irrevocable offer to sell:
(1) the principal amount of Outstanding Auction Rate Certificates
specified in such Bid if the Class Remittance Rate determined as
provided in this Section 2.1.1 shall be less than the rate specified
therein; or
(2) such principal amount, or a lesser principal amount of
Outstanding Auction Rate Certificates to be determined as set forth in
Section 2.1.1(d)(i)(D) hereof, if the Class Remittance Rate determined
as provided in this Section 2.1.1 shall be equal to the rate specified
therein; or
(3) such principal amount, or a lesser principal amount of
outstanding Auction Rate Certificates to be determined as set forth in
Section 2.1.1(d)(ii)(C) hereof, if the rate specified therein shall be
higher than the Class Remittance Rate and Sufficient Bids have not
been made.
(B) Subject to the provisions of Section 2.1.1(b) hereof, a Sell
Order by an Existing Certificateholder shall constitute an irrevocable
offer to sell:
(1) the principal amount of Outstanding Auction Rate Certificates
specified in such Sell Order; or (2) such principal amount, or a
lesser principal amount of Outstanding Auction Rate Certificates set
forth in Section 2.1.1(d)(ii)(C) hereof, if Sufficient Bids have not
been made.
(C) Subject to the provisions of Section 2.1.1(b) hereof, a Bid
by a Potential Certificateholder shall constitute an irrevocable offer
to purchase:
(1) the principal amount of Outstanding Auction Rate Certificates
specified in such Bid if the Class Remittance Rate determined as
provided in this Section 2.1.1 shall be higher than the rate specified
in such Bid; or
(2) such principal amount, or a lesser principal amount of
Outstanding Auction Rate Certificates set forth in Section
2.1.1(d)(i)(E) hereof, if the Class Remittance Rate determined as
provided in this Section 2.1.1 shall be equal to the rate specified in
such Bid.
(b) (i) Each Broker-Dealer shall submit in writing to the Auction
Agent prior to the Submission Deadline on each Auction Date all Orders obtained
by such BrokerDealer and shall specify with respect to each such Order:
(A) the name of the Bidder placing such Order;
(B) the aggregate principal amount and Class of Auction Rate
Certificates that are the subject of such Order;
(C) to the extent that such Bidder is an Existing
Certificateholder:
(1) the principal amount and Class of Auction Rate Certificates,
if any, subject to any Hold Order placed by such Existing
Certificateholder;
(2) the principal amount and Class of Auction Rate Certificates,
if any, subject to any Bid placed by such Existing Certificateholder
and the rate specified in such Bid; and
(3) the principal amount and Class of Auction Rate Certificates,
if any, subject to any Sell Order placed by such Existing
Certificateholder;
and
(D) to the extent such Bidder is a Potential Certificateholder,
the rate specified in such Potential Certificateholder's Bid.
(ii) If any rate specified in any Bid contains more
than three figures to the right of the decimal point, the Auction Agent shall
round such rate up to the next higher one thousandth (.001) of one percent.
(iii) If an Order or Orders covering all Outstanding
Auction Rate Certificates of the applicable Class owned by an Existing
Certificateholder is not submitted to the Auction Agent prior to the Submission
Deadline, the Auction Agent shall deem a Hold Order to have been submitted on
behalf of such Existing Certificateholder covering the principal amount of
Outstanding Auction Rate Certificates of such Class owned by such Existing
Certificateholder and not subject to an Order submitted to the Auction Agent.
(iv) Neither the Representative, the Trustee nor the
Auction Agent shall be responsible for any failure of a Broker-Dealer to submit
an Order to the Auction Agent on behalf of any Existing Certificateholder or
Potential Certificateholder.
(v) If any Existing Certificateholder submits through a
Broker-Dealer to the Auction Agent one or more Orders covering in the aggregate
more than the principal amount of the Class of Outstanding Auction Rate
Certificates owned by such Existing Certificateholder, such Orders shall be
considered valid as follows and in the following order of priority:
(A) All Hold Orders shall be considered valid, but only up
to the aggregate principal amount of the Class of Outstanding
Auction Rate Certificates owned by such Existing
Certificateholder, and if the aggregate principal amount of the
Class of Auction Rate Certificates subject to such Hold Orders
exceeds the aggregate principal amount of the Class of Auction
Rate Certificates owned by such Existing Certificateholder, the
aggregate principal amount of the Class of Auction Rate
Certificates subject to each such Hold Order shall be reduced pro
rata so that the aggregate principal amount of the Class of
Auction Rate Certificates subject to such Hold Order equals the
aggregate principal amount of the Class of Outstanding Auction
Rate Certificates owned by such Existing Certificateholder.
(B) (1) any Bid shall be considered valid up to an amount
equal to the excess of the principal amount of the Class of
Outstanding Auction Rate Certificates owned by such Existing
Certificateholder over the aggregate principal amount of the
Class of Auction Rate Certificates subject to any Hold Order
referred to in clause (A) of this paragraph (v);
(2) subject to subclause (1) of this clause (B), if more
than one Bid with the same rate is submitted on behalf of such
Existing Certificateholder and the aggregate principal amount of
the Class of Outstanding Auction Rate Certificates subject to
such Bids is greater than such excess, such Bids shall be
considered valid up to an amount equal to such excess;
(3) subject to subclauses (1) and (2) of this clause (B), if
more than one Bid with different rates are submitted on behalf of
such Existing Certificateholder, such Bids shall be considered
valid first in the ascending order of their respective rates
until the highest rate is reached at which such excess exists and
then at such rate up to the amount of such excess; and
(4) in any such event, the amount of the Class of
Outstanding Auction Rate Certificates, if any, subject to Bids
not valid under this clause (B) shall be treated as the subject
of a Bid by a Potential Certificateholder at the rate therein
specified; and
(C) All Sell Orders shall be considered valid up to an
amount equal to the excess of the principal amount of the Class
of Outstanding Auction Rate Certificates owned by such Existing
Certificateholder over the aggregate principal amount of the
Class of Auction Rate Certificates subject to Hold Orders
referred to in clause (A) of this paragraph (v) and valid Bids
referred to in clause (B) of this paragraph (v).
(vi) If more than one Bid for a Class of Auction Rate
Certificates is submitted on behalf of any Potential Certificateholder, each Bid
submitted shall be a separate Bid with the rate and principal amount therein
specified.
(vii) An Existing Certificateholder of a Class of
Auction Rate Certificates that offers to purchase additional Auction Rate
Certificates is, for purposes of such offer, treated as a Potential
Certificateholder.
(viii) Any Bid or Sell Order submitted by an Existing
Certificateholder covering an aggregate principal amount of a Class of Auction
Rate Certificates not equal to an Authorized Denomination shall be rejected and
shall be deemed a Hold Order. Any Bid submitted by a Potential Certificateholder
covering an aggregate principal amount of a Class of Auction Rate Certificates
not equal to an Authorized Denomination shall be rejected.
(ix) Any Bid specifying a rate higher than the Maximum
Auction Rate will (a) be treated as a Sell Order if submitted by an Existing
Certificateholder and (b) not be accepted if submitted by a Potential
Certificateholder.
(x) Any Bid submitted by an Existing Certificateholder
or a Potential Certificateholder specifying a rate lower than the Minimum
Auction Rate shall be treated as a Bid specifying the Minimum Auction Rate.
(xi) Any Order submitted in an Auction by a
Broker-Dealer to the Auction Agent at the Submission Deadline on any Auction
Date shall be irrevocable.
(c) (i) Not earlier than the Submission Deadline on each
Auction Date, the Auction Agent shall assemble all valid Orders submitted or
deemed submitted to it by the Broker-Dealers (each such Order as submitted or
deemed submitted by a Broker-Dealer being herein referred to individually as a
"Submitted Hold Order," a "Submitted Bid" or a "Submitted Sell Order," as the
case may be, or as a "Submitted Order," and collectively as "Submitted Hold
Orders," "Submitted Bids" or "Submitted Sell Orders," as the case may be, or as
"Submitted Orders") and shall determine for the applicable Class of Auction Rate
Certificates:
(A) the excess of the total principal amount of Outstanding
Auction Rate Certificates of such Class over the sum of the
aggregate principal amount of Outstanding Auction Rate
Certificates of such Class subject to Submitted Hold Orders (such
excess being herein referred to as the "Available Auction Rate
Certificates" of such Class), and
(B) from the Submitted Orders whether:
(1) the aggregate principal amount of Outstanding Auction
Rate Certificates of such Class subject to Submitted Bids by
Potential Certificateholders specifying one or more rates equal
to or lower than the Maximum Auction Rate;
exceeds or is equal to the sum of:
(2) the aggregate principal amount of Outstanding Auction
Rate Certificates of such Class subject to Submitted Bids by
Existing Certificateholders specifying one or more rates higher
than the Maximum Auction Rate; and
(3) the aggregate principal amount of Outstanding Auction
Rate Certificates of such Class subject to submitted Sell Orders;
(in the event such excess or such equality exists, other than because
all of the Outstanding Auction Rate Certificates of such Class are
subject to Submitted Hold Orders, such Submitted Bids described in
subclause (1) above shall be referred to collectively as "Sufficient
Bids"); and
(C) if Sufficient Bids exist, the "Bid Auction Rate", which shall
be the lowest rate specified in such Submitted Bids such that if:
(1) (x) each Submitted Bid from
Existing Certificateholders specifying such
lowest rate and (y) all other Submitted Bids
from Existing Certificateholders specifying
lower rates were rejected, thus entitling
such Existing Certificateholders to continue
to own the principal amount of Auction Rate
Certificates of such Class subject to such
Submitted Bids; and
(2) (x) each such Submitted Bid from
Potential Certificateholders specifying such
lowest rate and (y) all other Submitted Bids
from Potential Certificateholders specifying
lower rates were accepted;
the result would be that such Existing Certificateholders described in
subclause (1) above would continue to own an aggregate principal amount
of Outstanding Auction Rate Certificates of the applicable Class which,
when added to the aggregate principal amount of Outstanding Auction
Rate Certificates of such Class to be purchased by such Potential
Certificateholders described in subclause (2) above, would equal not
less than the Available Auction Rate Certificates of such Class.
(ii) Promptly after the Auction Agent has made the
determinations pursuant to Section 2.1.1(c)(i) hereof, the Auction
Agent shall advise the Trustee of the applicable Net Funds Cap (as
provided by the Servicer pursuant to Section 2.1.3 hereof), the Maximum
Auction Rate and the All Hold Rate and the components thereof on the
Auction Date and, based on such determinations, the Auction Rate for
the next succeeding Interest Period for such Class of Auction Rate
Certificates as follows:
(A) if Sufficient Bids exist, that the Auction Rate for the next
succeeding Interest Period for such Class shall be equal to the Bid
Auction Rate so determined;
(B) if Sufficient Bids do not exist (other than because all of
the Outstanding Auction Rate Certificates of such Class are subject to
Submitted Hold Orders), that the Auction Rate for the next succeeding
Interest Period shall be equal to the Maximum Auction Rate; or
(C) if all Outstanding Auction Rate Certificates of such Class
are subject to Submitted Hold Orders, that the Auction Rate for the
next succeeding Interest Period shall be equal to the All Hold Rate.
(iii) Promptly after the Auction Agent has determined the
Auction Rate, the Auction Agent shall determine and advise the
Trustee of the applicable Class Remittance Rate, which rate shall
be the lesser of (a) the Auction Rate and (b) the applicable Net
Funds Cap; provided, however, that in no event shall the Class
Remittance Rate exceed the Class Remittance Rate Limitation.
(d) Existing Certificateholders shall continue to own the
principal amount of Auction Rate Certificates of such Class that are subject to
Submitted Hold Orders. If the applicable Net Funds Cap is equal to or greater
than the Bid Auction Rate and if Sufficient Bids have been received by the
Auction Agent, the Bid Auction Rate will be the Class Remittance Rate, and
Submitted Bids and Submitted Sell Orders will be accepted or rejected and the
Auction Agent will take such other action as described below in subparagraph
(i).
If the applicable Net Funds Cap is less than the
Auction Rate, the Net Funds Cap will be the Class Remittance Rate. If the
Auction Rate and the Net Funds Cap are both greater than the Class Remittance
Rate Limitation, the Class Remittance Rate shall be equal to the Class
Remittance Rate Limitation. If the Auction Agent has not received Sufficient
Bids (other than because all of the Outstanding Auction Rate Certificates of
such Class are subject to Submitted Hold Orders), the Class Remittance Rate will
be the lesser of the Maximum Auction Rate and the applicable Net Funds Cap. In
any of the cases described above, Submitted Orders will be accepted or rejected
and the Auction Agent will take such other action as described below in
subparagraph (ii).
(i) if Sufficient Bids have been made and the Net Funds
Cap is equal to or greater than the Bid Auction Rate (in which case the Class
Remittance Rate shall be the Bid Auction Rate), all Submitted Sell Orders shall
be accepted and, subject to the provisions of paragraphs (iv) and (v) of this
Section 2.1.1(d), Submitted Bids shall be accepted or rejected as follows in the
following order of priority, and all other Submitted Bids shall be rejected:
(A) Existing Certificateholders' Submitted Bids specifying
any rate that is higher than the Class Remittance Rate shall be
accepted, thus requiring each such Existing Certificateholder to
sell the aggregate principal amount of Auction Rate Certificates
subject to such Submitted Bids;
(B) Existing Certificateholders' Submitted Bids specifying
any rate that is lower than the Class Remittance Rate shall be
rejected, thus entitling each such Existing Certificateholder to
continue to own the aggregate principal amount of Auction Rate
Certificates subject to such Submitted Bids;
(C) Potential Certificateholders' Submitted Bids specifying
any rate that is lower than the Class Remittance Rate shall be
accepted;
(D) Each Existing Certificateholders' Submitted Bid
specifying a rate that is equal to the Class Remittance Rate
shall be rejected, thus entitling such Existing Certificateholder
to continue to own the aggregate principal amount of Auction Rate
Certificates subject to such Submitted Bid, unless the aggregate
principal amount of Outstanding Auction Rate Certificates subject
to all such Submitted Bids shall be greater than the principal
amount of Auction Rate Certificates of the applicable Class (the
"remaining principal amount") equal to the excess of the
Available Auction Rate Certificates of such Class over the
aggregate principal amount of Auction Rate Certificates of such
Class subject to Submitted Bids described in clauses (B) and (C)
of this Section 2.1.1(d)(i), in which event such Submitted Bid of
such Existing Certificateholder shall be rejected in part, and
such Existing Certificateholder shall be entitled to continue to
own the principal amount of such Class of Auction Rate
Certificates subject to such Submitted Bid, but only in an amount
equal to the aggregate principal amount of Auction Rate
Certificates of such Class obtained by multiplying the remaining
principal amount by a fraction, the numerator of which shall be
the principal amount of Outstanding Auction Rate Certificates of
such Class owned by such Existing Certificateholder subject to
such Submitted Bid and the denominator of which shall be the sum
of the principal amount of Outstanding Auction Rate Certificates
of such Class subject to such Submitted Bids made by all such
Existing Certificateholders that specified a rate equal to the
Class Remittance Rate; and
(E) Each Potential Certificateholder's Submitted Bid
specifying a rate that is equal to the Class Remittance Rate
shall be accepted, but only in an amount equal to the principal
amount of Auction Rate Certificates of the applicable Class
obtained by multiplying the excess of the aggregate principal
amount of Available Auction Rate Certificates of such Class over
the aggregate principal amount of Auction Rate Certificates of
such Class subject to Submitted Bids described in clauses (B),
(C) and (D) of this Section 2.1.1(d)(i) by a fraction the
numerator of which shall be the aggregate principal amount of
Outstanding Auction Rate Certificates of such Class subject to
such Submitted Bid and the denominator of which shall be the sum
of the principal amount of Outstanding Auction Rate Certificates
of such Class subject to Submitted Bids made by all such
Potential Certificateholders that specified a rate equal to the
Class Remittance Rate.
(ii) If Sufficient Bids have not been made (other than
because all of the Outstanding Auction Rate Certificates of the applicable Class
are subject to submitted Hold Orders), or if the applicable Net Funds Cap is
less than the Bid Auction Rate (in which case the Class Remittance Rate shall be
the Net Funds Cap), or if the Class Remittance Rate Limitation applies, subject
to the provisions of Section 2.1.1(d)(iv) hereof, Submitted Orders shall be
accepted or rejected as follows in the following order of priority and all other
Submitted Bids shall be rejected:
(A) Existing Certificateholders' Submitted Bids specifying
any rate that is equal to or lower than the Class Remittance Rate
shall be rejected, thus entitling such Existing
Certificateholders to continue to own the aggregate principal
amount of Auction Rate Certificates subject to such Submitted
Bids;
(B) Potential Certificateholders' Submitted Bids specifying
(1) any rate that is equal to or lower than the Class Remittance
Rate shall be accepted and (2) any rate that is higher than the
Class Remittance Rate shall be rejected; and
(C) each Existing Certificateholder's Submitted Bid
specifying any rate that is higher than the Class Remittance Rate
and the Submitted Sell Order of each Existing Certificateholder
shall be accepted, thus entitling each Existing Certificateholder
that submitted any such Submitted Bid or Submitted Sell Order to
sell the Auction Rate Certificates subject to such Submitted Bid
or Submitted Sell Order, but in both cases only in an amount
equal to the aggregate principal amount of Auction Rate
Certificates of the applicable Class obtained by multiplying the
aggregate principal amount of Auction Rate Certificates subject
to Submitted Bids described in clause (B) of this Section
2.1.1(d)(ii) by a fraction the numerator of which shall be the
aggregate principal amount of Outstanding Auction Rate
Certificates of such Class owned by such Existing
Certificateholder subject to such submitted Bid or Submitted Sell
Order and the denominator of which shall be the aggregate
principal amount of Outstanding Auction Rate Certificates of such
Class subject to all such Submitted Bids and Submitted Sell
Orders.
(iii) If all Outstanding Auction Rate Certificates of
such Class are subject to Submitted Hold Orders, all Submitted Bids shall be
rejected.
(iv) If, as a result of the procedures described in
paragraph (i) or (ii) of this Section 2.1.1(d), any Existing Certificateholder
would be entitled or required to sell, or any Potential Certificateholder would
be entitled or required to purchase, a principal amount of Auction Rate
Certificates of the applicable Class that is not equal to an Authorized
Denomination, the Auction Agent shall, in such manner as in its sole discretion
it shall determine, round up or down the principal amount of Auction Rate
Certificates to be purchased or sold by any Existing Certificateholder or
Potential Certificateholder so that the principal amount of Auction Rate
Certificates purchased or sold by each Existing Certificateholder or Potential
Certificateholder shall be equal to an Authorized Denomination or an integral
multiple of $25,000 in excess thereof.
(v) If, as a result of the procedures described in
paragraph (ii) of this Section 2.1.1(d), any Potential Certificateholder would
be entitled or required to purchase less than an Authorized Denomination of
Auction Rate Certificates of the applicable Class, the Auction Agent shall, in
such manner as in its sole discretion it shall determine, allocate Auction Rate
Certificates of such Class for purchase among Potential Certificateholders so
that only Auction Rate Certificates of such Class in Authorized Denominations or
integral multiples of $25,000 in excess thereof are purchased by any Potential
Certificateholder, even if such allocation results in one or more of such
Potential Certificateholders not purchasing any Auction Rate Certificates of
such Class.
(e) Based on the result of each Auction, the Auction Agent shall
determine the aggregate principal amount of Auction Rate Certificates of the
applicable Class to be purchased and the aggregate principal amount of Auction
Rate Certificates of the applicable Class to be sold by Potential
Certificateholders and Existing Certificateholders on whose behalf each
Broker-Dealer submitted Bids or Sell Orders and, with respect to each
Broker-Dealer, to the extent that such aggregate principal amount of Auction
Rate Certificates of the applicable Class to be sold differs from such aggregate
principal amount of Auction Rate Certificates of the applicable Class to be
purchased, determine to which other Broker-Dealer or Broker-Dealers acting for
one or more purchasers such Broker-Dealer shall deliver, or from which other
Broker-Dealer or Broker-Dealers acting for one or more sellers such
Broker-Dealer shall receive, as the case may be, Auction Rate Certificates of
the applicable Class.
(f) Any calculation by the Auction Agent, the Servicer or the
Trustee, as applicable, of the Class Remittance Rate, One-Month LIBOR, the
Maximum Auction Rate, the All Hold Rate, the Net Funds Cap and the Non-Payment
Rate shall, in the absence of manifest error, be binding on all other parties.
SECTION 2.1.2. Certificate Insurer Default; Auction Agent Fees and
Expenses.
(a) The Trustee shall determine not later than 2:00 p.m., eastern
time, on the Business Day next succeeding a Remittance Date, whether a
Certificate Insurer Default has occurred. If a Certificate Insurer Event has
occurred, the Trustee shall, not later than 2:15 p.m., eastern time, on such
Business Day, send a notice thereof in substantially the form of Annex A
attached hereto to the Auction Agent, the Representative and the Certificate
Insurer by telecopy or similar means and, if such Certificate Insurer Default is
cured, the Trustee shall immediately send a notice in substantially the form of
Annex B attached hereto to the Auction Agent, the Representative and the
Certificate Insurer by telecopy or similar means.
(b) Not later than 2:00 p.m., eastern time, on the first
Remittance Date for any Class of Certificates occurring in each month, the
Trustee shall pay to the Auction Agent, in immediately available funds out of
amounts in the Expense Account an amount equal to the Auction Agent Fee (which
shall include the Broker-Dealer Fee) as calculated in the Auction Agent
Agreement. The Representative shall from time to time at the request of the
Auction Agent reimburse the Auction Agent for its reasonable expenses as
provided in the Auction Agent Agreement.
SECTION 2.1.3. Calculation of Maximum Auction Rate, All Hold
Rate, Net Funds Cap, One-Month LIBOR and Non-Payment Rate. The Servicer shall
calculate the Net Funds Cap applicable to the Auction Rate Certificates and
inform the Auction Agent thereof in writing no later than the Business Day
preceding each Auction Date. The Auction Agent shall calculate the Maximum
Auction Rate, the All Hold Rate and One-Month LIBOR, on each Auction Date and
shall notify the Trustee, the Representative and the Broker-Dealers of the Net
Funds Cap, the Maximum Auction Rate, the All Hold Rate and One-Month LIBOR, as
provided in the Auction Agent Agreement. If the ownership of the Auction Rate
Certificates is no longer maintained in Book-Entry Form by the Depository, the
Trustee shall calculate the Maximum Auction Rate, and the Servicer will report
to the Trustee in writing the Net Funds Cap, on the Business Day immediately
preceding the first day of each Interest Period commencing after the delivery of
certificates representing the Auction Rate Certificates. If a Certificate
Insurer Default shall have occurred, the Trustee shall calculate the Non-Payment
Rate on the Class Rate Determination Date for (i) each Interest Period
commencing after the occurrence and during the continuance of such Certificate
Insurer Default and (ii) any Interest Period commencing less than two Business
Days after the cure of any Certificate Insurer Default. The Auction Agent shall
determine One-Month LIBOR for each Interest Period other than the first Interest
Period; provided, that if the ownership of the Auction Rate Certificates is no
longer maintained in Book-Entry Form, or if a Certificate Insurer Default has
occurred, then the Trustee shall determine One-Month LIBOR for each such
Interest Period. The determination by the Trustee or the Auction Agent, as the
case may be, of One-Month LIBOR shall (in the absence of manifest error) be
final and binding upon all parties. If calculated or determined by the Auction
Agent, the Auction Agent shall promptly advise the Trustee and the
Representative of One-Month LIBOR.
SECTION 2.1.4. Notification of Rates, Amounts and Remittance Dates.
Promptly after the Closing Date and after the beginning of each
subsequent Interest Period relating to each Class of Auction Rate Certificates,
and in any event at least 10 days prior to any Remittance Date relating to a
Class of Auction Rate Certificates, the Trustee shall confirm with the Auction
Agent, so long as no Certificate Insurer Default has occurred and is continuing
and the ownership of the Auction Rate Certificates is maintained in BookEntry
Form by the Depository, (1) the date of such next Remittance Date relating to a
Class of Auction Rate Certificates and (2) the amount payable to the Auction
Agent on the Auction Date pursuant to Section 2.1.2(b) hereof.
If any day scheduled to be a Remittance Date shall be changed
after the Trustee shall have given the notice or confirmation referred to in the
preceding sentence, the Trustee shall, not later than 9:15 a.m., eastern time,
on the Business Day next preceding the earlier of the new Remittance Date or the
old Remittance Date, by such means as the Trustee deems practicable, give notice
of such change to the Auction Agent, so long as no Certificate Insurer Default
has occurred and is continuing and the ownership of the Auction Rate
Certificates is maintained in Book-Entry Form by the Depository.
SECTION 2.1.5. Auction Agent.
(a) Bankers Trust Company is hereby appointed as Initial Auction
Agent to serve as agent for the Representative in connection with Auctions. The
Trustee will, and the Trustee is hereby directed to, enter into the Initial
Auction Agent Agreement with Bankers Trust Company, as the Initial Auction
Agent. Any Substitute Auction Agent shall be (i) a bank, national banking
association or trust company duly organized under the laws of the United States
of America or any state or territory thereof having its principal place of
business in the Borough of Manhattan, New York, or such other location as
approved by the Trustee and the Market Agent in writing and having a combined
capital stock or surplus of at least $50,000,000, or (ii) a member of the
National Association of Securities Dealers, Inc., having a capitalization of at
least $50,000,000, and, in either case, authorized by law to perform all the
duties imposed upon it hereunder and under the Auction Agent Agreement and
approved by the Certificate Insurer in writing. The Auction Agent may at any
time resign and be discharged of the duties and obligations created by these
Auction Procedures by giving at least 90 days' notice to the Trustee, the
Representative, the Certificate Insurer and the Market Agent. The Auction Agent
may be removed at any time by the Trustee upon the written direction of the
Certificate Insurer, or with the consent of the Certificate Insurer, the
Certificateholders of 66-2/3% of the aggregate principal amount of the Auction
Rate Certificates then Outstanding, and if by such Certificateholders, by an
instrument signed by the Certificate Insurer or such Certificateholders or their
attorneys and filed with the Auction Agent, the Representative, the Market Agent
and the Trustee upon at least 90 days' notice. Neither resignation nor removal
of the Auction Agent pursuant to the preceding two sentences shall be effective
until and unless a Substitute Auction Agent has been appointed and has accepted
such appointment. If required by the Certificate Insurer, the Certificateholders
of 66-2/3% of the aggregate principal amount of the Auction Rate Certificates
then outstanding or by the Market Agent, a Substitute Auction Agent Agreement
shall be entered into with a Substitute Auction Agent. Notwithstanding the
foregoing, the Auction Agent may terminate the Auction Agent Agreement if,
within 25 days after notifying the Trustee, the Representative, the Certificate
Insurer and the Market Agent in writing that it has not received payment of any
Auction Agent Fee due it in accordance with the terms of the Auction Agent
Agreement, the Auction Agent does not receive such payment.
(b) If the Auction Agent shall resign or be removed or be
dissolved, or if the property or affairs of the Auction Agent shall be taken
under the control of any state or federal court or administrative body because
of bankruptcy or insolvency, or for any other reason, the Trustee, at the
direction of the Representative and the Certificate Insurer (after receipt of a
certificate from the Market Agent confirming that any proposed Substitute
Auction Agent meets the requirements described in the immediately preceding
paragraph), shall use its best efforts to appoint a Substitute Auction Agent.
(c) The Auction Agent is acting as agent for the Representative
in connection with Auctions. In the absence of bad faith or negligence on its
part, the Auction Agent shall not be liable for any action taken, suffered or
omitted in good faith or for any error of judgment made by it in the performance
of its duties under the Auction Agent Agreement. The Auction Agent shall not be
liable for any error of judgment made in good faith unless the Auction Agent
shall have been negligent in ascertaining the pertinent facts.
(d) In the event of a change in the Auction Agent Fee Rate
pursuant to Section 6.4(b) of the Auction Agent Agreement, the Auction Agent
shall give a Notice of Fee Rate Change to the Trustee, the Certificate Insurer
and the Representative in accordance with the Auction Agent Agreement.
SECTION 2.1.6. Broker-Dealers.
(a) The Auction Agent will enter into a Broker-Dealer Agreement
with each of Prudential Securities Incorporated ("Prudential") and ▇▇▇▇▇▇
Brothers Inc. ("▇▇▇▇▇▇") as the initial Broker-Dealers. A Responsible Officer of
the Representative may, from time to time, with the written consent of the
Certificate Insurer, approve one or more additional persons to serve as
Broker-Dealers under Broker-Dealer Agreements and shall be responsible for
providing such Broker-Dealer Agreements to the Trustee, the Certificate Insurer
and the Auction Agent, provided, however that while Prudential and ▇▇▇▇▇▇ are
serving as Broker-Dealers, each of Prudential and ▇▇▇▇▇▇ shall have the right to
consent to the approval of any additional Broker-Dealers, which consent will not
be unreasonably withheld. The Auction Agent shall have entered into a
Broker-Dealer Agreement with each Broker-Dealer prior to the participation of
any such Broker-Dealer in any Auction.
(b) Any Broker-Dealer may be removed at any time, at the request
of a Responsible Officer of the Representative, but there shall, at all times,
be at least one Broker-Dealer appointed and acting as such.
SECTION 2.1.7. Changes in the Auction Date. The Market Agent,
with the written consent of a Responsible Officer of the Representative, and the
written consent of the Certificate Insurer, may specify an earlier or later
Auction Date (but in no event more than five Business Days earlier or later)
than the Auction Date that would otherwise be determined in accordance with the
definition of "Auction Date" in Article I of these Auction Procedures with
respect to one or more specified Auction Periods in order to conform with then
current market practice with respect to similar securities or to accommodate
economic and financial factors that may affect or be relevant to the day of the
week constituting an Auction Date and the Class Remittance Rate borne on a Class
of Auction Rate Certificates. The Market Agent shall deliver a written request
for consent to such change in the length of the Auction Date to the
Representative and the Certificate Insurer not less than three days nor more
than 20 days prior to the effective date of such change together with a
certificate demonstrating the need for change in reliance on such factors. The
Market Agent shall provide notice of its determination to specify an earlier
Auction Date for one or more Auction Periods by means of a written notice
delivered at least 10 days prior to the proposed changed Auction Date to the
Trustee, the Auction Agent, the Representative, the Rating Agencies, the
Certificate Insurer and the Depository. Such notice shall be substantially in
the form of, or contain substantially the information contained in, Annex C to
these Auction Procedures.
In connection with any change described in this Section 2.1.7,
the Auction Agent shall provide such further notice to such parties as is
specified in Section 2.5 of the Auction Agent Agreement.
SECTION 2.2. Additional Provisions Regarding the Class Remittance
Rates on the Auction Rate Certificates. The determination of a Class Remittance
Rate by the Auction Agent, the Trustee or any other Person pursuant to the
provisions of the applicable Section of this Article II shall be conclusive and
binding on the Certificateholders of the Class of Auction Rate Certificates to
which such Class Remittance Rate applies, and the Representative and the Trustee
may rely thereon for all purposes.
In no event shall the cumulative amount of interest paid or
payable on a Class of Auction Rate Certificates (including interest calculated
as provided herein, plus any other amounts that constitute interest on the
Auction Rate Certificates of such Class under applicable law, which are
contracted for, charged, reserved, taken or received pursuant to the Auction
Rate Certificates of such Class or related documents) calculated from the date
of issuance of the Auction Rate Certificates of such Class through any
subsequent day during the term of the Auction Rate of such Class or otherwise
prior to payment in full of the Auction Rate Certificates of such Class exceed
the amount permitted by applicable law. If the applicable law is ever judicially
interpreted so as to render usurious any amount called for under the Auction
Rate Certificates of such Class or related documents or otherwise contracted
for, charged, reserved, taken or received in connection with the Auction Rate
Certificates of such Class, or if the acceleration of the maturity of the
Auction Rate Certificates of such Class results in payment to or receipt by the
Certificateholder or any former Certificateholder of the Auction Rate
Certificates of such Class of any interest in excess of that permitted by
applicable law, then, notwithstanding any provision of the Auction Rate
Certificates of such Class or related documents to the contrary, all excess
amounts theretofore paid or received with respect to the Auction Rate
Certificates of such Class shall be credited on the principal balance of the
Auction Rate Certificates of such Class (or, if the Auction Rate Certificates of
such Class have been paid or would thereby be paid in full, refunded by the
recipient thereof), and the provisions of the Auction Rate Certificates of such
Class and related documents shall automatically and immediately be deemed
reformed and the amounts thereafter collectible hereunder and thereunder
reduced, without the necessity of the execution of any new document, so as to
comply with the applicable law, but so as to permit the recovery of the fullest
amount otherwise called for under the Auction Rate Certificates of such Class
and under the related documents.
SECTION 2.3. Qualifications of Market Agent. The Market Agent
shall be a member of the National Association of Securities Dealers, Inc., have
a capitalization of at least $50,000,000 and be authorized by law to perform all
the duties imposed upon it by these Auction Procedures. The Market Agent may
resign and be discharged of the duties and obligations created by these Auction
Procedures by giving at least 30 days' notice to the Representative and the
Trustee, provided that such resignation shall not be effective until the
appointment of a successor market agent by the Representative and the acceptance
of such appointment by such successor market agent. The Market Agent may be
replaced at the direction of the Representative, by an instrument signed by an
officer of the Representative, filed with the Market Agent and the Trustee at
least 30 days before the effective date of such replacement, provided that such
replacement shall not be effective until the appointment of a successor market
agent by the Representative and the acceptance of such appointment by such
successor market agent.
In the event that the Market Agent shall be removed or be
dissolved, or if the property or affairs of the Market Agent shall be taken
under the control of any state or federal court or administrative body because
of bankruptcy or insolvency, or for any other reason, and there is no Market
Agent and the Representative shall not have appointed its successor as Market
Agent, the Trustee, notwithstanding the provisions of the first paragraph of
this Section, shall be deemed to be the Market Agent for all purposes of these
Auction Procedures until the appointment by the Representative of the successor
Market Agent. Nothing in this Section shall be construed as conferring on the
Trustee additional duties other than as set forth herein.
ANNEX A
THE MONEY STORE HOME EQUITY ASSET BACKED CERTIFICATES
SERIES 1997-A, CLASS A-11
NOTICE OF CERTIFICATE INSURER DEFAULT
NOTICE IS HEREBY GIVEN that a Certificate Insurer Default has occurred
and is continuing with respect to the Certificates identified above. The next
Auction for the Series 1997-A, Class A-11 Certificates will not be held. The
Auction Rate for the Series 1997-A, Class A-11 Certificates for the next
succeeding Interest Period shall be the Non-Payment Rate.
THE BANK OF NEW YORK,
as Trustee
Dated: By:________________________________
Name:
Title:
ANNEX B
THE MONEY STORE HOME EQUITY ASSET BACKED CERTIFICATES
SERIES 1997-A, CLASS A-11
NOTICE OF CURE OF CERTIFICATE INSURER DEFAULT
NOTICE IS HEREBY GIVEN that an Certificate Insurer Default with
respect to the Certificates identified above has been waived or cured. The next
Remittance Date is and the next Auction Date is .
THE BANK OF NEW YORK,
as Trustee
Dated: By:
Name:
Title:
ANNEX C
THE MONEY STORE HOME EQUITY ASSET BACKED CERTIFICATES
SERIES 1997-A, CLASS A-11
NOTICE OF CHANGE IN AUCTION DATE
Notice is hereby given by PRUDENTIAL SECURITIES INCORPORATED, as
Market Agent for the captioned Certificates, that with respect to the captioned
Certificates, the Auction Date is hereby changed as follows:
l. With respect to the captioned Certificates, the definition of
"Auction Date" shall be deemed amended by substituting "_________________
(number) Business Day" in the second line thereof.
2. This change shall take effect on ______________ which shall be the
Auction Date for the Auction Period commencing on ______________.
3. The Auction Date for the captioned Certificates shall be subject to
further change hereafter as provided in the Auction Procedures.
4. Terms not defined in this Notice shall have the meanings set forth
in the Auction Procedures relating to the captioned Certificates.
PRUDENTIAL SECURITIES INCORPORATED,
as Market Agent
Dated: By:
Name:
Title:
EXHIBIT A
CONTENTS OF MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include a
copy of any of the following items delivered to the Trustee and an original of
any of the other following items, all of which shall be available for inspection
by the Certificateholders:
1. The original Mortgage Note, endorsed "Pay to the order of
holder" or "Pay to the order of ______________" and signed in the
name of the Person delivering the note by a Responsible Officer,
with all prior and intervening endorsements showing a complete
chain of endorsement from the originator to such Person.
2. Either: (i) the original recorded Mortgage, with evidence
of recording thereon, (ii) a copy of the Mortgage certified as a
true copy by a Responsible Officer where the original has been
transmitted for recording until such time as the original is
returned by the public recording office or (iii) a copy of the
Mortgage certified by the public recording office in those
instances where the original recorded Mortgage has been lost.
3. Either (i) the original Assignment of Mortgage from the
Person delivering such Assignment to "The Bank of New York, as
Trustee under the Pooling and Servicing Agreement, dated as of
February 28, 1997, Home Equity Asset Backed Certificates Series
1997-A" with evidence of recording thereon (provided, however,
that where permitted under the laws of the jurisdiction wherein
the Mortgaged Property is located, the Assignment of Mortgage may
be effected by one or more blanket assignments for Mortgage Loans
secured by Mortgaged Properties located in the same county) or
(ii) a copy of the Assignment of Mortgage certified as a true
copy by a Responsible Officer of the Originator where the
original was transmitted for recording (provided, however, that
where the original Assignment of Mortgage is not being delivered
to the Trustee, each such Responsible Officer may complete one or
more blanket certificates attaching copies of one or more of such
Assignments of Mortgage relating to the Mortgages originated by
the related Originator).
4. The original policy of title insurance or, if such policy
has not yet been delivered by the insurer, the commitment or
binder to issue same, or if the original principal balance of the
Mortgage Loan was less than or equal to $15,000 or the Mortgage
Loan was not originated by a Originator, other evidence of the
status of title, which shall consist of an attorney's opinion of
title or certificate of title, a preliminary title report, a
property search, a title search, a lot book report, a property
information report or a report entitled "prelim" or "PIRT"
(property information report), and (ii) proof of hazard insurance
in the form of a hazard insurance policy or hazard insurance
policy endorsement that names the related Originator, its
successors and assigns, as a mortgagee/loss payee, and, if such
endorsement does not show the amount insured by the related
hazard insurance policy, some evidence of such amount.
5. Originals of all assumption and modification agreements, if
any.
6. Either: (i) original intervening assignments, if any, showing
a complete chain of title from the originator to the Person delivering
such Assignment, including warehousing assignments, with recording
information thereon, if such assignments were recorded, (ii) copies of
any assignments certified as true copies by a Responsible Officer of
the Originator where the original has been transmitted for recording
until such time as the originals are returned by the public recording
office, or (iii) copies of any assignments certified by the public
recording office in those instances where the original recorded
assignments have been lost.
7. Mortgage Loan closing statement and any other truth-in-lending
or real estate settlement procedure forms required by law.
8. Residential loan application.
9. Verification of employment and income, and tax returns, if any.
10. Credit report on the mortgagor.
11. Except with respect to certain Mortgage Loans with original
principal balances of less than $15,000, the appraisal made in connection with
the origination of the related Mortgage Loan with photographs of the subject
property and of comparable properties (if available), constituting evidence
sufficient to indicate that the Mortgaged Property relates to a Residential
Dwelling and identifying the type thereof.
12. Copy of any Prior Lien.
13. All other papers and records developed or originated by the
Originator or others, required to document the Mortgage Loan or to service the
Mortgage Loan.
EXHIBIT B-1
[FORM OF CLASS A-1, CLASS A-2, CLASS A-3,
CLASS A-4, CLASS A-6, CLASS A-7, CLASS A-8, CLASS A-9,
CLASS A-11 and CLASS A-12 CERTIFICATES]
THE MONEY STORE HOME EQUITY TRUST 1997-A
[ %] THE MONEY STORE HOME EQUITY ASSET BACKED CERTIFICATES
CLASS A-_
Representing Certain Interests in a
Trust containing certain Mortgage
Loans formed by
THE MONEY STORE INC.
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN A CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G AND
860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING
COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
Unless this Certificate is presented by an authorized representative of
The Depository Trust Company to the issuer or its agent for registration of
transfer, exchange or payment, and any certificate issued is registered in the
name of Cede & Co. or such other name as requested by an authorized
representative of The Depository Trust Company and any payment is made to Cede &
Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an
interest herein.
(This Certificate does not represent an interest in, or an obligation
of, nor are the underlying Mortgage Loans insured or guaranteed by, The Money
Store Inc. or any of its subsidiaries. This Certificate represents a fractional
ownership interest in the Trust described herein.)
No.: ▇-_-▇ ▇▇▇▇▇ ▇▇, ▇▇▇▇
▇▇▇▇▇▇▇ Day
$
Original Principal Amount Final Scheduled CUSIP
Distribution
Cede & Co.
Registered Holder
The registered Holder named above is the registered Holder of a
fractional interest in a trust fund (the "Trust Fund"), the trust estate of
which consists primarily of three sub-trusts, including two pools ("Pool I" and
"Pool II") of one- to four-family ("single family") residential first and second
mortgage loans, having fixed rates, in the case of Pool I, and adjustable rates,
in the case of Pool II (the "Pool I Home Equity Loans" and "Pool II Home Equity
Loans"), and one pool ("Pool III") of fixed rate five or more unit residential
or mixed-use residential and commercial ("multifamily") first mortgage loans
("Pool III Multifamily Loans") and certain related assets. The Certificates are
issued pursuant to a Pooling and Servicing Agreement, dated as of February 28,
1997 (the "Pooling and Servicing Agreement"), among The Money Store Inc. (the
"Representative" and "Servicer"), certain subsidiaries of the Representative
(the "Originators") and The Bank of New York, as trustee (the "Trustee").
The Original Principal Amount set forth above is equal to the product
of (i) the Percentage Interest represented by this Certificate and (ii) the
aggregate original principal amount of the Class A-_ Certificates on March 31,
1997 (the "Startup Day"), which aggregate amount on March 31, 1997 was
$__________. The Holder hereof is entitled to principal payments on each
Remittance Date, as hereinafter described, which will fully amortize such
Original Principal Amount over the period from the date of initial delivery
hereof to the final Remittance Date of the Class A-_ Certificates. Therefore,
the actual outstanding principal amount of this Certificate may, on any date
subsequent to the Remittance Date in April 1997 (the first Remittance Date) be
less than the Original Principal Amount set forth above.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE INSURED
OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT
NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
This Certificate is one of a Class of duly-authorized Certificates
designated as The Money Store Home Equity Trust 1997-A, Home Equity Asset Backed
Certificates, Class A-_ (the "Class A-_ Certificates"), and issued under and
subject to the terms, provisions and conditions of the Pooling and Servicing
Agreement, to which Pooling and Servicing Agreement the Holder of this
Certificate by virtue of acceptance hereof assents and by which such Holder is
bound. Also issued under the Pooling and Servicing Agreement are Certificates
designated as The Money Store Home Equity Trust 1997-A, Home Equity Asset Backed
Certificates, Class A-1 (the "Class A-_ Certificates"), The Money Store Home
Equity Trust 1997-A, Asset Backed Certificates, Class A-_ (the "Class A-_
Certificates"), The Money Store Home Equity Trust 1997-A, Home Equity Asset
Backed Certificates, Class A-__ (the "Class A Certificates"), The Money Store
Home Equity Trust 1997-A, Home Equity Asset Backed Certificates, Class A-_ (the
"Class A-_ Certificates"), (the "Class A-_ Certificates"), The Money Store Home
Equity Trust 1997-A, Home Equity Asset Backed Certificates, Class A-_ (the
"Class A-_ Certificates), The Money Store Home Equity Trust 1997-A, Home Equity
Asset Backed Certificates, Class A-_ (the "Class A-_ Certificates"), (the "Class
A-_ Certificates" and together with the Class A-_, Class A-_, Class A-_, Class
A-_, Class A-_, Class A-_, Class A-_, Class A-_, Class A-_, Class A-_, Class
A-_, the"Class A Certificates"),The Money Store Home Equity Trust 1997-A, Home
Equity Asset Backed Certificates, Class X (the "Class X Certificates") and
Certificates designated as The Money Store Home Equity Trust 1997-A, Home Equity
Asset Backed Certificates, Class R-1 and Class R-2 (the "Class R Certificates").
The Class A Certificates, Class X and the Class R Certificates are together
referred to herein as the "Certificates."
Terms capitalized herein and not otherwise defined herein shall have
the respective meanings set forth in the Pooling and Servicing Agreement.
On the 15th day of each month, or, if such day is not a Business Day,
then the next succeeding Business Day (each such day being a "Remittance Date"),
commencing April 1997, the Holders of the Class A-_ Certificates as of the close
of business on the last day of the calendar month immediately preceding the
calendar month in which such Remittance Date occurs (the "Record Date") will be
entitled to receive that portion of the Pool [I][III] Remittance Amount relating
to such Remittance Date as described in the Agreement. Except for the final
distribution, distributions will be made in immediately available funds to
Holders of the Class A-_ Certificates, by wire transfer or otherwise, to the
account of a Holder at a domestic bank or other entity having appropriate
facilities therefor, if such Holder has so notified the Trustee, or by check
mailed to the address of the person entitled thereto as it appears on the
Register.
Each Holder of record of a Class A-_ Certificate will be entitled to
receive such Holder's Percentage Interest in the amounts due on such Remittance
Date to the Holders of the Class A-_ Certificates. The Percentage Interest of
each Class A-_ Certificate as of any date of determination will be equal to the
percentage obtained by dividing the Original Principal Amount set forth on such
Class A-_ Certificate by $__________.
The Pool [I][III] Remittance Amount for any Remittance Date will be an
amount equal to the sum of (i) the Pool [I][III] Current Interest Requirement,
(ii) the Pool [I][III] Principal Distribution Amount, (iii) the Pool [I][III]
Carry-Forward Amount and (iv) any amount received by the Trustee from the
Servicer or an Originator and paid to the Holders of the Pool [I][II]
Certificates that constitutes a Monthly Advance and that is recoverable and
sought to be recovered as a voidable preference by a trustee in bankruptcy
pursuant to the United States Bankruptcy Code, as amended from time to time (11
U.S.C.), in accordance with a final, nonappealable order of a court having
competent jurisdiction.
In the event that any amounts referenced in subclause (iv) above
constitute Insured Payments or any portion thereof, payment of such amounts
shall be disbursed to the trustee in bankruptcy named in the final order of the
court exercising jurisdiction and not directly to any Pool [I][III]
Certificateholder unless such Pool [I][III] Certificateholder has returned
principal or interest paid on the Pool [I][III] Certificates to such trustee in
bankruptcy, in which case payment shall be disbursed to such Class A
Certificateholder.
The Mortgage Loans will be serviced by The Money Store Inc. (the
"Servicer") pursuant to the Pooling and Servicing Agreement. The Pooling and
Servicing Agreement permits the Servicer to enter into Subservicing Agreements
with certain institutions eligible for appointment as Subservicers for the
servicing and administration of certain Mortgage Loans. No appointment of any
Subservicer shall release the Servicer from any of its obligations under the
Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other obligation of,
or an interest in, nor are the underlying Mortgage Loans insured or guaranteed
by, The Money Store Inc. or any of its subsidiaries or affiliates and are not
insured or guaranteed by the Federal Deposit Insurance Corporation, the
Government National Mortgage Association, or any other governmental agency. This
Certificate is limited in right of payment to certain collections and recoveries
relating to the Mortgage Loans and amounts on deposit in the Certificate
Account, and payments received by the Trustee pursuant to the related MBIA
Policy, all as more specifically set forth hereinabove and in the Pooling and
Servicing Agreement.
No Holder shall have any right to institute any proceeding, judicial
or otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Holder of any Certificate shall have the right, which is absolute
and unconditional, to receive distributions to the extent provided in the
Pooling and Servicing Agreement with respect to such Certificate or to institute
suit for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Holder.
The Pooling and Servicing Agreement provides that the obligations
created thereby will terminate upon the earlier to occur of (i) the distribution
to the Certificateholders of all amounts required to be distributed to them
thereunder and (ii) at any time when a Qualified Liquidation of the Trust is
effected; provided, however, that in no event shall the Trust continue beyond
the expiration of 21 years from the death of the survivor of the last lineal
descendant of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late ambassador of the United States to the
Court of St. ▇▇▇▇▇, living on the Startup Date.
Written notice of the final distribution to be made with respect to
the Class A-_ Certificates shall be given by the Trustee to the Class A-_
Certificateholders after the Trustee determines that a final distribution is
required to be made, specifying (i) the final Remittance Date upon which final
distribution on the Class A-_ Certificates will be made upon presentation and
surrender of the Certificates at the office of the Trustee therein designated,
(ii) the amount of any such final distribution and (iii) that the Record Date
otherwise applicable to such Remittance Date is not applicable.
The final distribution on any Certificate shall only be made upon
presentation of such Certificate to the Trustee.
The Holders of a majority of the Percentage Interests represented by
the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7,
Class A-8, Class A-9, Class A-10, Class A-11 and Class A-12 Certificates, upon
compliance with the requirements set forth in the Pooling and Servicing
Agreement, have the right to exercise any trust or power set forth in the
Pooling and Servicing Agreement with respect to the Certificates or the Trust
Fund.
As provided in the Pooling and Servicing Agreement, the transfer of
this Certificate is registrable in the Register upon surrender of this
Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Certificates of like Class,
tenor and a like aggregate fractional undivided interest in the Trust Fund will
be issued to the designated transferee or transferees.
The Trustee is required to furnish certain information on each
Remittance Date to the Holder of this Certificate, as more fully described in
the Pooling and Servicing Agreement.
The Class A-_ Certificates are issuable only as registered
Certificates in the minimum Percentage Interest corresponding to a minimum
denomination of $1,000 original principal amount and integral multiples of
$1,000. As provided in the Pooling and Servicing Agreement, Class A-_
Certificates are exchangeable for new Class A-_ Certificates of authorized
denominations evidencing the same aggregate Percentage Interest.
No service charge will be made for any such registration of transfer
or exchange, but the Certificate Registrar or Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Trustee and any agent of the Trustee may treat the Person in whose
name this Certificate is registered as the owner hereof for all purposes, and
neither the Trustee or any such agent shall be affected by notice to the
contrary.
STATEMENT OF INSURANCE
The MBIA Insurance Corporation (the "Insurer") has issued a policy
containing the following provisions, such policy being on file at The Bank of
New York, as trustee (the "Trustee"), New York, New York.
The Insurer in consideration of the payment of the premium and subject
to the terms of the policy hereby unconditionally and irrevocably guarantees to
any Owner (as described below) that an amount equal to each full and complete
Insured Payment (as described below) will be received by the Trustee or its
successor, on behalf of the Owners from the Insurer, for distribution by the
Trustee to each Owner of each Owner's proportionate share of the Insured
Payment. The Insurer's obligations hereunder with respect to a particular
Insured Payment shall be discharged to the extent funds equal to the applicable
Insured Payment are received by the Trustee, whether or not such funds are
properly applied by the Trustee. Insured Payments shall be made only at the time
set forth in the policy and no accelerated Insured Payments shall be made
regardless of any acceleration of the Obligations (as that term is described
below) unless such acceleration is at the sole option of the Insurer.
Notwithstanding the foregoing paragraph, the policy does not
cover shortfalls, if any, attributable to the liability of the Trust, any REMIC
or the Trustee for withholding taxes, if any (including interest and penalties
in respect of any such liability). Additionally, the policy does not guaranty
payment of any Certificateholder's LIBOR Interest Carryover.
"Obligations" shall mean:
[$___________ The Money Store Home Equity Asset Backed
Certificates, Series 1997-A, Class A-1, Class ▇-▇, ▇▇▇▇▇
▇-▇, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8
and Class A-9]
[$___________ The Money Store Home Equity Asset Backed
Certificates, Series 1997-A, Class A-10 and Class A-11.]
[$__________ The Money Store Home Equity Asset Backed
Certificates, Series 1997-A, Class A-12.]
The 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 (as
described below) of (i) a certified copy of such order, (ii) an opinion of
counsel satisfactory to the Insurer that such order is final and not subject to
appeal, (iii) an assignment in such form as is reasonably required by the
Insurer, irrevocably assigning to the Insurer all rights and claims of the Owner
relating to or arising under the Obligations against the debtor which made such
preference payment or otherwise with respect to such preference payment and (iv)
appropriate instruments to effect the appointment of the Insurer as agent for
such Owner in any legal proceeding related to such preference payment, such
instruments being in a form satisfactory to the Insurer, provided that if such
documents are received after 12:00 noon New York City time on such Business Day,
they will be deemed to be received on the following Business Day. Such payments
shall be disbursed to the receiver or trustee in bankruptcy named in the final
order of the court exercising jurisdiction on behalf of the Owner and not to any
Owner directly unless such Owner has returned principal or interest paid on the
Obligations to such receiver or trustee in bankruptcy, in which case such
payment shall be disbursed to such Owner.
The Insurer will pay any other amount payable under the policy no
later than 12:00 noon New York City time on the later of the Remittance Date on
which the related Remittance Amount is due or the Business Day following receipt
in New York, New York on a Business Day by State Street Bank and Trust Company,
N.A. as Fiscal Agent for the Insurer or any successor fiscal agent appointed by
the Insurer (the "Fiscal Agent") of a Notice (as described below); provided that
if such Notice is received after 12:00 noon New York City time on such Business
Day, it will be deemed to be received on the following Business Day. If any such
Notice received by the Fiscal Agent is not in proper form or is otherwise
insufficient for the purpose of making a claim hereunder it shall be deemed not
to have been received by the Fiscal Agent for purposes of this paragraph, and
the Insurer or the Fiscal Agent shall promptly so advise the Trustee and the
Trustee may submit an amended Notice.
Insured Payments due hereunder unless otherwise stated herein will be
disbursed by the Fiscal Agent to the Trustee on behalf of the Owners by wire
transfer of immediately available funds in the amount of the Insured Payment
less, in respect of Insured Payments related to Preference Amounts, any amount
held by the Trustee for the payment of such Insured Payment and legally
available therefor.
The Fiscal Agent is the agent of the Insurer only and the Fiscal Agent
shall in no event be liable to Owners for any acts of the Fiscal Agent or any
failure of the Insurer to deposit or cause to be deposited, sufficient funds to
make payments due under the policy.
As used herein, the following terms shall have the following meanings:
"Agreement" means the Pooling and Servicing Agreement dated as of
February 28, 1997, among The Money Store Inc., as Representative and Servicer,
the Originators listed therein and the Trustee, as trustee without regard to any
amendment or supplement thereto.
"Business Day" means any day other than a Saturday, a Sunday or a day
on which banking institutions in New York City or in the city in which the
corporate trust office of the Trustee under the Agreement is located are
authorized or obligated by law or executive order to close.
"Deficiency Amount" means, with respect to any Remittance Date, (i)
the excess, if any, of (a) the Pool [I][III] Current Interest Requirement over
(b) the sum of the Pool [I][II] Available Remittance Amount (minus amounts
withdrawn to pay required premiums to the Insurer), and the Monthly Excess
Spread and the Subordination Reduction Amount, plus (ii) the Subordination
Deficit for Pool [I][II], if any, with respect to such Remittance Date.
"Insured Payment" means (i) as of any Remittance Date, any Deficiency
Amount and (ii) any Preference Amount.
"Notice" means the telephonic or telegraphic notice, promptly
confirmed in writing by telecopy substantially in the form of Exhibit A attached
to the policy, the original of which is subsequently delivered by registered or
certified mail, from the Trustee specifying the Insured Payment which shall be
due and owing on the applicable Remittance Date.
"Owner" means each [Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class A-3, Class A-4, Class
A-5, Class A-6 and Class A-7, Class A-8 and Class A-9][Class A-12]
Certificateholder (as defined in the Agreement)(other than the Servicer, the
Originators or the Trustee) who, on the applicable Remittance Date, is entitled
under the terms of the applicable [Class A-1, Class ▇- ▇, Class A-3, Class A-4,
Class A-5, Class A-6, Class A-7, Class A-8 and Class A-9][Class A- 12]
Certificate to payment thereunder.
"Preference Amount" means any amount previously distributed to an
Owner on the Certificates that is recoverable and sought to be recovered as a
voidable preference by a trustee in bankruptcy pursuant to the United States
Bankruptcy Code (11 U.S.C.), as amended from time to time, in accordance with a
final nonappealable order of a court having competent jurisdiction.
Capitalized terms used herein and not otherwise defined herein shall
have the respective meanings set forth in the Agreement as of the date of
execution of the policy, without giving effect to any subsequent amendment or
modification to the Agreement unless such amendment or modification has been
approved in writing by the Insurer.
Any notice hereunder or service of process on the Fiscal Agent of the
Insurer may be made at the address listed below for the Fiscal Agent of the
Insurer or such other address as the Insurer shall specify in writing to the
Trustee.
The notice address of the Fiscal Agent is 15th Floor, ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Municipal Registrar and Paying Agency, or such
other address as the Fiscal Agent shall specify to the Trustee in writing.
The policy is being issued under and pursuant to, and shall be
construed under, the laws of the State of New York, without giving effect to the
conflict of laws principles thereof.
The insurance provided by the policy is not covered by the
Property/Casualty Insurance Security Fund specified in Article 76 of the New
York Insurance Law.
The policy is not cancelable for any reason. The premium on the policy
is not refundable for any reason including payment, or provision being made for
payment, prior to maturity of the Obligations.
Unless the certificate of authentication hereon has been executed by
the Trustee or an Authenticating Agent, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
IN WITNESS WHEREOF, the Servicer has caused this Certificate
to be duly executed on behalf of the Trust Fund.
THE MONEY STORE INC.,
as Servicer
By:________________________________
Title: Executive Vice President
This is one of the Class A-_
Certificates referred to
in the within-mentioned
Pooling and Servicing
Agreement.
THE BANK OF NEW YORK
as Trustee
By:________________________
Authorized Signatory
Date: March 31, 1997
EXHIBIT B-2
[FORM OF CLASS A-10 CERTIFICATES]
THE MONEY STORE HOME EQUITY TRUST 1997-A
ADJUSTABLE RATE THE MONEY STORE HOME EQUITY ASSET BACKED
CERTIFICATES
CLASS A-10
Representing Certain Interests in a
Trust containing certain Mortgage
Loans formed by
THE MONEY STORE INC.
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN A CLASS OF "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G AND
860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING
COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
Unless this Certificate is presented by an authorized representative of
The Depository Trust Company to the issuer or its agent for registration of
transfer, exchange or payment, and any certificate issued is registered in the
name of Cede & Co. or such other name as requested by an authorized
representative of The Depository Trust Company and any payment is made to Cede &
Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an
interest herein.
(This Certificate does not represent an interest in, or an obligation of, nor
are the underlying Mortgage Loans insured or guaranteed by, The Money Store Inc.
or any of its subsidiaries. This Certificate represents a fractional ownership
interest in the Trust described herein.)
No.: ▇-▇▇-▇ ▇▇▇▇▇ ▇▇, ▇▇▇▇
▇▇▇▇▇▇▇ Day
$
Original Principal Final Scheduled CUSIP
Amount Distribution
Cede & Co.
Registered Holder
The registered Holder named above is the registered Holder of a
fractional interest in a trust fund (the "Trust Fund"), the trust estate of
which consists primarily of three sub-trusts, including two pools ("Pool I" and
"Pool II") of one- to four-family ("single family") residential first and second
mortgage loans, having fixed rates, in the case of Pool I, and adjustable rates,
in the case of Pool II (the "Pool I Home Equity Loans" and "Pool II Home Equity
Loans"), and one pool ("Pool III") of fixed rate five or more unit residential
or mixed-use residential and commercial ("multifamily") first mortgage loans
("Pool III Multifamily Loans") and certain related assets. The Certificates are
issued pursuant to a Pooling and Servicing Agreement, dated as of February 28,
1997 (the "Pooling and Servicing Agreement"), among The Money Store Inc. (the
"Representative" and "Servicer"), certain subsidiaries of the Representative
(the "Originators") and The Bank of New York, as trustee (the "Trustee").
The Original Principal Amount set forth above is equal to the product
of (i) the Percentage Interest represented by this Certificate and (ii) the
aggregate original principal amount of the Class A-10 Certificates on March 31,
1997 (the "Startup Day"), which aggregate amount on March 31, 1997 was
$_____________. The Holder hereof is entitled to principal payments on each
Remittance Date, as hereinafter described, which will fully amortize such
Original Principal Amount over the period from the date of initial delivery
hereof to the final Remittance Date of the Class A-10 Certificates. Therefore,
the actual outstanding principal amount of this Certificate may, on any date
subsequent to the Remittance Date in April 1997 (the first Remittance Date), be
less than the Original Principal Amount set forth above.
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE INSURED
OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT
NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
This Certificate is one of a Class of duly-authorized Certificates
designated as The Money Store Home Equity Trust 1997-A, Home Equity Asset Backed
Certificates, Class A-10 (the "Class A-10 Certificates"), and issued under and
subject to the terms, provisions and conditions of the Pooling and Servicing
Agreement, to which Pooling and Servicing Agreement the Holder of this
Certificate by virtue of acceptance hereof assents and by which such Holder is
bound. Also issued under the Pooling and Servicing Agreement are Certificates
designated as The Money Store Home Equity Trust 1997-A, Home Equity Asset Backed
Certificates, Class A-1 (the "Class A-1 Certificates"), The Money Store Home
Equity Trust 1997-A, Home Equity Asset Backed Certificates, Class A-2 (the
"Class A-2 Certificates"), The Money Store Home Equity Trust 1997-A, Home Equity
Asset Backed Certificates, Class A-3 (the "Class A-3 Certificates"), The Money
Store Home Equity Trust 1997-A, Home Equity Asset Backed Certificates, Class A-4
(the "Class A-4 Certificates"), The Money Store Home Equity Trust 1997-A, Home
Equity Asset Backed Certificates, Class A-5 (the "Class A-5 Certificates"), The
Money Store Home Equity Trust 1997-A, Home Equity Asset Backed Certificates,
Class A-6 (the "Class A-6 Certificates"), The Money Store Home Equity Trust
1997-A, Home Equity Asset Backed Certificates, Class A-7 (the "Class A- 7
Certificates"), The Money Store Home Equity Trust 1997-A, Home Equity Asset
Backed Certificates, Class A-8 (the "Class A-8 Certificates"), The Money Store
Home Equity Trust 1997-A, Home Equity Asset Backed Certificates, Class A-9 (the
"Class A-9 Certificates"), The Money Store Home Equity Trust 1997-A, Home Equity
Asset Backed Certificates, Class A-11 (the "Class A-11 Certificates," and
together with the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class
A-6, Class A-7, Class A-8, Class A-9 and Class A-10 Certificates, the "Class A
Certificates"), Certificates designated as The Money Store Home Equity Trust
1997-A, Home Equity Asset Backed Certificates, Class X (the "Class X
Certificates"), and Certificates designated as The Money Store Home Equity Trust
1997-A, Home Equity Asset Backed Certificates, Class R (the "Class R
Certificates"). The Class A Certificates, Class X and the Class R Certificates
are together referred to herein as the "Certificates."
Terms capitalized herein and not otherwise defined herein shall have
the respective meanings set forth in the Pooling and Servicing Agreement.
On the 15th day of each month, or, if such day is not a Business Day,
then the next succeeding Business Day (each such day being a "Remittance Date"),
commencing April 1997, the Holders of the Class A-10 Certificates as of the
close of business on the last day of the calendar month immediately preceding
the calendar month in which such Remittance Date occurs (the "Record Date") will
be entitled to receive that portion of the Pool II Remittance Amount relating to
such Remittance Date as described in the Agreement. Except for the final
distribution, distributions will be made in immediately available funds to
Holders of the Class A-10 Certificates, by wire transfer or otherwise, to the
account of a Holder at a domestic bank or other entity having appropriate
facilities therefor, if such Holder has so notified the Trustee, or by check
mailed to the address of the person entitled thereto as it appears on the
Register.
Each Holder of record of a Class A-10 Certificate will be entitled to
receive such Holder's Percentage Interest in the amounts due on such Remittance
Date to the Holders of the Class A-10 Certificates. The Percentage Interest of
each Class A-10 Certificate as of any date of determination will be equal to the
percentage obtained by dividing the Original Principal Amount set forth on such
Class A-10 Certificate by $_____________.
The Pool II Remittance Amount for any Remittance Date will be an
amount equal to the sum of (i) the Pool II Current Interest Requirement, (ii)
the Pool II Principal Distribution Amount, (iii) the Pool II Carry-Forward
Amount and (iv) any amount received by the Trustee from the Servicer or an
Originator and paid to the Holders of the Pool II Certificates that constitutes
a Monthly Advance and that is recoverable and sought to be recovered as a
voidable preference by a trustee in bankruptcy pursuant to the United States
Bankruptcy Code, as amended from time to time (11 U.S.C.), in accordance with a
final, nonappealable order of a court having competent jurisdiction.
With respect to the Remittance Date occurring in April 1997, the Class
A-10 Remittance Rate will be ______% per annum. For each Remittance Date
thereafter, the Class A-10 Remittance Rate will equal, subject to a maximum rate
equal to the Net Funds Cap, a per annum rate equal to [the sum of the London
interbank offered rate for one-month U.S. dollar deposits ("LIBOR"), determined
as described in the Pooling and Servicing Agreement and ____% (or ____% for each
Remittance Date occurring after the Optional Servicer Termination Date).][the
annual rate of interest determined according to the Auction Procedures.] [In no
event will the Class A-10 Remittance Rate exceed _____%.]
If on any Remittance Date, the Class A-10 Remittance Rate is based
upon the Net Funds Cap, the excess of (i) the amount of interest Class A-10
would be entitled to receive on such Remittance Date at a rate equal to [LIBOR
plus the applicable margin][the rate determined according to the Auction
Procedures] (but in no event greater than ____%) over (ii) the amount of
interest Class A-10 will receive on such Remittance Date at the Net Funds Cap,
together with the unpaid portion of any such excess from prior Remittance Dates
(and interest accrued thereon at the then applicable Class A-10 Remittance Rate
without giving effect to the Net Funds Cap, but in no event exceeding _____% per
annum) is referred to herein as the "Certificateholders' Interest Carryover."
Any Certificateholders' Interest Carryover will be paid on future Remittance
Dates as set forth in the Agreement. No Certificateholders' Interest Carryover
will be paid to the Class A-10 Certificates after the related principal balance
is reduced to zero. The ratings of the Class A-10 Certificates do not address
the likelihood of the payment of the amount of any Certificateholders' Interest
Carryover and the policy issued by the Certificate Insurer does not guaranty
payment of any such amounts.
In the event that any amounts referenced in subclause (iv) above
constitute Insured Payments or any portion thereof, payment of such amounts
shall be disbursed to the trustee in bankruptcy named in the final order of the
court exercising jurisdiction and not directly to any Pool II Certificateholder
unless such Pool II Certificateholder has returned principal or interest paid on
the Pool II Certificates to such trustee in bankruptcy, in which case payment
shall be disbursed to such Class A Certificateholder.
The Mortgage Loans will be serviced by The Money Store Inc. (the
"Servicer") pursuant to the Pooling and Servicing Agreement. The Pooling and
Servicing Agreement permits the Servicer to enter into Subservicing Agreements
with certain institutions eligible for appointment as Subservicers for the
servicing and administration of certain Mortgage Loans. No appointment of any
Subservicer shall release the Servicer from any of its obligations under the
Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other obligation of,
or an interest in, nor are the underlying Mortgage Loans insured or guaranteed
by, The Money Store Inc. or any of its subsidiaries or affiliates and are not
insured or guaranteed by the Federal Deposit Insurance Corporation, the
Government National Mortgage Association, or any other governmental agency. This
Certificate is limited in right of payment to certain collections and recoveries
relating to the Mortgage Loans and amounts on deposit in the Certificate
Account, and payments received by the Trustee pursuant to the related MBIA
Policy, all as more specifically set forth hereinabove and in the Pooling and
Servicing Agreement.
No Holder shall have any right to institute any proceeding, judicial
or otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Holder of any Certificate shall have the right, which is absolute
and unconditional, to receive distributions to the extent provided in the
Pooling and Servicing Agreement with respect to such Certificate or to institute
suit for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Holder.
The Pooling and Servicing Agreement provides that the obligations
created thereby will terminate upon the earlier to occur of (i) the distribution
to the Certificateholders of all amounts required to be distributed to them
thereunder and (ii) at any time when a Qualified Liquidation of the Trust is
effected; provided, however, that in no event shall the Trust continue beyond
the expiration of 21 years from the death of the survivor of the last lineal
descendant of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late ambassador of the United States to the
Court of St. ▇▇▇▇▇, living on the Startup Date.
Written notice of the final distribution to be made with respect to
the Class A-10 Certificates shall be given by the Trustee to the Class A-10
Certificateholders after the Trustee determines that a final distribution is
required to be made, specifying (i) the final Remittance Date upon which final
distribution on the Class A-10 Certificates will be made upon presentation and
surrender of the Certificates at the office of the Trustee therein designated,
(ii) the amount of any such final distribution and (iii) that the Record Date
otherwise applicable to such Remittance Date is not applicable.
The final distribution on any Certificate shall only be made upon
presentation of such Certificate to the Trustee.
The Holders of a majority of the Percentage Interests represented by
the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7,
Class A-8, Class A-9, Class A-10, Class A-11 and Class A-12 Certificates, upon
compliance with the requirements set forth in the Pooling and Servicing
Agreement, have the right to exercise any trust or power set forth in the
Pooling and Servicing Agreement with respect to the Certificates or the Trust
Fund.
As provided in the Pooling and Servicing Agreement, the transfer of
this Certificate is registrable in the Register upon surrender of this
Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Certificates of like Class,
tenor and a like aggregate fractional undivided interest in the Trust Fund will
be issued to the designated transferee or transferees.
The Trustee is required to furnish certain information on each
Remittance Date to the Holder of this Certificate, as more fully described in
the Pooling and Servicing Agreement.
The Class A-10 Certificates are issuable only as registered
Certificates in the minimum Percentage Interest corresponding to a minimum
denomination of $1,000 original principal amount and integral multiples of
$1,000. As provided in the Pooling and Servicing Agreement, Class A-10
Certificates are exchangeable for new Class A-10 Certificates of authorized
denominations evidencing the same aggregate Percentage Interest.
No service charge will be made for any such registration of transfer
or exchange, but the Certificate Registrar or Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Trustee and any agent of the Trustee may treat the Person in whose
name this Certificate is registered as the owner hereof for all purposes, and
neither the Trustee or any such agent shall be affected by notice to the
contrary.
STATEMENT OF INSURANCE
The MBIA Insurance Corporation (the "Insurer") has issued a policy
containing the following provisions, such policy being on file at The Bank of
New York, as trustee (the "Trustee"), New York, New York.
The Insurer in consideration of the payment of the premium and subject
to the terms of the policy hereby unconditionally and irrevocably guarantees to
any Owner (as described below) that an amount equal to each full and complete
Insured Payment (as described below) will be received by the Trustee or its
successor, on behalf of the Owners from the Insurer, for distribution by the
Trustee to each Owner of each Owner's proportionate share of the Insured
Payment. The Insurer's obligations hereunder with respect to a particular
Insured Payment shall be discharged to the extent funds equal to the applicable
Insured Payment are received by the Trustee, whether or not such funds are
properly applied by the Trustee. Insured Payments shall be made only at the time
set forth in the policy and no accelerated Insured Payments shall be made
regardless of any acceleration of the Obligations (as that term is described
below) unless such acceleration is at the sole option of the Insurer.
Notwithstanding the foregoing paragraph, the policy does not cover
shortfalls, if any, attributable to the liability of the Trust, and REMIC or the
Trustee for withholding taxes, if any (including interest and penalties in
respect of any such liability). Additionally, the policy does not guaranty
payment of any Certificateholder's LIBOR Interest Carryover.
"Obligations" shall mean:
[$___________ The Money Store Home Equity Asset Backed
Certificates, Series 1997-A, Class A-1, Class ▇-▇, ▇▇▇▇▇ ▇-▇,
Class A-4, Class A-5, Class A-6, Class A-7, Class A-8 and
Class A-9.]
[$___________ The Money Store Home Equity Asset Backed
Certificates, Series 1997-A, Class A-10 and Class A-11.]
[$___________ The Money Store Asset Backed Certificates,
Series 1997-A, Class A-12.]
The 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 (as
described below) of (i) a certified copy of such order requiring the return of a
preference payment, (ii) an opinion of counsel satisfactory to the Insurer that
such order is final and not subject to appeal, (iii) an assignment in such form
as is reasonably required by the Insurer, irrevocably assigning to the Insurer
all rights and claims of the Owner relating to or arising under the Obligations
against the debtor which made such preference payment or otherwise with respect
to such preference payment and (iv) appropriate instruments to effect the
appointment of the Insurer as agent for such Owner in any legal proceeding
related to such preference payment, such instruments being in a form
satisfactory to the Insurer, provided that if such documents are received after
12:00 noon New York City time on such Business Day, they will be deemed to be
received on the following Business Day. Such payments shall be disbursed to the
receiver or trustee in bankruptcy named in the final order of the court
exercising jurisdiction on behalf of the Owner and not to any Owner directly
unless such Owner has returned principal or interest paid on the Obligations to
such receiver or trustee in bankruptcy, in which case such payment shall be
disbursed to such Owner.
The Insurer will pay any other amount payable under the policy no
later than 12:00 noon New York City time on the later of the Remittance Date on
which the related Remittance Amount is due or the Business Day following receipt
in New York, New York on a Business Day by State Street Bank and Trust Company,
N.A. as Fiscal Agent for the Insurer or any successor fiscal agent appointed by
the Insurer (the "Fiscal Agent") of a Notice (as described below); provided that
if such Notice is received after 12:00 noon New York City time on such Business
Day, it will be deemed to be received on the following Business Day. If any such
Notice received by the Fiscal Agent is not in proper form or is otherwise
insufficient for the purpose of making a claim hereunder it shall be deemed not
to have been received by the Fiscal Agent for purposes of this paragraph, and
the Insurer or the Fiscal Agent shall promptly so advise the Trustee and the
Trustee may submit an amended Notice.
Insured Payments due hereunder unless otherwise stated herein will be
disbursed by the Fiscal Agent to the Trustee on behalf of the Owners by wire
transfer of immediately available funds in the amount of the Insured Payment
less, in respect of Insured Payments related to Preference Amounts, any amount
held by the Trustee for the payment of such Insured Payment and legally
available therefor.
The Fiscal Agent is the agent of the Insurer only and the Fiscal Agent
shall in no event be liable to Owners for any acts of the Fiscal Agent or any
failure of the Insurer to deposit or cause to be deposited, sufficient funds to
make payments due under the policy.
As used herein, the following terms shall have the following meanings:
"Agreement" means the Pooling and Servicing Agreement dated as of
February 28, 1997, among The Money Store Inc., as Representative and Servicer,
the Originators listed therein and the Trustee, as trustee without regard to any
amendment or supplement thereto.
"Business Day" means any day other than a Saturday, a Sunday or a day
on which banking institutions in New York City or in the city in which the
corporate trust office of the Trustee under the Agreement is located are
authorized or obligated by law or executive order to close.
"Deficiency Amount" means, with respect to any Remittance Date, (i)
the excess, if any, of (a) the Pool II Current Interest Requirement over (b) the
sum of the Pool II Available Remittance Amount (minus amounts withdrawn to pay
required premiums to the Insurer), and the Monthly Excess Spread and the
Subordination Reduction Amount, plus (ii) the Subordination Deficit for Pool II,
if any, with respect to such Remittance Date.
"Insured Payment" means (i) as of any Remittance Date, any Deficiency
Amount and (ii) any Preference Amount.
"Notice" means the telephonic or telegraphic notice, promptly
confirmed in writing by telecopy substantially in the form of Exhibit A attached
to the policy, the original of which is subsequently delivered by registered or
certified mail, from the Trustee specifying the Insured Payment which shall be
due and owing on the applicable Remittance Date.
"Owner" means each Class A-10 and Class A-11 Certificateholder (as
defined in the Agreement)(other than the Servicer, the Originators or the
Trustee) who, on the applicable Remittance Date, is entitled under the terms of
the applicable Class A-10 and Class A-11 Certificate to payment thereunder.
"Preference Amount" means any amount previously distributed to an
Owner on the Certificates that is recoverable and sought to be recovered as a
voidable preference by a trustee in bankruptcy pursuant to the United States
Bankruptcy Code (11 U.S.C.), as amended from time to time, in accordance with a
final nonappealable order of a court having competent jurisdiction.
Capitalized terms used herein and not otherwise defined herein shall
have the respective meanings set forth in the Agreement as of the date of
execution of the policy, without giving effect to any subsequent amendment or
modification to the Agreement unless such amendment or modification has been
approved in writing by the Insurer.
Any notice hereunder or service of process on the Fiscal Agent of the
Insurer may be made at the address listed below for the Fiscal Agent of the
Insurer or such other address as the Insurer shall specify in writing to the
Trustee.
The notice address of the Fiscal Agent is 15th Floor, ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Municipal Registrar and Paying Agency, or such
other address as the Fiscal Agent shall specify to the Trustee in writing.
The policy is being issued under and pursuant to, and shall be
construed under, the laws of the State of New York, without giving effect to the
conflict of laws principles thereof.
The insurance provided by the policy is not covered by the
Property/Casualty Insurance Security Fund specified in Article 76 of the New
York Insurance Law.
The policy is not cancelable for any reason. The premium on the policy
is not refundable for any reason including payment, or provision being made for
payment, prior to maturity of the Obligations.
Unless the certificate of authentication hereon has been executed by
the Trustee or an Authenticating Agent, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
IN WITNESS WHEREOF, the Servicer has caused this Certificate to be
duly executed on behalf of the Trust Fund.
THE MONEY STORE INC.,
as Servicer
By:___________________________________
Title: Executive Vice President
This is one of the Class A-
Certificates referred to
in the within-mentioned
Pooling and Servicing
Agreement.
THE BANK OF NEW YORK
as Trustee
By:________________________
Authorized Signatory
Date: March 31, 1997
EXHIBIT B-3
THE MONEY STORE HOME EQUITY TRUST 1997-A
HOME EQUITY ASSET BACKED CERTIFICATE
CLASS R
Representing Certain Interests in a Trust
containing certain Mortgage
Loans formed by
THE MONEY STORE INC.
(This certificate does not represent an interest in, or an obligation
of, nor are the underlying Mortgage Loans insured or guaranteed by, The Money
Store Inc. or any of its subsidiaries. This Certificate represents a fractional
ownership interest in the Trust Fund described herein.)
No.: R-_ March 31, 1997
Startup Day
[.01%]
[99.99%] Percentage Interest
Final Scheduled
Distribution
Registered Holder
The registered Holder named above is the registered Holder of a
fractional interest in a trust fund (the "Trust Fund"), the trust estate of
which consists primarily of three sub-trusts, including two pools ("Pool I" and
"Pool II") of one- to four-family ("single family") residential first and second
mortgage loans, having fixed rates, in the case of Pool I, and adjustable rates,
in the case of Pool II (the "Pool I Home Equity Loans" and "Pool II Home Equity
Loans"), one pool ("Pool III") of fixed rate five or more unit residential or
mixed-use residential and commercial ("multifamily") first mortgage loans ("Pool
III Multifamily Loans") and certain related assets. The Certificates are issued
pursuant to a Pooling and Servicing Agreement, dated as of February 28, 1997
(the "Pooling and Servicing Agreement"), among The Money Store Inc. (the
"Representative" and "Servicer"), certain subsidiaries of the Representative
(the "Originators") and The Bank of New York, as trustee (the "Trustee").
THIS CERTIFICATE IS A PASS-THROUGH CERTIFICATE ONLY AND,
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE INSURED
OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT
NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
This Certificate is one of a Class of duly-authorized Certificates
designated as The Money Store Home Equity Trust 1997-A, Home Equity Asset-Backed
Certificates, Class R (the "Class R Certificates"), and issued under and subject
to the terms, provisions and conditions of the Pooling and Servicing Agreement,
to which Pooling and Servicing Agreement the Holder of this Certificate by
virtue of acceptance hereof assents and by which such Holder is bound. Also
issued under the Pooling and Servicing Agreement in connection with the Trust
Fund are Certificates designated as The Money Store Home Equity Trust 1997-A,
Class A-1, Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class A-4, Class A-5, Class A-6, Class A-7,
Class A-8, Class A-9, Class A-10, Class A-11 and Class A-12 Certificates
(collectively, the "Class A Certificates"), and Certificates designated as The
Money Store Home Equity Trust 1997-A, Class X (the "Class X Certificates"). The
Class A Certificates, Class X and Class R Certificates are together referred to
herein as the "Certificates."
Terms capitalized herein and not otherwise defined herein shall have
the respective meanings set forth in the Pooling and Servicing Agreement.
On the 15th day of each month, or, if such day is not a Business Day,
then the next succeeding Business Day (each such day being a "Remittance Date"),
commencing in April 1997, the Holders of the Class R Certificates as of the
close of business on the Startup Day with respect to the first Remittance Date
and, with respect to each Remittance Date thereafter, on the last day of the
calendar month immediately preceding the calendar month in which such Remittance
Date occurs (the "Record Date") will be entitled to receive the amounts due on
such Remittance Date to the Holders of the Class R Certificates. Except for the
final distribution, distributions will be made in immediately available funds to
Holders of Certificates, by wire transfer or otherwise, to the account of a
Holder at a domestic bank or other entity having appropriate facilities
therefor, if such Holder has so notified the Trustee, or by check mailed to the
address of the person entitled thereto as it appears on the Register.
Each Holder of record of a Class R Certificate will be entitled to
receive such Holder's Percentage Interest in the amounts due on such Remittance
Date to the Holders of the Class R Certificates. The amounts due on each
Remittance Date are limited to certain residual amounts remaining after all
amounts due to the Holders of the Class A Certificates have been paid on such
Remittance Date.
The Mortgage Loans will be serviced by The Money Store Inc. (the
"Servicer") pursuant to the Pooling and Servicing Agreement. The Pooling and
Servicing Agreement permits the Servicer to enter into Subservicing Agreements
with certain institutions eligible for appointment as Subservicers for the
servicing and administration of certain Mortgage Loans. No appointment of any
Subservicer shall release the Servicer from any of its obligations under the
Pooling and Servicing Agreement.
This Certificate does not represent a deposit or other obligation of,
or an interest in, nor are the underlying Mortgage Loans insured or guaranteed
by, The Money Store Inc. or any of its subsidiaries or affiliates and are not
insured or guaranteed by the Federal Deposit Insurance Corporation, the
Government National Mortgage Association, or any other governmental agency. This
Certificate is limited in right of payment to certain collections and recoveries
relating to the Mortgage Loans and amounts on deposit in the Certificate Account
all as more specifically set forth hereinabove and in the Pooling and Servicing
Agreement.
No Holder shall have any right to institute any proceeding, judicial
or otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Holder of any Certificate shall have the right which is absolute
and unconditional to receive distributions to the extent provided in the Pooling
and Servicing Agreement with respect to such Certificate or to institute suit
for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Holder.
The Pooling and Servicing Agreement provides that the obligations
created thereby will terminate upon the earlier to occur of (i) the distribution
to the Certificateholders of all amounts required to be distributed to them
thereunder and (ii) at any time when a Qualified Liquidation of the Trust is
effected; provided, however, that in no event shall the trust created thereby
continue beyond the expiration of 21 years from the death of the survivor of the
descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late ambassador of the United States to
the Court of St. ▇▇▇▇▇, living on the Startup Date.
Written notice of the final distribution to be made with respect to
the Class R Certificates shall be given by the Trustee to the Class R
Certificateholders, mailed promptly after the Trustee determines that a final
distribution is required to be made, specifying (i) the final Remittance Date
upon which final distribution on the Class R Certificates will be made upon
presentation and surrender of the Certificates at the office of the Trustee
therein designated, (ii) the amount of any such final distribution and (iii)
that the Record Date otherwise applicable to such Remittance Date is not
applicable.
The final distribution on any Certificate shall only be made upon
presentation of such Certificate to the Trustee.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth and referred to on the face hereof, the
transfer of this Certificate is registrable in the Register upon surrender of
this Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Certificates of like Class,
tenor and a like aggregate fractional undivided interest in the Trust Fund will
be issued to the designated transferee or transferees.
The Trustee is required to furnish certain information on each
Remittance Date to the Holder of this Certificate, as more fully described in
the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Class R Certificates are exchangeable for
new Class R Certificates evidencing the same aggregate Percentage Interest.
No service charge will be made for any such registration of transfer
or exchange, but the Registrar or Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Trustee and any agent of the Trustee may treat the Person in whose
name this Certificate is registered as the owner hereof for all purposes, and
neither the Trustee or any such agent shall be affected by notice to the
contrary.
Unless the certificate of authentication hereon has been executed by
the Trustee or an Authenticating Agent, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
IN WITNESS WHEREOF, the Servicer has caused this Certificate to be duly
executed on behalf of the Trust Fund.
THE MONEY STORE INC.,
as Servicer
By:_____________________________________
Title: Executive Vice President
This is one of the Class R-_
Certificates referred
to in the within-mentioned
Pooling and Servicing Agreement
THE BANK OF NEW YORK,
as Trustee
By:
Authorized Signatory
Date: March 31, 1997
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN THE ONLY "RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G and
860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING
COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY BE MADE ONLY IN A TRANSACTION EXEMPT FROM
THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 4.02 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
TRANSFER OF THIS CLASS R CERTIFICATE IS RESTRICTED AS SET FORTH IN THE
POOLING AND SERVICING AGREEMENT. NO TRANSFER OF THIS CLASS R CERTIFICATE MAY BE
MADE TO A "DISQUALIFIED ORGANIZATION" AS DEFINED IN SECTION 860E(e)(5) OF THE
CODE. SUCH TERM INCLUDES THE UNITED STATES, ANY STATE OR POLITICAL SUBDIVISION
THEREOF, ANY FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, ANY AGENCY OR
INSTRUMENTALITY OF ANY OF THE FOREGOING (OTHER THAN CERTAIN TAXABLE
INSTRUMENTALITIES), ANY COOPERATIVE ORGANIZATION FURNISHING ELECTRIC ENERGY OR
PROVIDING TELEPHONE SERVICE TO PERSONS IN RURAL AREAS, OR ANY ORGANIZATION
(OTHER THAN A FARMERS' COOPERATIVE) THAT IS EXEMPT FROM FEDERAL INCOME TAX
UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX ON UNRELATED BUSINESS INCOME. NO
TRANSFER OF THIS CLASS R CERTIFICATE WILL BE REGISTERED BY THE CERTIFICATE
REGISTRAR UNLESS THE PROPOSED TRANSFEREE HAS DELIVERED AN AFFIDAVIT AFFIRMING,
AMONG OTHER THINGS, THAT THE PROPOSED TRANSFEREE IS NOT A DISQUALIFIED
ORGANIZATION AND IS NOT ACQUIRING THE CLASS R CERTIFICATE FOR THE ACCOUNT OF A
DISQUALIFIED ORGANIZATION. A COPY OF THE FORM OF AFFIDAVIT REQUIRED OF EACH
PROPOSED TRANSFEREE IS ON FILE AND AVAILABLE FROM THE TRUSTEE.
A TRANSFER IN VIOLATION OF THE APPLICABLE RESTRICTIONS MAY GIVE RISE
TO A SUBSTANTIAL TAX UPON THE TRANSFEROR OR, IN CERTAIN CASES, UPON AN AGENT
ACTING FOR THE TRANSFEREE. A PASS-THRU ENTITY THAT HOLDS THIS CLASS R
CERTIFICATE AND THAT HAS A DISQUALIFIED ORGANIZATION AS A RECORD HOLDER IN ANY
TAXABLE YEAR GENERALLY WILL BE SUBJECT TO A TAX FOR EACH SUCH YEAR EQUAL TO THE
PRODUCT OF (A) THE AMOUNT OF EXCESS INCLUSIONS WITH RESPECT TO THE PORTION OF
THIS CERTIFICATE OWNED THROUGH SUCH PASS-THRU ENTITY BY SUCH DISQUALIFIED
ORGANIZATION, AND (B) THE HIGHEST MARGINAL FEDERAL TAX RATE ON CORPORATIONS. FOR
PURPOSES OF THE PRECEDING SENTENCE, THE TERM "PASS-THRU" ENTITY INCLUDES
REGULATED INVESTMENT COMPANIES, REAL ESTATE INVESTMENT TRUSTS, COMMON TRUST
FUNDS, PARTNERSHIPS, TRUSTS, ESTATES, COOPERATIVES TO WHICH PART I OF SUBCHAPTER
T OF THE CODE APPLIES AND, EXCEPT AS PROVIDED IN REGULATIONS, NOMINEES.
IN ADDITION, THE TAX SIMPLIFICATION ACT OF 1991 (H.R. 2777 AND S.
1394), INTRODUCED ON JUNE 26, 1991, PROVIDES THAT EACH PARTNER IN A "LARGE
PARTNERSHIP" HOLDING A RESIDUAL INTEREST IN A REMIC SHALL BE TREATED AS A
DISQUALIFIED ORGANIZATION FOR PURPOSES OF THE TAX IMPOSED ON PASS-THRU ENTITIES
UNDER SECTION 860E(e)(6) OF THE CODE. IF ENACTED, THIS DEFINITION WOULD BE
EFFECTIVE FOR A PASS-THRU ENTITY'S TAXABLE YEARS ENDING ON OR AFTER DECEMBER 31,
1992. NO PREDICTION CAN BE MADE REGARDING WHETHER SUCH LEGISLATION WILL BE
ENACTED OR IF SO, WHAT THE ULTIMATE EFFECTIVE DATE WILL BE.
EXHIBIT C
PRINCIPAL AND INTEREST ACCOUNT LETTER AGREEMENT
March 31, 1997
To: First Union National Bank of North Carolina
One First Union Center, TW-19
Charlotte, North Carolina. 28288 (the "Depository")
As "Servicer" under the Pooling and Servicing Agreement, dated as of
February 28, 1997, The Money Store Home Equity Asset Backed Certificates, Series
1997-A, Class A-1, Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class A-4, Class A-5, Class A-6, Class
A-7, Class A-8, Class A-9, Class A-10, Class A-11, Class A-12, Class X and Class
R (the "Agreement"), we hereby authorize and request you to establish an
account, as a Principal and Interest Account pursuant to Section 5.03 of the
Agreement, to be designated as "The Money Store Inc., in trust for the
registered holders of The Money Store Home Equity Asset Backed Certificates,
Series 1997- A, Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class
A-6, Class A-7, Class A-8, Class A-9, Class A-10, Class A-11, Class A-12, Class
X and Class R, and various Mortgagors." All deposits in the account shall be
subject to withdrawal therefrom by order signed by the Servicer. You may refuse
any deposit which would result in violation of the requirement that the account
be fully insured as described below. This letter is submitted to you in
duplicate. Please execute and return one original to us.
The Money Store Inc.
By:_________________________
Name:
Title:
The undersigned, as Depository, hereby certifies that the above
described account has been established under Account Number ________________, at
the office of the depository indicated above, and agrees to honor withdrawals on
such account as provided above. The amounts deposited at any time in the account
will be insured to the maximum amount provided by applicable law by the Federal
Deposit Insurance Corporation through the Bank Insurance Fund.
First Union National Bank of
North Carolina
(Name of Depository)
By:___________________________
Name:
Title:
EXHIBIT D
RESALE CERTIFICATION
_______________, 19__
[Representative]
[Servicer]
[Trustee]
[Co-Trustee]
[Certificate Insurer]
[Certificate Registrar]
Re: Class R Certificate issued under the Pooling and Servicing
Agreement, The Money Store Home Equity Asset Backed Certificates,
Series 1997-A dated as of February 28, 1997 among The Bank of New
York, as Trustee, The Money Store Inc. (the "Representative"),
and certain subsidiaries of the Representative
Dear Sirs:
___________________________________________ ("Seller") intends to
transfer the captioned Certificate to _______________ ("Purchaser"), for
registration in the name of
----------------------------------------------------.
1. In connection with such transfer, and in accordance with Section
4.02 of the captioned Agreement, Seller hereby certifies to you the following
facts: Neither the Seller nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of the Certificate, any
interest in the Certificate or any other similar security to, or solicited any
offer to buy or accept a transfer, pledge or other disposition of the
Certificate, any interest in the Certificate or any other similar security with,
any person in any manner, or made any general solicitation by means of general
advertising or in any other manner, or taken any other action which would
constitute a distribution of the Certificate under the Securities Act of 1933,
as amended (the "1933 Act"), or which would render the disposition of the
Certificate a violation of Section 5 of the 1933 Act or require registration
pursuant thereto.
2. The Purchaser warrants and represents to, and covenants with, the
Seller, the Trustee and the Servicer pursuant to Section 4.02 of the Pooling and
Servicing Agreement that:
a. The Purchaser agrees to be bound, as Certificateholder, by all
of the terms, covenants and conditions of the Pooling and Servicing Agreement
and the Certificate, and from and after the date hereof, the Purchaser assumes
for the benefit of each of the Servicer and the Seller all of the Seller's
obligations as Certificateholder thereunder;
b. The Purchaser understands that the Certificate has not been
registered under the 1933 Act or the securities laws of any state;
c. The Purchaser is acquiring the Certificate for investment for
its own account or the account of another qualified institutional buyer (within
the meaning of Rule 144A) only and not for any other person;
d. The Purchaser considers itself a substantial, sophisticated
institutional investor having such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of
investment in the Certificate;
e. The Purchaser has been furnished with all information
regarding the Certificate that it has requested from the Seller, the Trustee or
the Servicer; and
f. Neither the Purchaser nor anyone acting on its behalf has
offered, transferred, pledged, sold or otherwise disposed of the Certificate,
any interest in the Certificate or any other similar security to, or solicited
any offer to buy or accept a transfer, pledge or other disposition of the
Certificate, any interest in the Certificate or any other similar security from,
or otherwise approached or negotiated with respect to the Certificate, any
interest in the Certificate or any other similar security with, any person
(other than a qualified institutional buyer within the meaning of Rule 144A) in
any manner, or made any general solicitation by means of general advertising or
in any other manner, or taken any other action which would constitute a
distribution of the Certificate under the 1933 Act or which would render the
disposition of the Certificate a violation of Section 5 of the 1933 Act or
require registration pursuant thereto, nor will it act, nor has it authorized or
will it authorize any person to act, in such manner with respect to the
Certificate.
[The following is to be completed if transfer is being made pursuant
to Rule 144A].
3. The Purchaser understands and agrees with the Seller that the
Seller is transferring the Certificate pursuant to the exemption from
registration under the 1933 Act provided by Rule 144A thereunder ("Rule 144A")
and the Purchaser hereby represents and warrants to the Seller, the Trustee and
the Servicer that the Purchaser is a "qualified institutional buyer" as defined
in Rule 144A because (i) the Purchaser owned and/or invested on a discretionary
basis $_________1 in securities (except for the excluded securities referred to
below) as of -------- 1 The Purchaser must own and/or invest on a discretionary
basis at least $100,000,000 in securities unless Buyer is a dealer, and, in that
case, Buyer must own and/or invest on a discretionary basis at least $10,000,000
in securities.
the end of the Purchaser's most recent fiscal year (such amount being calculated
in accordance with Rule 144A) and (ii) the Purchaser satisfies the criteria in
the category marked below.
Corporation, etc. The Purchaser is a corporation other than a
bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or
charitable organization described in Section 501(c)(3) of the
Internal Revenue Code.
Bank. The Purchaser (a) is a national bank or banking
institution organized under the laws of any State, territory
or the District of Columbia, the business of which is
substantially confined to banking and is supervised by the
State or territorial banking commission or similar official or
is a foreign bank or equivalent institution, and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, a copy of which is
attached hereto.
Savings and Loan. The Purchaser (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is
supervised and examined by a state or Federal authority having
supervision over any such institutions or is a foreign savings
and loan association or equivalent institution and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, a copy of which is
attached hereto.
Broker-dealer. The Purchaser is a dealer registered pursuant
to Section 15 of the Securities Exchange Act of 1934.
Insurance Company. The Purchaser is an insurance company whose
primary and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by insurance
companies and which is subject to supervision by the insurance
commissioner or a similar official or agency of a State,
territory or the District of Columbia.
The term "Securities" as used herein does not include (i) securities of
issuers that are affiliated with the Purchaser, (ii) securities that are part of
an unsold allotment to or subscription by the Purchaser (if the Purchaser is a
dealer), (iii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iv) bank deposit notes and certificates of deposit,
(v) loan participation, (vi) repurchase agreements, (vii) securities owned but
subject to a repurchase agreement and (viii) currency, interest rate and
commodity swaps.
For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Purchaser, the Purchaser used
the cost of such securities to the Purchaser and did not include any of the
securities referred to in the preceding paragraph.
Further, in determining such aggregate amount, the Purchaser may have
included securities owned by subsidiaries of the Purchaser, but only if such
subsidiaries are consolidated with the Purchaser in its financial statements
prepared in accordance with generally accepted accounting principles and if the
investment of such subsidiaries are managed under the Purchaser's direction.
However, such securities were not included if the Purchaser is a majority owned,
consolidated subsidiary of another enterprise and the Purchaser is not itself a
reporting company under the Securities Exchange Act of 1934.
The Purchaser acknowledges that it is familiar with Rule 144A and
understands that you are and will continue to rely on the statements made
herein.
The Purchaser agrees to notify you of any changes in the information
and conclusions herein. Until such notice is given to you, the Purchaser's
purchase of the Certificate will constitute a reaffirmation of the foregoing
certifications and acknowledgments as of the date of such purchase.
Further, if the Purchaser is a bank or savings and loan as provided
above, the Purchaser agrees that it will furnish the Seller with updated annual
financial statements promptly after they become available.
4. The Purchaser warrants and represents to, and covenants with, the
Seller, the Servicer, the Trustee and the Representative that:
a. The Purchaser agrees to be bound, as Certificateholder, by the
restrictions on transfer contained in the Pooling and Servicing Agreement; and
b. Either: (1) the Purchaser is not an employee benefit plan
within the meaning of section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), ("Plan") or a plan within the meaning of
section 4975(e)(1) of the Internal Revenue Code of 1986 ("Code") (also a
"Plan"), and the Purchaser is not directly or indirectly purchasing the
Certificates on behalf of, as investment manager of, as named fiduciary of, as
trustee of, or with assets of a Plan; or (2) Purchaser shall deliver the opinion
of counsel required pursuant to Section 4.02(c) of the Pooling and Servicing
Agreement.
5. This Certification may be executed in one or more counterparts and
by the different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same agreement.
IN WITNESS WHEREOF, the parties have caused this Resale Certification
to be executed by their duly authorized officers as of the date first above
written.
------------------------------, ------------------------------------,
Seller Purchaser
By:____________________________ By:_________________________________
Its:___________________________ Its:________________________________
Taxpaer
Identification No._____________ Identification No.____________
EXHIBIT E
ASSIGNMENT
THIS ASSIGNMENT dated as of the ____ day of __________, 19__, by and
between _________________________, ("Assignor") and _________________________
("Assignee"), provides:
That for and in consideration of the sum of TEN DOLLARS ($10.00) and
other valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, the parties hereby agree as follows:
1. Assignor hereby grants, transfers and assigns to Assignee all of
the right, title and interest of Assignor, as Certificateholder, in, to and
under that certain Pooling and Servicing Agreement, The Money Store Home Equity
Asset Backed Certificates, Series 1997-A, Class A-1, Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class
A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class A-9, Class A-10, Class
A-11, Class A-12, Class X and Class R (the "Pooling and Servicing Agreement"),
dated as of February 28, 1997 by and among The Bank of New York, as Trustee
("Trustee") and The Money Store Inc., as Representative and Servicer and the
Originators, and that certain Certificate, Class R No. __ Series 1997-A (the
"Certificate") issued thereunder by the Servicer.
2. For the purpose of inducing Assignee to purchase the Certificate
from Assignor, Assignor warrants and represents that:
a. Assignor is the lawful owner of the Certificate with the full
right to transfer the Certificate free from any and all claims and encumbrances
whatsoever;
b. The Assignor has not received notice, and has no knowledge, of
any offsets, counterclaims or other defenses available to the Servicer with
respect to the Pooling and Servicing Agreement or the Certificate; and
c. The Assignor has no knowledge of and has not received notice
of any amendments to the Pooling and Servicing Agreement or the Certificate.
3. By execution hereof Assignee agrees to be bound, as
Certificateholder, by all of the terms, covenants and conditions of the Pooling
and Servicing Agreement, and the Certificate and from and after the date hereof
Assignee assumes for the benefit of each of the Servicer, the Representative,
the Trustee and the Assignor all of Assignor's obligations as Certificateholder
thereunder.
4. The Assignee warrants and represents to, and covenants with, the
Assignor, the Representative and the Servicer that:
a. The Assignee agrees to be bound, as Certificateholder, by the
restrictions on transfer contained in the Pooling and Servicing Agreement; and
b. Either: (1) the Assignee is not an employee benefit plan
within the meaning of section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), ("Plan") or a plan within the meaning of
section 4975(e)(1) of the Internal Revenue Code of 1986 ("Code") (also a
"Plan"), and the Assignee is not directly or indirectly purchasing the
Certificates on behalf of, as investment manager of, as named fiduciary of, as
trustee of, or with assets of a Plan; or (2) Assignee shall deliver the opinion
of counsel required pursuant to Section 4.02(c) of the Pooling and Servicing
Agreement.
5. This Assignment may be executed in one or more counterparts and by
the different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same agreement.
WITNESS the following signatures.
By:______________ By:______________ By:______________ By:_____________
Its:_____________ Its:_____________ Its:_____________ Its:____________
Taxpayer Taxpayer Taxpayer Taxpayer
Identification Identification Identification Identification
No.______________ No.______________ No.______________ No._____________
EXHIBIT E-1
WIRING INSTRUCTIONS FORM
_______________, 19__
[Paying Agent]
[Trustee]
========================
------------------------
Re: The Money Store Home Equity Asset Backed Certificates,
Series 1997-A [Class A-1][Class A-2][Class A-3][Class
A-4][Class A-5][Class A-6][Class A-7][Class A-8][Class
A-9][Class A-10][Class A-11][Class A-12][Class X][Class R],
Number ___ Issued by The Money Store Inc., as Servicer
Dear Sir:
In connection with the sale of the above-captioned Certificate by
___________________________________ to ____________________________________,
("Transferee") you, as Paying Agent with respect to the related Mortgages Loans,
are instructed to make all remittances to Transferee as Certificateholder as of
____________, 19__ by wire transfer. For such wire transfer, the wiring
instructions are as follows:
===========================
---------------------------
--------------------------------
Transferee
Certificateholder's mailing address:
Name:
Address:
EXHIBIT F
FORM OF [TRUSTEE] INITIAL CERTIFICATION
, 1997
MBIA Insurance Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
The Money Store, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
TMS Special Holdings, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Prudential Securities Incorporated, as
representative of the Underwriters
▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Pooling and Servicing Agreement The Money Store Home Equity Asset
Backed Certificates, Series 1997-A, dated as of February 28, 1997
among The Money Store Inc. as Representative and Servicer, the
Originators and The Bank of New York, as Trustee
Gentlemen:
In accordance with Section 2.05 of the above-captioned Pooling
and Servicing Agreement, the undersigned, as [Trustee], hereby certifies that,
except as noted on the attachment hereto, if any (the "Loan Exception Report"),
it has received an Assignment of Mortgage, or a certified copy thereof, and a
Mortgage Note with respect to each [Initial] [Subsequent] [Mortgage Loan] listed
in the Mortgage Loan Schedule and the documents contained therein appear to bear
original signatures.
The [Trustee] has made no independent examination of any such documents
beyond the review specifically required in the above-referenced Pooling and
Servicing Agreement. The [Trustee] makes no representations as to: (i) the
validity, legality, sufficiency, enforceability or genuineness of any such
documents or any of the [Mortgage Loans] identified on the Mortgage Loan
Schedule, or (ii) the collectability, insurability, effectiveness or suitability
of any such [Mortgage Loan].
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
[THE BANK OF NEW YORK,
as Trustee]
By:
Name:
Title:
EXHIBIT F-1
FORM OF [TRUSTEE] [CUSTODIAN] INTERIM CERTIFICATION
_______________, 1997
MBIA Insurance Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
The Money Store Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
TMS Special Holdings, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Prudential Securities Incorporated, as
representative of the Underwriters
▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Pooling and Servicing Agreement The Money Store Home Equity Asset
Backed Certificates, Series 1997-A, dated as of February 28, 1997
among The Money Store Inc. as Representative and Servicer, the
Originators and The Bank of New York, as Trustee
Gentlemen:
In accordance with Section 2.05 of the above-referenced Pooling and
Servicing Agreement, the undersigned, as [Trustee], hereby certifies that as to
each [Initial] [Subsequent] [Mortgage Loan] listed in the Mortgage Loan Schedule
(other than any [Initial] [Subsequent] [Mortgage Loan] paid in full or any
[Initial] [Subsequent] [Mortgage Loan] listed on the attachment hereto), it has
reviewed the documents delivered to it pursuant to Section 2.04 (other than
items listed in Section 2.04(d)(ii)) of the Pooling and Servicing Agreement and
has determined that (i) all such documents are in its possession, (ii) such
documents have been reviewed by it and have not been mutilated, damaged, torn or
otherwise physically altered and relate to such [Mortgage Loan], (iii) based on
its examination and only as to the foregoing documents, the information set
forth in the Mortgage Loan Schedule respecting such [Initial] [Subsequent]
[Mortgage Loan] is correct and (iv) each Mortgage Note has been endorsed as
provided in Section 2.04 of the Pooling and Servicing Agreement.
Further, [except for Mortgaged Properties relating to [Mortgage Loans]
identified on the Mortgage Loan Schedule by an account number beginning with
__________ or ________,] each Mortgaged Property is a Residential Dwelling of
the type set forth in the appraisal obtained in connection with the origination
of the related [Mortgage Loan], and for each [Mortgage Loan] with an original
principal balance in excess of $15,000 for which the documents in the possession
of the [Trustee] indicate that the related Originator conducted a drive-by
appraisal pursuant to FHLMC Form 704 or alternative FNMA Form in connection with
originating such [Mortgage Loan], such [Mortgage Loan] (A) had an original
principal balance not in excess of $35,000, and (B) has a Loan-to-Value Ratio
less than 50% (based solely on the LTV included on the Mortgage Loan Schedule)
and/or an appraisal on FNMA/FHLMC Form 1004 was performed by the related
Originator within one year prior to the origination of such [Mortgage Loan]. The
[Trustee] has made no independent examination of such documents beyond the
review specifically required in the above-referenced Pooling and Servicing
Agreement. The [Trustee] makes no representations as to: (i) the validity,
legality, enforceability or genuineness of any such documents contained in each
or any of the [Mortgage Loans] identified on the Mortgage Loan Schedule, or (ii)
the collectability, insurability, effectiveness or suitability of any such
[Mortgage Loan].
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
[THE BANK OF NEW YORK
as Trustee]
By:___________________________
Name:_________________________
Title:________________________
EXHIBIT G
FORM OF [TRUSTEE] FINAL CERTIFICATION
[date]
[Certificate Insurer]
[Servicer]
[Certificateholders]
[Representative]
Re: Pooling and Servicing Agreement dated as of February 28, 1997
among The Money Store Inc. as Representative and Servicer, the
Originators and The Bank of New York, as Trustee, The Money Store
Home Equity Asset Backed Certificates, Series 1997-A
Gentlemen:
In accordance with Section 2.05 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as [Trustee], hereby certifies that,
except as noted on the attachment hereto, as to each [Mortgage Loan] listed in
the Mortgage Loan Schedule (other than any [Mortgage Loan] paid in full or
listed on the attachment hereto) it has reviewed the documents delivered to it
pursuant to Section 2.04 (other than items listed in Section 2.04(d)(ii)) of the
Pooling and Servicing Agreement and has determined that (i) all such documents
are in its possession, (ii) such documents have been reviewed by it and have not
been mutilated, damaged, torn or otherwise physically altered and relate to such
[Mortgage Loan], (iii) based on its examination, and only as to the foregoing
documents, the information set forth in the Mortgage Loan Schedule respecting
such [Mortgage Loan] is correct and (iv) each Mortgage Note has been endorsed as
provided in Section 2.04 of the Pooling and Servicing Agreement. Further,
[except for Mortgaged Properties relating to [Mortgage Loans] identified on the
Mortgage Loan Schedule by an account number beginning with _______ or _______,]
each Mortgaged Property is a Residential Dwelling of the type set forth in the
appraisal obtained in connection with the origination of the related [Mortgage
Loan], and for each [Mortgage Loan] with an original principal balance in excess
of $15,000 for which the documents in the possession of the [Trustee] indicate
that the related Originator conducted a drive-by appraisal pursuant to FHLMC
Form 704 or alternative FNMA Form in connection with originating such [Mortgage
Loan], such [Mortgage Loan] (A) had an original principal balance not in excess
of $35,000, and (B) has a Loan-to-Value Ratio less than 50% (based solely on the
LTV included on the Mortgage Loan Schedule) and/or an appraisal on FNMA/FHLMC
Form 1004 was performed by the related Originator within one year prior to the
origination of such [Mortgage Loan]. The [Trustee] has made no independent
examination of such documents beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The [Trustee] makes no
representations as to: (i) the validity, legality, enforceability or genuineness
of any such documents contained in each or any of the [Mortgage Loans]
identified on the Mortgage Loan Schedule, or (ii) the collectability,
insurability, effectiveness or suitability of any such [Mortgage Loan].
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
[THE BANK OF NEW YORK
as Trustee]
By:__________________________________
Name: ___________________________
Title: ____________________________
EXHIBIT H
POOL I MORTGAGE LOAN SCHEDULE
[To Be Delivered to Trustee]
EXHIBIT H-1
POOL II MORTGAGE LOAN SCHEDULE
[To Be Delivered to Trustee]
EXHIBIT H-2
POOL III MORTGAGE LOAN SCHEDULE
[To Be Delivered to Trustee]
EXHIBIT I
LIST OF ORIGINATORS
The Money Store/Minnesota Inc.
The Money Store/D.C. Inc.
The Money Store/Kentucky Inc.
The Money Store Home Equity Corp.
TMS Mortgage Inc.
EXHIBIT J
REQUEST FOR RELEASE OF DOCUMENTS
To: [Trustee]
Re: Pooling and Servicing Agreement, The Money Store Home Equity
Asset Backed Certificates, Series 1997-A, dated as of February
28, 1997
In connection with the administration of the pool of Mortgage Loans
held by you as [Trustee] for the Certificateholders, we request the release, and
acknowledge receipt, of the (Trustee's Mortgage File/[specify document]) for the
Mortgage Loan described below, for the reason indicated.
Mortgagor's Name, Address & Zip Code:
Mortgage Loan Number:
Reason for Requesting Documents (check one)
1. Mortgage Loan Paid in Full (Servicer hereby certifies that all
amounts received in connection therewith have been credited to
the Principal and Interest Account and remitted to the Trustee
for deposit into the Certificate Account pursuant to the Pooling
and Servicing Agreement.)
2. Mortgage Loan Liquidated (Servicer hereby certifies that all
proceeds of foreclosure, insurance or other liquidation have been
finally received and credited to the Principal and Interest
Account and remitted to the Trustee for deposit into the
Certificate Account pursuant to the Pooling and Servicing
Agreement.)
3. Mortgage Loan in Foreclosure
4. Mortgage Loan Purchased Pursuant to Section 11.01 of the Pooling
and Servicing Agreement.
5. Mortgage Loan Repurchased or Substituted Pursuant to Article II
or III of the Pooling and Servicing Agreement (Servicer hereby
certifies that the repurchase price or Substitution Adjustment
has been credited to the Principal and Interest Account and
remitted to the Trustee for deposit into the Certificate Account
pursuant to the Pooling and Servicing Agreement.)
6. Other
(explain)____________________________________________________
-----------------------------------------------------------------
If box 1 or 2 above is checked, and if all or part of the Trustee's
Mortgage File was previously released to us, please release to us our previous
receipt on file with you, as well as any additional documents in your possession
relating to the above specified Mortgage Loan.
If box 3, 4, 5 or 6 above is checked, upon our return of all of the
above documents to you as [Trustee] please acknowledge your receipt by signing
in the space indicated below, and returning this form.
THE MONEY STORE INC.
By: ______________________________________________
Name: ______________________________________
Title: _______________________________________
Documents returned to [Trustee]:
--------------------------------------------
[Trustee]
By:____________________________
Date:__________________________
EXHIBIT K
TRANSFER AFFIDAVIT
STATE OF )
) : ss:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as follows:
1. The undersigned is a of , the proposed transferee (the
"Transferee") of a Percentage Interest in a Class R Certificate (the
"Certificate") issued pursuant to the Pooling and Servicing Agreement, The Money
Store Home Equity Asset Backed Certificates, Series 1997-A, Class A-1, Class
▇-▇, ▇▇▇▇▇ ▇-▇, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class
A-9, Class A-10, Class A-11, Class A-12, Class X and Class R, dated as of
February 28, 1997 (the "Agreement"), among The Money Store Inc., as
Representative and Servicer (the "Servicer"), the Originators and The Bank of
New York, as Trustee. Capitalized terms used, but not defined herein shall have
the meanings ascribed to such terms in the Agreement. The Transferee has
authorized the undersigned to make this affidavit on behalf of the Transferee.
2. The Transferee is, as of the date hereof, and will be, as of the
date of the transfer, a Permitted Transferee. The Transferee is acquiring its
Percentage Interest in the Certificate either (i) for its own account or (ii) as
nominee, trustee or agent for another Person and has attached hereto an
affidavit from such Person in substantially the same form as this affidavit. The
Transferee has no knowledge that any such affidavit is false.
3. The Transferee has been advised of, and understands that (i) a tax
will be imposed on transfers of the Certificate to Persons that are not
Permitted Transferees; (ii) such tax will be imposed on the transferor, or, if
such transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is not a Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability for
the tax if the subsequent Transferee furnished to such Person an affidavit that
such subsequent Transferee is a Permitted Transferee and, at the time of
transfer, such Person does not have actual knowledge that the affidavit is
false.
4. The Transferee has been advised of, and understands that a tax will
be imposed on a "pass-through entity" holding the Certificate if at any time
during the taxable year of the pass-through entity a Person that is not a
Permitted Transferee is a record holder of an interest in such entity. The
Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is a Permitted Transferee and the pass-through
entity does not have actual knowledge that such affidavit is false. (For this
purpose, a "pass-through entity" includes a regulated investment company, a real
estate investment trust or common trust fund, a partnership trust or estate, and
certain cooperatives and, except as may be provided in Treasury Regulations,
persons holding interests in pass-through entities as a nominee for another
Person.)
5. The Transferee has reviewed the provisions of Section 4.02 of the
Agreement (incorporated herein by reference) and understands the legal
consequences of the acquisition of a Percentage Interest in the Certificate
including, without limitation, the restrictions on subsequent Transfers and the
provisions regarding voiding the Transfer and mandatory sales. The Transferee
expressly agrees to be bound by and to abide by the provisions of Section 4.02
of the Agreement and the restrictions noted on the face of the Certificate. The
Transferee understands and agrees that any breach of any of the representations
included herein shall render the transfer to the Transferee contemplated hereby
null and void.
6. The Transferee agrees to require a Transfer Affidavit from any
Person to whom the Transferee attempts to transfer its Percentage Interest in
the Certificate, and in connection with any transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
transfer its Percentage Interest or cause any Percentage Interest to be
transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate (a "Transfer
Certificate") to the effect that such Transferee has no actual knowledge that
the Person to which the transfer is to be made is not a Permitted Transferee.
7. The Transferee's taxpayer identification number is
___________________.
8. Section references and defined terms not defined herein have the
meanings ascribed thereto in the Agreement.
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
duly authorized officer and its corporate seal to be hereunto affixed, duly
attested, this day of , 19__.
[NAME OF TRANSFEREE]
By:______________________________________
Name:__________________________________
Title:___________________________________
[Corporate seal]
ATTEST:
-------------------------
[Assistant] Secretary
STATE OF )
) : ss:
COUNTY OF )
Personally appeared before me the above-named , known or proved to me
to be the same person who executed the foregoing instrument and to be the of the
Transferee, and acknowledged that he executed the same as his free act and deed
and the free act and deed of the Transferee.
Subscribed and sworn before me this day of , 19__.
NOTARY PUBLIC
My Commission expires the ____ day of __________, 19__.
EXHIBIT L-1
TO CERTIFICATE GUARANTY INSURANCE POLICY
NUMBER: ___________
NOTICE UNDER CERTIFICATE GUARANTY
INSURANCE POLICY NUMBER:
FORM OF NOTICE
State Street Bank and Trust
Company, N.A., as Fiscal Agent
for MBIA Insurance Corporation
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Municipal Registrar and
Paying Agency (▇▇▇▇ ▇▇▇▇▇)
▇▇▇▇ Insurance Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
The undersigned, a duly authorized officer of [Trustee], as trustee
(the "Trustee"), hereby certifies to State Street Bank and Trust Company, N.A.
(the "Fiscal Agent") and MBIA Insurance Corporation (the "Insurer"), with
reference to Certificate Guaranty Insurance Policy Number: _____________ (the
"Policy") issued by the Insurer in respect of the $___________ The Money Store
Home Equity Asset Backed Certificates, Series 1997-A, Class A-1, Class ▇-▇,
▇▇▇▇▇ ▇-▇, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8 and Class A-9
(the "Obligations"), that:
(i) the Trustee is the trustee under the Pooling and Servicing
Agreement dated as of February 28, 1997, among The Money Store Inc.,
as Representative and Servicer, the Originators named therein and the
Trustee, as trustee for the Owners;
(ii) the Pool I Current Interest Requirement for the Remittance
Date occurring on ____________________ (the "Applicable Remittance
Date") is $_____________;
(iii) the sum of (a) the Pool I Available Remittance Amount
(including any amount transferred from the Spread Account to the
Certificate Account pursuant to Section 6.01(a)(iii) of the Agreement
and minus amounts withdrawn required to pay premiums to the Insurer),
(b) the Monthly Excess Spread and (c) the Subordination Reduction
Amount (the "Pool I Adjusted Available Remittance Amount") respecting
the Applicable Remittance Date is $______________;
(iv) the Subordination Deficit respecting the Applicable
Remittance Date is $---------------;
(v) the amount of any previously distributed Pool I Available
Amount that is recoverable and sought to be recovered as a voidable
preference by a trustee in bankruptcy pursuant to the Bankruptcy Code
in accordance with a final nonappealable order of a court having
competent jurisdiction (the "Preference Amount") is $--------------;
(vi) the amount by which the Pool I Current Interest Requirement
exceeds the Pool I Adjusted Available Remittance Amount, plus any
Subordination Deficit, plus any Preference Amount (the "Insured
Payment") is $____________;
(vii) the Trustee is making a claim under and pursuant to the
terms of the Policy for the dollar amount of the Insured Payment set
forth in (vi) above to be applied to the payment of the Remittance
Amount for the Applicable Remittance Date in accordance with the
Agreement; and
(viii) the Trustee directs that payment of the Insured Payment be made
to the following account by bank wire transfer of federal or other
immediately available funds in accordance with the terms of the Policy:
[INSURANCE PAYING AGENT'S ACCOUNT].
Any capitalized term used in this Notice and not otherwise defined
herein shall have the meaning assigned thereto in the Policy.
IN WITNESS WHEREOF, the Trustee has executed and delivered this Notice
under the Policy as of the _____ day of , ____.
[TRUSTEE]
By:______________________________________
Name:_________________________________
Title:_________________________________
EXHIBIT L-2
TO CERTIFICATE GUARANTY INSURANCE POLICY
NUMBER: ___________
NOTICE UNDER CERTIFICATE GUARANTY
INSURANCE POLICY NUMBER:
FORM OF NOTICE
State Street Bank and Trust
Company, N.A., as Fiscal Agent
for MBIA Insurance Corporation
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Municipal Registrar and
Paying Agency (▇▇▇▇ ▇▇▇▇▇)
▇▇▇▇ Insurance Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
The undersigned, a duly authorized officer of [Trustee], as trustee
(the "Trustee"), hereby certifies to State Street Bank and Trust Company, N.A.
(the "Fiscal Agent") and MBIA Insurance Corporation (the "Insurer"), with
reference to Certificate Guaranty Insurance Policy Number: _____________ (the
"Policy") issued by the Insurer in respect of the $_________ The Money Store
Home Equity Asset Backed Certificates, Series 1997-A, Class A-10 and Class A-11
(the "Obligations"), that:
(i) the Trustee is the trustee under the Pooling and Servicing
Agreement dated as of February 28, 1997, among The Money Store Inc.,
as Representative and Servicer, the Originators named therein and the
Trustee, as trustee for the Owners;
(ii) the Pool II Current Interest Requirement for the Remittance
Date occurring on ____________________ (the "Applicable Remittance
Date") is $_____________;
(iii) the sum of (a) the Pool II Available Remittance Amount
(including any amount transferred from the Spread Account to the
Certificate Account pursuant to Section 6.01(a)(iii) of the Agreement
and minus amounts withdrawn required to pay premiums to the Insurer),
(b) the Monthly Excess Spread and (c) the Subordination Reduction
Amount (the "Pool II Adjusted Available Remittance Amount") respecting
the Applicable Remittance Date is $______________;
(iv) the Subordination Deficit respecting the Applicable
Remittance Date is $---------------;
(v) the amount of any previously distributed Pool II Available
Amount that is recoverable and sought to be recovered as a voidable
preference by a trustee in bankruptcy pursuant to the Bankruptcy Code
in accordance with a final nonappealable order of a court having
competent jurisdiction (the "Preference Amount") is $--------------;
(vi) the Supplemental Interest Trust Deficiency Amount is
$------------------------;
(vii) the amount by which the Pool II Current Interest
Requirement exceeds the Pool II Adjusted Available Remittance Amount,
plus any Subordination Deficit, plus any Preference Amount, plus any
Supplemental Interest Trust Deficiency Amount (the "Insured Payment")
is $____________;
(viii) the Trustee is making a claim under and pursuant to the
terms of the Policy for the dollar amount of the Insured Payment set
forth in (vii) above to be applied to the payment of the Remittance
Amount and, if applicable, Supplemental Interest Payments, for the
Applicable Remittance Date in accordance with the Agreement; and
(xi) the Trustee directs that payment of the Insured Payment be
made to the following account by bank wire transfer of federal or
other immediately available funds in accordance with the terms of the
Policy: [INSURANCE PAYING AGENT'S ACCOUNT].
Any capitalized term used in this Notice and not otherwise defined
herein shall have the meaning assigned thereto in the Policy.
IN WITNESS WHEREOF, the Trustee has executed and delivered this Notice
under the Policy as of the _____ day of , ____.
[TRUSTEE]
By:_____________________________________
Name:________________________________
Title:_______________________________
EXHIBIT L-3
TO CERTIFICATE GUARANTY INSURANCE POLICY
NUMBER: ___________
NOTICE UNDER CERTIFICATE GUARANTY
INSURANCE POLICY NUMBER:
FORM OF NOTICE
State Street Bank and Trust
Company, N.A., as Fiscal Agent
for MBIA Insurance Corporation
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Municipal Registrar and
Paying Agency (▇▇▇▇ ▇▇▇▇▇)
▇▇▇▇ Insurance Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
The undersigned, a duly authorized officer of [Trustee], as trustee
(the "Trustee"), hereby certifies to State Street Bank and Trust Company, N.A.
(the "Fiscal Agent") and MBIA Insurance Corporation (the "Insurer"), with
reference to Certificate Guaranty Insurance Policy Number: _____________ (the
"Policy") issued by the Insurer in respect of the $____________ The Money Store
Home Equity Asset Backed Certificates, Series 1997-A, Class A-12 (the
"Obligations"), that:
(i) the Trustee is the trustee under the Pooling and Servicing
Agreement dated as of February 28, 1997, among The Money Store Inc.,
as Representative and Servicer, the Originators named therein and the
Trustee, as trustee for the Owners;
(ii) the Pool III Current Interest Requirement for the Remittance
Date occurring on ____________________ (the "Applicable Remittance
Date") is $_____________;
(iii) the sum of (a) the Pool III Available Remittance Amount
(including any amount transferred from the Spread Account to the
Certificate Account pursuant to Section 6.01(a)(iii) of the Agreement
and minus amounts withdrawn required to pay premiums to the Insurer),
(b) the Monthly Excess Spread and (c) the Subordination Reduction
Amount (the "Pool III Adjusted Available Remittance Amount")
respecting the Applicable Remittance Date is $______________;
(iv) the Subordination Deficit respecting the Applicable
Remittance Date is $---------------;
(v) the amount of any previously distributed Pool III Available
Amount that is recoverable and sought to be recovered as a voidable
preference by a trustee in bankruptcy pursuant to the Bankruptcy Code
in accordance with a final nonappealable order of a court having
competent jurisdiction (the "Preference Amount") is $--------------;
(vi) the amount by which the Pool III Current Interest
Requirement exceeds the Pool III Adjusted Available Remittance Amount,
plus any Subordination Deficit, plus any Preference Amount (the
"Insured Payment") is $____________;
(vii) the Trustee is making a claim under and pursuant to the
terms of the Policy for the dollar amount of the Insured Payment set
forth in (vi) above to be applied to the payment of the Remittance
Amount for the Applicable Remittance Date in accordance with the
Agreement; and
(viii) the Trustee directs that payment of the Insured Payment be
made to the following account by bank wire transfer of federal or
other immediately available funds in accordance with the terms of the
Policy: [INSURANCE PAYING AGENT'S ACCOUNT].
Any capitalized term used in this Notice and not otherwise defined
herein shall have the meaning assigned thereto in the Policy.
IN WITNESS WHEREOF, the Trustee has executed and delivered this Notice
under the Policy as of the _____ day of , ____.
[TRUSTEE]
By:_________________________________________
Name:____________________________________
Title:_____________________________________
EXHIBIT M
CUSTODIAL AGREEMENT
Dated __________, 199__
THE BANK OF NEW YORK, a New York banking corporation, as Trustee (the
"Trustee") and ____________________________, a ____________________________ (the
"Custodian"), agree as follows:
WHEREAS, the Trustee, the Originators and The Money Store Inc. ("The
Money Store") have entered into a Pooling and Servicing Agreement dated as of
February 28, 1997 relating to The Money Store Home Equity Asset Backed
Certificates, Series 1997-A, Class ▇- ▇, Class A-2, Class A-3, Class A-4, Class
A-5, Class A-6, Class A-7, Class A-8, Class A-9, Class A-10, Class A-11, Class
A-12, Class X and Class R, (the "Pooling Agreement"), the terms defined therein
being used herein with the same meaning) pursuant to which the Originators
transferred, assigned, set-over and otherwise conveyed to the Trustee, without
recourse, all of the Originators' right, title and interest in and to the
mortgage loans identified in Exhibits H, H-1 and H-2 to the Pooling Agreement
(the "Mortgage Loans"); and
WHEREAS, in connection with such transfer and assignment and pursuant
to the Pooling Agreement, the Trustee holds, directly or pursuant to a custodial
agreement, the Mortgage Files:
WITNESSETH THAT:
In consideration of the premises and of the mutual agreements herein
contained, the Custodian and the Trustee agree as follows:
1. Appointment as Custodian; Acknowledgment of Receipt. Subject to the
terms and conditions herein, the Trustee hereby appoints the Custodian, and the
Custodian hereby accepts such appointment, as its Custodian to maintain custody
of the Trustee's Mortgage Files. The Custodian hereby acknowledges receipt of
the Mortgage Notes, the Mortgages, the assignments and other documents relating
to the Mortgage Loans referred to in Section 2.04, except for the items referred
to in Section 2.04(d)(ii), of the Pooling Agreement. The Trustee shall be liable
for all of the Custodian's fees under this Agreement.
2. Maintenance of Office. The Custodian agrees to maintain each
Trustee's Mortgage File identified in Section 2.04 of the Pooling Agreement,
said Exhibit being incorporated herein by reference, at the office of the
Custodian located at ________ ___________________ or at such other office of the
Custodian in New York, New York as the Custodian shall designate from time to
time after giving the Trustee 30 days' prior written notice.
3. Duties of Custodian. As Custodian, the Custodian shall have and
perform the following powers and duties:
(a) Safekeeping. To segregate the Trustee's Mortgage Files
from all other mortgages and mortgage notes and similar records in its
possession, to identify the Trustee's Mortgage Files as being held and to hold
the Trustee's Mortgage Files for and on behalf of the Trustee for the benefit of
all present and future Certificateholders, to maintain accurate records
pertaining to each Mortgage Note and Mortgage in the Trustee's Mortgage Files as
will enable the Trustee to comply with the terms and conditions of the Pooling
Agreement, to maintain at all times a current inventory thereof and to conduct
periodic physical inspections of the Trustee's Mortgage Files held by it under
this Agreement in such a manner as shall enable the Trustee and the Custodian to
verify the accuracy of such record-keeping, inventory and physical possession.
The Custodian will promptly report to the Trustee any failure on its part to
hold the Trustee's Mortgage Files as herein provided and promptly take
appropriate action to remedy any such failure.
(b) Release of Documents. To release any Mortgage Note and
Mortgage in the Trustee's Mortgage Files as provided in the Pooling Agreement.
(c) Administration; Reports. In general, to attend to all
non-discretionary details in connection with maintaining custody of the
Trustee's Mortgage Files on behalf of the Trustee. In addition, the Custodian
shall assist the Trustee generally in the preparation of reports to
Certificateholders or to regulatory bodies to the extent necessitated by the
Custodian's custody of the Trustee's Mortgage Files.
4. Access to Records. The Custodian shall permit the Trustee or its
duly authorized representatives, attorneys or auditors and those persons
permitted access pursuant to Section 5.13 of the Pooling Agreement to inspect
the Trustee's Mortgage Files and the books and records maintained by the
Custodian pursuant hereto at such times as they may reasonably request, subject
only to compliance with the terms of the Pooling Agreement.
5. Instructions; Authority to Act. The Custodian shall be deemed to
have received proper instructions with respect to the Trustee's Mortgage Files
upon its receipt of written instructions signed by a Responsible Officer of the
Trustee. A certified copy of a resolution of the Board of Directors of the
Trustee may be accepted by the Custodian as conclusive evidence of the authority
of any such officer to act and may be considered as in full force and effect
until receipt of written notice to the contrary by the Custodian from the
Trustee. Such instructions may be general or specific in terms.
6. Indemnification by the Custodian. The Custodian agrees to indemnify
the Trustee for any and all liabilities, obligations, losses, damages, payments,
costs or expenses, including attorneys' fees, of any kind whatsoever which may
be imposed on, incurred by or asserted against the Trustee as the result of any
act or omission in any way relating to the maintenance and custody by the
Custodian of the Trustee's Mortgage Files; provided, however, that the Custodian
shall not be liable for any portion of any such amount resulting from the gross
negligence or willful misconduct of the Trustee.
7. Advice of Counsel. The Custodian and the Trustee further agree that
the Custodian shall be entitled to rely and act upon advice of counsel with
respect to its performance hereunder as Custodian and shall be without liability
for any action reasonably taken pursuant to such advice, provided that such
action is not in violation of applicable Federal or State law. This paragraph
shall not negate the Custodian's obligations under paragraph 6 above.
8. Effective Period, Termination and Amendment, and Interpretive and
Additional Provisions. This Agreement shall become effective as of the date
hereof and shall continue in full force and effect until terminated as
hereinafter provided, and may be amended at any time by mutual agreement of the
parties hereto. This Agreement may be terminated by either party in a writing
delivered or mailed, postage prepaid, to the other party, such termination to
take effect no sooner than sixty (60) days after the date of such delivery or
mailing. Concurrently with, or as soon as practicable after, the termination of
this Agreement, the Custodian shall redeliver the Trustee's Mortgage Files to
the Trustee at such place as the Trustee may reasonably designate. In connection
with the administration of this Agreement, the Custodian and the Trustee may
agree from time to time upon the interpretation of the provisions of this
Agreement as may in their opinion by consistent with the general tenor and
purposes of this Agreement, any such interpretation to be signed and annexed
hereto.
9. Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York.
10. Notices. Notices and other writings shall be delivered or mailed,
postage prepaid, to the Trustee at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Administration - MBS, or to the
Custodian at, _________________________________________, Attention: __________;
or to such other address as the Trustee or the Custodian may hereafter specify
in writing. Notices or other writings shall be effective only upon actual
receipt by the parties.
11. Binding Effect. This Agreement shall be binding upon and shall
inure to the benefit of the Trustee and the Custodian and their respective
successors and assigns. Concurrently with the appointment of a successor trustee
as provided in Section 12.08 of the Pooling Agreement, the Trustee and the
Custodian shall amend this Agreement to make said successor trustee the
successor to the Trustee hereunder.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and on its behalf by a duly authorized
officer as of the day and year first above written.
THE BANK OF NEW YORK
as Trustee under the Pooling
Agreement referred to above
By:_________________________________________
Name:____________________________________
Title:_____________________________________
____________________________________________, as
Custodian
By:_________________________________________
Name:____________________________________
Title:_____________________________________
EXHIBIT N
FORM OF LIQUIDATION REPORT
Customer Name:
Account number:
Original Principal Balance:
1. Liquidation Proceeds
Principal Prepayment $ ________
Property Sale Proceeds ________
Insurance Proceeds ________
Other (Itemize) ________
Total Proceeds $_______
2. Servicing Advances $ ________
Monthly Advances ________
Total Advances $_______
3. Net Liquidation Proceeds $_______
(Line 1 minus Line 2)
4. Principal Balance of the Mortgage
Loan on date of liquidation $_______
5. Realized (Loss) or Gain $_______
(Line 3 minus Line 4)
EXHIBIT O
DELINQUENCY AND FORECLOSURE INFORMATION
REO FORECLOSURES
OUTSTANDING # # OF # OF OUTSTANDING # OF OUTSTANDING
INVESTOR DOLLARS ACCT RANGES AMOUNT ACCTS. PCT ACCTS DOLLARS % ACCTS DOLLARS %
------------------------------------------------------------------------------------------------------------------
1 TO 29 DAYS
30 TO 59 DAYS
60 TO 89 DAYS
90 AND OVER
TOTALS
EXHIBIT P
[OMITTED]
EXHIBIT Q
[OMITTED]
EXHIBIT R
SERVICER'S MONTHLY COMPUTER TAPE FORMAT
The computer tape to be delivered to the Trustee pursuant to Section
6.10 shall contain the following information for each Mortgage Loan as of the
related Record Date:
1. Name of the Mortgagor, address of the Mortgaged
Property and Account Number.
2. The LTV as of the origination date of the Mortgage
Loan.
3. The Due Date.
4. The Mortgage Loan Original Principal Balance.
5. The Mortgage Interest Rate.
6. The Monthly Payment.
7. The date on which the last payment was received and
the amount of such payment segregated into the following
categories; (a) total interest received (including Servicing
Fee, Contingency Fee and Excess Spread); (b) Servicing Fee and
Contingency Fee; (c) Excess Spread; (d) The amount equal to
total interest received minus Servicing Fee, Contingency Fee
and Excess Spread; (e) principal and Excess Payments received;
(f) Curtailments received; and (g) Principal Prepayments
received.
8. The Mortgage Loan Principal Balance.
9. The Mortgage Note maturity date.
10. A "Delinquency Flag" noting that the Mortgage Loan is current or
delinquent. If delinquent, state the date on which the last
payment was received.
11. A "Foreclosure Flag" noting that the Mortgage Loan is
the subject of foreclosure proceedings.
12. An "REO Flag" noting that the Mortgage Loan is an REO
Property.
13. A "Liquidated Mortgage Loan Flag" noting that the Mortgage Loan
is a Liquidated Mortgage Loan and the Net Liquidation Proceeds
received in connection therewith.
14. Lifetime Cap.
15. Lifetime Floor.
16. Periodic Cap.
17. Net Funds Cap.
18. Any additional information reasonably requested by the
Trustee.
EXHIBIT S
SUB-SERVICING AGREEMENT
THIS SUB-SERVICING AGREEMENT is made effective as of the 31st day of
March 1997, by and between The Money Store Inc., a New Jersey corporation (the
"Servicer") whose principal business address is ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, and each of the entities listed on Schedule A hereto (each an
"Originator", and collectively the "Originators").
RECITALS
1. Each Originator is a wholly-owned subsidiary of the Servicer.
2. The Servicer, the Originators and The Bank of New York, as trustee
(the "Trustee"), are parties to that certain Pooling and Servicing Agreement
dated and effective as of February 28, 1997 (the "Pooling and Servicing
Agreement").
3. Pursuant to the terms of the Pooling and Servicing Agreement, each
Originator has transferred those certain Mortgage Loans (as defined in the
Pooling and Servicing Agreement) listed next to each Originator's name on
Schedule B hereto to the Trustee for the benefit of Certificateholders (as
defined in the Pooling and Servicing Agreement).
4. The Originators desire to convey to the Servicer the right to
service the Mortgage Loans. As authorized by the Pooling and Servicing
Agreement, the Servicer desires to enter into a subservicing agreement with each
Originator so that each Originator will perform subservicing functions for the
Mortgage Loans transferred by it to the Trustee, such subservicing functions to
be rendered in compliance with the terms of the Pooling and Servicing Agreement.
5. Each Originator desires to undertake such subservicing and supervision
of the Mortgage Loans on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the agreements of the parties
herein and other good and valuable consideration, the receipt and sufficiency of
which each party hereby acknowledges, and in order in part to induce the Trustee
to enter into the Pooling and Servicing Agreement and perform its obligations
thereunder, the parties agree as follows:
1. Assignment of Servicing; Subservicing Agreement. Each Originator
hereby assigns, transfers, conveys and sets over to the Servicer, its successors
and assigns, all of such Originator's right, title and interest to service the
Mortgage Loans listed next to such Originator's name on the schedule furnished
by each Originator to the Servicer and dated the date hereof, to have and to
hold such rights hereby assigned, conveyed and transferred to the Servicer, for
its own use and benefit, and that of its successors and assigns, forever. In
consideration of the foregoing assignment, the Servicer hereby appoints each
Originator as subservicer with respect to the Mortgage Loans conveyed by each
such Originator to the Trustee each such Originator to service and supervise
such Mortgage Loans as provided for herein, such subservicing to commence on the
effective date of this Agreement and to terminate as provided for herein. As
compensation for such subservicing and supervision, each Originator shall be
entitled to an annual fee for each Mortgage Loan serviced, such fee to be
computed and paid as set forth on Schedule B hereto. Each Originator, as
contract subservicer, shall service and administer the Mortgage Loans and shall
have full power and authority, acting alone, to do any and all things in
connection with such servicing and administration which the Originator may deem
necessary or desirable; provided, however, that each Originator shall conduct
its servicing activities (i) in compliance with and pursuant to the servicing
requirements set out in the Pooling and Servicing Agreement, as such
requirements relate to subservicing rendered thereunder, and (ii) to the extent
not inconsistent with such Originator's obligations as an authorized subservicer
under the Pooling and Servicing Agreement, (x) in accordance with the provisions
of Section 3 hereof and (y) otherwise in accordance with the standards and
requirements set forth on Schedule C hereto and subject to applicable Federal,
state and local laws and regulations. On or after the date hereof, each
Originator shall deliver such appropriately executed and authenticated
instruments of sale, assignment, transfer and conveyance to the Servicer, if
any, including limited powers of attorney, as the Servicer or its counsel
determine to be reasonable in order to accomplish the transfer to the Servicer
of such Originator's rights with respect to the servicing.
2. Representations and Warranties. Each Originator represents and
warrants as follows:
2.1 Such Originator is a corporation duly organized, validly existing
and in good standing under the laws of its state of incorporation. Originator is
and at all relevant times has been properly licensed and qualified to transact
business in all appropriate jurisdictions, to conduct all activities performed
with respect to origination and servicing of the Mortgage Loans and is in good
standing in each jurisdiction in which the failure to be in such good standing
would have a material, adverse effect on the consummation of the transactions
contemplated hereby.
2.2 Originator has all requisite corporate power, authority and
capacity to enter into this Agreement and to perform the obligations required of
it hereunder. The execution and delivery of this Agreement by the Originator,
and the consummation of the transactions contemplated hereby, have each been
duly and validly authorized by all necessary corporate action. This Agreement
constitutes the valid and legally binding agreement of Originator enforceable in
accordance with its terms, and no offset, counterclaim or defense exists to the
full performance of this Agreement, subject to laws respecting bankruptcy,
receivership, insolvency and other laws affecting creditors' rights generally.
2.3 The execution, delivery and performance of this Agreement by
Originator, its compliance with the terms hereof and consummation of the
transactions contemplated will not violate, conflict with, result in a breach
of, constitute a default under, be prohibited by or require any additional
approval under its certificate of incorporation, bylaws, or any instrument or
agreement to which it is a party or by which it is bound or which affects the
servicing conveyed hereunder.
2.4 Such Originator is the lawful owner of the servicing, has the sole
right and authority to transfer the servicing as contemplated hereby, and is not
contractually obligated to sell the servicing to any other party. The transfer,
assignment and delivery of the servicing in accordance with the terms and
conditions of this Agreement shall vest in the Servicer all rights as servicer
free and clear of any and all claims, charges, defenses, offsets and
encumbrances of any kind or nature whatsoever, including but not limited to
those of Originator.
2.5 With respect to each individual Mortgage Loan for which servicing
rights are assigned hereunder, such Originator makes to the Servicer those
representations and warranties that are contained in Section 3.02 of the Pooling
and Servicing Agreement.
3. Originator's Duties. Until the principal, interest and any other
amounts due on each Mortgage Loan are paid in full, each Originator shall:
A. Proceed diligently to collect all payments due under the terms
of each Mortgage Loan as they become due.
B. Keep a complete and accurate account of and properly apply
all sums collected by it from the mortgagor on account of each such
Mortgage Loan for principal and interest, and upon request, furnish
evidence acceptable to the Servicer of all expenditures for taxes,
assessments and other public charges and hazard insurance premiums. In
the event any Mortgagor fails to make a payment to an Originator
required to be made under the terms of any such Mortgage Loan, such
Originator will notify the Servicer of such fact within 20 days after
the same shall have become due and payable.
C. Deposit all funds received in respect of each Mortgage Loan
in an account in an institution the accounts of which are insured by an
agency of the United States government. Unless directed otherwise by
the Servicer such account shall be held by a Originator, which shall
maintain or shall cause to be maintained detailed records to show the
respective interest of each individual mortgagor in the account.
D. Pay into the related Principal and Interest Accounts (as
defined in the Pooling and Servicing Agreement) all amounts of
principal and interest collected under the Mortgage Loans.
E. Submit to the Servicer at least annually an accounting of the
balances in each such account, if any.
F. Perform such other customary duties, furnish such other
reports and execute such other documents in connection with its duties
hereunder as the Servicer from time to time reasonably may require.
4. Advances by Originator. In the event an Originator, on behalf of
the Servicer, makes any advance of principal and/or interest to the holder of a
mortgage serviced hereunder before such Originator has received the applicable
mortgage payment from any mortgagor, or makes any other advance to protect the
security of a mortgage or otherwise (including but not limited to property
taxes, special assessments, and hazard insurance premiums), except advances
related to foreclosure or real estate owned losses (which are covered by Section
8), then the Servicer, promptly upon being billed therefore, shall, at its
option, either (i) reimburse such Originator the full amount of all such
advances, (ii) credit such amount as a set-off against amounts such Originator
may then owe to the Servicer pursuant to this Agreement, (iii) use a combination
of such reimbursement and crediting to fully discharge such amount or (iv)
forego such reimbursement or crediting with respect to all or a portion of such
amount, in which case the amount not reimbursed or offset shall be deemed
currently due and payable and, until paid to such Originator, shall bear
interest on the average monthly balance thereof at the underlying Mortgage Loan
Rate.
5. Originator's Records; Monitoring of Property. Each Originator will
during regular business hours make all of its records and files relating to
Mortgage Loans covered by this Agreement available for inspection by the
Servicer and its authorized agents. In addition, an Originator will use ordinary
diligence to ascertain, and will forthwith notify the Servicer of any of the
following which might come to the attention of such Originator:
A. The vacating of or any change in the occupancy of any premises
securing a mortgage.
B. The sale or transfer of any such premises.
C. The death, bankruptcy, insolvency or other disability of a
mortgagor which might impair ability to repay the Mortgage Loan.
D. Any loss or damage in excess of $10,000 to any such premises,
in which event, in addition to notifying the Servicer, an Originator
shall see to it that the insurance companies concerned are promptly
notified. For losses or damages of $10,000 or less, the Servicer
hereby authorizes an Originator to endorse insurance checks or drafts
on behalf of the Servicer. For losses or damages in excess of $10,000,
an Originator shall make a report to the Servicer and the Servicer
retains the right to endorse any insurance drafts related to such loss
or damage.
E. Any lack of repair or any other deterioration or waste
suffered or committed in respect to the premises covered by any
mortgage.
It is understood and agreed, however, that no notice need be given to the
Servicer of any facts other than those of which an Originator has actual notice,
or those of which an Originator would, except for its negligence, have had
actual notice.
6. No Waiver, Release or Consent by Originator. An Originator will not
waive, modify, release or consent to postponement on the part of the mortgagor
of any term or provision of any Mortgage Loan without the consent of the
Servicer.
7. Hazard Insurance. An Originator shall cause to be maintained such
fire and hazard insurance as shall be requested by the Servicer pursuant to
Sections 5.07 and 5.08 of the Pooling and Servicing Agreement.
8. Foreclosure and Real Estate Owned. An Originator will assist in the
foreclosure or other acquisition of the property securing any Mortgage Loan and
the transfer of such property, pursuant to instruction of the Servicer given
under Section 5.10 of the Pooling and Servicing Agreement.
9. Term; Termination. This Agreement shall commence on the date hereof
and shall, subject to earlier termination pursuant to the provisions of this
Section 9, terminate upon the termination of the Pooling and Servicing
Agreement. This Agreement may be canceled and terminated (i) at any time
hereunder by the Servicer on 10 days notice to an Originator, or (ii) by the
Trustee on notice to an Originator, at any time after the Trustee shall have
become the successor servicer with respect to the Mortgage Loans pursuant to
Sections 10.01 and 10.02 of the Pooling and Servicing Agreement. In addition,
this Agreement may be canceled and terminated by the Servicer, by notice to an
Originator, if:
A. An Originator fails in a material respect to perform its
obligations hereunder and (i) does not cure or rectify such failure within 45
days or, (ii) if the character of such cure or rectification is such that it
cannot reasonably be effected within 45 days, does not commence such cure or
rectification within 45 days and complete the same within a commercially
reasonable time thereafter, given the circumstances.
B. An Originator becomes insolvent or bankrupt or is placed under
conservatorship or receivership.
C. An Originator assigns or attempts to assign its rights and
obligations hereunder, without written consent of the Servicer,
provided that any assignment, transfer or other conveyance of an
Originator's rights and obligations hereunder that occurs as a result
of a merger, consolidation, reorganization, name change or acquisition
of or involving an Originator shall not be construed as an assignment
(or attempted assignment) under the provisions of this Section 9.C.
Upon termination of this Agreement, an Originator will account for and turn over
to the Servicer all funds collected under each Mortgage Loan for which said
termination is effective, less only the compensation, fees and reimbursements
then due an Originator, and will deliver to the Servicer or its designee all
records and documents relating to each such mortgage.
10. Compliance with Laws, Rules and Regulations. Each Originator will
comply with, and will use all reasonable efforts to cause each Mortgagor to
comply with, all applicable state and federal rules and regulations or
requirements including those requiring the giving of notices.
11. Fidelity, Errors and Omissions Insurance, Etc. Each Originator
agrees to be responsible, at no expense to the Servicer, for seeing to it that
at all times, while this Agreement is in force, policies of fidelity, fire, and
extended coverage, theft, forgery, and errors and omissions insurance are
maintained in conformity with the Pooling and Servicing Agreement. Each
Originator will, without demand therefore, provide the Servicer annually, on a
date agreeable to the Servicer, a certificate or binder of insurance delineating
the various types of insurance carried by such Originator.
12. Miscellaneous. This document contains the entire agreement between
the parties hereto and cannot be modified in any respect except by an amendment
in writing signed by each party. The invalidity of any portion of this Agreement
shall in no way affect the balance thereof. Any notice permitted or required
hereunder shall be in writing and shall be deemed given when hand delivered to
an officer or authorized agent of, or when mailed, registered or certified mail,
postage prepaid, to Servicer or an Originator at the address of the Servicer set
forth above. The captions and headings used in this Agreement are for
convenience only, and do not define or limit the terms and provisions of this
Agreement. Notwithstanding any provision in this Agreement to the contrary,
nothing contained herein shall be deemed an attempt to assign or an assignment
of any servicing rights by an Originator to the Servicer if an attempted
assignment of the same without the consent of any agency or instrumentality of
the United States or a state thereof (a "Regulatory Authority") with
jurisdiction over such assignment would constitute a breach of an applicable
regulatory requirement or agreement between an Originator and such Regulatory
Authority unless and until such consent shall have been obtained. In the event
the consent of any Regulatory Authority is required to authorize the conveyance
of any or all of the servicing to be conveyed hereunder and such consent shall
not have been granted prior to the occurrence of an Event of Default under
Section 10.01 of the Pooling and Servicing Agreement, then upon the occurrence
of an Event of Default, each Originator shall enter into an agreement with the
Trustee which agreement shall be in form and substance satisfactory to the
Trustee and its counsel, which recognizes the Trustee as the successor servicer
of the Mortgage Loans as provided for by such Section 10.01, and shall continue
to subservice the Mortgage Loans or shall convey such subservicing at the
election and upon the direction of the Trustee.
IN WITNESS WHEREOF, each party has caused this instrument to be signed
in its corporate name on its behalf by its proper officials duly authorized as
of the day and year first above written.
SERVICER:
ATTEST: The Money Store Inc.
By: ______________________ By: ______________________________
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Dear
Assistant Secretary Executive Vice President
ORIGINATORS:
The Money Store/Minnesota Inc.
The Money Store/D.C. Inc.
The Money Store/Kentucky Inc.
The Money Store Home Equity Corp.
TMS Mortgage Inc.
ATTEST:
By: _______________________ By: ______________________________
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Dear
Assistant Secretary Executive Vice President
SCHEDULE A
The Money Store/Minnesota Inc.
The Money Store/D.C. Inc.
The Money Store/Kentucky Inc.
The Money Store Home Equity Corp.
TMS Mortgage Inc.
SCHEDULE B
Each Originator shall receive 25 basis points as compensation for
servicing hereunder as well as other servicing fees as permitted.
ORIGINATORS MORTGAGE LOANS TRANSFERRED
The Money Store/Minnesota Inc.
The Money Store/D.C. Inc.
The Money Store/Kentucky Inc.
The Money Store Home Equity Corp.
TMS Mortgage Inc.
SCHEDULE C
1. Make telephone contact with any Mortgagor whose account is either a first
payment default or delinquent 9-29 days.
2. Confirm telephone contacts as necessary.
3. Contact, in writing, each Mortgagor who can not be contacted.
4. Send a "default" letter to any Mortgagor who is 30 days delinquent.
5. Commence foreclosure proceedings after 60 days delinquency.
6. Obtain legal counsel where appropriate including in foreclosure matter
commenced by prior lienholders and bankruptcy matters.
7. Monitor all outside counsel and proceedings.
8. Monitor loans for continuing performance.